FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
Date of Report (Date of earliest event reported): December 29, 1998
---------------------------
Westbridge Capital Corp.
--------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8538 73-1165000
- ----------- --------- ----------------
(State of Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(817) 878-3300
-----------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
----------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
***This Form 8-K consists of 5 pages. The Exhibit Index is on page 5.
<PAGE>
Item 3. Bankruptcy or Receivership
On December 17, 1998, the United States Bankruptcy Court for the District
of Delaware (the "Bankruptcy Court") entered Findings of Fact, Conclusions of
Law, and Order (the "Confirmation Order") under 11 U.S.C. ss.ss. 1129(a) and (b)
and Fed. R. Bankr. P. 3020 confirming the First Amended Plan of Reorganization
of Westbridge Capital Corp. ("Westbridge") dated October 30, 1998, as modified
(the "Plan"). The effective date of the Plan is expected to be on or around
January 20, 1999. The following summary of the Plan omits certain information
contained in the Plan. Any statements contained herein are not necessarily
complete, and in each such instance reference is made to, and such statements
are qualified in their entirety by, the Plan. A copy of the Confirmation Order
with accompanying exhibits, including a copy of the Plan as confirmed, is
attached hereto.
The Plan generally provides for the cancellation of all outstanding shares
of Westbridge's equity securities, 11% senior subordinated notes due 2002 and
7-1/2% convertible subordinated notes due 2004, as well as (i) the sale of new
convertible preferred stock to Credit Suisse First Boston Corporation ("CSFB")
and, at their option, holders of Westbridge's 7-1/2% convertible subordinated
notes, due 2004 ("7-1/2% Convertible Note Claims") as of May 20, 1998, (ii) the
distribution of cash to the holders of Westbridge's 11% senior subordinated
notes, due 2002 ("11% Note Claims"), (iii) the issuance of new convertible
preferred stock to holders of CSFB 11% Note Claims, (iv) the issuance of new
common stock to the holders of unsecured claims including, but not limited to,
the holders of 7-1/2% Convertible Note Claims, (v) the issuance of new common
stock and new warrants to the holders of old preferred stock and old common
stock, (vi) the cancellation of unvested common stock grants and all unexercised
warrants and options, (vii) the adoption of stock option plans providing for the
issuance on and after the effective date (x) to officers and directors of up to
10% of the fully diluted new common stock outstanding as of the effective date
and (y) to marketing agents of up to 3% of the fully diluted new common stock
outstanding as of the effective date, and (viii) the settlement of a putative
class action entitled James C. Karabedian, et al. v. Westbridge Capital Corp.,
Martin E. Kantor, James W. Thigpen, Patrick J. Mitchell, Forum Capital Markets
L.P., and Raymond James & Associates, Inc., Civ. Action No. 3:97 CV 3087-T and
the distribution of cash to securities litigation claimants.
As of December 28, 1998, there were 7,035,809 shares of Westbridge's common
stock, par value $.10 per share, and 11,935 shares of Westbridge's Series A
Preferred Stock outstanding. Pursuant to the Plan, approximately 6,500,000
shares of New Common Stock (as defined in the Plan) and approximately 23,000
shares of New Preferred Stock (as defined in the Plan) will be issued in respect
of claims and interests filed and owed under the Plan. As of the effective date
of the Plan, the total authorized capital stock of New Westbridge (as defined in
the Plan) will consist of 30,000,000 shares of New Common Stock and 40,000
shares of New Preferred Stock. For financial information regarding the assets
and liabilities of Westbridge, refer to Westbridge's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998. Westbridge's most recent monthly
operating report, filed with the Bankruptcy Court on December 18, 1998, reflects
that the total unconsolidated assets of the registrant were approximately $61.2
million and the total unconsolidated liabilities of the registrant were
approximately $104.2 million.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
2 Findings of Fact, Conclusions of Law, and Order Under 11
U.S.C.ss.ss.1129(a) and (b) and Fed. R. Bankr. P. 3020
Confirming First Amended Plan of Reorganization of
Westbridge Capital Corp. dated October 30, 1998, as modified
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTBRIDGE CAPITAL CORP.
Dated: December 29, 1998 By: /s/ Patrick J. Mitchell
------------------------
Name: Patrick J. Mitchell
Title: Chairman & Chief
Executive Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ---------------- ---------------------------------------------------------
2 Findings of Fact, Conclusions of Law, and Order Under 11
U.S.C.ss.ss.1129(a) and (b) and Fed. R. Bankr. P. 3020
Confirming First Amended Plan of Reorganization of
Westbridge Capital Corp. dated October 30, 1998, as modified
<PAGE>
EXHIBIT 2
<PAGE>
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- -------------------------------------------------------------------------------
In re ) Chapter 11 Case
) No. 98-2105 (MFW)
WESTBRIDGE CAPITAL CORP., )
)
Debtor. )
- -------------------------------------------------------------------------------
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER UNDER
11 U.S.C. ss.ss. 1129(a) AND (b) AND FED. R. BANKR.
P. 3020 CONFIRMING FIRST AMENDED PLAN OF
REORGANIZATION OF WESTBRIDGE CAPITAL CORP.
DATED OCTOBER 30, 1998, AS MODIFIED
<PAGE>
Doc#:DS5:149139.5
RECITALS
A. Westbridge Capital Corp. ("Westbridge" or the "Debtor"), debtor and
debtor-in-possession, filed the First Amended Plan Of Reorganization of
Westbridge Capital Corp., dated October 30, 1998 (such plan, as transmitted to
parties in interest, being the "Original Plan" and, as subsequently modified by
paragraph 34 hereof, the "Plan"1/ and the Amended Disclosure Statement With
Respect To First Amended Plan Of Reorganization Of Westbridge Capital Corp.,
dated October 30, 1998 (the "Disclosure Statement").
<PAGE>
B. On September 17, 1998, the Court entered an order (i)
scheduling a disclosure statement hearing, (ii) establishing deadlines and
procedures for filing objections to the adequacy of the disclosure statement and
(iii) approving the form and manner of notice of the disclosure statement
hearing. Notice of the disclosure statement hearing and the last day for
objections thereto were sent on or about September 24, 1998 by regular mail to
all known creditors, indenture trustees, equity security holders, the office of
the United States Trustee for this District and the Securities and Exchange
Commission. In addition, notice of the disclosure statement hearing was
published in the regular editions of The Fort Worth Star Telegram, The New York
Times, The Wall Street Journal, The News Journal (Wilmington, Delaware), and The
Clarion Ledger (Jackson Mississippi).
C. On October 30, 1998, the Court entered an order (the
"Solicitation Procedures Order") (i) approving the Disclosure Statement, (ii)
scheduling a hearing to consider confirmation of the Plan (the "Confirmation
Hearing"), (iii) establishing deadlines and procedures for filing objections to
confirmation of the Plan, (iv) approving the form and manner of notice of
confirmation hearing (the "Confirmation Hearing Notice"), (v) establishing
solicitation, voting, and tabulation procedures and deadlines, and (vi)
approving procedures and forms of the exercise of certain purchase rights.
D. As required by the Solicitation Procedures Order, the
Debtor, through its noticing agent, Logan & Co., Inc. ("Logan & Co."), on or
about November 6, 1998, timely mailed (a) the Confirmation Hearing Notice, (b)
the Disclosure Statement (with the Original Plan attached as an exhibit), (c) a
ballot (if appropriate) and return envelope (such ballot and envelope being
referred to collectively as a "Ballot") and a solicitation letter from the
creditors committee (if appropriate) to all known creditors, indenture trustees
and equity security holders of the Debtor and other parties in interest in this
case, as set forth in the Certificates of Service of Kathleen M. Logan of Logan
& Co., each dated November 13, 1998. In addition, notice of the Confirmation
Hearing was published in the regular editions of The Fort Worth Star Telegram,
The New York Times and The Wall Street Journal.
<PAGE>
E. The Debtor filed the affidavit of Cindy Kehoe, Advertising
Clerk of the Publisher of The Wall Street Journal, sworn to November 13, 1998,
the certification of publication of Arlene Moller, Principal Clerk of the
Publisher of The New York Times, certified on November 13, 1998 and the
Affidavit of Tammie Bryant, Bid and Legal Coordinator of The Fort Worth Star
Telegram, sworn to on November 17, 1998, attesting to the fact that the
Confirmation Hearing Notice was published in accordance with the Solicitation
Procedures Order.
F. The Debtor filed the certification of Kathleen M. Logan of
Logan & Co., certified on December 11, 1998, attesting to and certifying the
method and results of the ballot and master ballot tabulation for the Classes of
Claims and Interests (Classes 7, 8, 9 and 10) voting to accept or reject the
Original Plan (the "Voting Report").
G. None of the non-Debtor parties to the executory contracts
and unexpired leases listed on the Debtor's Schedule G (Executory Contracts and
Unexpired Leases) filed on September 16, 1998 filed an objection to the proposed
assumption of its contract or lease.
H. On December 15, 1998, the Debtor filed (i) a memorandum of
law (the "Confirmation Memorandum"); (ii) the affidavit of Patrick J. Mitchell;
(iii) the affidavit of Michael A. Kramer; and (iv) the affidavit of Michael E.
Adler, all in support of confirmation of the Plan.
I. The Confirmation Hearing was held on December 17, 1998.
<PAGE>
NOW, THEREFORE, based upon the Court's review of the
affidavits and Voting Report previously filed with the Court and upon the
Confirmation Memorandum and upon (i) all of the evidence proffered or adduced
at, memoranda filed in connection with, and arguments of counsel made at, the
Confirmation Hearing and (ii) the entire record of this chapter 11 case (the
"Chapter 11 Case"), and after due deliberation thereon and good cause appearing
therefor
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT2/
1. Exclusive Jurisdiction; Venue; Core Proceeding (28 U.S.C.
ss.ss. 157(b)(2) and 1334(a)). This Court has jurisdiction over the Chapter 11
Case pursuant to 28 U.S.C. ss.ss. 157 and 1334. Venue is proper pursuant to 28
U.S.C. ss.ss. 1408 and 1409. Confirmation of the Plan is a core proceeding under
28 U.S.C. ss. 157(b)(2), and this Court has exclusive jurisdiction to determine
whether the Plan complies with the applicable provisions of the Bankruptcy Code
and should be confirmed.
2. Judicial Notice. This Court takes judicial notice of the
docket of the Chapter 11 Case maintained by the Clerk of the Court and/or its
duly-appointed agent, including, without limitation, all pleadings and other
documents filed, all orders entered, and all evidence and argument made,
proffered or adduced at, the hearings held before the Court during the pendency
of the Chapter 11 Case, including, but not limited to, the hearings to consider
the adequacy of the Debtor's Disclosure Statement.
<PAGE>
3. Burden Of Proof. The Debtor, as proponent of the Plan, has
the burden of proving the elements of sections 1129(a) and (b) by a
preponderance of the evidence.
4. Transmittal And Mailing Of Materials, Notice. The
Disclosure Statement, Original Plan, Ballots and Confirmation Hearing Notice
were transmitted and served in compliance with the Solicitation Procedures Order
and the Bankruptcy Rules, and such transmittal and service were adequate and
sufficient. Adequate and sufficient notice of the Confirmation Hearing and the
other dates and hearings described in the Solicitation Procedures Order was
given in compliance with the Bankruptcy Rules and the Solicitation Procedures
Order, and no other or further notice is or shall be required.
5. Plan Compliance With the Bankruptcy Code (11 U.S.C. ss.
1129(a)(1)). The Plan complies with the applicable provisions of the Bankruptcy
Code, thereby satisfying section 1129(a)(1) of the Bankruptcy Code.
(a) Proper Classification (11 U.S.C. ss.ss. 1122, 1123(a)(1)). In addition
to Administrative Claims and Priority Tax Claims, which need not be designated,
the Plan designates thirteen Classes of Claims and Interests. The Claims and
Interests placed in each Class are substantially similar to other Claims or
Interests, as the case may be, in each such Class. Valid business, factual and
legal reasons exist for separately classifying the various Classes of Claims and
Interests created under the Plan, and such Classes do not unfairly discriminate
between holders of Claims or Interests. Thus, the Plan satisfies sections 1122
and 1123(a)(1) of the Bankruptcy Code.
<PAGE>
(b) Specify Unimpaired Classes (11 U.S.C. ss. 1123(a)(2)). The Plan
specifies that Classes 1, 2, 3, 4, 5 and 6 are not impaired under the Plan,
thereby satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specify Treatment Of Impaired Classes (11 U.S.C. ss. 1123(a)(3)).
Articles II and III of the Plan designate Classes 7, 8, 9, 10, 11, 12 and 13 as
impaired and specify the treatment of Claims and Interests in those Classes,
thereby satisfying section 1123(a)(3) of the Bankruptcy Code.
<PAGE>
(d) No Discrimination (11 U.S.C. ss. 1123(a)(4)). The Plan provides for the
same treatment by the Debtor for each Claim or Interest in each respective Class
unless the holder of a particular Claim or Interest has agreed to a less
favorable treatment of such Claim or Interest, thereby satisfying section
1123(a)(4) of the Bankruptcy Code. With respect to Class 8, the Plan provides
for the same treatment by the Debtor of each Claim in Groups 8-A and 8-B.
Differences in recoveries between Groups 8-A and 8-B result solely from the
reallocation of a portion of distributions from Group 8-B to Class 7 pursuant to
the terms of the 7 1/2% Note Indenture, which is authorized by Article III of
the Plan and section 510(a) of the Bankruptcy Code; no portion of distributions
to holders of Claims in Group 8-A are being reallocated to holders of Claims in
Class 7. With respect to Class 7, the Plan provides for the holders of Claims in
Groups 7-A and 7-B to receive the same percentage recovery (payment in full plus
interest), but holders of Group 7-A Claims will receive Cash and, by agreement,
holders of Group 7-B Claims will receive New Convertible Preferred Stock. CSFB
would be entitled to receive a Cash distribution but has agreed to be classified
separately for distribution purposes only and to receive New Convertible
Preferred Stock in lieu of a Cash distribution. CSFB has separately agreed to
purchase New Convertible Preferred Stock in an amount sufficient to fund
distributions to other members of Class 7. Consequently, if CSFB were to receive
Cash instead of New Convertible Preferred Stock on account of its 11% Note
Claims, it would be required to purchase additional New Convertible Preferred
Stock to fund its own distribution.
(e) Implementation Of Plan (11 U.S.C. ss. 1123(a)(5)). The Plan provides
adequate and proper means for implementation of the Plan, thereby satisfying
section 1123(a)(5) of the Bankruptcy Code.
(f) Nonvoting Equity Securities (11 U.S.C. ss. 1123(a)(6)). Pursuant to
Article V of the Plan, Reorganized Westbridge's Amended Certificate of
Incorporation and By-Laws, filed with the Court on December 14, 1998, prohibit
the issuance of non-voting equity securities, thereby satisfying section
1123(a)(6) of the Bankruptcy Code.
<PAGE>
(g) Selection Of Officers And Directors (11 U.S.C. ss. 1123(a)(7)). Article
V of the Plan provides that the initial board of directors of Reorganized
Westbridge will consist of seven (7) members, four of whom will be selected by
CSFB or its designee, one of whom will be selected by the Official Committee of
Unsecured Creditors appointed in this Chapter 11 case (the "Creditors
Committee") and two of whom will be selected by Westbridge or Reorganized
Westbridge. See Plan Article V. Since the Plan provides that approximately 94%
of the New Common Stock of Reorganized Westbridge will be distributed to the
Debtor's unsecured creditors (and CSFB is the Debtor's largest unsecured
creditor), it is appropriate that the Creditors Committee and CSFB select a
majority of the board of directors of Reorganized Westbridge. In addition, the
Plan provides that the officers of the Debtor immediately prior to the Effective
Date will serve as the initial officers of Reorganized Westbridge on and after
the Effective Date. See Plan Article V. These provisions of the Plan and the
manner of selection of the officers and directors are consistent with the
interests of creditors and equity security holders and with public policy,
thereby satisfying section 1123(a)(7) of the Bankruptcy Code.
(h) Additional Plan Provisions (11 U.S.C. ss. 1123(b)). The Plan's
provisions are appropriate and not inconsistent with the applicable provisions
of the Bankruptcy Code, including provisions for (i) the disposition of
executory contracts and unexpired leases (Article X) and (ii) waivers of and
covenants not to sue various persons, exculpation of various persons and
entities with respect to actions taken in furtherance of the Chapter 11 Case,
and preliminary and permanent injunctions against certain actions against the
Debtor, its estate, Reorganized Westbridge, and their respective property
(Article VII).
(i) Fed. R. Bankr. P. 3016(a). The Original Plan (Docket No. 81) is dated
and identifies the entity submitting it, thereby satisfying Fed. R. Bankr. P.
3016(a).
6. Debtor's Compliance With the Bankruptcy Code (11 U.S.C. ss. 1129(a)(2)).
The Debtor has complied with the applicable provisions of the Bankruptcy Code,
thereby satisfying section 1129(a)(2) of the Bankruptcy Code. Specifically:
<PAGE>
(a) The Debtor is a proper debtor under section 109
of the Bankruptcy Code and a proper proponent of the Plan under section
1121(a) of the Bankruptcy Code;
(b) The Debtor has complied with applicable
provisions of the Bankruptcy Code, except as otherwise provided or
permitted by orders of this Court; and
(c) The Debtor has complied with the applicable
provisions of the Bankruptcy Code, the Bankruptcy Rules, and the
Solicitation Procedures Order in transmitting the Original Plan, the
Disclosure Statement, the Ballots, and related documents and notices
and in soliciting and tabulating votes on the Original Plan.
7. Plan Proposed In Good Faith (11 U.S.C. ss. 1129(a)(3)). The
Debtor has proposed the Plan in good faith and not by any means forbidden by
law, thereby satisfying section 1129(a)(3) of the Bankruptcy Code. In
determining that the Plan has been proposed in good faith, the Court has
examined the totality of the circumstances surrounding the filing of the Chapter
11 Case and the formulation of the Plan and taken into account the absence of
any objections pursuant to section 1129(a)(3) of the Bankruptcy Code. See Fed.
R. Bankr. P. 3020(b). The Chapter 11 Case was filed, and the Plan was proposed,
with the legitimate and honest purposes of reorganizing the Debtor and
expeditiously distributing cash and interests in Reorganized Westbridge to the
Debtor's creditors and equity holders pursuant to a plan. The Plan is the
product of months of extensive, arm's length negotiations among the Debtor, the
Ad-Hoc Committee comprised of certain holders of the 11% Notes and 7 1/2%
Convertible Notes and their respective legal and financial advisors. The
pre-negotiated Plan reflects the results of these negotiations.
<PAGE>
8. Payments For Services Or Costs And Expenses (11 U.S.C. ss.
1129(a)(4)). Any payment made or to be made by the Debtor for services or for
costs and expenses in or in connection with the Chapter 11 Case, or in
connection with the Plan and incident to the Chapter 11 Case, have been approved
by, or is subject to the approval of, the Court as reasonable, thereby
satisfying section 1129(a)(4) of the Bankruptcy Code.
<PAGE>
9. Directors, Officers, And Insiders (11 U.S.C. ss.
1129(a)(5)). The Debtor has complied with section 1129(a)(5) of the Bankruptcy
Code. The Plan provides that the initial board of directors of Reorganized
Westbridge will consist of seven (7) members, four of whom are to have been
selected by CSFB or its designee, one of whom is to have been selected by the
Creditors Committee and two of whom are to have been selected by Westbridge or
Reorganized Westbridge. See Plan Article V. Each of CSFB, the Creditors
Committee and Westbridge have selected their respective directors except that
CSFB has determined to only select two directors at this time. The names (and
affiliations) of each of the five directors selected have been disclosed at or
before the Confirmation Hearing and such board of directors are being appointed
pursuant to this Confirmation Order and will take office on the Effective Date.
See Exhibit C admitted into evidence at the Confirmation Hearing held on
December 17, 1998, and Plan Article V. Patrick J. Mitchell, the Debtor's
president and chief executive officer, will be one director. In addition, the
Plan provides that the officers of the Debtor (Patrick J. Mitchell and Patrick
H. O'Neill) immediately prior to the Effective Date will serve as the initial
officers of Reorganized Westbridge on and after the Effective Date. See Plan
Article V. The appointment to, or continuance in, such office of each of the
proposed directors and officers is consistent with the interests of creditors,
equity security holders, and with public policy, thereby satisfying section
1129(a)(5) of the Bankruptcy Code. The employment agreements (including their
compensation arrangements) between Westbridge and each of Mr. Mitchell and Mr.
O'Neill, respectively, were included as Exhibits to the Form 8-K filed by
Westbridge with the Securities and Exchange Commission on September 21, 1998,
and each of their respective employment agreements will be assumed on the
Effective Date.
10. No Rate Changes (11 U.S.C. ss. 1129(a)(6)). The Debtor is
a holding company and conducts all of its business operations through its
non-debtor subsidiaries. Thus, section 1129(a)(6) of the Bankruptcy Code is not
applicable in this Chapter 11 Case.
11. Best Interests Of Creditors Test (11 U.S.C. ss.
1129(a)(7)). The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The
liquidation analysis contained in Exhibit E to the Disclosure Statement and
other evidence proffered or adduced at the Confirmation Hearing including the
proffered testimony and affidavit of Michael A. Kramer (a) are persuasive and
credible, (b) have not been controverted by other evidence or challenged, and
(c) establish that each holder of a Claim or Interest in an impaired Class
either (i) has accepted the Plan or (ii) will receive or retain under the Plan,
on account of such Claim or Interest, property of a value, as of the Effective
Date of the Plan, that is not less than the amount that it would receive if the
Debtor were liquidated under chapter 7 of the Bankruptcy Code on such date.
<PAGE>
12. Acceptance By Certain Classes (11 U.S.C. ss. 1129(a)(8)).
Classes 1, 2, 3, 4, 5 and 6 are Classes of unimpaired Claims that are
conclusively presumed to have accepted the Plan under section 1126(f) of the
Bankruptcy Code. Classes 7, 8, 9 and 10 have voted to accept the Plan in
accordance with sections 1126(c) and (d) of the Bankruptcy Code. See Affidavit
of Kathleen M. Logan. Classes 11, 12 and 13 are not entitled to receive or
retain any property under the Plan and, therefore, are deemed to have rejected
the Plan pursuant to section 1126(g) of the Bankruptcy Code. Although section
1129(a)(8) of the Bankruptcy Code has not been satisfied with respect to Classes
11, 12, and 13, the Plan is confirmable because the Plan satisfies section
1129(b) of the Bankruptcy Code with respect to those Classes, as found below.
13. Treatment Of Administrative And Tax Claims (11 U.S.C. ss.
1129(a)(9)). The treatment of Administrative Claims and Priority Non-Tax Claims
under Article III of the Plan satisfies the requirements of section
1129(a)(9)(A) and (B) of the Bankruptcy Code, and the treatment of Priority Tax
Claims under Article IV of the Plan satisfies the requirements of section
1129(a)(9)(C) of the Bankruptcy Code.
14. Acceptance By Impaired Class (11 U.S.C. ss. 1129(a)(10)).
Classes 7 (Unsecured 11% Note Claims) and 8 (General Unsecured Claims/7 1/2%
Convertible Note Claims) are impaired classes of Claims that have voted to
accept the Plan, and, to the Debtor's knowledge, they have accepted the Plan in
requisite amounts not counting the votes of any "insiders", thus satisfying
section 1129(a)(10) of the Bankruptcy Code. See Certification of Kathleen M.
Logan.
<PAGE>
15. Feasibility (11 U.S.C. ss. 1129(a)(11)). As part of an
analysis to determine whether the Debtor has the ability to meet its obligations
under the Plan, the Debtor, with the assistance of its financial advisor,
prepared projections of its financial performance for each of the five fiscal
years in the period ending December 2002 (the "Projection Period"). These
projections, and the assumptions on which they are based, are included in the
Projected Financial Information attached to the Disclosure Statement as Exhibit
D. The financial information and projections appended to the Disclosure
Statement include for the five fiscal years in the Projection Period:
(i) Historical and Projected Balance Sheets of Reorganized
Westbridge;
(ii) Historical and Projected Statements of Operation of
Reorganized Westbridge;
(iii)Historical and Projected Statements of Cash Flow of
Reorganized Westbridge; and
(iv) a Projected Capitalization table of Reorganized Westbridge.
Based upon such projections, and the fact that the Plan provides that, except as
otherwise specified, this Confirmation Order will act as of the Effective Date
as a discharge of all debts of, Claims against, liens on, and Equity Interests
in the Debtor, its assets and properties, arising at any time before the entry
of this Confirmation Order, the Debtor believes that it will be able to make the
payments required pursuant to the Plan and, therefore, that confirmation of the
Plan is not likely to be followed by liquidation or the need for further
reorganization. Thus, section 1129(a)(11) is satisfied, as evidenced by the
affidavit and proffered testimony of Michael A. Kramer.
<PAGE>
16. Payment Of Fees (11 U.S.C. ss. 1129(a)(12)). All fees
payable on or before the Effective Date under 28 U.S.C. ss. 1930 have been paid
or will be paid on the Effective Date pursuant to Article IX of the Plan,
thereby satisfying section 1129(a)(12) of the Bankruptcy Code.
17. Continuation Of Retiree Benefits (11 U.S.C. ss.
1129(a)(13)). Pursuant to Article XI of the Plan, all retiree benefits will
continue at levels established pursuant to section 1114 of the Bankruptcy Code.
Thus, the Plan satisfies section 1129(a)(13) of the Bankruptcy Code.
18. Fair And Equitable; No Unfair Discrimination (11 U.S.C.
ss. 1129(b)). Classes 11, 12 and 13 (the "Rejecting Classes") are impaired
Classes of Interests that are deemed to have rejected the Plan pursuant to
section 1126(g) of the Bankruptcy Code. These are the only Classes that have not
accepted, or been deemed to have accepted, the Plan. The Debtor presented
uncontroverted evidence at the Confirmation Hearing that the Plan does not
discriminate unfairly and is fair and equitable with respect to each of the
Rejecting Classes, as required by section 1129(b)(1) of the Bankruptcy Code.
Thus, the Plan may be confirmed notwithstanding the Debtor's failure to satisfy
section 1129(a)(8) of the Bankruptcy Code.
<PAGE>
19. Modifications To Plan. The modifications to the Original
Plan set forth in paragraph 34 hereof, constitute technical changes and do not
materially adversely affect or change the treatment of any Claim or Interest.
Accordingly, pursuant to Fed. R. Bankr. P. 3019, these modifications do not
require additional disclosure under section 1125 of the Bankruptcy Code or
resolicitation of acceptances or rejections under section 1126 of the Bankruptcy
Code, nor do they require that holders of Claims or Interests be afforded an
opportunity to change previously cast acceptances or rejections of the Original
Plan.
20. Good Faith Solicitation (11 U.S.C. ss. 1125(e)). Based
upon the record before the Court, the Debtor and the Creditors Committee, and
their agents, accountants, business consultants, representatives, attorneys, and
advisors, have solicited votes on the Plan in good faith and in compliance with
the applicable provisions of the Bankruptcy Code and are entitled to the
protections afforded by section 1125(e) of the Bankruptcy Code and the
exculpation provisions set forth in Article VII.J of the Plan.
21. Adequate Assurance. No non-Debtor party to any of the
Assumed Contracts has objected to its assumption and assignment pursuant to the
Plan. The Debtor has cured, or provided adequate assurance that Reorganized
Westbridge will cure, defaults (if any) under or relating to each executory
contract or unexpired lease listed on the Debtor's schedules, which are being
assumed by the Debtor (the "Assumed Contracts").
22. Satisfaction Of Confirmation Requirements. The Plan
satisfies the requirements for confirmation set forth in section 1129 of the
Bankruptcy Code.
23. Retention Of Jurisdiction. The Court may properly retain
jurisdiction over the matters set forth in Article VII of the Plan and paragraph
43 below.
<PAGE>
DECREES
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, DECREED AND DETERMINED THAT,
24. Confirmation. The Plan (a copy of which is annexed hereto as Exhibit A,
and which consists of the Original Plan and the modifications set forth in
paragraph 34 hereof) is approved and confirmed under section 1129 of the
Bankruptcy Code.
25. Provisions Of Plan And Order Nonseverable And Mutually
Dependent. The provisions of the Plan and this Confirmation Order, including the
findings of fact and conclusions of law set forth herein, are nonseverable and
mutually dependent.
26. Plan Classification Controlling. The classification of
Claims for purposes of the distributions to be made under the Plan shall be
governed solely by the terms of the Plan. The classifications set forth on the
Ballots tendered to or returned by the Debtor's creditors and equity security
holders in connection with voting on the Plan (a) were set forth on the Ballots
solely for purposes of voting to accept or reject the Plan, (b) do not
necessarily represent, and in no event shall be deemed to modify or otherwise
affect, the actual classification of such Claims or Interests under the Plan for
distribution purposes, and (c) shall not be binding on the Debtor, its estates,
or Reorganized Westbridge.
<PAGE>
27. Binding Effect. Pursuant to section 1141 of the Bankruptcy
Code, effective as of the Confirmation Date, but subject to the occurrence of
the Effective Date, and except as expressly provided in the Plan or this
Confirmation Order, the provisions of the Plan (including the exhibits to, and
all documents and agreements executed pursuant to, the Plan) and the
Confirmation Order shall be binding on (a) the Debtor, (b) Reorganized
Westbridge, (c) all holders of Claims against and Interests in the Debtor,
whether or not impaired under the Plan and whether or not, if impaired, such
holders accepted the Plan, (e) each Person acquiring property under the Plan,
(f) any other party in interest, and (g) each of the foregoing's respective
heirs, successors, assigns, trustees, executors, administrators, affiliates,
officers, directors, agents, representatives, attorneys, beneficiaries, or
guardians.
28. Revesting Of Assets. Except as otherwise expressly
provided in the Plan, on the Effective Date, Reorganized Westbridge shall be
vested with all of the property of the estate free and clear of all claims,
liens, encumbrances, charges and other interests of creditors and equity
security holders, provided that the security interests securing the LaSalle
Credit Agreement and LaSalle Letter of Credit shall not be terminated or
discharged. Reorganized Westbridge may operate its businesses free of any
restrictions imposted by the Bankruptcy Code, the Bankruptcy Rules or by the
Court, subject only to the terms and conditions of the Plan.
<PAGE>
29. Waiver Of Claims; Covenant Not to Sue; Injunction.
Effective as of the Confirmation Date, but subject to the occurrence of the
Effective Date, and except as otherwise expressly provided in the Plan or this
Confirmation Order, all Persons who have held, hold, or may hold Claims against
or Equity Interests in the Debtor (x) shall be deemed to have covenanted with
each of the past and present officers and directors of the Debtor to waive and
not to (1) sue or otherwise seek any recovery from such officers and directors,
or their respective property, whether for tort, fraud, contract, violations of
federal or state securities laws, or otherwise, based in whole or in part upon
any act or omission, transaction, event, or other occurrence taking place on or
before the Effective Date in any way relating to the Debtor, the Chapter 11
Case, or the Plan or (2) assert against any of such officers and directors, or
their respective property, any Claim, obligation, right, cause of action, or
liability which any such holder of a Claim against or Equity Interest in the
Debtor may be entitled to assert in any case, whether for tort, fraud, contract,
violations of federal or state securities laws, or otherwise, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, based in whole
or in part upon any act or omission, transaction, event, or other occurrence
taking place on or before the Effective Date in any way relating to the Debtor,
the Chapter 11 Case, or the Plan and (y) are permanently enjoined, on and after
the Effective Date, from commencing or continuing in any manner any action or
other proceeding of any kind with respect to such Claims, obligations, rights,
causes of action, or liabilities released or waived hereunder or under the Plan.
<PAGE>
30. Releases. Effective as of the Confirmation Date, but
subject to the occurrence of the Effective Date, including the approval of the
Final Settlement Agreement in the Securities Litigation by the U.S. District
Court for the Northern District of Texas and except as otherwise expressly
provided in the Plan or this Confirmation Order, each of the Debtor's past and
present officers and directors and their respective property shall be released
from any and all Claims, obligations, rights, causes of action, and liabilities
which any holder of a Claim against or Equity Interest in the Debtor may be
entitled to assert in any case, whether for tort, fraud, contract, violations of
federal or state securities laws, or otherwise whether known or unknown, whether
foreseen or unforeseen, existing or hereafter arising, based in whole or in part
upon any act or omission, transaction, event or other occurrence taking place on
or before the Effective Date in any way relating to the Debtor, the Chapter 11
Case, or the Plan.
30.A. Based on the binding authority in this district cited by the Debtor
in its memorandum in support of confirmation (Gillman, et al. v. Continental
Airlines, Inc. et al., Case No. 93-319 (JJF), slip op. (D. Del. Sept. 30, 1998)
appeal filed), No. 98-CV5509 (3d Cir. Oct. 30, 1998); Ad Hoc Committee of CTA
Bondholders v. Continental Airlines, Inc., et al., Case No. 93-232 (SLR), slip
op. at 14-15 (D. Del. March 16, 1995), the releases, provided in the Plan are
appropriate on the facts of this case because (1) a substantial part of the
funding of the Final Settlement Agreement in the Securities Litigation is being
provided by National Union, which insists on the releases as a condition to such
funding, (2) the parties potentially affected by the releases have had an
opportunity to object to them in this Court and have failed to do so, and (3)
the parties potentially affected by the releases have an opportunity to object
to them in the Securities Litigation before the U.S. District Court for the
Northern District of Texas which must approve the Final Settlement Agreement
before this Plan becomes effective.
<PAGE>
31. Continuation Of Automatic Stay. All injunctions or stays
provided for in the Chapter 11 Case under sections 105 or 362 of the Bankruptcy
Code, or otherwise, and in existence on the Confirmation Date, shall remain in
full force and effect until the Effective Date.
<PAGE>
32. Assumed Contracts And Leases. Except as otherwise provided
in the Plan, this Confirmation Order, or in any contract, instrument, release,
or other agreement or document entered into in connection with the Plan, all of
the executory contracts and unexpired leases to which the Debtor is a party, to
the extent such contracts or leases are executory contracts or unexpired leases,
are hereby deemed assumed and such assumption is hereby approved, effective as
of, and subject to the occurrence, of the Effective Date, except those contracts
or leases which (i) are executory contracts or unexpired leases which are the
subject of a motion to reject pending on the Confirmation Date, (ii) have
previously been assumed or rejected by the Debtor, (iii) employment agreements,
if any, terminated prior to or in connection with the Plan (including without
limitation, those employment agreements set forth on Exhibit E to the Plan), and
(iv) have expired or terminated pursuant to their own terms during the pendency
of the Chapter 11 Case. The Assumed Contracts shall remain in full force and
effect for the benefit of the assignee(s) thereof, notwithstanding any provision
in such an Assumed Contract (including those described in sections 365(b), (c),
(e) and (f) of the Bankruptcy Code) or under applicable non-bankruptcy law that
purports to (a) terminate, modify, or restrict, or permit a party other than the
Debtor to terminate, modify or restrict, such contract or lease or the Debtor's
rights thereunder, (b)create or impose, or permit a party other than the Debtor
to create or impose, any additional duties, obligations, penalties, default
rates of interest or payments (monetary or nonmonetary) upon the Debtor, as a
result of (x) the filing of a petition for relief under chapter 11 of the
Bankruptcy Code by the Debtor or (y) the Debtor's insolvency or financial
condition at any time before its Chapter 11 Case is closed, or (c) prohibit,
condition, or restrict assignment or transfer of such contract or lease.
33. Rule 9019 Settlement. Pursuant to Fed. R. Bankr. P. 9019
and in consideration for the distributions and other benefits provided under,
described in, contemplated by, and/or implemented by the Plan, the Plan
constitutes a good faith compromise and settlement by and among the Debtor, the
holders of Securities Litigation Claims, and the holders of Underwriter Claims,
of all claims or controversies relating to the claims and causes of action
included in the Putative Class Action. The settlement, as reflected in the
relative distributions to and recoveries by holders of Securities Litigation
Claims and Underwriter Claims, (a) is fair and reasonable, affords such holders
distributions within the range of possible litigation outcomes, and, in each
case, provides such holders with distributions more favorable than their worst
case litigation scenario, and (b) is in the best interests of the Debtor, its
estate, and all Claim holders, including affected holders of Securities
Litigation Claims and Underwriter Claims. Accordingly, the compromise and
settlement embodied in the Plan, including, but not limited to, the Plan's
treatment of Securities Litigation Claims and Underwriter Claims, as described
in Articles IV.6 and VII.0 of the Plan, is approved.
34. Modifications To Plan. At the request of its proponent,
the Original Plan is hereby modified pursuant to 11 U.S.C. ss. 1127(a) as
follows:
<PAGE>
(a) Article IV.8(a)(ii) of the Plan is modified by deleting the
figure "$250,000" and inserting in lieu thereof the figure "$280,000";
and
(b) Article XII.B.3 of the Plan is modified by deleting the words
"sixty (60)" and inserting in lieu thereof the words "one hundred and
twenty (120)".
The Original Plan and the modifications set forth above together constitute the
Plan.
35. General Authorizations. Pursuant to section 1142(b) of the Bankruptcy
Code, (a) the Debtor, (b) Reorganized Westbridge, and (c) all other necessary
parties are authorized and empowered to (x) execute and deliver any instrument,
agreement or document and (y) perform any act that is necessary, desirable, or
required to comply with the terms and conditions of the Plan and consummation of
the Plan, and are authorized and empowered, without limitation, to take all
actions necessary or appropriate to enter into, implement, and consummate the
contracts, instruments, and other agreements or documents created in connection
with the Plan; provided, however, that the Debtor, with the consent of CSFB and
the Creditors Committee, may make such additional ministerial changes to the
Plan as the Debtor deems necessary, without notice and a hearing under section
1127(b) of the Bankruptcy Code or disclosure or resolicitation under section
1127(c) of the Bankruptcy Code, as long as such changes do not adversely affect
the rights of any party in interest.
<PAGE>
36. Plan Supplement Approved. The forms, terms and provisions
of each of the Plan Supplement documents (collectively, the "Plan Documents")
filed on or before the Confirmation Date are hereby approved. The Debtor is
hereby authorized, until the Plan shall have become effective in accordance with
its terms, to amend, supplement or modify any of the Plan Documents, with the
consent of the Creditors Committee and CSFB, and thereafter, pursuant to the
terms of each of the Plan Documents. The Plan Documents shall constitute legal,
valid, binding and authorized obligations of the respective parties thereto,
enforceable in accordance with their terms (except as enforceability may be
limited by any bankruptcy or insolvency proceeding filed by any party thereto
subsequent to the date of the execution of each such document).
37. Authorizations Under Delaware Law. Reorganized Westbridge
is authorized, empowered, and directed pursuant to Section 303 of the Delaware
General Corporation Law to take any and all actions necessary or desirable to
implement the transactions contemplated by the Plan and this Confirmation Order,
all without further corporate action or action of the directors or stockholders
of Westbridge, including, without limitation:
(a) to reconstitute the board of directors of Westbridge and of
Reorganized Westbridge as contemplated by Article V.B.1 of the Plan;
(b) to amend the Certificate of Incorporation and By-laws of
Westbridge as contemplated by Article V.B.1 of the Plan; and
(c) to change the name of Westbridge as of the Effective Date to
Ascent Assurance, Inc.
38. Exemption From Certain Taxes. Pursuant to section 1146(c) of
the Bankruptcy Code:
(a) the issuance, transfer, or exchange of any
security, or the making, delivery, filing, or recording of any
instrument of transfer under the Plan, shall not be taxed under any law
imposing a stamp tax or similar tax; and
<PAGE>
(b) all filing or recording officers, wherever
located and by whomever appointed, are hereby authorized to comply with
the foregoing and this Court specifically retains jurisdiction
concerning such matters.
39. Bar Date For Administrative Claims. Except as otherwise
ordered by this Court, all holders of asserted Administrative Claims, except
professional fee Claims and Claims for reimbursement of the expenses of members
of the Creditors Committee, not paid prior to the Confirmation Date must submit
proofs of Claim on or before the 30th day after the Confirmation Date (the
"Administrative Claims Bar Date") or forever be barred from doing so. All
applications for final allowance ("Final Fee Applications") of compensation and
reimbursement of professional fees and expenses ("Professional Fees") pursuant
to sections 327, 328, 330, 331, or 1103 of the Bankruptcy Code for services
rendered to the Debtor prior to the Effective Date must be filed and served on
Reorganized Westbridge and counsel for Reorganized Westbridge on or before the
60th day after the Effective Date (the "Professional Fee Bar Date"). The notice
of entry of this Confirmation Order to be delivered pursuant to Fed. R. Bankr.
P. 3020(c) and 2002(f) shall set forth each such date and constitute notice of
the Administrative Claims Bar Date and Professional Fee Bar Date. The Debtor, or
Reorganized Westbridge, CSFB and the Creditors Committee, as the case may be,
shall have 60 days (or such longer period as may be allowed by order of this
Court) following the Administrative Claims Bar Date and Professional Fee Bar
Date, as applicable, to review and object to such Administrative Claims or
Professional Fee Claims before a hearing for determination of allowance of such
Administrative Claims or Professional Fees, as the case may be.
<PAGE>
40. Resolution Of Claims. Except as otherwise ordered by this
Court, any Claim other than an Administrative Claim that is not an Allowed Claim
shall be determined, resolved, or adjudicated in accordance with the terms of
the Plan. The Debtor or Reorganized Westbridge, CSFB or the Creditors Committee,
as the case may be, may (a) until 60 days after the Effective Date (unless
extended by order of this Court) file objections in this Court to the allowance
of any Claims not heretofore objected to (whether or not a proof of Claim has
been filed) and/or (b) amend (in the case of Reorganized Westbridge or the
Debtor only) its schedules at any time before this Chapter 11 Case is closed.
41. Payment Of Fees. All fees payable by Westbridge under 28 U.S.C.ss.1930
shall be paid on or before the Effective Date.
42. Failure To Consummate Plan. In accordance with Article XII
of the Plan, if the Effective Date does not occur on or before one hundred and
twenty (120) days after the Confirmation Date, upon notification submitted by
Westbridge to the Court: (a) the Confirmation Order shall be vacated, (b) no
distributions under the Plan shall be made, (c) Westbridge and all holders of
Claims and Equity Interests shall be restored to the status quo ante as of the
day immediately preceding the Confirmation Date as though the Confirmation Date
had never occurred, and (d) Westbridge's obligations with respect to Claims and
Equity Interests shall remain unchanged and nothing contained in the Plan shall
constitute or be deemed a waiver or release of any Claims or Equity Interests by
or against Westbridge or any other person or to prejudice in any manner the
rights of Westbridge or any person in any further proceedings involving
Westbridge.
<PAGE>
43. Retention Of Jurisdiction. Pursuant to sections 105(a) and
1142 of the Bankruptcy Code, and notwithstanding the entry of this Confirmation
Order or the occurrence of the Effective Date, this Court shall retain exclusive
jurisdiction over all matters arising out of, and related to, the Chapter 11
Case and the Plan to the fullest extent permitted by law, including, among other
things, jurisdiction to:
(a) hear and determine applications for the assumption or
rejection of executory contracts or unexpired leases pending on the
date the Plan is confirmed, and the allowance of Claims resulting
therefrom;
(b) determine any other applications, adversary proceedings, and
contested matters pending on the Effective Date;
(c) ensure that distributions to holders of Allowed Claims and
Allowed Equity Interests are accomplished as provided herein;
(d) resolve disputes as to the ownership of any Claim or Equity
Interest;
(e) hear and determine timely objections to Administrative Claims
and Claims;
(f) enter and implement such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, revoked,
modified or vacated;
(g) issue such orders in aid of execution of the Plan, to the
extent authorized by section 1142 of the Bankruptcy Code;
(h) consider any modifications of the Plan, to cure any defect or
omission, or to reconcile any inconsistency in any order of the Court,
including, without limitation, the Confirmation Order;
(i) resolve disputes concerning nondebtor releases, exculpations,
and injunctions contained herein;
(j) hear and determine all applications for compensation and
reimbursement of expenses of professionals under sections 330, 331,
and 503(b) of the Bankruptcy Code;
<PAGE>
(k) hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan;
(l) hear and determine any issue for which the Plan requires a
Final Order of the Court;
(m) hear and determine matters concerning state, local, and
federal taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;
(n) hear any other matters not inconsistent with the Bankruptcy
Code;
(o) hear and determine disputes arising in connection with
compensation and reimbursement of expenses of professionals for
services rendered during the period commencing on the Confirmation
Date through and including the Effective Date;
(p) hear and determine disputes arising in connection with any
fees and expenses of any Trustee for services rendered through and
including the Effective Date; and
(q) enter a final decree closing the Chapter 11 Case.
44 Acceptance and Execution of Plan Supplement. Each and every federal,
state and local governmental agency or department is hereby directed to accept,
and lessors and holders of liens are directed to execute, any and all documents
and instruments necessary and appropriate to consummate the transactions
contemplated by the Plan and Plan Supplement including, without limitation,
documents and instruments for recording in county and state offices wherein the
Amended Westbridge Certificate of Incorporation or any other Plan Document may
need to be filed in order to effectuate the Plan.
<PAGE>
45 Exemption From Securities Laws. The exemption from the
requirements of Section 5 of the Securities Act of 1933, 15 U.S.C. ss. 77e, and
any state or local law requiring registration for the offer or sale of a
security provided for in the Plan is authorized by 11 U.S.C. ss. 1145 and shall
apply to the New Convertible Preferred Stock, Purchase Rights, New Common Stock
and New Warrants offered in connection with the Plan.
46 Notice Of Entry Of Confirmation Order. On or before the
tenth (10th) Business Day following the date of entry of this Confirmation
Order, the Debtor shall serve notice of entry of this Confirmation Order
pursuant to Fed. R. Bankr. P. 2002(f)(7), 2002(k), and 3020(c) on all creditors,
equity security holders, the United States Trustee and other parties in
interest, by causing a notice of entry of the Confirmation Order in
substantially the form of the notice annexed hereto as Exhibit B, which form is
hereby approved (the "Notice of Confirmation"), to be delivered to such parties
by first class mail, postage prepaid. The Debtor is hereby authorized and
directed to effect mailing of the Notice of Confirmation to holders of public
debt and equity securities in the manner set forth in the Solicitation
Procedures Order; provided, however, that notice need not be given or served
under the Bankruptcy Code, the Bankruptcy Rules, or this Confirmation Order to
any Person to whom the Debtor mailed a notice of the Confirmation Hearing, but
received such notice returned marked "undeliverable as addressed," "moved - left
no forwarding address" or "forwarding order expired," or similar reason, unless
the Debtor has been informed in writing by such Person of that Person's new
address. The notice described herein is adequate under the particular
circumstances and no other or further notice is necessary.
<PAGE>
47 References To Plan Provisions. The failure specifically to
include or reference any particular provision of the Plan in this Confirmation
Order shall not diminish or impair the effectiveness of such provision, it being
the intent of the Court that the Plan be confirmed in its entirety.
48 Confirmation Order Controlling. If there is any direct
conflict between the Plan and this Confirmation Order, the terms of this
Confirmation Order shall control.
49 Reversal. If any or all of the provisions of this
Confirmation Order are hereafter reversed, modified or vacated by subsequent
order of this Court or any other court, such reversal, modification or vacatur
shall not affect the validity of the acts or obligations incurred or undertaken
under or in connection with the Plan prior to the Debtor's receipt of written
notice of any such order; nor shall such reversal, modification or vacatur of
this Confirmation Order affect the validity or enforceability of such act or
obligation. Notwithstanding any such reversal, modification or vacatur of this
Confirmation Order, any such act or obligation incurred or undertaken pursuant
to, and in reliance on, this Confirmation Order prior to the effective date of
such reversal, modification or vacatur shall be governed in all respects by the
provisions of this Confirmation Order and the Plan and all Plan Documents or any
amendments or modifications thereto.
<PAGE>
50 Applicable Non Bankruptcy Law. Pursuant to sections 1123(a)
and 1142(a) of the Bankruptcy Code, the provisions of this Confirmation Order,
the Plan and Plan Documents shall apply and be enforceable notwithstanding any
otherwise applicable nonbankruptcy law.
Dated: Wilmington, Delaware
December 17, 1998
/s/ Mary F. Walrath
HON. MARY F. WALRATH
UNITED STATES BANKRUPTCY JUDGE
1/ Unless otherwise defined, capitalized terms used herein shall have the
meanings ascribed to them in the Plan (a copy of which is annexed
hereto as Exhibit A). Any term used in the Plan or in this Confirmation
Order that is not defined in the Plan or this Confirmation Order, but
that is used in the United States Bankruptcy Code, 11 U.S.C. ss.ss.
101-1330, as amended (the "Bankruptcy Code"), or the Federal Rules of
Bankruptcy Procedure (the "Bankruptcy Rules"), shall have the meaning
ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules,
as the case may be.
2/ Findings of fact shall be construed as conclusions of law and
conclusions of law shall be construed as findings of fact when
appropriate. See Fed. R. Bankr. P. 7052.
Doc#:DS5:98578.3
<PAGE>
EXHIBIT A
<PAGE>
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: ) Chapter 11
)
WESTBRIDGE CAPITAL CORP., ) Case No. 98-2105 (MFW)
)
)
Debtor. )
)
)
FIRST AMENDED PLAN OF REORGANIZATION OF WESTBRIDGE CAPITAL CORP. UNDER CHAPTER
11 OF THE BANKRUPTCY CODE
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
Alan W. Kornberg
Andrew N. Rosenberg
W. Andrew P. Logan III
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
-and-
YOUNG CONAWAY STARGATT & TAYLOR, LLP
James L. Patton, Jr.
1110 N. Market Street
P.O. Box 391
Rodney Square North, 11th Floor
Wilmington, Delaware 19801
(302) 571-6600
Attorneys for Westbridge Capital Corp.
Dated: Wilmington, Delaware
October 30, 1998
<PAGE>
Doc#:DS5:98578.3
Table of Contents
<TABLE>
<CAPTION>
Page #
<S> <C>
I. DEFINITIONS AND CONSTRUCTION OF TERMS........................................................ 1
A. Definitions.............................................................................. 1
B. Interpretation, Application of Definitions and Rules of Construction. ...................18
II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS................................................19
Introduction.................................................................................19
1. Unclassified Claims (not entitled to vote on the Plan)................................19
2. Unimpaired Classes Of Claims (deemed to have accepted the Plan and,
therefore, not entitled to vote on the Plan...........................................19
3. Impaired Classes of Claims and Interests (entitled to vote on the Plan)...............20
4. Impaired Classes Of Claims And Equity Interests (deemed to have rejected the
Plan and, therefore, not entitled to vote on the Plan)................................21
III. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS...........................21
1. Administrative Claims.................................................................21
2. Professional Compensation And Reimbursement Claims....................................22
3. Priority Tax Claims...................................................................22
IV. TREATMENT OF CLAIMS ANDEQUITY INTERESTS......................................................23
1. Class 1 - Priority Non-Tax Claims.....................................................23
2. Class 2 - LaSalle Claim...............................................................23
3. Class 3 - Convenience Claims..........................................................23
4. Class 4 - Secured Claims..............................................................24
5. Class 5 - Intercompany Claims.........................................................24
6. Class 6 - Securities Litigation Claims................................................25
7. Class 7 - Unsecured 11% Note Claims...................................................25
8. Class 8 - Other Unsecured Claims......................................................26
9. Class 9 - Old Preferred Stock Interests...............................................27
10.Class 10 - Old Common Stock Interests and Old Restricted Common Stock Interests.......27
11.Class 11 - Unvested Old Restricted Common Stock Interests.............................27
12.Class 12 - Old Warrant Interests......................................................28
13.Class 13 - Old Option Interests.......................................................28
V. PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENTOF REORGANIZED WESTBRIDGE............28
A. Directors and Officers of Reorganized Westbridge.........................................28
1. The Initial Board of Directors........................................................28
2. Management of Reorganized Westbridge..................................................28
3. Officers..............................................................................29
B. Corporate Action.........................................................................29
1. Amended Westbridge Certificate of Incorporation and Amended Westbridge
By-Laws...............................................................................29
C. Securities to Be Issued Pursuant to the Plan.............................................29
1. New Common Stock......................................................................29
2. New Convertible Preferred Stock.......................................................29
3. The New Warrants......................................................................30
4. Securities Laws Matters...............................................................30
D. Retention and Incentive Bonus Program....................................................30
E. Marketing Agent Stock Options............................................................30
F. Officer and Director Stock Options.......................................................31
VI. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN AND TREATMENT OF DISPUTED,
CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS...............31
A. Voting of Claims and Equity Interests....................................................31
B. Nonconsensual Confirmation...............................................................31
C. Distributions............................................................................31
1. Method of Distribution Under the Plan.................................................31
2. Disputed General Unsecured Claims.....................................................33
3. Surplus Distributions to Holders of Allowed Unsecured Claims..........................34
4. Objections To And Resolution Of Administrative Claims and Claims; Administrative
and Priority Claims Reserve...........................................................34
5. Hart-Scott-Rodino Act Filing Requirements.............................................35
6. Allocation of Consideration...........................................................35
7. Cancellation and Surrender of Existing Securities and Agreements......................36
8. Trustee Fees..........................................................................36
VII. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN.......................................37
A. Registration Rights Agreement............................................................37
B. Continued Corporate Existence and Vesting of Assets in Reorganized Westbridge............37
C. Termination of Subordination Rights......................................................37
D. Discharge of Westbridge..................................................................38
E. Injunction...............................................................................38
F. Preservation/Waiver of Causes of Action..................................................38
1. Preservation of Rights................................................................38
2. Waiver of Causes of Action............................................................39
G. Votes Solicited in Good Faith............................................................39
H. Administrative Claims Incurred after the Confirmation Date...............................39
I. Westbridge's Limited Release.............................................................40
J. Exculpation, Release and Injunction of Released Parties..................................40
1. Exculpation...........................................................................40
2. Injunction............................................................................41
K. Release of Officers and Directors; Waiver of Claims......................................41
1. Waiver of Claims; Covenant Not To Sue.................................................41
2. Limited Releases......................................................................42
3. Limitation of Governmental Releases...................................................42
L Term of Bankruptcy Injunction or Stays...................................................43
M. Preservation of Insurance................................................................43
N. Officers' and Directors' Indemnification Rights..........................................43
O. The Securities Litigation Settlement Fund................................................43
1. Payment of Securities Litigation Settlement Payment...................................43
2. Administration........................................................................44
3. Allocation of Assets..................................................................44
VIII. RETENTION OF JURISDICTION....................................................................44
IX. MISCELLANEOUS PROVISIONS.....................................................................45
A. Payment of Statutory Fees................................................................45
B. Dissolution of Creditors Committee.......................................................45
C. Modification of the Plan.................................................................45
D. Governing Law............................................................................45
E. Filing or Execution of Additional Documents..............................................45
F. Withholding and Reporting Requirements...................................................46
G. Exemption From Transfer Taxes............................................................46
H. Waiver of Federal Rule of Civil Procedure 62(a)..........................................46
I. Headings.................................................................................46
J. Exhibits/Schedules.......................................................................46
K. Notices..................................................................................46
L. Plan Supplement..........................................................................47
M. Conflict.................................................................................47
X. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.....................................................47
XI. BENEFIT PLANS................................................................................48
XII. EFFECTIVENESS OF THE PLAN....................................................................49
A. Confirmation of the Plan.................................................................49
B. Effectiveness of the Plan................................................................49
1. Conditions Precedent to Effectiveness.................................................49
2. Waiver of Conditions..................................................................50
3. Effect of Failure of Conditions.......................................................50
4. Vacatur of Confirmation Order.........................................................50
5. Survival of the Final Settlement Agreement............................................50
XIII. NEW CONVERTIBLE PREFERRED STOCK PURCHASE.....................................................50
A. Stock Purchase Agreement.................................................................50
B. Purchase Right. ........................................................................51
1. Eligibility...........................................................................51
</TABLE>
<PAGE>
Westbridge Capital Corp. proposes the following plan of reorganization under
section 1121(a) of the Bankruptcy Code.
I.
DEFINITIONS AND CONSTRUCTION OF TERMS
A. Definitions. Unless otherwise defined herein, or the context otherwise
requires, the following terms shall have the respective meanings set forth
below:
Ad-Hoc Committee means the unofficial committee that
was formed by certain holders of the 11% Notes and 7 1/2%
Convertible Notes prior to the Petition Date.
Administrative Claim means any right to payment constituting
a cost or expense of administration of the Chapter 11
Case of a kind specified under section 503(b) and
entitled to priority under section 507(a)(1) of the
Bankruptcy Code, including, without limitation, any
actual and necessary costs and expenses of preserving
the estate of the Debtor, any actual and necessary
costs and expenses of operating the business of the
Debtor, any indebtedness or obligations incurred or
assumed by the Debtor in Possession in connection with
the conduct of its business, including, without
limitation, for the acquisition or lease of property or
an interest in property or the rendition of services,
all compensation and reimbursement of expenses to the
extent Allowed by the Court under section 330 or 503 of
the Bankruptcy Code, and any fees or charges assessed
against the estate of the Debtor under section 1930 of
chapter 123 of title 28 of the United States Code.
Administrative and has the meaning assigned to such term in Section
Priority Claims VI.C.4(b)(i)of the Plan.
Reserve
Agent-Options has the meaning assigned to such term in Section
V.E of the Plan.
Allowed Claim or means, with reference to
Allowed Interest any Claim or Equity Interest, (a) any Claim against or
Equity Interest in the Debtor which has been listed by
the Debtor in its Schedules, as such Schedules may be
amended by the Debtor from time to time in accordance
with Bankruptcy Rule 1009, as liquidated in amount and
not disputed or contingent and with respect to which no
contrary proof of claim or interest has been filed, (b)
any Claim or Equity Interest specifically Allowed under
this Plan, (c) any Claim or Equity Interest which is
not Disputed or (d) any Claim or Equity Interest the
amount or existence of which, if Disputed, (i) has been
determined by a Final Order of a court of competent
jurisdiction other than the Court, or (ii) has been
Allowed by Final Order of the Court; provided, however,
that any Claims or Equity Interests allowed solely for
the purpose of voting to accept the Plan pursuant to an
order of the Court shall not be considered "Allowed
Claims" or "Allowed Equity Interests" hereunder.
Amended Guarantee means that certain Amended and
Agreement Restated Guaranty, dated as of the Effective Date, by
Reorganized Westbridge, in favor of LaSalle, which
shall be in substantially the form contained in the
Plan Supplement.
Amended Westbridge means the Amended and Restated
By-Laws By-Laws of Reorganized Westbridge, which shall be in
substantially the form contained in the Plan
Supplement.
Amended Westbridge means the amended and restated Certificate of
Certificate of Incorporation of Westbridge, which shall be in
Incorporation substantially the form contained in the Plan
Supplement.
Ballots means each of the ballot forms distributed with the
Disclosure Statement to each holder of an Impaired
Claim or Equity Interest (other than to holders of
Impaired Claims or Equity Interests deemed to have
rejected the Plan or otherwise not entitled to vote on
the Plan) upon which is to be indicated, among other
things, acceptance or rejection of the Plan.
Bankruptcy Code means title 11 of the United States Code, 11
U.S.C. ss.ss. 101 et seq., as in effect on the date
hereof.
Bankruptcy Rules means the Federal Rules of Bankruptcy
Procedure as promulgated by the United States Supreme
Court under section 2075 of title 28 of the United
States Code, and local rules of the Court, as the
context may require.
Bonus Program has the meaning assigned to such term in
Section V.D of the Plan.
Business Day means any day on which commercial banks are
open for business, and not authorized to close, in the
City of New York, New York except any day designated as
a legal holiday by Bankruptcy Rule 9006(a).
Cash means legal tender of the United States of America and
equivalents thereof.
Causes of Action means all claims, choses in action and
causes of action (including those assertable
derivatively), now owned or hereafter acquired by
Westbridge, and the Cash and non-Cash proceeds thereof,
whether arising under the Bankruptcy Code or other
Federal, state or foreign law, including, without
limitation, any causes of action arising under sections
510, 544, 547, 548, 549, 550, 551 or any other section
of the Bankruptcy Code.
Chapter 11 Case means the chapter 11 case commenced by the
Debtor.
Claims Agreement means the Memorandum of Understanding,
dated October 26, 1998, a copy of which is attached
hereto as Exhibit F. - Confirmation Date means the date
on which the Confirmation Order is entered by the
Court.
Confirmation Hearing means the hearing to consider
confirmation of the Plan pursuant to section 1128 of
the Bankruptcy Code.
Confirmation Order means the order entered by the Court
confirming the Plan pursuant to section 1129 of the
Bankruptcy Code.
Convenience Claim means a Claim that would otherwise be
classified as a Class 7 Unsecured Claim, other than a
Claim arising out of or in connection with the
ownership of the 7 1/2% Convertible Notes, that is (a)
$2,000 or less or (b) more than $2,000 if the holder
has elected, on a timely cast Ballot, to accept $2,000
in Cash in full satisfaction, discharge, and release of
such Claim.
Court means, (a) the United States Bankruptcy Court for the
District of Delaware, having jurisdiction over the
Chapter 11 Case; (b) to the extent there is no
reference pursuant to section 157 of title 28 of the
United States Code, the United States District Court
for the District of Delaware; and (c) any other court
having jurisdiction over the Chapter 11 Case.
Credit Agreement means that certain Credit Agreement dated
as of June 6, 1997 between Westbridge Funding Corp. and
LaSalle, as amended.
Creditors Committee means the Official Committee of
Unsecured Creditors appointed by the United States
Trustee in the Chapter 11 Case on October 2, 1998, as
constituted from time to time.
CSFB means Credit Suisse First Boston Corporation.
CSFB 11% Note Claims means any 11% Note Claims held by CSFB
as of the Petition Date.
Debtor means Westbridge Capital Corp., a Delaware
corporation, also referred to herein as "Westbridge."
Debtor in Possession means the Debtor in its capacity as
debtor in possession in the Chapter 11 Case pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code.
Disclosure Statement means the written disclosure statement
that relates to this Plan, as approved by the Court
pursuant to section 1125 of the Bankruptcy Code, as
such disclosure statement may be amended, modified or
supplemented from time to time.
Disputed means any Claim, or Equity Interest, or any portion
thereof, that is not an Allowed Claim or Allowed
Interest, including, but not limited to, Claims or
Interests (a)(i) that have not been Scheduled by the
Debtor or (ii) have been Scheduled at zero or as
contingent, unliquidated or disputed, (b) that are the
subject of a proof of claim that differs in nature,
amount or priority from the Debtor's Schedules, and (c)
the allowance or disallowance of which is not yet the
subject of a Final Order.
District Court means the United States District Court for
the Northern District of Texas, which court has
jurisdiction over the Putative Class Action.
District Court Order means any order or orders entered by
the District Court approving the Securities Litigation
Settlement and Final Settlement Agreement.
Effective Date means the first Business Day on which all of
the conditions specified in Section XII.B.1 of the Plan
have been satisfied or waived in accordance with
Section XII.B.2 of the Plan; provided, however, that if
a stay of the Confirmation Order is in effect on such
date, the Effective Date will be the first Business Day
after such stay is no longer in effect.
11% Note Claims means the unsecured Claims of the 11%
Noteholders arising under or as a result of the 11%
Notes, except that any such Claims held by CSFB as of
the Petition Date shall be deemed to be CSFB 11% Note
Claims.
11% Noteholders means holders of the 11% Notes.
11% Notes means the 11% Senior Subordinated Notes, due
2002, of Westbridge, issued and outstanding under the
11% Note Indenture.
11% Note Indenture means that certain Indenture, dated as
of February 15, 1995, between Westbridge, as issuer,
and Bank One Trust Company, N.A. (successor by merger
to Liberty Bank and Trust Company of Oklahoma City,
N.A.), as Trustee, pursuant to which the 11% Notes were
issued, together with any amendment or supplement
thereto.
Eligible Holder has the meaning assigned to such term in
Section XIII.B.1 of the Plan.
Equity Interest or means any share of preferred
Interest stock or common stock or other instrument evidencing an
ownership interest in the Debtor, whether or not
transferable, and any option, warrant, or right,
contractual or otherwise, to acquire any such interest.
Exercise Instructions has the meaning assigned to such term
in Section XIII.B.1(c) of the Plan.
Exercise Notice means the form of exercise notice which will
provide for the exercise of the Purchase Rights
pursuant to Section XIII of the Plan.
Exercise Price has the meaning assigned to such term in
Section XIII.B.1(b) of the Plan.
Exercise Period means the period commencing on the thirtieth
day prior to the Confirmation Date and concluding on
the first day after the Confirmation Date, or, if
either of such dates is not a Business Day, the next
following Business Day.
Exercising Holder has the meaning assigned to such term in
Section XIII.B.1(c) of the Plan.
Face Amount means (a) when used in reference to a Disputed
Claim, the full stated amount claimed by the holder of
such Claim in any proof of claim timely filed with the
Court or otherwise deemed timely filed by any Final
Order of the Court or other applicable bankruptcy law,
and (b) when used in reference to an Allowed Claim, the
allowed amount of such Claim.
Final Order means an order or judgment of the Court, or
other court of competent jurisdiction, as entered on
the docket in the Chapter 11 Case, the operation or
effect of which has not been stayed, reversed or
amended, and as to which order or judgment (or any
revision, modification, or amendment thereof) the time
to appeal or seek review or rehearing has expired and
as to which no appeal or petition for review or
rehearing was filed or, if filed, remains pending.
Final Settlement means the definitive Settlement
Agreement Agreement to be executed by the parties to the Claims
Agreement implementing the terms of the Claims
Agreement and Securities Litigation Settlement.
General Unsecured Claim means any Unsecured Claim (including
any Underwriter Claims) other than a 11% Note Claim,
CSFB 11% Note Claim or 7 1/2% Convertible Note Claim.
Government has the meaning assigned to such term in Section
VII.K.3 of the Plan.
Guaranty Agreement means that certain Guaranty Agreement
dated as of June 6, 1997 by Westbridge in favor of
LaSalle.
HSR Act means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
Impaired means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within
the meaning of section 1124 of the Bankruptcy Code.
Indemnification Escrow means the $250,000 fund (less any
withdrawals therefrom) held in that certain escrow
account at the Bank of New York (Account No. 382345),
which amount is equal to the deductible under the
National Union Policy and which funds are to be
released to cover expenses, including attorney's fees,
actually and reasonably incurred by certain officers
and directors of the Debtor in connection with the
defense or settlement of any action, suit or cause of
action relating to their service as officers or
directors of the Debtor.
Initial Distribution means the Effective Date or as
Date soon thereafter as practicable; provided, however, that
the Initial Distribution Date for the Allowed 11% Note
Claims and Allowed CSFB 11% Note Claims shall be the
Effective Date.
Initial Holder means, (i) any person or entity who will
initially hold shares of New Convertible Preferred
Stock and/or New Common Stock on the Effective Date,
(ii) any investment fund for which any person thereof
acts as manager, (iii) any partnership or other entity
for which any person thereof acts directly or
indirectly as a general partner, managing member or
controlling stockholder, and (iv) any person otherwise
affiliated with any of the foregoing individuals or
entities.
Initial Group 8-A means the aggregate number of shares
Distribution Amount of New Common Stock to be distributed
on the Initial Distribution Date to all holders of
Allowed Group 8-A Claims which shall be computed as
follows: (a) a fraction, (i) the numerator of which is
the Allowed Amount of Group 8-A Claims and (ii) the
denominator of which is the Allowed Amount of Group 8-A
Claims and the Allowed Amount of Group 8-B Claims times
(b) the number of shares of New Common Stock which is
equal to 94% of all issued and outstanding New Common
Stock on the Effective Date.
Initial Group 8-B means the aggregate number of shares
Distribution Amount of New Common Stock to be distributed
on the Initial Distribution Date to all holders of
Allowed Group 8-B Claims which shall be computed as
follows: (a) a fraction, (i) the numerator of which is
the Allowed Amount of Group 8-B Claims and (ii) the
denominator of which is the Allowed Amount of Group 8-A
Claims and the Allowed Amount of Group 8-B Claims times
(b) the number of shares of New Common Stock which is
equal to 94% of all issued and outstanding New Common
Stock on the Effective Date less (c) the Subordination
Redistribution Amount.
Intercompany Claim means any Claim held by a Subsidiary of
the Debtor against the Debtor, including, without
limitation, (a) any account reflecting intercompany
book entries by such Subsidiary with respect to the
Debtor, (b) any Claim not reflected in book entries
that is held by such Subsidiary, and (c) any derivative
Claim asserted or assertable by or on behalf of such
Subsidiary against the Debtor.
LaSalle means LaSalle National Bank.
LaSalle Claim means all Claims against the Debtor of LaSalle
(i) under the LaSalle Credit Agreement and Guaranty and
(ii) in respect of the Debtor's reimbursement
obligations to LaSalle in connection with the LaSalle
Letter of Credit.
LaSalle Credit means the "Pledged Collateral" as
Agreement Collateral defined in the Pledge Agreement dated as
of June 6, 1997 between Westbridge and LaSalle, as
amended.
LaSalle Letter of means that certain Irrevocable
Credit Standby Letter of Credit No. 9200102116 issued by
LaSalle in favor of National Financial Insurance
Company.
LaSalle Letter of means the trust account established at
Credit Collateral LaSalle (Account No. 15799300) in which
certain bonds are held as collateral for the Debtor's
reimbursement obligations to LaSalle in connection with
the LaSalle Letter of Credit.
Management Employment means those certain employment agreements,
Agreements each dated as of September 15, 1998, between
the Debtor and Patrick J. Mitchell and
Patrick H. O'Neill, respectively.
National Union Policy means that certain Directors, Officers
and Corporate Liability Insurance Policy (Policy No.
484-86-18) issued by National Union Fire Insurance
Company of Pittsburgh, PA to Westbridge providing for
coverage therein described with a $5,000,000 limit on
liability, together with any similar policies of
insurance coverage provided from time to time to, or
for the benefit of, the Debtor and its officers and
directors prior to the Petition Date.
New Common Stock means the common stock of Reorganized
Westbridge, par value $.01 per share, to be authorized
and issued by Reorganized Westbridge on the Effective
Date pursuant to the Plan.
New Convertible means the convertible preferred stock
PreferredStock of Reorganized Westbridge to be
authorized and issued by Reorganized Westbridge on the
Effective Date pursuant to the Plan, on the terms and
subject to the conditions described in Exhibit A
hereto, and which shall be in substantially the form
contained in the Plan Supplement.
New Warrants means the warrants to purchase in the
aggregate 7% of all issued and outstanding shares of
New Common Stock, on the terms and subject to the
conditions described in Exhibit B hereto, and which
shall be in substantially the form contained in the
Plan Supplement.
Notice of Acceptance has the meaning assigned to such term
in Section XIII.B.1(c) of the Plan.
Officer and Director has the meaning assigned
Stock Options to such term in Section V.F of the Plan.
Old Common Stock means the common stock, par value $.10 per
share, issued by Westbridge and outstanding on the
Petition Date.
Old Options means any options, calls, subscriptions or
similar rights or other agreements or commitments,
contractual or otherwise, other than Old Warrants,
obligating Westbridge to issue, transfer or sell any
shares of Old Common Stock.
Old Preferred Stock means all shares of Westbridge's Series
A Cumulative Convertible Redeemable Exchangeable
Preferred Stock outstanding on the Petition Date.
Old Restricted Common means all shares of Old Common
Stock Stock granted pursuant to the Restricted Stock Plan
dated as of April 19, 1996, other than Unvested Old
Restricted Common Stock.
Old Warrants means any warrants obligating Westbridge to
issue, transfer or sell any shares of Old Common Stock.
Payment Date has the meaning assigned to such term in
Section XIII.B.1(e) of the Plan.
Petition Date means September 16, 1998, the date on which
the Debtor filed its petition for relief commencing the
Chapter 11 Case.
Plan means this Plan as it may be amended or modified, from
time to time, together with all addenda, exhibits,
schedules, or other attachments, if any.
Plan Supplement means the forms of documents specified in
Section IX.L of the Plan.
Pro Rata means, at any time, the proportion that (x) with
respect to Claims, the Face Amount of a Claim in a
particular Class bears to the aggregate Face Amount of
all Claims (including Disputed Claims) in such Class
and (y) with respect to Interests, the number of shares
or other equity interests held by a particular holder
in a particular Class bears to the aggregate number of
all shares and other equity interests in a particular
Class, unless in each case the Plan provides otherwise.
Pro Rata Percentage has the meaning assigned to such term
in Section XIII.B.1(a) of the Plan.
Priority Non-Tax Claim means Claims entitled to priority
under the Plan pursuant to section 507(a) of the
Bankruptcy Code, other than Administrative Claims and
Priority Tax Claims which are unclassified under the
Plan, including, without limitation, certain allowed
employee compensation and benefit claims of
Westbridge's employees incurred within ninety (90) and
one hundred eighty (180) days, respectively, prior to
the Petition Date.
Priority Tax Claim means any unsecured Claim held by a
governmental unit entitled to a priority in right of
payment under section 507(a)(8) of the Bankruptcy Code.
Purchase Right has the meaning assigned to such term in
Section XIII.B of the Plan.
Putative Class Action means the putative class action civil
lawsuit pending in the District Court , styled James C.
Karabedian, et al. v. Westbridge Capital Corp.,
Martin E. Kantor, James W. Thigpen, Patrick J.
Mitchell, Forum Capital Markets L.P., and Raymond James
& Associates, Inc., Civ. Action No. 3:97 CV 3087-T.
Quarter means the period beginning on the Effective Date and
ending on the immediately succeeding March 31, June 30,
September 30, or December 31, and each three-month
period thereafter, as the context may require.
Record Date means the record date for purposes of making
distributions under the Plan on account of Allowed
Claims and Allowed Interests, which date shall be the
fifth (5th) Business Day preceding the Confirmation
Date.
Registration Rights means a registration rights
Agreement agreement by Reorganized Westbridge in favor of certain
Initial Holders, which shall be in substantially the
form contained in the Plan Supplement.
Released Parties has the meaning assigned to such term in
Section VII.J.1 of the Plan.
Reorganized Westbridge means Westbridge, or any successor
thereto by merger, consolidation, or otherwise, on and
after the Effective Date.
Reserve has the meaning assigned to such term in Section
VI.C.2(a) of the Plan.
Schedules means the schedules of assets and liabilities,
statements of financial affairs, and lists of holders
of Claims and Equity Interests filed with the Court by
Westbridge, including any amendments or supplements
thereto.
Scheduled means, with respect to any Claim or Interest, the
status and amount, if any, of such Claim or Interest as
set forth in the Schedules.
Secured Claim means a Claim that is secured by a security
interest in or lien upon property, or the proceeds of
the sale of such property, in which the Debtor has an
interest, to the extent of the value as of the
Effective Date, or such later date as is established by
the Court, of such interest or lien determined by a
Final Order of the Court pursuant to section 506 of the
Bankruptcy Code or as otherwise agreed upon in writing
by the Debtor and the holder of such Claim.
Securities Litigation means a Claim arising from the
Claim purchase or sale of shares of Old Common Stock of
Westbridge or 11% Notes or 7-1/2% Convertible Notes at
any time between October 31, 1996 and October 31, 1997,
but excluding (i) all Class 7, 8 and 10 Claims and
Interests and (ii) any Claims which are excluded from
the Securities Litigation Settlement pursuant to the
District Court Order or Final Settlement Agreement.
Securities Litigation means a holder of a Securities Litigation Claim.
Claimant
Securities Litigation means the settlement of the Putative Class Action
Settlement described in the Claims Agreement.
Securities Litigation has the meaning set forth in Section VII.O.1 of the
Settlement Fund Plan.
StockPurchase Agreement means that certain Stock Purchase
Agreement, dated as of September 15, 1998, between the
Debtor and CSFB, pursuant to which CSFB has agreed,
subject to the terms and conditions contained therein,
to purchase all of the New Convertible Preferred Stock
(other than the New Convertible Preferred Stock
distributed to holders of Allowed Class 7 Claims in
Group 7-B or acquired by holders of Allowed Class 8
Claims in Group 8-B who exercise the Purchase Right), a
copy of which Stock Purchase Agreement is attached to
the Plan as Exhibit C.
Subordination Related has the meaning assigned to such term in
Rights Section VII.C of the Plan.
Subordination means the value of that
Redistribution Amount portion of Group 8-B's allocation of New Common Stock
equal to the difference between (x) the value of the
Cash and New Convertible Preferred Stock to be
distributed to holders of Allowed Class 7 Claims under
the Plan and (y) the value of the Cash and New
Convertible Preferred Stock which holders of Allowed
Claims in Class 7 would be entitled to receive under
the Plan without giving effect to the Claims of the
holders of Allowed Claims in Class 7 against holders of
Allowed Claims in Group 8-B arising from the
contractual subordination, "make whole," default
interest, post-petition interest, and other similar
provisions set forth in the 11% Note Indenture and the
7 1/2% Convertible Note Indenture.
Subsequent Distribution means the twentieth day after
Date the end of the Quarter following the Quarter in which
the Initial Distribution Date occurs and the twentieth
day after the end of each such subsequent Quarter.
Subsidiary means a corporation, partnership or other entity
of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such
other ownership interests having such power only by
reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of
such corporation, partnership or other entity are at
the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more
intermediaries, or both, by the Debtor.
Surplus Distributions has the meaning assigned to such term
in Section VI.C.3 of the Plan.
7 1/2% Convertible Note means the unsecured Claims of the 7 1/2% Convertible
Claims Noteholders arising under or as a result of the 7 1/2%
Convertible Notes.
7 1/2% Convertible means holders of the 7 1/2% Convertible Notes.
Noteholders
7 1/2% Convertible Notes means the 7 1/2% Convertible
Subordinated Notes, due 2004, of Westbridge issued and
outstanding under the 7 1/2% Convertible Note
Indenture.
7 1/2% Convertible means that certain Indenture, dated as
Note Indenture of April 24, 1997, between
Westbridge, as issuer, and First Union National Bank,
as Trustee, pursuant to which the 7 1/2% Convertible
Notes were issued, together with any amendments or
supplements thereto.
Trustee means, (i) with respect to the 11% Note Indenture,
Bank One Trust Company, N.A., in its capacity as
trustee under such indenture and (ii) with respect to
the 7 1/2% Convertible Note Indenture, First Union
National Bank, in its capacity as trustee under such
indenture.
Underwriter means Forum Capital Markets, L.P. or Raymond James &
Associates, Inc.
Underwriter Claim means a Claim asserted by an Underwriter
for reimbursement, contribution or indemnification
(including pursuant to any indemnification agreement)
on account of or relating to a Claim for damages or
rescission arising out of the purchase or sale of 7
1/2% Convertible Notes or 11%, to the extent that such
Claims arise in connection with the Putative Class
Action and the Final Settlement Agreement.
Unsecured Claim means any Claim that is not a Secured Claim,
Administrative Claim, Convenience Claim, Priority Tax
Claim or Priority Non-Tax Claim.
Unvested Old Restricted means all shares of Old Restricted Common Stock
Common Stock which were not vested as of the
Petition Date under the Restricted Stock Plan dated as
of April 19, 1996 (including all shares which have
vested but have not yet been issued).
Westbridge means Westbridge Capital Corp., a Delaware
corporation, also referred to herein as the "Debtor".
<PAGE>
Doc#:DS5:98578.3
B. Interpretation, Application of Definitions and Rules of Construction
Wherever from the context it appears appropriate, each term stated
in either the singular or the plural shall include both the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, feminine and neuter, such meanings to be applicable to both the
singular and plural forms of the terms defined. Capitalized terms in the Plan
that are not defined herein shall have the same meaning assigned to such terms
by the Bankruptcy Code or Bankruptcy Rules, as the case may be. The words
"herein," "hereof," and "hereunder" and other words of similar import refer to
the Plan as a whole and not to any particular section or subsection in the Plan
unless expressly provided otherwise. All gender references shall be deemed to
refer to both genders. The words "includes" and "including" are not limiting and
mean that the things specifically identified are set forth for purposes of
illustration, clarity or specificity and do not in any respect qualify,
characterize or limit the generality of the class within which such things are
included. Captions and headings to articles, sections and exhibits are inserted
for convenience of reference only, are not a part of this Plan, and shall not be
used to interpret this Plan. The rules of construction set forth in section 102
of the Bankruptcy Code shall apply to this Plan. In computing any period of time
prescribed or allowed by this Plan, the provisions of Bankruptcy Rule 9006(a)
shall apply.
II.
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Introduction . All Claims and Equity Interests, except Administrative Claims and
Priority Tax Claims, are placed in the Classes set forth below. In accordance
with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and
Priority Tax Claims, as described below, have not been classified.
A Claim or Equity Interest is placed in a particular Class only to
the extent that the Claim or Equity Interest falls within the description of
that Class, and is classified in other Classes to the extent that any portion of
the Claim or Equity Interest falls within the description of such other Classes.
A Claim is also placed in a particular Class for the purpose of receiving
distributions pursuant to the Plan only to the extent that such Claim is an
Allowed Claim in that Class and such Claim has not been paid, released, or
otherwise settled prior to the Effective Date.
1. Unclassified Claims (not entitled to vote on the Plan)
(a) Administrative Claims.
(b) Priority Tax Claims.
2. Unimpaired Classes Of Claims (deemed to have accepted the Plan
and, therefore, not entitled to)vote on the Plan
(a) Class 1: Priority Non-Tax Claims.
Class 1 consists of all Priority Non-Tax Claims.
(b) Class 2: LaSalle Claims.
Class 2 consists of the LaSalle Claims.
(c) Class 3: Convenience Claims.
Class 3 consists of all Convenience Claims.
<PAGE>
(d) Class 4: Secured Claims.
Class 4 consists of all Secured Claims.
(e) Class 5: Intercompany Claims.
Class 5 consists of all Intercompany Claims.
(f) Class 6: Securities Litigation Claims.
Class 6 consists of all Securities Litigation Claims.
3. Impaired Classes of Claims and Interests
(entitled to vote on the Plan)
(a) Class 7: 11% Note Claims.
Class 7 consists of all 11% Note Claims. Class
7 Claims have been divided into separate groups described
below. Together, all of the groups of 11% Note Claims constitute a single
Class of Claims for voting purposes under the Plan and the Bankruptcy Code.
(i) Group 7-A: Group 7-A consists of all 11%
Note Claims other than CSFB 11% Note Claims.
(ii) Group 7-B: Group 7-B consists of all
CSFB 11% Note Claims.
(b) Class 8: Unsecured Claims.
Class 8 consists of all Unsecured Claims
(other than 11% Note Claims and CSFB 11% Note Claims). Class 8 Unsecured
Claims have been divided into separate groups described below. Together,
all of the groups of Unsecured Claims (other than 11% Note Claims and CSFB
11% Note Claims) constitute a single Class of Claims for voting purposes under
the Plan and the Bankruptcy Code.
(i) Group 8-A: Group 8-A consists of all
General Unsecured Claims.
(ii) Group 8-B: Group 8-B consists of all
7 1/2% Convertible Note Claims.
(c) Class 9: Old Preferred Stock Interests.
Class 9 consists of all Old Preferred Stock
Interests.
<PAGE>
(d) Class 10: Old Common Stock Interests and
Old Restricted Common Stock Interests.
Class 10 consists of all Old Common Stock Interests
and Old Restricted Common Stock Interests.
4. Impaired Classes Of Claims And Equity Interests (deemed to have
rejected the Plan and, therefore, not entitled to vote on the Plan)
(a) Class 11: Unvested Old Restricted Common Stock
Interests.
Class 11 consists of all Unvested Old Restricted
Common Stock Interests.
(b) Class 12: Old Warrant Interests.
Class 12 consists of all Old Warrant Interests.
(c) Class 13: Old Option Interests.
Class 13 consists of all Old Option Interests.
III.
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
1. Administrative Claims
<PAGE>
Except to the extent that any entity entitled to payment of any Allowed
Administrative Claim agrees to a different treatment, each holder of an Allowed
Administrative Claim shall receive Cash in an amount equal to such Allowed
Administrative Claim on the later of the Effective Date and the date such
Administrative Claim becomes an Allowed Administrative Claim, or as soon
thereafter as is practicable; provided, however, that Allowed Administrative
Claims representing liabilities incurred in the ordinary course of business by
the Debtor in Possession or liabilities arising under loans or advances to or
other obligations incurred by the Debtor in Possession (to the extent authorized
and approved by the Court if such authorization and approval was required under
the Bankruptcy Code) shall be paid in full and performed by Reorganized
Westbridge in the ordinary course of business in accordance with the terms and
subject to the conditions of any agreements governing, instruments evidencing,
or other documents relating to, such transactions.
2. Professional Compensation And Reimbursement Claims
All entities seeking an award by the Court of compensation for services
rendered or reimbursement of expenses incurred through and including the
Confirmation Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of
the Bankruptcy Code (a) shall file their respective final applications for
allowances of compensation for services rendered and reimbursement of expenses
incurred through the Confirmation Date by the date that is 60 days after the
Effective Date or such other date as may be fixed by the Court and (b) if
granted, such an award by the Court shall be paid in full in such amounts as are
Allowed by the Court (i) on the date such Administrative Claim becomes an
Allowed Administrative Claim, or as soon thereafter as is practicable or (ii)
upon such other terms as may be mutually agreed upon between such holder of an
Administrative Claim and the Debtor in Possession or, on and after the Effective
Date, Reorganized Westbridge.
3. Priority Tax Claims
Except to the extent that a holder of an Allowed Priority Tax Claim has
been paid by the Debtor prior to the Effective Date or agrees to a different
treatment, each holder of an Allowed Priority Tax Claim shall receive, at the
sole option of Reorganized Westbridge, (a) Cash in an amount equal to such
Allowed Priority Tax Claim on the later of the Effective Date and the date such
Priority Tax Claim becomes an Allowed Priority Tax Claim, or as soon thereafter
as is practicable, or (b) equal annual Cash payments in an aggregate amount
equal to such Allowed Priority Tax Claim, together with interest at a fixed
annual rate equal to 8-1/4%, over a period through the sixth anniversary of the
date of assessment of such Allowed Priority Tax Claim, or upon such other terms
determined by the Court to provide the holder of such Allowed Priority Tax Claim
deferred Cash payments having a value, as of the Effective Date, equal to such
Allowed Priority Tax Claim. Each holder of a Priority Tax Claim which is not
payable on or before the Effective Date will survive confirmation of the Plan,
remain unaffected thereby, and be paid as and when due, except to the extent
that a holder of such Claim agrees to a different treatment.
<PAGE>
IV.
TREATMENT OF CLAIMS AND
EQUITY INTERESTS
1. Class 1 - Priority Non-Tax Claims
(a) Distributions. Each Allowed Claim in Class 1 shall be paid in full in
Cash on the Effective Date (if not before) except to the extent that any holder
of such an Allowed Claim agrees to a different treatment.
(b) Impairment and Voting. Class 1 shall be unimpaired
under the Plan. Holders of Allowed Claims in Class 1 are presumed to accept
the Plan and are not entitled to vote to accept or reject the Plan.
2. Class 2 - LaSalle Claim
(a) Distributions. On or about the Effective Date,
Reorganized Westbridge shall execute and deliver to LaSalle the Amended
Guarantee Agreement. The Debtor's reimbursement obligations to LaSalle
in respect of the LaSalle Letter of Credit and LaSalle's Lien on the
LaSalle Letter of Credit Collateral and LaSalle Credit
Agreement Collateral are hereby ratified and affirmed and shall not be affected
by the Plan. Accordingly, the LaSalle Claim shall be unimpaired under section
1124 of the Bankruptcy Code, except to the extent that the holder of such Claim
agrees to a different treatment, and shall not be affected by the Plan or the
Chapter 11 Case.
(b) Impairment and Voting. Class 2 shall be unimpaired
under the Plan. The holder of Allowed Claims in Class 2 is presumed to accept
the Plan and is not entitled to vote to accept or reject the Plan.
3. Class 3 - Convenience Claims
(a) Distributions. Each holder of an Allowed
Convenience Claim shall receive Cash in an amount equal to 100% of
such Allowed Convenience Claim on the later of the Effective Date
and the date such Convenience Claim becomes an Allowed
Convenience Claim, or as soon thereafter as is practicable.
(b) Impairment and Voting. Class 3 shall be
unimpaired under the Plan. The holders of Allowed Claims in Class 3
are presumed to accept the Plan and are not entitled to vote to accept
or reject the Plan.
<PAGE>
(c) Election to be Treated as a Convenience Claim. By
checking the appropriate box on a timely cast Ballot, the holder
of an Allowed General Unsecured Claim in an amount greater
than $2,000 may elect to reduce the amount of such holder's
Allowed General Unsecured Claim to $2,000 and to receive a distribution upon
such Allowed Class 3 Convenience Claim in the amount of $2,000 as described
above. Such an election shall constitute a waiver of the right to collect, and a
release of, the amount of the Allowed General Unsecured Claim in excess of
$2,000, and the holder of such Allowed Class 3 Convenience Claim shall be deemed
to have released the Debtor and its estate, and its property from any and all
liability for such excess amount. The holder of an Allowed General Unsecured
Claim which timely elects to reduce the amount of its Allowed Claim shall be
deemed to be the holder of an Allowed Class 3 Convenience Claim for
classification, voting and all other purposes under the Plan.
4. Class 4 - Secured Claims
(a) Distributions.
Except to the extent that a holder of an Allowed Secured Claim agrees to a
different treatment, at the sole option of the Debtor, (i) each Allowed Secured
Claim shall be reinstated and rendered unimpaired in accordance with section
1124(2) of the Bankruptcy Code, notwithstanding any contractual provision or
applicable nonbankruptcy law that entitles the holder of an Allowed Secured
Claim to demand or receive payment of such Allowed Secured Claim prior to the
stated maturity of such Allowed Secured Claim from and after the occurrence of a
default, (ii) each holder of an Allowed Secured Claim shall receive Cash in an
amount equal to such Allowed Secured Claim, including any interest on such
Allowed Secured Claim required to be paid pursuant to section 506(b) of the
Bankruptcy Code, on the later of the Effective Date and the date such Allowed
Secured Claim becomes an Allowed Secured Claim, or as soon thereafter as is
practicable, or (iii) each holder of an Allowed Secured Claim shall receive the
collateral securing its Allowed Secured Claim and any interest on such Allowed
Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy
Code, in full and complete satisfaction of such Allowed Secured Claim on the
later of the Effective Date and the date such Allowed Secured Claim becomes an
Allowed Secured Claim, or as soon thereafter as is practicable.
(b) Impairment and Voting. Class 4 shall be
unimpaired under the Plan. The holders of Allowed Claims in
Class 4 are presumed to accept the Plan and are not entitled to vote
to accept or reject the Plan.
5. Class 5 - Intercompany Claims
(a) Distributions. Intercompany Claims shall be
unimpaired under section 1124 of the Bankruptcy Code, and shall not be
affected by the Plan or the Chapter 11 Case.
(b) Impairment and Voting. Class 5 shall be
unimpaired under the Plan. The holders of Allowed Claims in Class 5 are
presumed to accept the Plan and are not entitled to vote to accept or
reject the Plan.
<PAGE>
6. Class 6 - Securities Litigation Claims
(a) Distributions. Each holder of a Class 6 Claim
shall receive in respect thereof all rights and distributions to which such
holder is entitled as a Securities Litigation Claimant pursuant to the
Claims Agreement, the District Court Order and the Final Settlement
Agreement. A holder of a Class 6 Claim that is provided for by this
Section IV.6(a) shall not be entitled to receive any additional payments
or distributions by reason of Claims for the same loss or
damages filed against the Debtor.
(b) Impairment and Voting. Class 6 shall be
unimpaired under the Plan. The holders of Claims in Class 6 are presumed
to accept the Plan and are not entitled to vote to accept or reject the Plan.
7. Class 7 - Unsecured 11% Note Claims
-----------------------------------
(a) Distributions.
(i) Group 7-A. On the Initial Distribution Date or as
soon thereafter as is practicable, each holder of an Allowed 11% Note
Claim as of the Record Date shall receive Cash in an amount equal to
such Allowed 11% Note Claim as calculated in accordance with clause
(iii) below.
(ii) Group 7-B. On the Initial Distribution Date or
as soon thereafter as is practicable, each holder of an Allowed CSFB
11% Note Claim as of the Record Date shall receive New Convertible
Preferred Stock with a liquidation preference equal to such Allowed
CSFB 11% Note Claim.
(iii) Allowance of Group 7-A and Group 7-B Claims.
On, and subject to the occurrence of, the Effective Date, the CSFB
11% Note Claims and the 11% Note Claims shall be deemed Allowed 11%
Note Claims and Allowed CSFB 11% Note Claims in Class 7 in the
aggregate amount of $22,114,445 as of the Petition Date (consisting
of Allowed 11% Note Claims in the aggregate amount of $14,421,935.31
and Allowed CSFB 11% Note Claims in the aggregate amount of
$7,692,509.69), plus simple interest accruing at the rate per annum
of eleven percent (11%) on the principal amount of the Allowed CSFB
11% Note Claims and Allowed 11% Note Claims from and after the
Petition Date to but not including the Effective Date.
(b) Impairment and Voting. Class 7 is impaired under the
Plan. The holders of Allowed Claims in Class 7 are entitled to vote to
accept or reject the Plan.
<PAGE>
8. Class 8 - Other Unsecured Claims
(a) Distributions.
(i) Group 8-A.
(1) On the Initial Distribution Date
or as soon thereafter as is practicable, each holder of an
Allowed General Unsecured Claim as of the Record Date shall
receive its Pro Rata share of the Initial Group
8-A Distribution Amount less the number of shares of New Common Stock
in the Reserve.
(2) On each Subsequent Distribution Date,
each holder of an Allowed General Unsecured Claim as of
the Record Date shall receive a Pro Rata share of the
New Common Stock in the Surplus Distribution being made on such
Subsequent Distribution Date.
(ii) Allowance of Underwriter Claims. On, and subject
to the occurrence of, the Effective Date, the Underwriter
Claims shall be deemed Allowed General Unsecured Claims in
Group 8-A in an aggregate amount not to exceed $280,000.
(ii) Group 8-B.
(1) On the Initial Distribution Date
or as soon thereafter as is practicable, each holder of
an Allowed 7 1/2% Convertible Note Claim as of the Record Date
shall receive its Pro Rata share of the Initial
Group 8-B Distribution Amount less the number of shares of New Common
Stock in the Reserve.
(2) On each Subsequent Distribution Date,
each holder of an Allowed 7 1/2% Note Claim as of the
Record Date shall receive its Pro Rata Share of New Common Stock
in the Surplus Distribution being made on such Subsequent
Distribution Date.
(3) On, and subject to the occurrence of,
the Effective Date, the 7 1/2% Convertible Note Claims shall be
deemed Allowed Unsecured Claims in Group 8-B in the aggregate
amount of $77,260,416.
(4) As set forth in Section XIII, holders
of Allowed 7 1/2% Convertible Note Claims as of May 20, 1998, who
remain holders of such 7 1/2% Convertible Notes as of October 22,
1998, shall be entitled to participate, at their option, in
the purchase of New Convertible Preferred Stock.
<PAGE>
(b) Impairment and Voting. Class 8 is impaired under the
Plan. The holders of
Allowed Claims in Class 8 are entitled to vote to accept or reject the Plan.
9. Class 9 - Old Preferred Stock Interests
(a) Distributions. On the Initial Distribution
Date or as soon thereafter as is practicable, each holder of an Allowed
Class 9 Old Preferred Stock Interest shall receive its Pro Rata
share of (i) New Common Stock representing 4% of all
issued and outstanding shares of New Common Stock on the Effective Date and (ii)
New Warrants to purchase up to 2% of all issued and outstanding shares of New
Common Stock on a fully-diluted basis.
(b) Impairment and Voting. Class 9 is impaired under the
Plan. The holders of
Allowed Class 9 Old Preferred Stock Interests are entitled to vote to accept or
reject the Plan.
10. Class 10 - Old Common Stock Interests and Old Restricted
Common Stock Interests
(a) Distributions. On the Initial Distribution
Date or as soon thereafter as is practicable, each holder of an
Allowed Class 10 Old Common Stock Interest and an Allowed Class 10
Old Restricted Common Stock Interest shall receive its Pro Rata
share of (i) New Common Stock representing 2% of all issued and outstanding
shares of New Common Stock on the Effective Date and (ii) New Warrants to
purchase up to 5% of all issued and outstanding shares of New Common Stock on a
fully-diluted basis.
(b) Impairment of Voting. Class 10 is impaired under the
Plan. The holders of
Allowed Class 10 Old Common Stock Interests and Allowed Class 10 Old Restricted
Common Stock Interests are entitled to vote to accept or reject the Plan.
11. Class 11 - Unvested Old Restricted Common Stock Interests
(a) Distributions. On the Effective Date, the
Unvested Old Restricted Common Stock shall be canceled and the
holders of Unvested Old Restricted Stock shall not be entitled to,
and shall not, receive or retain any property or interest in
property on account of such Unvested Old Restricted Common Stock.
(b) Impairment and Voting. Class 11 is impaired under the
Plan. The holders of Allowed Class 11 Interests are deemed to have rejected
the Plan, and, therefore, are not entitled to vote to accept or reject the Plan.
<PAGE>
12. Class 12 - Old Warrant Interests
(a) Distributions. On the Effective Date, the
Old Warrants shall be canceled and the holders of Old Warrants shall not be
entitled to, and shall not, receive or retain any property or interest in
property on account of such Old Warrants.
(b) Impairment and Voting. Class 12 is impaired under the
Plan. The holders of Allowed Class 12 Interests are deemed to have rejected
the Plan, and, therefore, are not entitled to vote to accept or reject the Plan.
13. Class 13 - Old Option Interests
(a) Distributions. On the Effective Date, the Old
Options shall be canceled and the holders of Old Options shall not be entitled
to, and shall not, receive or retain any property or interest in property on
account of such Old Options.
(b) Impairment and Voting. Class 13 is impaired under the
Plan. The holders of Allowed Class 13 Interests are deemed to have rejected
the Plan, and, therefore, are not entitled to vote to accept or reject the Plan.
V.
PROVISIONS REGARDING CORPORATE
GOVERNANCE AND MANAGEMENT
OF REORGANIZED WESTBRIDGE
A. Directors and Officers of Reorganized Westbridge
1. The Initial Board of Directors
The initial board of directors of Reorganized Westbridge shall
consist of seven (7) members, four of whom shall be selected by CSFB or its
designee, one of whom shall be selected by the Creditors Committee and two of
whom shall be selected by Westbridge or Reorganized Westbridge, whose names
shall be disclosed on or before the date of the Confirmation Hearing.
2. Management of Reorganized Westbridge
On the Effective Date, the Board of Directors of Reorganized
Westbridge set forth in Section V.A.1 hereof, who shall be appointed pursuant to
the Confirmation Order, shall take office and be deemed appointed on the
Effective Date.
<PAGE>
3. Officers
The officers of the Debtor immediately prior to the Effective
Date shall serve as the initial officers of Reorganized Westbridge on and after
the Effective Date. Such officers shall serve in accordance with any employment
agreement with Reorganized Westbridge and applicable nonbankruptcy law.
B. Corporate Action
. The adoption of the Amended Westbridge Certificate of
Incorporation and Amended ws Westbridge By-Laws shall be deemed to have occurred
and be effective as of the Effective Date without any further action by the
directors or stockholders of Westbridge or Reorganized Westbridge. The Amended
Westbridge Certificate of Incorporation shall, among other things, contain
appropriate provisions consistent with the Plan (i) governing the authorization
of the New Convertible Preferred Stock and the New Common Stock, (ii)
prohibiting the issuance of nonvoting equity securities as required by section
1123(a)(6) of the Bankruptcy Code, and (iii) implementing such other matters as
Reorganized Westbridge, CSFB and the Creditors Committee believe are necessary
and appropriate to effectuate the terms and conditions of the Plan. The Amended
Westbridge Certificate of Incorporation shall not include any "super-majority"
voting provisions. On or prior to the Effective Date, Reorganized Westbridge
shall file with the Secretary of State of the State of Delaware, in accordance
with sections 103 and 303 of the Delaware General Corporation Law, the Amended
Westbridge Certificate of Incorporation and such certificate shall be the
certificate of incorporation for Reorganized Westbridge.
C. Securities to Be Issued Pursuant to the Plan
1. New Common Stock
On the Effective Date, the issuance of 30,000,000 shares of New
Common Stock is hereby authorized without further act or action under applicable
law, regulation, rule or order. The Debtor shall issue and distribute 6,500,000
of such authorized shares to the holders of Allowed Claims or Allowed Interests
in Classes 8, 9 and 10 in accordance with this Plan. Each share of New Common
Stock will entitle its holder to one vote. Holders of New Common Stock will have
the right to participate proportionately in any dividends distributed by
Reorganized Westbridge.
2. New Convertible Preferred Stock
<PAGE>
On the Effective Date, the issuance of 40,000 shares of New
Convertible Preferred Stock is hereby authorized without further act or action
under applicable law, regulation, rule or order. The Debtor shall issue and
distribute 22,750 (such number to increase if the Effective Date occurs after
December 31, 1998) of such authorized shares in the aggregate to CSFB (under the
Stock Purchase Agreement and as a holder of the CSFB 11% Note Claims) and
holders of 7 1/2% Convertible Notes who exercise the Purchase Rights in
accordance with this Plan. The complete terms of the New Convertible Preferred
Stock will be as set forth in the Certificate of Designation included in the
Plan Supplement.
3. The New Warrants
On the Effective Date, the issuance of New Warrants to purchase
up to 7% of New Common Stock on a fully diluted basis is hereby authorized
without further act or action under applicable law, regulation, rule or order.
The New Warrants will entitle the holders thereof to receive the right to
purchase, pro rata, 7% of all issued and outstanding shares of New Common Stock
on a fully-diluted basis. The New Warrants will have an initial exercise price
based on an enterprise valuation of $95 million, will be subject to customary
anti-dilution provisions and will expire on the fifth anniversary of the
Effective Date.
4. Securities Laws Matters
(a) Registration Rights Agreement. Each Initial Holder
receiving a distribution of New Convertible Preferred Stock or New Common
Stock representing more than 10% of the aggregate New Convertible Preferred
Stock or New Common Stock issued on the Effective Date shall be entitled to
become a party to the Registration Rights Agreement.
(b) Public Market. Westbridge and Reorganized
Westbridge shall make all reasonable efforts necessary to ensure an active
and fully-valued public market for the trading of the New Common Stock.
D. Retention and Incentive Bonus Program
If not theretofore adopted by the Debtor, on the Effective Date,
Reorganized Westbridge or Westbridge will have implemented the retention and
incentive bonus program (the "Bonus Program") in substantially the form
contained in the Plan Supplement.
E. Marketing Agent Stock Options
If not theretofore adopted by the Debtor, on the Effective Date,
Reorganized Westbridge will adopt a stock option plan which permits Reorganized
Westbridge to grant to its marketing agents options to acquire up to 3% of all
issued and outstanding shares of New Common Stock on a fully diluted basis (the
"Agent Options"), which stock option plan shall be in substantially the form
contained in the Plan Supplement.
<PAGE>
F. Officer and Director Stock Options
If not theretofore adopted by the Debtor, on the Effective Date,
Reorganized Westbridge will adopt a stock option plan which permits Reorganized
Westbridge to grant to its officers and directors options to acquire up to 10%
of all issued and outstanding shares of New Common Stock on a fully diluted
basis (the "Officer and Director Stock Options"), which stock option plan shall
be in substantially the form contained in the Plan Supplement.
VI.
PROVISIONS REGARDING VOTING AND
DISTRIBUTIONS UNDER THE PLAN AND TREATMENT
OF DISPUTED, CONTINGENT AND UNLIQUIDATED
ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS
A. Voting of Claim and Equity Interest.
Each holder of an Allowed Claim or an Allowed Equity Interest in an
Impaired Class of Claims or Equity Interests shall be entitled to vote
separately to accept or reject the Plan as provided in such order as may be
entered by the Court establishing certain procedures with respect to the
solicitation and tabulation of votes to accept or reject the Plan, or any other
order or orders of the Court.
B. Nonconsensual Confirmation. If any Impaired Class of Claims
or Equity Interests entitled to vote shall not accept the Plan by
the requisite statutory majorities provided in sections 1126(c) or 1126(d)
of the Bankruptcy Code, as applicable, the Debtor reserves the right
to have the Court confirm the Plan under section 1129(b) of
the Bankruptcy Code.
C. Distributions.
1. Method of Distribution Under the Plan
(a) Date and Delivery of Distribution. Distributions
under the Plan shall be made by Reorganized Westbridge or its
designee to the holders of Allowed Administrative Claims, Allowed Claims
or Allowed Equity Interests at the addresses set forth on the Schedules,
unless such addresses are superseded by proofs of claim or transfers
of claims filed pursuant to Bankruptcy Rule 3001 (or at the last known
addresses of such holders if Westbridge or Reorganized
Westbridge has been notified in writing of a change of address).
<PAGE>
(b) Distribution of Cash. Any payment of Cash by
Reorganized Westbridge pursuant
to the Plan shall be made at the option and in the sole discretion of
Reorganized Westbridge, by (i) a check drawn on, or (ii) wire transfer from, a
domestic bank selected by Reorganized Westbridge.
(c) Distribution of Unclaimed Property. Any
distribution of Cash under the Plan which is unclaimed after the later
to occur of (a) five years after distribution or (b) six months after the
date on which such claimant's Claim is allowed shall be transferred to
Reorganized Westbridge notwithstanding state or other escheat
or similar laws to the contrary. Distributions under the Plan consisting of New
Common Stock or New Warrants that are unclaimed for a period of five years after
distribution shall be added to the Reserve and entitlement by the holder of a
Claim or Interest to such distribution shall be extinguished and forever barred.
The Debtor shall file with the Court a list of holders of unclaimed
distributions of Cash, New Common Stock and New Warrants on the third, fourth
and fifth anniversaries of the Effective Date.
(d) Saturdays, Sundays, or Legal Holidays. If
any payment or act under the Plan is required to be made or performed
on a date that is not a Business Day, then the making of such payment
or the performance of such act may be completed on
the next succeeding Business Day, and shall be deemed to have been completed as
of the required date.
(e) Fractional Shares. No fractional shares of
New Common Stock or New Convertible Preferred Stock shall be distributed.
When any distribution on account of an Allowed Claim or Allowed
Interest pursuant to the Plan would otherwise result in the issuance of a
number of shares of New Common Stock or New Convertible Preferred Stock
that is not a whole number, the actual distribution of shares of New
Common Stock or New Convertible Preferred Stock shall be rounded as
follows: (i) fractions of one-half or greater shall be rounded to the next
higher whole number and (ii) fractions of less than one-half
shall be rounded to the next lower whole number.
(f) Distributions to Holders as of the Record Date. As at
the close of business on the Record Date, the claims register (for Claims)
and transfer ledger (for Equity Interests) shall be closed, and there
shall be no further changes in the record holders of any Claims
or Equity Interests. The Debtor and Reorganized Westbridge shall have
no obligation to recognize any transfer of any Claims or
Equity Interests occurring after the Record Date. The Debtor and Reorganized
Westbridge shall instead be entitled to recognize and deal for purposes under
the Plan (except as to voting to accept or reject the Plan pursuant to Section
VI.A) with only those record holders stated on the claims register (for Claims)
and transfer ledgers (for Equity Interests) as of the close of business on the
Record Date.
<PAGE>
2. Disputed General Unsecured Claims
(a) Distributions Withheld For Disputed General
Unsecured Claims.
(i) Establishment And Maintenance Of Reserve. On the
Initial Distribution Date and each Subsequent Distribution Date,
Reorganized Westbridge shall place into a reserve an amount of New
Common Stock equal to 100% of the distributions to which holders of
Disputed General Unsecured Claims would be entitled under the Plan as
of such date if such Disputed General Unsecured Claims were Allowed
General Unsecured Claims in their Disputed Claim Face Amounts (the
"Reserve"). Such amounts shall be determined by reference to the
aggregate Face Amount of all Disputed General Unsecured Claims that
have Face Amounts, plus an amount to be determined by the Court to be
reserved for any given Disputed General Unsecured Claims that do not
have Face Amounts.
(ii) Property Held in Reserve. Cash held in the
Reserve, if any (including dividends paid on New Common Stock held in
the Reserve, if any), shall be deposited in a segregated bank account
or accounts in the name of Reorganized Westbridge and designated as
held in trust for the benefit of holders of Allowed General Unsecured
Claims. Cash held in the Reserve shall not constitute property of
Reorganized Westbridge. Reorganized Westbridge shall invest the Cash
held in the Reserve in a manner consistent with the investment
guidelines to be agreed upon by the Debtor and the Creditors
Committee, which investment guidelines shall be included in the Plan
Supplement. Reorganized Westbridge shall pay, or cause to be paid,
out of the funds held in the Reserve, any tax imposed on the Reserve
by any governmental unit with respect to income generated by the
property held in the Reserve. The yield earned on such invested Cash
(net of applicable taxes) shall be distributed to each holder of an
Allowed Unsecured Claim on the last Subsequent Distribution Date
under the Plan, based upon each holder's Pro Rata share. New Common
Stock held in the Reserve shall be held in trust by Reorganized
Westbridge for the benefit of the potential claimants of such
securities and shall not constitute property of Reorganized
Westbridge.
<PAGE>
(iii) Distributions Upon Allowance Of Disputed
General Unsecured Claims. The holder of a Disputed General Unsecured
Claim that becomes an Allowed Claim subsequent to the Initial
Distribution Date shall receive a distribution of New Common Stock
from the Reserve on the next Subsequent Distribution Date that
follows the Quarter during which such Disputed General Unsecured
Claim becomes an Allowed Claim pursuant to a Final Order. Such
distributions shall be made in accordance with the Plan based upon
the distributions that would have been made to such holder under the
Plan if the Disputed General Unsecured Claim had been an Allowed
Claim on or prior to the Effective Date.
3.Surplus Distributions to Holders of Allowed Unsecured Claims.
The following consideration shall constitute surplus
distributions (the "Surplus Distributions") pursuant to the Plan: (i) pursuant
to Section VI.C.1(c), distributions under the Plan to holders of Allowed
Unsecured Claims that are unclaimed for a period of five years after
distribution thereof; and (ii) to the extent that a Disputed General Unsecured
Claim is not Allowed or becomes an Allowed Claim in an amount less than the
Disputed Claim Face Amount, shares of New Common Stock equal to the number of
shares of New Common Stock held in the Reserve on account of such excess. The
Surplus Distributions shall be distributed to the holders of Allowed Unsecured
Claims pursuant to Section IV.8 of the Plan[^]; provided, however, that
Reorganized Westbridge shall not be under any obligation to make Surplus
Distributions on a Subsequent Distribution Date unless the New Common Stock to
be distributed on a Subsequent Distribution Date consists of 1,000 shares of New
Common Stock or more, unless the distribution is the final Subsequent
Distribution Date under the Plan.
4. Objections To And Resolution Of Administrative Claims
and Claims; Administrative and Priority Claims Reserve
(a) Objections To And Resolution of Administrative
Claims and Claims. Except as to applications for allowances of compensation
and reimbursement of expenses under sections 330 and 503 of the
Bankruptcy Code, the Debtor, Reorganized
Westbridge, the Creditors Committee and CSFB shall have the exclusive right to
make and file objections to Administrative Claims and Claims subsequent to the
Confirmation Date. All objections shall be litigated to a Final Order; provided,
however, that Reorganized Westbridge, the Creditors Committee and CSFB, jointly,
shall have the authority to compromise, settle, otherwise resolve or withdraw
any objections, or otherwise settle or compromise any Claim, without approval of
the Court. Unless otherwise ordered by the Court, the Debtor, Reorganized
Westbridge, the Creditors Committee, or CSFB shall file all objections to
Administrative Claims and Claims that are the subject of proofs of claims or
requests for payment filed with the Court (other than applications for
allowances of compensation and reimbursement of expenses) and serve such
objections upon the holders of the Administrative Claim or Claim as to which the
objection is made as soon as is practicable, but in no event later than 60 days
after the Effective Date or such later date as may be approved by the Court.
(b) Administrative and Priority Claims Reserve.
<PAGE>
(i) Establishment of Administrative and Priority
Claims Reserve. On the Effective Date, Reorganized Westbridge shall
place into reserve an amount of Cash equal to (i) the sum of the
aggregate Face Amount of all Disputed Administrative Claims, Disputed
Priority Tax Claims, and Disputed Priority Non-Tax Claims that have
Face Amounts, plus (ii) an amount to be determined by the Court to be
reserved for any Disputed Administrative Claims, Disputed Priority
Tax Claims and Disputed Priority Non-Tax Claims that do not have Face
Amounts (the "Administrative and Priority Claims Reserve").
(ii) Cash Held in Administrative and Priority Claims
Reserve. Cash held in the Administrative and Priority Claims Reserve
shall be deposited in a segregated bank account or accounts in the
name of Reorganized Westbridge and designated as held in trust for
the benefit of holders of Allowed Administrative Claims, Allowed
Priority Tax Claims and Allowed Priority Non-Tax Claims. Cash held in
the Administrative and Priority Claims Reserve shall not constitute
property of Reorganized Westbridge. Reorganized Westbridge shall
invest the Cash held in the Administrative and Priority Claims
Reserve in a manner consistent with investment guidelines to be
included in the Plan Supplement. Reorganized Westbridge shall pay, or
cause to be paid, out of the funds held in the Administrative and
Priority Claims Reserve, any tax imposed on the Administrative and
Priority Claims Reserve by any governmental unit with respect to
income generated by Cash held in the Administrative and Priority
Claims Reserve. Any Cash held in the Administrative and Priority
Claims Reserve after all Administrative and Priority Claims have been
Allowed or disallowed shall be transferred to and become the property
of Reorganized Westbridge.
5. Hart-Scott-Rodino Act Filing Requirements
Any person or entity who will receive a distribution of New
Convertible Preferred Stock and/or New Common Stock under the Plan who is
required to file a pre-merger notification and report pursuant to the HSR Act,
shall not receive such distribution until the notification and waiting periods
under the HSR Act applicable to such person or entity shall have expired or been
terminated.
6. Allocation of Consideration
The aggregate consideration to be distributed to the holders of
Allowed Claims in each Class under the Plan shall be treated as first satisfying
an amount equal to the stated principal amount of the Allowed Claim for such
holders and any remaining consideration as satisfying accrued, but unpaid,
interest and costs, if any, and attorneys' fees where applicable.
<PAGE>
7. Cancellation and Surrender of Existing Securities
and Agreements
As of the latest to occur of the Effective Date and the Initial
Distribution Date, the 11% Notes, the 7 1/2% Convertible Notes, the 11% Note
Indenture, the 7 1/2% Convertible Note Indenture, the Old Preferred Stock, the
Old Common Stock, the Old Restricted Stock, the Old Warrants and the Old Options
shall be deemed canceled and such agreements and securities, together with all
security interests, liens and instruments issued pursuant thereto, shall have no
further legal effect other than as evidence of any right to receive
distributions under the Plan; provided, however, that the 11% Note Indenture and
7 1/2% Convertible Note Indenture shall continue in effect solely for the
purposes of (i) allowing the applicable Trustee to make the distributions to be
made on account of such Claims under the Plan, and (ii) permitting such
applicable Trustee to maintain any rights or liens it may have for fees, costs
and expenses under the 11% Note Indenture and 7 1/2% Convertible Note Indenture.
Notwithstanding any other provision of the Plan, as a condition
precedent to receiving any distribution under the Plan, each holder of a
promissory note, share certificate, or other instrument or security evidencing a
Claim or Equity Interest must surrender such promissory note, share certificate,
or other instrument or security to Reorganized Westbridge or its designee or
must execute and deliver an affidavit of loss and furnish an indemnity or bond
in substance and amount reasonably satisfactory to Reorganized Westbridge.
Any holder of a Claim or Equity Interest that fails to surrender
such instrument or security or to provide the affidavit and indemnity or bond,
before the later to occur of (i) the second anniversary of the Effective Date
and (ii) six months following the date such holder's Claim becomes an Allowed
Claim or Interest, shall be deemed to have forfeited all rights, Claims, and/or
Equity Interests and may not receive or participate in any distribution under
the Plan.
8. Trustee Fees
On the Effective Date, each Trustee shall receive an amount of
Cash equal to the amount of reasonable fees and expenses of such Trustee
(including the reasonable fees and expenses of the respective counsel retained
by each Trustee), in accordance with and to the extent provided for in the 11%
Note Indenture or 7 1/2% Convertible Note Indenture, as applicable, whether
incurred prior or subsequent to the Petition Date, without application by or on
behalf of such Trustee or their respective counsel to the Court. Distributions
made to the holders of Allowed Claims pursuant to the Plan will not be reduced
on account of such payments to each Trustee.
<PAGE>
VII.
IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN
A. Registration Rights Agreement
On or before the Effective Date, Reorganized Westbridge will
execute the Registration Rights Agreement without the requirement of any further
corporate action.
B. Continued Corporate Existence and Vesting of Assets in
Reorganized Westbridge.
Westbridge, as Reorganized Westbridge, shall continue to exist
after the Effective Date with all powers of a corporation under the laws of the
State of Delaware and without prejudice to any right to alter or terminate such
existence (whether by merger or otherwise) under such applicable state law.
Except as otherwise expressly provided in the Plan, on the Effective Date,
Reorganized Westbridge shall be vested with all of the property of the estate
free and clear of all claims, liens, encumbrances, charges and other interests
of creditors and equity security holders, provided that the security interests
securing the LaSalle Credit Agreement and LaSalle Letter of Credit shall not be
terminated or discharged; and Reorganized Westbridge may operate its businesses
free of any restrictions imposed by the Bankruptcy Code, the Bankruptcy Rules or
by the Court, subject only to the terms and conditions of the Plan.
C. Termination of Subordination Rights
All Claims of the 11% Noteholders and 7 1/2% Convertible
Noteholders against the Debtor and all rights and Claims between or among the
11% Noteholders and 7 1/2% Convertible Noteholders relating in any manner
whatsoever to claimed subordination rights, rights to post-petition and default
interest, or similar rights, if any (collectively, "Subordination-Related
Rights"), shall be deemed satisfied by the distributions under, described in,
contemplated by, and/or implemented by, this Plan to holders of such Claims and
such rights shall be deemed waived, released, discharged, and terminated as of
the latest to occur of the Effective Date and the Initial Distribution Date, and
all actions related to the enforcement of such Subordination-Related Rights
shall be permanently enjoined. Distributions under, described in, contemplated
by, and/or implemented by, this Plan shall not be subject to levy, garnishment,
attachment, or like legal process by any holder of a Claim, including, but not
limited to, holders of 11% Note Claims and 7 1/2% Convertible Note Claims, by
reason of any claimed Subordination-Related Rights or otherwise, so that each
holder of a Claim shall have and receive the complete benefit of the
distributions in the manner set forth and described in this Plan.
<PAGE>
D. Discharge of Westbridge.
The rights afforded herein and the treatment of all Claims and
Equity Interests herein shall be in exchange for and in complete satisfaction,
discharge, and release of all Claims and Equity Interests of any nature
whatsoever, including any interest accrued on such Claims from and after the
Petition Date, against the Debtor, the Debtor in Possession, or any of its
assets or properties, arising prior to the Effective Date. Except as otherwise
expressly specified in the Plan, the Confirmation Order shall act as of the
Effective Date as a discharge of all debts of, Claims against, liens on, and
Equity Interests in the Debtor, its assets and properties, arising at any time
before the entry of the Confirmation Order, regardless of whether a proof of
claim or interest with respect thereto was filed, whether the Claim or Equity
Interest is Allowed, or whether the holder thereof votes to accept the Plan or
is entitled to receive a distribution thereunder. After the Effective Date, any
holder of such discharged Claim or Equity Interest shall be precluded from
asserting against the Debtor, Reorganized Westbridge, or any of its assets or
properties, any other or further Claim or Equity Interest based on any document,
instrument, act, omission, transaction, or other activity of any kind or nature
that occurred before the entry of the Confirmation Order.
E. Injunction
Except as otherwise expressly provided in the Plan, the
Confirmation Order, or a separate order of the Court, all entities who have
held, hold, or may hold Claims against or Equity Interests in the Debtor which
arose before or were held as of the Effective Date, are permanently enjoined, on
and after the Effective Date, from (a) commencing or continuing in any manner
any action or other proceeding of any kind against the Debtor with respect to
any such Claim or Equity Interest, (b) the enforcement, attachment, collection,
or recovery by any manner or means of any judgment, award, decree, or order
against the Debtor on account of any such Claim or Equity Interest, (c)
creating, perfecting, or enforcing any encumbrance of any kind against the
Debtor or against the property or interests in property of the Debtor on account
of any such Claim or Equity Interest and (d) asserting any right of setoff,
subrogation, or recoupment of any kind against any obligation due from the
Debtor or against the property or interests in property of the Debtor on account
of any such Claim or Equity Interest. Such injunction shall extend to successors
of the Debtor (including, without limitation, Reorganized Westbridge) and their
respective properties and interests in property.
F. Preservation/Waiver of Causes of Action.
<PAGE>
1. Pursuant to the Plan, and sections 544, 547, 548, 549, 550,
551, 553 and 1123(b)(3)(B) of the Bankruptcy Code, the Debtor and Reorganized
Westbridge shall retain all rights and all Causes of Action accruing to
Westbridge, the estate, or Reorganized Westbridge, including, without
limitation, (i) the avoidance of any transfer of an interest of Westbridge in
property or any obligation incurred by Westbridge, or (ii) the turnover of any
property to the estate, and except as expressly noted in the Plan or
Confirmation Order, nothing contained in the Plan or the Confirmation Order
shall be deemed to be a waiver or relinquishment of any such rights or Cause of
Action. Nothing contained in the Plan or the Confirmation Order shall be deemed
to be a waiver or relinquishment of any Claim, Cause of Action, right of setoff,
or other legal or equitable defense which Westbridge had immediately prior to
the Petition Date which is not specifically waived or relinquished by the Plan.
Reorganized Westbridge shall have, retain, reserve and be entitled to assert all
such Claims, Causes of Action, rights of setoff and other legal or equitable
defenses which Westbridge had immediately prior to the Petition Date as fully as
if the Chapter 11 Case had not been commenced; and all of Reorganized
Westbridge's legal and equitable rights respecting any Claim which is not
specifically waived or relinquished by the Plan may be asserted after the
Effective Date to the same extent as if the Chapter 11 Case had not been
commenced.
2. The Debtor hereby waives any rights or Causes of Action it may
have against the holders of the 11% Notes, the 7 1/2% Convertible Notes, the
members of the Ad Hoc Committee, and the Trustees under each of the 11% Note
Indenture and the 7 1/2% Convertible Note Indenture, and each of their
representatives and agents (including any professionals retained by such persons
or entities) whether known or unknown, foreseen or unforeseen, existing or
hereafter arising, in law, equity or otherwise, based in whole or in part upon
any omission, transaction, event or other occurrence taking place prior to the
Effective Date in any way relating to the 11% Notes, the 7-1/2% Convertible
Notes, the Chapter 11 Case or the Plan.
G. Votes Solicited in Good Faith
Westbridge has, and upon confirmation of the Plan shall be deemed
to have, solicited acceptances of the Plan in good faith and in compliance with
the applicable provisions of the Bankruptcy Code. Westbridge (and each of its
affiliates, agents, directors, officers, employees, advisors, and attorneys)
have participated in good faith and in compliance with the applicable provisions
of the Bankruptcy Code in the offer, issuance, sale, and purchase of the
securities offered and sold under the Plan and therefore is not, and on account
of such offer, issuance, sale, solicitation, and/or purchase will not be, liable
at any time for the violation of any applicable law, rule, or regulation
governing the solicitation of acceptances or rejections of the Plan or the
offer, issuance, sale, or purchase of the securities offered and sold under the
Plan.
H. Administrative Claims Incurred after the Confirmation Date
<PAGE>
Administrative Claims incurred by Reorganized Westbridge after
the date and time of the entry of the Confirmation Order, including (without
limitation) Claims for professionals' fees and expenses incurred after such
date, shall not be subject to application and may be paid by Reorganized
Westbridge in the ordinary course of business and without application for or
Court approval.
I. Westbridge's Limited Release.
On the Effective Date, Westbridge on behalf of itself, its
non-debtor Subsidiaries and the estate, shall be deemed to release
unconditionally all of their respective present and former officers and
directors, except those officers and directors set forth on Exhibit D to this
Plan, from any and all Claims, obligations, suits, judgments, damages, rights,
Causes of Action and liabilities whatsoever, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or otherwise, based
in whole or in part upon actions taken in their respective capacities described
above or any omission, transaction, event or other occurrence taking place on or
prior to the Effective Date in any way relating to Westbridge, the Chapter 11
Case or the Plan, except that (i) no individual shall be released from (x) any
act or omission that constitutes gross negligence or willful misconduct or (y)
any contractual obligation of any such person to the Debtor or its non-debtor
Subsidiaries, and (ii) Reorganized Westbridge shall not relinquish or waive the
right to assert any of the foregoing as a legal or equitable defense or right of
set-off or recoupment against any Claims of any such persons asserted against
Westbridge or its non-debtor Subsidiaries.
J. Exculpation, Release and Injunction of Released Parties.
<PAGE>
1. Westbridge and Reorganized Westbridge and all of their
respective present and former officers, directors, employees, advisors,
attorneys, financial advisors, accountants, and other professionals and each of
the Trustees, counsel to each of the respective Trustees, the Creditors
Committee members, counsel to the Creditors Committee, Ad Hoc Committee members,
counsel to the Ad Hoc Committee, financial advisors to the Creditors Committee
and Ad Hoc Committee and each of their representatives and agents (including any
professionals retained by such persons or entities) (the "Released Parties")
shall have no liability whatsoever to any holder or purported holder of an
Administrative Claim, Claim, or Equity Interest for any act or omission in
connection with, or arising out of, the Plan, the Disclosure Statement, the
negotiation of the Plan, the negotiation of the Stock Purchase Agreement and the
other documents included in the Plan Supplement, the pursuit of approval of the
Disclosure Statement or the solicitation of votes for confirmation of the Plan,
the Chapter 11 Case, the consummation of the Plan, the administration of the
Plan or the property to be distributed under the Plan, or any transaction
contemplated by the Plan or Disclosure Statement or in furtherance thereof
(including, without limitation, the various management, employee, director and
agent retention, incentive bonus and stock option plans, employment contracts,
programs and arrangements adopted in connection with the Plan or the Chapter 11
Case), except for willful misconduct or gross negligence as determined by a
Final Order, and, in all respects, shall be entitled to rely upon the advice of
counsel with respect to their duties and responsibilities under the Plan. This
exculpation shall be in addition to, and not in limitation of, all other
releases, indemnities, exculpations and any other applicable law or rules
protecting such Released Parties from liability.
2. Injunction. Pursuant to section 105 of the Bankruptcy
Code, no holder or purported holder of an Administrative Claim,
Claim or Equity Interest shall be permitted to commence
or continue any action, employment of process, or an act to collect, offset, or
recover any Claim against a Released Party that accrued on or prior to the
Effective Date and has been released or waived pursuant to Section VII.J.1.
K. Release of Officers and Directors; Waiver of Claims.
1. Waiver of Claims; Covenant Not To Sue
(a) Effective as of the Confirmation Date, but
subject to the occurrence of the Effective Date, and except as
otherwise expressly provided in this Plan or
the Confirmation Order, the Debtor and Debtor in Possession (x) shall be deemed
to have covenanted with each of the present and former officers and directors of
the Debtor, except those officers and directors set forth on Exhibit D to this
Plan, to waive and not to (1) sue or otherwise seek any recovery from such
officers and directors, or their respective property, whether for tort, fraud,
contract, violations of federal or state securities laws, or otherwise, based in
whole or in part upon any act or omission, transaction, event, or other
occurrence taking place on or before the Effective Date in any way relating to
the Debtor, the Chapter 11 Case, or the Plan or (2) assert against any of the
Debtor's present or former officers and directors, except those officers and
directors set forth on Exhibit D to this Plan, or their respective property, any
Claim, obligation, right, cause of action, or liability which the Debtor may be
entitled to assert in any case, whether for tort, fraud, contract, violations of
federal or state securities laws, or otherwise, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, based in whole or in part
upon any act or omission, transaction, or other occurrence taking place on or
before the Effective Date in any way relating to the Debtor, the Chapter 11
Case, or the Plan and (y) are permanently enjoined, on and after the Effective
Date, from commencing or continuing in any manner any action or other proceeding
of any kind with respect to such Claims, obligations, rights, causes of action,
or liabilities released or waived hereunder; except that (i) the foregoing
waivers and covenants shall not apply to (x) any act or omission of any
individual that constitutes gross negligence or willful misconduct or (y) any
contractual obligation of any individual to the Debtor or its non-debtor
Subsidiaries, and (ii) Reorganized Westbridge shall not relinquish or waive the
right to assert any Claims, obligations, rights, causes of action, or
liabilities, as a legal or equitable defense or recoupment against any Claims of
any such persons asserted against Westbridge or its non-debtor Subsidiaries.
<PAGE>
(b) Effective as of the Confirmation Date,
but subject to the occurrence of the Effective Date, and except as
otherwise expressly provided in this Plan or the Confirmation Order,
all Persons who have held, hold, or may hold Claims
against or Equity Interests in the Debtor (x) shall be deemed to have covenanted
with each of the past and present officers and directors of the Debtor to waive
and not to (1) sue or otherwise seek any recovery from such officers and
directors, or their respective property, whether for tort, fraud, contract,
violations of federal or state securities laws, or otherwise, based in whole or
in part upon any act or omission, transaction, event, or other occurrence taking
place on or before the Effective Date in any way relating to the Debtor, the
Chapter 11 Case, or the Plan or (2) assert against any of such officers and
directors, or their respective property, any Claim, obligation, right, cause of
action, or liability which any such holder of a Claim against or Equity Interest
in the Debtor may be entitled to assert in any case, whether for tort, fraud,
contract, violations of federal or state securities laws, or otherwise, whether
known or unknown, foreseen or unforeseen, existing or hereafter arising, based
in whole or in part upon any act or omission, transaction, event, or other
occurrence taking place on or before the Effective Date in any way relating to
the Debtor, the Chapter 11 Case, or the Plan and (y) are permanently enjoined,
on and after the Effective Date, from commencing or continuing in any manner any
action or other proceeding of any kind with respect to such Claims, obligations,
rights, causes of action, or liabilities released or waived hereunder.
2. Limited Release. Effective as of the Confirmation Date,
but subject to the occurrence of the Effective Date, and except as
otherwise expressly provided in the Plan or the
Confirmation Order, each of the Debtor's past and present officers and directors
and their respective property shall be released from any and all Claims,
obligations, rights, causes of action, and liabilities which any holder of a
Claim against or Equity Interest in the Debtor may be entitled to assert in any
case, whether for tort, fraud, contract, violations of federal or state
securities laws, or otherwise, whether known or unknown, whether foreseen or
unforeseen, existing or hereafter arising, based in whole or in part upon any
act or omission, transaction, event or other occurrence taking place on or
before the Effective Date in any way relating to the Debtor, the Chapter 11
Case, or the Plan.
3. Limitation of Governmental Releases. Notwithstanding
Sections VII.K.1. and 2 of the Plan, the Plan shall not release,
discharge, or exculpate any non-debtor party from any debt owed to the United
States Government and/or its agencies, including the Pension Benefit Guaranty
Corporation (the "Government"), or from any liability arising under the Internal
Revenue Code, the Employee Retirement Income Security Act of 1974, as amended,
or the environmental laws, securities laws or criminal laws of the United
States. In addition, notwithstanding Sections VII.K.1 and 2 of the Plan, the
Plan shall not enjoin or prevent the Government from collecting any such
liability from any such non-debtor party.
<PAGE>
L. Term of Bankruptcy Injunction or Stays.
All injunctions or stays provided for in the Chapter 11 Case
under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence
on the Confirmation Date, shall remain in full force and effect until the
Effective Date.
M. Preservation of Insurance.
The Debtor's discharge and release from all Claims as provided
herein, except as necessary to be consistent with this Plan, shall not diminish
or impair the enforceability of any insurance policy (including the National
Union Policy) that may cover Claims against the Debtor, Reorganized Westbridge
(including, without limitation, its past and present officers and directors) or
any other person or entity.
N. Officers' and Directors' Indemnification Rights.
Notwithstanding any other provisions of the Plan, the obligations
of the Debtor to indemnify its present and former directors, officers, and
employees against any obligations, liabilities, costs or expenses pursuant to
the articles of incorporation or by-laws of the Debtor, applicable state law,
specific agreement, or any combination of the foregoing, shall not survive the
Effective Date and shall be discharged, regardless of whether indemnification is
owed in connection with an event occurring prior to, upon, or subsequent to the
Petition Date; provided, however, that Reorganized Westbridge shall take all
such actions as are necessary or desirable to maintain in full force and effect
the National Union Policy until such time as it may expire by its terms and
directors and officers of the Debtor and its Subsidiaries covered by the
National Union Policy shall be entitled to make claims thereunder pursuant to
the terms thereof notwithstanding the provisions of this Section VII.N; provided
further, however, that the Indemnification Escrow shall be terminated on the
Effective Date and the Debtor shall retain the Cash contained in the
Indemnification Escrow free and clear of any Claims or other rights or interests
of any Person.
O. The Securities Litigation Settlement Fund.
1. Within five (5) days of the entry of the
District Court Order by the District Court (which date shall not be
earlier than the Effective Date) requiring the
payment of such amount, the Debtor and National Union shall pay the aggregate
sum of $1,000,000 (the "Securities Litigation Settlement Fund") pursuant to, and
in accordance with the terms of, the Final Settlement Agreement and the District
Court Order; which payment shall be in full satisfaction and discharge of the
liabilities of the Debtor in respect of the Securities Litigation Claims. The
payment by the Debtor and National Union shall be comprised of Cash paid by the
Debtor and payments made by National Union under the National Union Policy.
<PAGE>
2. The Securities Litigation Settlement Fund shall be
held in accordance with the Final Settlement Agreement, subject to the
jurisdiction of the District Court. No distribution shall be made
from the Securities Litigation Settlement Fund
except pursuant to the Final Settlement Agreement and an order of the District
Court.
3. The distribution of the Securities Litigation
Settlement Fund shall be made pursuant to the Final Settlement Agreement
and the District Court Order to be entered by the District Court prior
to the Effective Date, as the same may be amended, modified or supplemented
from time to time by the District Court in accordance with the terms of
such District Court Order on such notice as the District Court deems
appropriate.
VIII.
RETENTION OF JURISDICTION
<PAGE>
The Court shall have exclusive jurisdiction of all matters
arising out of, and related to, the Chapter 11 Case and the Plan pursuant to,
and for the purposes of, section 105(a) and section 1142 of the Bankruptcy Code
and for, among other things, the following purposes: (1) to hear and determine
applications for the assumption or rejection of executory contracts or unexpired
leases pending on the date the Plan is confirmed, and the allowance of Claims
resulting therefrom; (2) to determine any other applications, adversary
proceedings, and contested matters pending on the Effective Date; (3) to ensure
that distributions to holders of Allowed Claims and Allowed Equity Interests are
accomplished as provided herein; (4) to resolve disputes as to the ownership of
any Claim or Equity Interest; (5) to hear and determine timely objections to
Administrative Claims and Claims; (6) to enter and implement such orders as may
be appropriate in the event the Confirmation Order is for any reason stayed,
revoked, modified or vacated; (7) to issue such orders in aid of execution of
the Plan, to the extent authorized by section 1142 of the Bankruptcy Code; (8)
to consider any modifications of the Plan, to cure any defect or omission, or to
reconcile any inconsistency in any order of the Court, including, without
limitation, the Confirmation Order; (9) to resolve disputes concerning nondebtor
releases, exculpations, and injunctions contained herein; (10) to hear and
determine all applications for compensation and reimbursement of expenses of
professionals under sections 330, 331, and 503(b) of the Bankruptcy Code; (11)
to hear and determine disputes arising in connection with the interpretation,
implementation, or enforcement of the Plan; (12) to hear and determine any issue
for which the Plan requires a Final Order of the Court; (13) to hear and
determine matters concerning state, local, and federal taxes in accordance with
sections 346, 505, and 1146 of the Bankruptcy Code; (14) to hear any other
matter not inconsistent with the Bankruptcy Code; (15) to hear and determine
disputes arising in connection with compensation and reimbursement of expenses
of professionals for services rendered during the period commencing on the
Confirmation Date through and including the Effective Date; (16) to hear and
determine disputes arising in connection with any fees and expenses of any
Trustee for services rendered through and including the Effective Date and (17)
to enter a final decree closing the Chapter 11 Case.
IX.
MISCELLANEOUS PROVISIONS
A. Payment of Statutory Fees.
All fees payable on or before the Effective Date pursuant to
section 1930 of title 28 of the United States Code, as determined by the Court
at the Confirmation Hearing, shall be paid on or before the Effective Date.
B. Dissolution of Creditors Committee.
The appointment of the Creditors Committee shall terminate on the
later of the sixtieth day following the Effective Date and the first date on
which there exists a Final Order with respect to the applications for final
allowances of compensation and reimbursement of expenses of the attorneys and
financial advisors to the Creditors Committee.
C. Modification of the Plan.
Westbridge reserves the right, in accordance with the Bankruptcy
Code, to amend or to modify the Plan, with the consent of the Creditors
Committee and CSFB prior to the entry of the Confirmation Order. After entry of
the Confirmation Order, Reorganized Westbridge or Westbridge may amend or modify
the Plan, or remedy any defect or omission or reconcile any inconsistency in the
Plan in such a manner as may be necessary to carry out the purpose and intent of
the Plan.
D. Governing Law.
Unless a rule of law or procedure is supplied by Federal law
(including the Bankruptcy Code and Bankruptcy Rules) or the Delaware General
Corporation Law, the laws of the State of New York (without reference to the
conflicts of laws provisions thereof) shall govern the construction and
implementation of the Plan and any agreements, documents, and instruments
executed in connection with the Plan.
E. Filing or Execution of Additional Documents.
<PAGE>
On or before the Effective Date, Westbridge or Reorganized
Westbridge, shall file with the Court or execute, as appropriate, such
agreements and other documents as may be necessary or appropriate to effectuate
and further evidence the terms and conditions of the Plan.
F. Withholding and Reporting Requirements.
In connection with the Plan and all instruments issued in
connection therewith and distributions thereon, Reorganized Westbridge shall
comply with all withholding and reporting requirements imposed by any federal,
state, local, or foreign taxing authority and all distributions hereunder shall
be subject to any such withholding and reporting requirements.
G. Exemption From Transfer Taxes
Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer or exchange of Equity Securities under the Plan, the making or
assignment of any lease or sublease or the making or delivery of any other
instrument whatsoever, in furtherance of or in connection with the Plan shall
not be subject to any stamp, real estate transfer, recording or other similar
tax.
H. Waiver of Federal Rule of Civil Procedure 62(a)
The Debtor may request that the Confirmation Order include (a)
a finding that Fed. R. Civ. P. 62(a) shall not apply to the Confirmation
Order and (b) authorization for the Debtor to consummate the Plan immediately
after entry of the Confirmation Order.
I. Headings.
Headings used in the Plan are for convenience and reference only
and shall not constitute a part of the Plan for any purpose.
J. Exhibits/Schedules
All Exhibits and Schedules to the Plan are incorporated into and
constitute a part of the Plan as if set forth herein.
K. Notices
All notices, requests, and demands hereunder to be effective
shall be in writing and unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when actually delivered or, in the case
of notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows:
<PAGE>
To the Debtor: Westbridge Capital Corp., 110 West Seventh Street, Fort
Worth, Texas 76102, attention: Patrick J. Mitchell, Tel.: (817) 878-3306/Fax:
(817) 878-3672, with a copy to Paul, Weiss, Rifkind, Wharton & Garrison, 1285
Avenue of the Americas, New York, New York 10019-6064, attention: Alan W.
Kornberg, Tel.: (212) 373-3000/Fax: (212) 757-3990.
To the Creditors Committee: Stroock & Stroock & Lavan LLP, 180 Maiden Lane,
New York, New York 10038, attention: Fred S. Hodara, Tel: (212) 806-5400/ Fax:
(212) 806-6006.
To CSFB: Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York
10038, attention: Michael J. Sage, Tel.: (212) 504-6000/Fax: (212) 504-6666.
L. Plan Supplement
Forms of the documents relating to the Amended Westbridge
Certificate of Incorporation, the Amended Westbridge Bylaws, Amended Guarantee
Agreement, New Convertible Preferred Stock, New Warrants, Registration Rights
Agreement, investment guidelines referred to in Section VI.C.2(a)(ii), Agent
Options, Officers and Director Stock Options and the Bonus Program shall be
contained in the Plan Supplement and filed with the Clerk of the Court at least
10 days prior to the date of the Confirmation Hearing. Upon its filing with the
Court, the Plan Supplement may be inspected in the office of the Clerk of the
Court during normal court hours. Holders of Claims or Equity Interests may
obtain a copy of the Plan Supplement upon written request to the Debtor in
accordance with Section IX.K of the Plan.
M. Conflict
The terms of this Plan shall govern in the event of any
inconsistency with the summaries of the Plan set forth in the Disclosure
Statement.
X.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
<PAGE>
Other than (i) executory contacts or unexpired leases which are
the subject of a motion to reject pending on the Confirmation Date, and (ii)
employment agreements, if any, terminated prior to or in connection with the
Plan (including, without limitation, those employment agreements set forth on
Exhibit E to this Plan), all of the executory contracts, unexpired leases and
employment agreements that exist between Westbridge and any person, are
specifically assumed as of the Effective Date pursuant to the Plan. All Claims
for damages arising from the rejection of executory contracts or unexpired
leases must be filed with the Court in accordance with the terms of the order
authorizing such rejection or, if not rejected by separate order, within thirty
(30) days from the entry of the Confirmation Order. Any Claims not filed within
such time will be forever barred from assertion against Westbridge, its estate
and Reorganized Westbridge. All Allowed Claims arising from the rejection of
executory contracts or unexpired leases shall be treated as Class 8 Claims in
Group 8-A or Class 3 Claims (Convenience Claims), as the case may be.
Reorganized Westbridge, except as otherwise agreed by the parties, will cure any
and all undisputed defaults within 60 days of the Effective Date under any
executory contract, unexpired lease or employment agreement assumed pursuant to
the Plan in accordance with section 365 of the Bankruptcy Code. All disputed
defaults that are required to be cured shall be cured either within 30 days of
the entry of a Final Order determining the amount, if any, of the Debtor's or
Reorganized Westbridge's liability with respect thereto, or as may otherwise be
agreed to by the parties.
XI.
BENEFIT PLANS
All employment and severance agreements and policies, and all
employee compensation and benefit plans, policies, and programs of the Debtor
applicable generally to its employees, including agreements and programs subject
to section 1114 of the Bankruptcy Code, as in effect on the Effective Date,
including, without limitation, all savings plans, retirement plans, health care
plans, disability plans, severance benefit plans, incentive plans, and life,
accidental death, and dismemberment insurance plans, shall be deemed to be, and
shall be treated as through they are, executory contracts that are assumed under
the Plan, but only to the extent that rights under such agreements and programs
are held by the Debtor or individuals who are Reorganized Westbridge employees
as of the Effective Date, and the Debtor's obligations under such agreements and
programs to individuals who are employees of the Debtor on the Effective Date
shall survive the Effective Date of this Plan, without prejudice to Reorganized
Westbridge's rights under applicable non-bankruptcy law to modify, amend, or
terminate the foregoing arrangements, except for (i) such executory contracts or
plans specifically rejected pursuant to the Plan (to the extent such rejection
does not violate section 1114 of the Bankruptcy Code) and (ii) such executory
contracts or plans as have previously been terminated (including, without
limitation, any employment agreements set forth on Exhibit E to this Plan), or
rejected, pursuant to a Final Order, or specifically waived by the beneficiaries
of such plans, contracts, or programs.
<PAGE>
XII.
EFFECTIVENESS OF THE PLAN
A. Confirmation of the Plan
The Plan can be confirmed either under section 1129(a) of the
Bankruptcy Code or in a non-consensual manner under section 1129(b) of the
Bankruptcy Code so long as the conditions of Section XII.B.1 have been satisfied
or waived pursuant to Section XII.B.2.
B. Effectiveness of the Plan.
1. Conditions Precedent to Effectiveness
The Plan shall not become effective unless and until it has been
confirmed and the following conditions have been satisfied in full or waived
pursuant to Section XII.B.2: (1) the Confirmation Order in a form satisfactory
to the Debtor, CSFB and the Creditors Committee shall have become a Final Order;
(2) the Effective Date shall have occurred within six months following the
Petition Date; (3) the Amended Westbridge Certificate of Incorporation shall
have been properly filed with the Secretary of State of the State of Delaware;
(4) all authorizations, consents and regulatory approvals (including, without
limitation, any approvals required under the HSR Act or state insurance laws or
regulations relating to the change in ownership of Westbridge upon the Effective
Date) required (if any) for the Plan's effectiveness shall have been obtained;
(5) the aggregate amount of Class 8 Claims in Group 8-A does not exceed
$5,000,000; (6) each of the conditions to the Stock Purchase Agreement other
than the occurrence of the Effective Date shall have been satisfied or waived as
set forth therein; (7) the aggregate amount of Administrative Claims and
Priority Non-Tax Claims as of the Effective Date does not exceed $5,000,000; (8)
the Debtor, CSFB and the Creditors Committee shall each have approved the form
and substance of each of the Amended Westbridge Certificate of Incorporation,
the Amended Westbridge Guarantee, the Amended Westbridge By-Laws, the New Common
Stock, the New Convertible Preferred Stock, the New Warrants, the Registration
Rights Agreement, the Bonus Program, the Agent Options, the Management
Employment Agreements and the Officer and Director Stock Options; and (9) the
District Court shall have entered the District Court Order approving the Final
Settlement Agreement and any amendments thereof, which District Court Order
shall not materially modify or alter the Securities Litigation Settlement as
described in the Claims Agreement.
<PAGE>
2. Waiver of Conditions
Westbridge may waive any or all of the conditions set forth in
Section XII.B.1 above at any time, with the prior consent of the Creditors
Committee and CSFB, without leave of or order of the Court and without any
formal action.
3. Effect of Failure of Conditions
In the event that the Effective Date does not occur on or before
one hundred and twenty (120) days after the Confirmation Date, upon notification
submitted by Westbridge to the Court: (a) the Confirmation Order shall be
vacated, (b) no distributions under the Plan shall be made, (c) Westbridge and
all holders of Claims and Equity Interests shall be restored to the status quo
ante as of the day immediately preceding the Confirmation Date as though the
Confirmation Date had never occurred, and (d) Westbridge's obligations with
respect to the Claims and Equity Interests shall remain unchanged and nothing
contained in the Plan shall constitute or be deemed a waiver or release of any
Claims or Equity Interests by or against Westbridge or any other person or to
prejudice in any manner the rights of Westbridge or any person in any further
proceedings involving Westbridge.
4. Vacatur of Confirmation Order
If an order denying confirmation of the Plan is entered, then the
Plan shall be null and void in all respects, and nothing contained in the Plan
shall (a) constitute a waiver or release of any Claims against or Equity
Interests in Westbridge; (b) prejudice in any manner the rights of the holder of
any Claim against, or Equity Interest in, Westbridge; (c) prejudice in any
manner any right, remedy or claim of Westbridge; or (d) be deemed an admission
against interest by Westbridge.
5. The Final Settlement Agreement shall survive consummation of
the Plan, except to the extent that any provision of the Final Settlement
Agreement is inconsistent with the Plan, in which case the provisions of the
Plan shall supersede such inconsistent provision of the Final Settlement
Agreement.
XIII.
NEW CONVERTIBLE PREFERRED STOCK PURCHASE
<PAGE>
A. Stock Purchase Agreement. As provided in the Stock Purchase
Agreement, CSFB has agreed to purchase all of the issued and authorized
New Convertible Preferred Stock not distributable to holders of Allowed
CSFB 11% Note Claims upon the terms and subject to the conditions set
forth below and in the Stock Purchase Agreement.
The aggregate proceeds received by the Debtor from the exercise of such Purchase
Rights shall be distributed under the Plan to fund distributions to holders of
Allowed Class 7 Claims in Group 7-A.
B. Purchase Right. Under the Plan, each holder of a 7-1/2%
Convertible Note as of October 22, 1998 shall be issued the right
(a "Purchase Right"), on the terms and conditions hereinafter set forth,
to purchase upon exercise and satisfaction
of other conditions its Pro Rata Percentage (as defined below) of the New
Convertible Preferred Stock not distributed to holders of Allowed CSFB 11% Note
Claims at a purchase price equal to the liquidation preference of the New
Convertible Preferred Common Stock. The aggregate proceeds received by the
Debtor from the exercise of such Purchase Rights shall be distributed under the
Plan to fund distributions to holders of Allowed Class 7 Claims in Group 7-A.
The Debtor will issue an aggregate of 14,836,413 Purchase Rights (which amount
is equal to one Purchase Right for every one dollar of liquidation preference of
New Convertible Preferred Stock not distributed to holders of Allowed CSFB 11%
Note Claims).
1. In order to be eligible to exercise the Purchase
Right, a holder of a 7 1/2% Convertible Note must have been the record
holder of such 7 1/2% Convertible Note as of May 20, 1998 and must continue
to be the record holder of such 7 1/2% Convertible Note as of October 22, 1998
(each such holder, an "Eligible Holder"). The Purchase Right is nontransferable.
(a) Purchase Right Amount. The Purchase Right
shall entitle each Eligible Holder to purchase New Convertible Preferred
Stock with a liquidation preference equal to the product of (1) such holder's
Pro Rata Percentage multiplied by (2)
the liquidation preference as of the Effective Date of the New Convertible
Preferred Stock not distributable to holders of Allowed CSFB 11% Note Claims
under Section IV.7(a)(ii) (i.e., each single Purchase Right shall entitle each
Eligible Holder to purchase New Convertible Preferred Stock with a liquidation
preference of one dollar). "Pro Rata Percentage" means, with respect to any
Eligible Holder, its Pro Rata share (based on its holdings as of May 20, 1998
less any 7 1/2% Convertible Notes sold by it between May 20, 1998 and October
22, 1998) of Class 8 Allowed Claims in Group 8-B.
(b) Exercise Price. The purchase price of the
Purchase Right shall be equal to the liquidation preference of the New
Convertible Preferred Stock in respect of which the Purchase Right is
validly exercised (such amount, the "Exercise Price").
<PAGE>
(c) Exercise Notice. In order to exercise the
Purchase Right, each Eligible Holder must complete the Exercise Notice
and return a properly completed and duly executed Exercise Notice
to the Debtor no later than 5:00 p.m. on the last
day of the Exercise Period. The Exercise Notice will not be deemed to have been
timely delivered unless it is actually received by the Debtor prior to the last
day of the Exercise Period at its address as set forth in the instructions
accompanying the Exercise Notice (the "Exercise Instructions"). In order to
facilitate the exercise of the Purchase Right, the Debtor has mailed to each
Eligible Holder a form of Exercise Notice, together with the Exercise
Instructions, following the Court's approval of the Disclosure Statement.
Promptly following the last day of the Exercise Period, the Debtor shall give
written notice to each Eligible Holder whose Exercise Notice was properly
completed, duly executed and timely received (an "Exercising Holder") of the
acceptance of its Exercise Notice and notice of the date on which the Exercise
Price is required to be received by the Debtor from such Eligible Holder (such
notice, a "Notice of Acceptance").
(d) Determination of Validity. All questions as to
eligibility of holders entitled to participate in the Purchase Right,
the conformity of any Exercise Notice with the Exercise Instructions,
the timeliness of the Debtor's receipt of any Exercise Notice or the
validity of any Exercise Notice shall be determined
by the Debtor in its sole discretion and its determination shall be final and
binding. In addition, the Debtor shall have the absolute right, in its sole
discretion, to reject any and all Exercise Notices determined by it not to be in
proper form or not to be in conformity with any of the Exercise Instructions. No
Exercise Notice shall be deemed to have validly delivered until all
irregularities with respect to it have been cured or waived. The Debtor shall
not be under any duty to give any holder notification of irregularities in the
Exercise Notice and shall not have any liability to any holder for any failure
to give such notice. The Debtor reserves the absolute right to waive any and all
irregularities in any Exercise Notice whether or not similar irregularities are
waived in the case of any other holder submitting an Exercise Notice. If any
Exercise Notice is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when executing the
Exercise Notice and, unless waived by the Debtor, proper evidence satisfactory
to the Debtor, in its reasonable discretion, of such person's authority so to
act must be submitted. A beneficial owner of 7 1/2% Convertible Notes that are
held by or registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or custodian is urged to contact such entity promptly
if such beneficial holder wishes to participate in the Purchase Right.
<PAGE>
(e) Payment. Payment of the Exercise Price shall be due on
the date specified in the Notice of Acceptance (such date, the "Payment Date"),
which date shall be no less than three Business Days prior to
the Effective Date. Payment of the
Exercise Price must be made by wire transfer of immediately available funds to
the Debtor's account identified in the Acceptance Notice or by certified check
delivered to the Debtor's address identified in the Acceptance Notice, in each
case so as to be received by the Debtor no later than 5:00 p.m. on the Payment
Date. Payment shall be held in escrow by the Debtor until the Effective Date. On
the Effective Date, all monies shall be released to the Debtor from such escrow
and each Exercising Holder shall receive the applicable number of shares of New
Convertible Preferred Stock on the Initial Distribution Date. In the event that
any Exercising Holder shall fail to deliver the Exercise Price to the Debtor on
or before the Payment Date, such Exercising Holder shall be deemed to have
irrevocably waived its right to participate in the Purchase Right and the
Debtor's acceptance of its Exercise Notice shall be automatically rescinded
without notice and of no further force or effect. In the event the Court does
not confirm the Plan or the Effective Date does not occur, the offer contained
herein also shall be automatically rescinded without notice and of no further
force and effect and any money received by the Debtor hereunder shall promptly
be returned to the applicable Exercising Holder.
Dated: Fort Worth, Texas
October 27, 1998
WESTBRIDGE CAPITAL CORP.
By:/s/ Patrick J. Mitchell
Name: Patrick J. Mitchell
Title: President
<PAGE>
EXHIBIT A TO PLAN
SUMMARY OF TERMS OF NEW
CONVERTIBLE PREFERRED STOCK
<TABLE>
<S> <C>
New Convertible Preferred Stock: 100% of the issued and authorized New Convertible
Preferred Stock of the Debtor will be distributed to
holders of Allowed CSFB 11% Note Claims or purchased
under the Stock Purchase Agreement or Purchase Rights.
The aggregate purchase price for the New Convertible
Preferred Stock shall equal the Allowed Amount of the 11%
Note Claims as of the Effective
Date (excluding the CSFB 11%
Note Claims).
Dividend: Annual cumulative dividend rate of 10.25% (the dividends
shall compound on an annual basis). Dividends will be
paid in additional shares of New Convertible Preferred
Stock (the "Dividend Stock"). The Dividend Stock shall
have the same terms as the New Convertible Preferred
Stock.
Conversion: Initially convertible into 41.4% of the New Common Stock,
based on an Effective Date of December 31, 1998. The
Allowed Amount of the 11% Note Claims will increase after
the Petition Date as a result of the continued accrual of
interest during the pendency of the Chapter 11 Case. The
amount of New Convertible Preferred Stock which the
Debtor intends to issue to fund distributions to holders
of the 11% Note Claims is based on the Allowed Amount of
the 11% Note Claims assuming an Effective Date of
December 31, 1998. Consequently, the Debtor will need to
issue additional New Convertible Preferred Stock if the
Effective Date does not occur by December 31, 1998. If
the issuance of additional New Convertible Preferred
Stock is required, such additional New Convertible
Preferred Stock will be convertible into additional New
Common Stock, thus increasing the percentage of New
Common Stock which the New Convertible Preferred Stock
may be initially converted to. Each issuance of Dividend
Stock after the Effective Date shall also cause an
increase in the percentage of New Common Stock into which
the New Convertible Preferred Stock will be convertible
to.
Redemption: Reorganized Westbridge shall be required to redeem 100%
of the then outstanding New Convertible Preferred Stock
on the fifth anniversary of the Effective Date.
</TABLE>
<PAGE>
EXHIBIT B TO PLAN
SUMMARY OF TERMS OF
NEW WARRANTS
<TABLE>
<S> <C>
WARRANTS: Warrants to purchase up to 7% of the issued and outstanding New Common
Stock, on a fully diluted basis.
EXERCISE PRICE: Based on Enterprise Valuation of $95 million.
TERM: The New Warrants shall expire on the fifth anniversary of the Effective
Date.
OTHER TERMS: Such other customary terms (including anti-dilution provisions) as may
be mutually agreeable to the Debtor, CSFB and the Creditors Committee.
</TABLE>
NY1:#3179319v10
EXHIBIT C TO PLAN
STOCK PURCHASE AGREEMENT
<PAGE>
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
September 15, 1998, by and between WESTBRIDGE CAPITAL CORP., a Delaware
corporation (the "Company"), and CREDIT SUISSE FIRST BOSTON CORPORATION, a
Massachusetts corporation (the "Purchaser").
WHEREAS, pursuant to the Company's plan of reorganization (as
amended from time to time, the "Pre-Negotiated Plan") in a case (the "Chapter 11
Case") being filed on the date hereof under chapter 11 of title 11 of the United
States Code (the "Bankruptcy Code"), the Company intends to issue purchase
rights (the "Purchase Rights") to the holders of its outstanding 7 1/2%
Convertible Subordinated Notes Due 2004 (the "Convertible Subordinated Notes")
entitling such holders to purchase newly issued shares (the "Preferred Shares")
of Series A Cumulative Convertible Redeemable Preferred Stock of the Company
(the "Convertible Preferred Stock"), the proceeds of which will be used by the
Company to fund distributions to certain of the holders of its outstanding 11%
Senior Subordinated Notes Due 2002 (the "Senior Subordinated Notes") in
accordance with the Pre-Negotiated Plan; and
WHEREAS, the Purchaser is the holder of approximately 55% of
the Convertible Subordinated Notes and desires to purchase from the Company its
pro rata share of the Preferred Shares, as well as any other Preferred Shares
which are not purchased by the other holders of the Convertible Subordinated
Notes in accordance with the Pre-Negotiated Plan, all on the terms and subject
to the conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED SHARES; CLOSING
SECTION 1.01 Purchase and Sale of Preferred Shares.
On the terms and subject to the conditions set forth in this Agreement, the
Purchaser hereby agrees to purchase from the Company, and the Company hereby
agrees to sell to the Purchaser, on the Closing Date (as defined herein) (i)
such number of Preferred Shares as Purchaser shall be entitled to purchase
pursuant to the Purchase Rights granted to Purchaser under the Pre-Negotiated
Plan, and (ii) such additional number of Preferred Shares as shall equal the
aggregate number of the remaining Preferred Shares which are not being purchased
on such date pursuant to the Pre-Negotiated Plan by the other holders of
Convertible Subordinated Notes pursuant to the Purchase Rights granted to such
holders in accordance with the Pre-Negotiated Plan. The purchase price for each
Preferred Share shall be the stated liquidation preference per Preferred Share
as set forth in the Certificate of Incorporation (as defined herein) (the "Share
Purchase Price"), payable in immediately available funds at the Closing as
provided in Section 1.04 hereof.
SECTION 1.02 Time and Place of Closing. Subject to the satisfaction or waiver on
the Closing Date of the conditions set forth in Section 1.03 below, the closing
of the purchase and sale of Preferred Shares under this Agreement (the
"Closing") will take place on the effective date of the Pre-Negotiated Plan (the
"Closing Date") at 10:00 a.m. New York City time at the offices of Milbank,
Tweed, Hadley & McCloy, New York, New York or at such other time and location as
the parties may mutually establish.
SECTION 1.03 Conditions to Closing.
(a) The obligation of the Purchaser to purchase the number of
Preferred Shares set forth in this Agreement to be purchased by it hereunder on
the Closing Date is subject to the fulfillment, at or before the Closing, of
each of the following conditions (all or any of which may be waived in whole or
in part by the Purchaser in its sole discretion):
(i) Each representation and warranty made by the Company in
this Agreement (other than those made as of a specified earlier date)
shall be true and correct in all material respects on and as of the
Closing Date as though such representation or warranty was made on and
as of the Closing Date, and any representation or warranty made as of a
specified date earlier than the Closing Date shall have been true and
correct in all material respects on and as of such earlier date, and
the Company shall have delivered to the Purchaser a certificate, dated
the Closing Date and executed in the name and on behalf of the Company
by its President or any Vice President, to such effect.
(ii) The Company shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by the Company at
or before the Closing Date, and the Company shall have delivered to the
Purchaser a certificate, dated the Closing Date and executed in the
name and on behalf of the Company by its President or any Vice
President, to such effect.
(iii) The Pre-Negotiated Plan shall have been confirmed and
shall have become effective in accordance with its terms, and the
material terms of the Pre-Negotiated Plan shall be substantially the
same as the material terms contained in the draft plan of
reorganization attached hereto as Appendix I (the "Draft Plan").
(iv) Between the date hereof and the Closing Date, there shall
not have occurred (x) any material adverse change in the operations or
business of the Company and its subsidiaries (taken as a whole), other
than the commencement of the Chapter 11 Case or (y) any event affecting
generally and materially adversely the industry in which the Company
and its subsidiaries (taken as a whole) conduct their business which
would materially and adversely affect the ability of the Company and
its subsidiaries (taken as a whole) to operate their business.
(v) The Registration Rights Agreement (as such term is defined
in the Pre-Negotiated Plan) shall have been executed and delivered by
the Company, and the material terms of the Registration Rights
Agreement shall be substantially the same as the material terms
contained in the registration rights agreement attached hereto as
Appendix II.
(b) The obligation of the Company to sell Preferred Shares to
the Purchaser hereunder is subject to the fulfillment, at or before the Closing,
of each of the following conditions (all or any of which may be waived in whole
or in part by the Purchaser in its sole discretion):
(i) Each representation and warranty made by the Purchaser in
this Agreement (other than those made as of a specified earlier date)
shall be true and correct in all material respects on and as of the
Closing Date as though such representation or warranty was made on and
as of the Closing Date, and any representation or warranty made as of a
specified date earlier than the Closing Date shall have been true and
correct in all material respects on and as of such earlier date, and
the Purchaser shall have delivered to the Company a certificate, dated
the Closing Date and executed in the name and on behalf of the
Purchaser by its President or any Vice President, to such effect.
(ii) The Purchaser shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required
by this Agreement to be so performed or complied with by the Purchaser
on or before the Closing Date, and the Purchaser shall have delivered
to the Company a certificate, dated the Closing Date and executed in
the name and on behalf of the Purchaser by its President or any Vice
President, to such effect.
(iii) The Pre-Negotiated Plan shall have been confirmed and
shall have become effective in accordance with its terms, and the
material terms of the Pre-Negotiated Plan shall be substantially the
same as the material terms contained in the Draft Plan.
(iv) Between the date hereof and the Closing Date, there shall
not have occurred (x) any material adverse change in the operations or
business of the Company and its subsidiaries (taken as a whole), other
than the commencement of the Chapter 11 Case or (y) any event affecting
generally and materially adversely the industry in which the Company
and its subsidiaries (taken as a whole) conduct their business which
would materially and adversely affect the ability of the Company and
its subsidiaries (taken as a whole) to operate their business.
(v) The Registration Rights Agreement shall have been executed
and delivered by the Purchaser, and the material terms of the
Registration Rights Agreement shall be substantially the same as the
material terms contained in the registration rights agreement attached
hereto as Appendix II.
SECTION 1.04 Issuance of and Payment for the Preferred Shares. At the Closing,
(i) the Company shall issue and deliver to the Purchaser a certificate or
certificates, registered in the name of the Purchaser, representing the
aggregate number of Preferred Shares being purchased by the Purchaser pursuant
to Section 1.01, and (ii) the Purchaser shall pay to the Company, by wire
transfer of immediately available funds to an account designated in writing by
the Company at least two Business Days prior to the Closing Date, an amount
equal to the Share Purchase Price multiplied by the aggregate number of
Preferred Shares being purchased by the Purchaser hereunder.
SECTION 1.05 Restrictive Legend.
(a) In addition to any legend required by the General Corporation Law of the
State of Delaware, each certificate evidencing the Preferred Shares issued at
Closing, any shares of the Company's Common Stock issued upon conversion thereof
and any shares of capital stock of the Company issued with respect thereto (the
"Restricted Securities"), will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
ANY SHARES OF THE COMPANY'S COMMON STOCK ISSUED UPON
CONVERSION THEREOF, OR APPLICABLE STATE SECURITIES LAWS AND,
ACCORDINGLY, SUCH SHARES MAY NOT BE TRANSFERRED, SOLD, OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SUCH LAWS, AND UNTIL A
SATISFACTORY CERTIFICATE HAS BEEN FURNISHED TO THE COMPANY AS
TO SUCH EXEMPTION."
(b) Following the Closing Date, upon delivery to the Company by a Holder of a
certificate, in form and substance reasonably satisfactory to the Company and
duly executed by an authorized officer of the Holder, to the effect that the
Restricted Securities have been transferred (i) pursuant to a registration
statement that has been declared effective by the Securities and Exchange
Commission (the "SEC") and was, at the time of such sale or other transfer,
effective under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act") or (ii) without registration
pursuant to a transaction which complies with the requirements of Rule 144, the
Company will, or will instruct its transfer agent to, issue upon surrender of
the certificates representing such Restricted Securities, one or more new
certificates evidencing the Restricted Securities so transferred, which new
certificates will not bear the legend set forth in paragraph (a) above. Other
than with respect to any sale or other transfer for which any such certificate
has been received by the Company or for which the Company has received a
reasonably satisfactory opinion of counsel to the effect that such sale or other
transfer is not required to be registered under the Securities Act or applicable
state securities laws, the Company or the Company's transfer agent at the
Company's instruction may refuse to transfer Restricted Securities on the
transfer books of the Company and any such transfer shall be null and void.
(c) The holder of certificates representing Restricted Securities bearing the
legend provided for in paragraph (a) shall also be entitled to receive
certificates not bearing such legend, upon furnishing the Company with a
reasonably satisfactory opinion of counsel to the effect that such legend may be
removed under the Securities Act and applicable state securities laws. ARTICLE
II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as
follows:
SECTION 2.01 Organization, Qualifications and Corporate Power.
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Company is duly licensed or qualified to do business as a foreign corporation in
each jurisdiction in which the nature of its business or the ownership of its
assets and/or properties makes such licensing or qualification necessary and
where the failure to so qualify would have a material adverse effect on the
business, properties, operations or condition (financial or other) of the
Company and its direct and indirect subsidiaries (the "Subsidiaries") taken as a
whole. The Company has full corporate power and authority to own and use its
assets and properties and to carry on its business as currently conducted.
(b) Each Subsidiary is a corporation duly incorporated (or
limited liability company duly organized), validly existing and in good standing
under the laws of the state of its incorporation (or organization) and is duly
licensed or qualified to do business as a foreign corporation (or limited
liability company) in each jurisdiction in which the nature of its business or
the ownership of its assets and properties make such licensing or qualification
necessary and where the failure to so qualify would have a material adverse
effect on the business, properties, operations or condition (financial or other)
of the Company and the Subsidiaries taken as a whole. Each Subsidiary has the
corporate power and authority to own and hold its assets and properties and to
carry on its business as currently conducted.
SECTION 2.02 Authorization of Agreements, Etc.
The Company has full corporate power and authority to execute, deliver and
perform this Agreement and to issue, sell and deliver the Preferred Shares. The
execution and delivery by the Company of this Agreement have been, and at or
prior to the Closing the performance by the Company of its obligations hereunder
and the issuance and sale by the Company of the Preferred Shares pursuant hereto
will have been, duly authorized by all requisite corporate action on the part of
the Company. This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the
effect of any bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and general principles of equity.
SECTION 2.03 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement by the Company do not, and at
the Closing the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby will not,
conflict with, result in a violation and breach of, constitute (with or without
notice or lapse of time or both) a default under, or result in the creation or
imposition of any lien upon any of the assets or properties of the Company or
any of its Subsidiaries under, (i) any of the terms, conditions or provisions of
any law, statute, rule, regulation or ordinance (together, "Laws"), or any
judgment, decree, order, writ, permit or license (together, "Orders") of any
court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States or any state, county, city or other
political subdivision (a "Governmental or Regulatory Authority") or other agency
of government, (ii) the certificate of incorporation or the by-laws of the
Company, or (iii) any provision of any indenture, agreement or other instrument
(a "Contract") by which the Company or any of its Subsidiaries or any of their
respective properties or assets are bound.
(b) Except for the consents, approvals, actions, filings and notices
contemplated in, and the effectiveness of, the Pre-Negotiated Plan, the filing
of the certificate of incorporation to be filed pursuant to the Pre-Negotiated
Plan (the "Certificate of Incorporation") with the Secretary of State of the
State of Delaware (which filing will be made prior to the Closing), and the
filing of a Current Report on Form 8-K with the Securities and Exchange
Commission and any reports or notices required to be filed with the New York
Stock Exchange (or any other stock exchange or similar entity), no consent,
approval or action of, filing with or notice to any Government or Regulatory
Authority or other public or private third party is necessary or required on the
part of the Company under any of the terms, conditions or provisions of any Law
or Order of any Governmental or Regulatory Authority or any Contract to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective assets or properties is bound for
the execution and delivery of this Agreement by the Company, the performance by
the Company of its obligations hereunder or the consummation of the transactions
contemplated hereby, other than such consents, approvals, actions, filings and
notices which the failure to make or obtain, as the case may be, individually or
in the aggregate, could not be reasonably expected to have a material adverse
effect on the Company and its Subsidiaries taken as a whole or materially impair
the ability of the Company to consummate the transactions contemplated by this
Agreement. SECTION 2.04 Capital Stock.
(a) At or prior to the Closing, the Preferred Shares shall
have been duly authorized by all necessary corporate action on the part of the
Company, and when issued and paid for in accordance with this Agreement, will be
effective under the General Corporation Law of the State of Delaware (the
"DGCL") and the Certificate of Incorporation to grant the preferences,
limitations and relative rights contemplated by the Certificate of Incorporation
to the holders thereof from time at the Closing, and will be validly issued,
fully paid and nonassessable. The issuance, sale and delivery of the Preferred
Shares, will not be subject to any preemptive rights or to any right of first
refusal or other similar right in favor of any person.
(b) At or prior to the Closing, the shares of Common Stock
issuable upon conversion of the Preferred Shares will have been duly and validly
reserved and will not be subject to any preemptive rights or rights of first
refusal under the DGCL or otherwise created by the Company, and when issued upon
conversion of the Preferred Shares in accordance with their terms, such shares
will be validly issued, fully paid and nonassessable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS TO THE COMPANY
The Purchaser hereby represents and warrants to the Company as
follows:
SECTION 3.01 Organization, Qualifications and Corporate Power. The Purchaser is
a corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts.
SECTION 3.02 Authorization of Agreements, Etc. The Purchaser has full corporate
power and authority to execute, deliver and perform this Agreement. The
execution and delivery by the Purchaser of this Agreement, and the performance
by the Purchaser of its obligations hereunder, have been duly authorized by all
requisite corporate action. This Agreement has been duly executed and delivered
by the Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject to the effect of any bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and general principles of equity.
SECTION 3.03 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement by the Purchaser do not, and
the performance by the Purchaser of its obligations hereunder and the
consummation of the transactions contemplated hereby will not, conflict with,
result in a violation and breach of, constitute (with or without notice or lapse
of time or both) a default under, or result in the creation or imposition of any
lien upon any of the assets or properties of the Company or any of its
Subsidiaries under, (i) any of the terms, conditions or provisions of any Law or
any Order of any Governmental or Regulatory Authority or other agency of
government, (ii) the certificate of incorporation or the by-laws of the
Purchaser, or (iii) any provision of any indenture, agreement or other
instrument (a "Contract") by which the Purchaser or any of its properties or
assets are bound.
(b) Except for any filing of a pre-merger notification report required under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules
and regulations thereunder, the filing of such report, as may be required under
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, and any applicable filings with, or
approvals of, state insurance regulation authorities, no consent, approval or
action of, filing with or notice to any Government or Regulatory Authority or
other public or private third party is necessary or required on the part of the
Purchaser under any of the terms, conditions or provisions of any Law or Order
of any Governmental or Regulatory Authority or any Contract to which the
Purchaser or any of its Subsidiaries is a party or by which the Purchaser or any
of its Subsidiaries or any of their respective assets or properties is bound for
the execution and delivery of this Agreement by the Purchaser, the performance
by the Purchaser of its obligations hereunder or the consummation of the
transactions contemplated hereby, other than such consents, approvals, actions,
filings and notices which the failure to make or obtain, as the case may be,
individually or in the aggregate, could not be reasonably expected to have a
material adverse effect on the Purchaser and its subsidiaries taken as a whole
or materially impair the ability of the Purchaser to consummate the transactions
contemplated by this Agreement. SECTION 3.04 Acquisition for Investment;
Accredited Investor.
(a) The Preferred Shares to be acquired by the Purchaser
pursuant to this Agreement will be acquired by the Purchaser for its own account
for the purpose of investment, and not with a view to, or for sale in connection
with, any distribution thereof which would require registration under the
Securities Act. The Purchaser will refrain from transferring or otherwise
disposing of any of the Preferred Shares, or any interest therein, in such
manner as to cause the Company to be in violation of the registration
requirements of the Securities Act, or applicable state securities or blue sky
laws.
(b) The Purchaser is an "accredited investor" as defined
in Rule 501 of Regulation D under the Securities Act.
ARTICLE IV
COVENANTS
Each of the Company and the Purchaser covenants and agrees
with the other that, at all times from and after the date hereof until the
Closing, it will comply with all covenants and provisions of this Article IV,
except to the extent the other party may otherwise consent in writing.
SECTION 4.01 Regulatory and Other Approvals. Each of the Company and the
Purchaser will as promptly as practicable take all commercially reasonable steps
necessary or desirable and cooperate with each other to obtain all consents,
approvals or actions, make all filings and give all notices required to
consummate the transactions contemplated hereby.
SECTION 4.02 Notice and Cure. Each of the Company and the Purchaser will
promptly notify the other in writing of, and contemporaneously will provide the
other with true and complete copies of any and all information or documents
relating to, and will use all commercially reasonable efforts to cure before the
Closing, any event, transaction or circumstance, occurring after the date of
this Agreement that causes or will cause any covenant or agreement of either
such party under this Agreement to be breached or that renders or will render
untrue any representation or warranty of either such party contained in this
Agreement as if the same were made on or as of the date of such event,
transaction or circumstance.
SECTION 4.03 Fulfillment of Conditions. Each of the Company and the Purchaser
will take all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each condition to the obligations of
such party contained in this Agreement and will not take or fail to take any
action that could reasonably be expected to result in the nonfulfillment of any
such condition.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Non-Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements contained
in this Agreement or any other instrument delivered pursuant to this Agreement
shall not survive the purchase of the Preferred Shares hereunder.
SECTION 5.02 Termination.
(a) This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:
(i) at any time before the Closing, by mutual written agreement of the
Company and Purchaser;
(ii) at any time before the Closing, by the Company or the Purchaser, upon
notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party's obligations under this
Agreement becomes impossible or impracticable with the use of commercially
reasonable efforts if the failure of such condition to be satisfied is not
caused by a breach hereof by the terminating party; or
(iii) automatically upon any termination of that certain agreement between
the Company and the Purchaser attached hereto as Appendix III (the "Lock-up
Agreement"), other than a termination pursuant to the Agreement Termination
Event specified in paragraph (a) of the definition thereof contained in Section
4 of the Lock-up Agreement.
(b) If this Agreement is validly terminated pursuant to
paragraph (a), this Agreement will forthwith become null and void, and there
will be no liability or obligation on the part of the Company or the Purchaser
(or any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in Section 5.03
will continue to apply following any termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 4.02(a), the Company will remain liable to the Purchaser for
any willful breach of this Agreement by the Company existing at the time of such
termination, and the Purchaser will remain liable to the Company for any willful
breach of this Agreement by the Purchaser existing at the time of such
termination, and the Company or the Purchaser may seek such remedies, including
damages and fees of attorneys, against the other with respect to any such breach
as are provided in this Agreement or as are otherwise available at law or in
equity
SECTION 5.03 Expenses, Etc.
Each party hereto will pay such party's own expenses in connection with the
transactions contemplated hereby, whether or not such transactions shall be
consummated.
SECTION 5.04 Notices
. Any notice or other communications required or permitted hereunder shall be
deemed to be sufficient if contained in a written instrument delivered in person
or duly sent by first class certified mail, postage prepaid, or by telecopy
addressed to such party at the address or telecopy number set forth below or
such other address or telecopy number as may hereafter be designated in writing
by the addressee to the addressor listing all parties:
If to the Company, to:
Westbridge Capital Corp.
110 West Seventh Street
Suite 300
Fort Worth, TX 76102
Attention: Patrick H. O'Neill, Esq.
General Counsel
Facsimile No.: 817-878-3672
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Attention: Robert S. Reder, Esq.
Facsimile No. (212) 530-5219
If to the Purchaser, to:
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, NY 10010-3629
Attention: David J. Matlin and Alex Lagetko
Facsimile No.: 212-325-8290
with a copy to:
Cadwalader, Wickershan & Taft
100 Maiden Lane
New York, NY 10038
Attention: Michael J. Sage, Esq.
Facsimile No.: 212-504-6666
or, in any case, at such other address or addresses as shall have been furnished
in writing by such party to the other parties hereto. All such notices,
requests, consents and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of mailing, on the fifth business day following the date of such
mailing, and (c) in the case of telecopy, when received.
SECTION 5.05 Parties in Interest
. All covenants and agreements contained in this Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not.
SECTION 5.06 Entire Agreement; Assignment
. This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof and may not be amended or modified nor any provisions
waived except in a writing signed by the parties hereto. This Agreement may not
be assigned by any party without the prior written consent of the other and any
attempt to do so will be void, except that the Purchaser may assign any or all
of its rights, interests and obligations hereunder to a subsidiary or any other
third party, provided that any such subsidiary or third-party agrees in writing
to be bound by all of the terms, conditions and provisions contained herein, but
no such assignment shall relieve the Purchaser of its obligations hereunder,
except, that in connection with any assignment to a subsidiary or any other
third party which, in either case (i) is an entity, the commercial paper
obligations of which are rated at least A-1 by Standard & Poor's Corporation or
P-1 by Moody's Investors Service, Inc. (or a comparable rating by any other
nationally recognized statistical ratings organization) or (ii) on the date of
any such assignment, by wire transfer of immediately available funds, deposits
with an independent financial institution under an escrow arrangement reasonably
satisfactory to the Company an amount equal to the aggregate Share Purchase
Price payable pursuant to Section 1.04, the Purchaser shall be relieved of its
obligations under this Agreement upon the execution and delivery by such
subsidiary or other third party of written agreement to be bound by all of the
terms, conditions and provisions contained herein. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
SECTION 5.07 Counterparts
. This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
SECTION 5.08 Governing Law
. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York without regard to the conflicts of law principles
thereof. Each party irrevocably submits to the exclusive jurisdiction of the
court having jurisdiction over the Chapter 11 Case in any action, suit or
proceeding arising out of or relating to this Agreement or any of the
transactions contemplated hereby, and agrees that any such action, suit or
proceeding shall be brought only in such court. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such action, suit or proceeding
brought in such a court and any claim that any such action, suit or proceeding
brought in such a court has been brought in an inconvenient forum.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
WESTBRIDGE CAPITAL CORP.
By: /s/Patrick J. Mitchell
Name: Patrick J. Mitchell
Title:President
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Alex Lagetko
Name: Alex Lagetko
Title: Director
(..continued)
NY1:#3183326v5
APPENDIX I
PLAN OF REORGANIZATION OF WESTBRIDGE CAPITAL CORP.
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
<PAGE>
APPENDIX II
DRAFT REGISTRATION RIGHTS AGREEMENT
<PAGE>
MTHM Draft
9/14/98
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, dated as of __________, 1998, among
___________________, a Delaware corporation (the "Company"), the holders of
Common Stock and the holders of New Convertible Preferred Stock of the Company
listed on Schedule I hereto (the "Initial Holders").
W I T N E S S E T H:
WHEREAS, pursuant to Section ___ of the Plan of Reorganization of the
Company under Chapter 11 of the Bankruptcy Code dated __________, 1998, as the
same may have been amended or supplemented from time to time prior to the date
hereof (the "Plan"), as of the Effective Date (as defined in the Plan) the
Company is obligated to enter into a registration rights agreement substantially
in the form of Exhibit "B" thereto; and
WHEREAS, the parties hereto have agreed that the execution and delivery
by the Company and the Initial Holders of this Agreement will satisfy such
obligation under the Plan;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and agreements set forth herein, the parties hereby agree as follows:
1. Definitions.
(a) Capitalized terms used in this Agreement but not otherwise defined
herein shall have the meanings given to them in the Plan. Each reference herein
to an agreement, document or instrument shall mean that agreement, document or
instrument as from time to time amended, modified or supplemented in accordance
with its terms, including in each case all exhibits, annexes and schedules to
such agreement, document or instrument, all of which are incorporated by
reference to such agreement, document or instrument. The use herein of the word
"or" shall not be deemed exclusive.
(b) As used in this Exhibit, the following capitalized terms shall have
the meanings ascribed to them below:
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company being issued and sold pursuant to the Plan.
"Effective Date" means the effective date as defined in
the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference
to a particular section thereof shall be deemed to include a reference
to the comparable section, if any, of any such similar federal statute.
"Holder" means a registered holder of Registrable Securities
who is an Initial Holder .
"Person" means an individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization
or government or any department or agency thereof.
"Preferred Stock" means the Series A Cumulative Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company
being issued pursuant to the Plan.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement or any other
amendments and supplements to such prospectus, including without
limitation any preliminary prospectus, any pre-effective or
post-effective amendment and all material incorporated by reference in
any prospectus.
"Registrable Securities" means (i) the shares of Common Stock
issued to any Initial Holder pursuant to the Plan, (ii) the shares of
Preferred Stock issued to any Initial Holder pursuant to the Plan or
the Stock Purchase Agreement dated as of September __, 1998 between the
Company and Credit Suisse First Boston Corporation (the "Stock Purchase
Agreement"), (iii) any shares of Common Stock issued upon conversion of
shares of Preferred Stock issued to any Initial Holder pursuant to the
Plan or the Stock Purchase Agreement and (iv) any securities issued or
issuable in respect of or in exchange for any of the shares of Common
Stock or Preferred Stock referred to in clause (i), (ii) or (iii) by
way of a stock dividend or other distribution, stock split, reverse
stock split or other combination of shares, recapitalization,
reclassification, merger, consolidation or exchange offer. As to any
particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (i) a Registration Statement
with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall be eligible to be
disposed of in accordance with such Registration Statement, (ii) such
securities shall (x) have been sold, or (y) with respect to any
Registrable Securities held by any Holder, all Registrable Securities
then owned by such Holder can be sold in any three-month period, in
either case pursuant to Rule 144 (or any successor provision) under the
Securities Act ("Rule 144"), (iii) such securities shall have been
otherwise transferred and new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered
by the Company or (iv) such securities shall have ceased to be
outstanding. Shares of Common Stock available upon the conversion of
the Preferred Stock shall not constitute "Registrable Securities" for
purposes of this Agreement and shall not be available for inclusion in
a Registration Statement to be filed pursuant to Section 2 or 5 hereof
until such shares are actually obtained upon conversion of the
Preferred Stock.
"Registration Expenses" has the meaning set forth in
Section 4 hereof.
"Registration Statement" means any registration statement of
the Company which covers Registrable Securities pursuant to the
provisions of this Registration Rights Agreement, all amendments and
supplements to such Registration Statement, including post-effective
amendments, and all exhibits and all material incorporated by reference
in such Registration Statement.
"SEC" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or
the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to
the comparable section, if any, of any such similar federal statute.
2. Demand Registration.
(a) Requests for Registration. Subject to the provisions of paragraphs
(b), (c) and (d) of this Section 2, at any time during the period beginning on
the Effective Date and ending on the first date on which there are no
Registrable Securities (the "Demand Registration Period"), any Holder or group
of Holders holding at least 10% of any class of the aggregate Registrable
Securities still outstanding on a fully-diluted basis may make a written request
for registration under the Securities Act of all or any part of such Holder's or
Holders' Registrable Securities (a "Demand Registration"). Such request shall
specify the amount of Registrable Securities to be registered and the intended
method or methods of disposition. Within 10 days after receipt of such request,
the Company shall send written notice of such request to all Holders and shall,
subject to the provisions of paragraphs (b), (c) and (d) of this Section 2,
include in such Demand Registration all Registrable Securities with respect to
which the Company receives written requests (specifying the amount of
Registrable Securities to be registered and the intended method or methods of
disposition) for inclusion therein within 30 days after such notice is sent. The
Company shall file with the SEC a Registration Statement, registering all
Registrable Securities that any Holders have requested the Company to register,
for disposition in accordance with the intended method or methods set forth in
their notices to the Company, and the Company shall use good faith efforts to
make such filing within 30 days of such request. The Company shall use its best
efforts to cause such Registration Statement to be declared effective as soon as
practicable after filing and to remain effective until the earlier of (i) 90
days following the date on which it was declared effective and (ii) the date on
which all of the Registrable Securities covered thereby are disposed of in
accordance with the method or methods of disposition stated therein.
(b) Number of Registrations. The Holders shall be entitled to request
an aggregate of five (5) Demand Registrations during the Demand Registration
Period; provided, however, that the Company will not be obligated to comply with
any such request unless (i) such request is made by Persons holding at least 10%
of the aggregate amount of any class of Registrable Securities at the time
outstanding and (ii) the Company has not effected another Demand Registration in
accordance with the provisions of this Agreement within the previous six months.
(c) Suspension of Registration. The Company shall have the right to
delay the filing or effectiveness of a Registration Statement for any Demand
Registration and to require the Holders not to sell under any such Registration
Statement, during one or more periods aggregating not more than 60 days in each
twelve-month period during the Demand Registration Period in the event that (i)
the Company would, in accordance with the advice of its counsel, be required to
disclose in the Prospectus information not otherwise then required by law to be
publicly disclosed and (ii) in the judgment of the Company, there is a
reasonable likelihood that such disclosure, or any other action to be taken in
connection with the Prospectus, would materially and adversely affect any
existing or prospective material business situation, transaction or negotiation
or otherwise materially and adversely affect the Company.
(d) Offering by the Company. The Company may include in any Demand
Registration additional shares of capital stock to be sold for the Company's
account pursuant to such registration; provided, however, that if the managing
underwriter for a Demand Registration that involves an underwritten offering
shall advise the Company that, in its opinion, the inclusion of the amount and
kind of shares of capital stock to be sold for the Company's account would
adversely affect the success of the offering for the selling Holders, then the
number and kind of shares of capital stock to be sold for the Company's account
shall be reduced (and may be reduced to zero) in accordance with the managing
underwriter's recommendation.
(e) Suspension of Effectiveness. In the event that a Demand
Registration which has been declared or ordered effective in accordance with the
rules of the SEC is not kept effective for the period of time contemplated by
Section 2(a) (after taking into account any suspensions and extensions thereof),
then such Demand Registration shall not be counted as a Demand Registration for
purposes of Section 2(b).
3. Registration Procedures.
(a) The Company to Use Best Efforts. In connection with the Company's
Demand Registration obligations pursuant to Section 2 hereof, the Company shall
use its best efforts to effect such registrations to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall use its best
efforts:
(i) to prepare and file with the SEC a Registration Statement
relating to each Demand Registration on any appropriate form under the
Securities Act, and to cause such Registration Statement to become
effective as soon as practicable and to remain continuously effective
for the time period required by the provisions of this Agreement to the
extent permitted under the Securities Act, provided that as far in
advance as practical before filing such Registration Statement or any
amendment thereto, the Company will furnish to the Holders copies of
reasonably complete drafts of all such documents proposed to be filed
(including exhibits), and the Holders shall have the opportunity to (i)
object to any information pertaining solely to the Holders that is
contained therein and the Company will make the corrections reasonably
requested by the Holders with respect to such information and (ii)
comment on any other information contained therein and the Company will
in good faith consider whether any changes or corrections are required,
in each case, prior to filing any such Registration Statement or
amendment;
(ii) to prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period set forth in paragraph (a) of Section 2; and to cause
the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed in accordance with the
Securities Act and any rules and regulations promulgated thereunder;
and otherwise to comply with the provisions of the Securities Act as
may be necessary to facilitate the disposition of all Registrable
Securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of disposition
by the selling Holders thereof set forth in such Registration Statement
or such Prospectus or Prospectus supplement;
(iii) to notify the selling Holders and the managing
underwriters, if any, promptly if at any time (A) any Prospectus,
Registration Statement or amendment or supplement thereto is filed, (B)
any Registration Statement, or any post-effective amendment thereto,
becomes effective, (C) the SEC requests any amendment or supplement to,
or any additional information in respect of, any Registration Statement
or Prospectus, (D) the SEC issues any stop order suspending the
effectiveness of a Registration Statement or initiates any proceedings
for that purpose, (E) the representations and warranties of the Company
contemplated by subclause (B) of clause (xii) of this paragraph (a)
cease to be true and correct, (F) the Company receives any notice that
the qualification of any Registrable Securities for sale in any
jurisdiction has been suspended or that any proceeding has been
initiated for the purpose of suspending such qualification, or (G) any
event occurs which requires that any changes be made in such
Registration Statement or any related Prospectus so that such
Registration Statement or Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(iv) to make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement,
or the qualification of any Registrable Securities for sale in any
jurisdiction, at the earliest possible moment;
(v) to furnish to each selling Holder and each managing
underwriter, if any, one signed copy of the applicable Registration
Statement and any post-effective amendment thereto, including all
financial statements and schedules thereto, all documents incorporated
therein by reference and all exhibits thereto (including exhibits
incorporated by reference) as promptly as practicable after filing such
documents with the SEC;
(vi) to deliver to each selling Holder and each underwriter,
if any, as many copies of the Prospectus or Prospectuses (including
each preliminary Prospectus) and any amendment or supplement thereto as
such Persons may reasonably request; and to consent to the use of such
Prospectus or any amendment or supplement thereto by each such selling
Holder and underwriter, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus,
amendment or supplement;
(vii) prior to any public offering of Registrable Securities,
to register or qualify, or to cooperate with the selling Holders, the
underwriters, if any, and their respective counsel in connection with
the registration or qualification of such Registrable Securities, for
offer and sale under the securities or blue sky laws of such
jurisdictions as may be requested by the Holders of a majority of the
Registrable Securities included in such Registration Statement; to keep
each such registration or qualification effective during the period set
forth in paragraph (a) of Section 2 that the applicable Registration
Statement is required to be kept effective; and to do any and all other
acts or things necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by such
Registration Statement; provided, however, that the Company will not be
required to qualify generally to do business in any jurisdiction where
it is not then so qualified or to take any action which would subject
it to taxation or general service of process in any jurisdiction where
it is not then so subject;
(viii) to cooperate with the selling Holders and the
underwriters, if any, in the preparation and delivery of certificates
representing the Registrable Securities to be sold, such certificates
to be in such denominations and registered in such names as such
selling Holders or managing underwriters may request at least three
Business Days prior to any sale of Registrable Securities represented
by such certificates;
(ix) to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriters, if any, to
consummate the sale of such Registrable Securities in conformity with
federal law and the laws of the jurisdictions in which such Registrable
Securities shall be registered or qualified pursuant to clause (viii)
of this paragraph (a);
(x) upon the occurrence of any event described in subclause
(C) or (G) of clause (iii) of this paragraph (a), promptly to prepare
and file a supplement or post-effective amendment to the applicable
Registration Statement or Prospectus or any document incorporated
therein by reference, and any other required document, either in
accordance with the request of the SEC, or so that such Registration
Statement and Prospectus will not thereafter contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, as the case
may be, and to cause such supplement or post-effective amendment to
become effective as soon as practicable;
(xi) to cause all Registrable Securities covered by such
Registration Statement to be listed or included on any securities
exchange (or on any quotation system operated by a national securities
association) on which such Registrable Securities are then listed or
included, if any; to enter into customary agreements with any such
securities exchange or system, including, if necessary, a listing
application and indemnification agreement in customary form; and to
provide a transfer agent for such Registrable Securities no later than
the effective date of such Registration Statement;
(xii) to take all other actions in connection therewith as are
reasonably necessary or desirable in order to expedite or facilitate
the disposition of the Registrable Securities included in such
Registration Statement and, in the case of an underwritten offering:
(A) to enter into an underwriting agreement in customary form for the
managing underwriters with respect to issuers of similar market
capitalization and reporting and financial histories; (B) to make
representations and warranties to each Holder participating in such
offering and to each of the underwriters, in such form, substance and
scope as are customarily made to the managing underwriters by issuers
of similar market capitalization and reporting and financial histories
and to confirm the same to the extent customary if and when requested;
(C) to obtain opinions of counsel to the Company (which may be the
Company's inside counsel) and updates thereof addressed to each Holder
participating in such offering and to each of the underwriters, such
opinions and updates to be in customary form to cover the matters
customarily covered in opinions obtained in underwritten offerings by
the managing underwriters for issuers of similar market capitalization
and reporting and financial histories; (D) to obtain "comfort" letters
and updates thereof from the Company's independent certified public
accountants addressed to each of the underwriters, such letters to be
in customary form and to cover matters of the type customarily covered
in "comfort" letters to the managing underwriters in connection with
underwritten offerings by them for issuers of similar market
capitalization and reporting and financial histories; (E) to provide,
in the underwriting agreement to be entered into in connection with
such offering, indemnification provisions and procedures no less
favorable than those set forth in Section 6 hereof with respect to all
parties to be indemnified pursuant to such Section 6; and (F) to
deliver such customary documents and certificates as may be reasonably
requested by Holders of a majority of the Registrable Securities
included in such Registration Statement and the managing underwriters
to evidence compliance with clause (B) of this paragraph (xii) and with
any customary conditions contained in the underwriting agreement
entered into by the Company in connection with such offering;
(xiii) in the case of any offering other than an underwritten
offering: (A) to make representations and warranties to each Holder
participating in such offering, in such form, substance and scope as
are customarily made in such offerings by issuers of similar market
capitalization and reporting and financial histories and to confirm the
same if and when requested, (B) to obtain "comfort" letters and updates
thereof from the Company's independent certified public accountants,
such letters to be in customary form and to cover the matters of the
type customarily covered in "comfort" letters in such offerings for
issuers of similar market capitalization and reporting and financial
histories, (C) to obtain an opinion of counsel to the Company (which
may be the Company's inside counsel) at the time of effectiveness of
such Registration Statement covering such offering and an update
thereof at the time of effectiveness of any post-effective amendment to
such Registration Statement (other than by reason of incorporation by
reference of documents filed with the SEC) addressed to each Holder of
any Registrable Securities covered by such Registration Statement,
covering matters customarily covered in opinions obtained in
underwritten offerings by issuers with similar market capitalization
and reporting and financial histories; and (D) to deliver a certificate
of a senior executive officer of the Company at the time of
effectiveness of such Registration Statement and, upon the request of
Holders of a majority of the Registrable Securities included in such
Registration Statement, updates thereof, such certificates to cover
matters customarily covered in officers' certificates delivered in
connection with underwritten offerings by issuers with similar market
capitalization and reporting and financial histories;
(xiv) to make available for inspection by representatives of
the Holders of Registrable Securities being sold pursuant to any Demand
Registration and of the underwriters, if any, participating in such
sale all financial and other records, pertinent corporate documents and
properties of the Company, and to cause the Company's officers,
directors and employees to supply all information reasonably requested
by any such representatives, in connection with such Demand
Registration; provided, however, that all information regarding such
records, documents and properties shall be subject to customary
confidentiality agreements to be entered into by such Persons with the
Company;
(xv) to comply with all applicable rules and regulations of
the SEC relating to such Registration Statement and the distribution of
the securities being offered or otherwise necessary in order to perform
the Company's obligations under this paragraph (a);
(xvi) to cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc. and in
the performance of any customary or required due diligence
investigation by any underwriter; and
(xvii) to take all other reasonable steps necessary and
appropriate to effect such registration in the manner contemplated by
the provisions of this Agreement.
(b) Holders' Obligation to Furnish Information. The Company may
require, as a condition precedent to the Company's obligations under this
Section 3, each Holder of Registrable Securities as to which any registration is
being effected to furnish to the Company such information regarding the
distribution of such securities as the Company may from time to time reasonably
request.
(c) Suspension of Sales Pending Amendment of Prospectus. Each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in subclause (C), (D), (E), (F) or (G) of clause
(iii) of paragraph (a) of this Section 3, such Holder will forthwith forego or
delay the disposition of any Registrable Securities covered by such Registration
Statement or Prospectus until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by clause (x) of such paragraph
(a), or until it is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in such Prospectus,
and, if so directed by the Company, such Holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of any Prospectus covering such Registrable Securities.
If the Company shall have given any such notice during a period when a Demand
Registration is in effect, the 90-day period described in clause (i) of
paragraph (a) of Section 3 shall be extended by the number of days from and
including the date of the giving of such notice to and including the date when
each Holder of Registrable Securities covered by such Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by clause (x) of such paragraph (a) or shall have been advised in
writing by the Company that the use of the applicable Prospectus may be resumed.
4. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with its obligations under the provisions of this Agreement shall be borne by
the Company, including without limitation all (i) registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws, (iii)
printing expenses (including expenses of printing Prospectuses), (iv) messenger
and delivery expenses, (v) internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (vi) fees and disbursements of its counsel and its
independent certified public accountants (including the expenses of any special
audit or "comfort" letters required by or incident to such performance or
compliance), (vii) securities acts liability insurance (if the Company elects to
obtain such insurance), (viii) reasonable fees and expenses of any special
experts retained by the Company in connection with any registration hereunder,
(ix) reasonable fees and expenses of other Persons retained by the Company, and
(x) reasonable fees and expenses of one counsel for the Holders of Registrable
Securities covered by each Registration Statement, with such counsel to be
selected by Holders of a majority of such Registrable Securities (all such
expenses being herein referred to as "Registration Expenses"); provided,
however, that Registration Expenses shall not include any underwriting
discounts, commissions, fees or expenses or transfer taxes attributable to the
sale of the Registrable Securities.
5. Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time during the
Demand Registration Period the Company proposes to register any Registrable
Securities under the Securities Act, whether or not for sale for its own account
(other than a registration on Form S-4 or Form S-8, or any successor or similar
forms), in a manner that would permit registration of Registrable Securities of
the same class for sale to the public under the Securities Act, it will each
such time promptly give written notice to all Persons who hold of record any
Registrable Securities of the same class of its intention to do so and of the
intended method of disposition of the shares being registered, of the
registration form of the SEC that has been selected by the Company and of rights
of Holders under this Section 5 (the "Section 5 Notice"). The Company will use
its best efforts to include in the proposed registration (and, if such
registration involves an underwritten offering, in the underwriting) all
Registrable Securities of the same class that the Company is requested in
writing, within 15 days after the Section 5 Notice is given, to register by the
Holders thereof; provided, however, that (i) if, at any time after giving
written notice of its intention to register any Registrable Securities and prior
to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register
such Registrable Securities, the Company may, at its election, give written
notice of such determination to all Persons who hold of record any Registrable
Securities of the same class and, thereupon, shall be relieved of its obligation
to register any Registrable Securities of the same class in connection with such
abandoned registration, without prejudice, however, to the rights of Holders
under Section 2 hereof and (ii) in case of a determination by the Company to
delay registration of its Registrable Securities, the Company shall be permitted
to delay the registration of such Registrable Securities of the same class for
the same period as the delay in registering such Registrable Securities. No
registration effected under this Section 5 shall relieve the Company of its
obligations to effect registrations upon request under Section 2 and,
notwithstanding anything to the contrary in Section 2, no Holder shall have the
right to require the Company to register any Registrable Securities pursuant to
Section 2 until the later of (A) the completion of the distribution of the
securities offered and registered pursuant to the Section 5 Notice and (B) 90
days after the date each registration statement described in the first sentence
of this paragraph (a) is declared effective.
(b) Expenses. The Company shall pay all Registration Expenses in
connection with each registration of Registrable Securities of the same class
requested pursuant to this Section 5; provided, however, that each Holder shall
pay all underwriting discounts, commissions, fees or expenses or transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities of the same class pursuant to a Registration Statement effected
pursuant to this Section 5.
(c) Priority in Incidental Registration. If the managing underwriter
for a registration pursuant to this Section 5 that involves an underwritten
offering shall advise the Company that, in its opinion, the inclusion of the
amount of Registrable Securities of the same class to be sold for the account of
Holders would adversely affect the success of the offering for the Company, then
the number of Registrable Securities of the same class to be sold for the
account of such Holders shall be reduced (and may be reduced to zero) in
accordance with the managing underwriter's recommendation. In the event that the
number of Registrable Securities of the same class to be included in any
registration is reduced (but not to zero), the number of such Registrable
Securities of the same class included in such registration shall be allocated
pro rata among all requesting Holders, on the basis of the relative number of
shares of such Registrable Securities of the same class each such Holder has
requested to be included in such registration. If, as a result of the proration
provisions of this paragraph (c), any Holder shall not be entitled to include
all Registrable Securities of the same class in a registration pursuant to this
Section 5 that such Holder has requested be included, such Holder may elect to
withdraw its Registrable Securities of the same class from the registration;
provided, however, that such withdrawal election shall be irrevocable and, after
making a withdrawal election, a Holder shall no longer have any right to include
Registrable Securities of the same class in the registration as to which such
withdrawal election was made.
(d) Merger, Consolidation, etc. Notwithstanding anything in this
Section 5 to the contrary, Holders shall not have any right to include their
Registrable Securities in any distribution or registration of equity securities
by the Company, which is a result of a merger, consolidation, acquisition,
exchange offer, recapitalization, other reorganization, dividend reinvestment
plan, stock option plan or other employee benefit plan, or any similar
transaction having the same effect.
6. Indemnification.
(a) Indemnification by the Company. In the event of any registration of
any securities of the Company under the Securities Act pursuant to Section 2 or
5 hereof, the Company will, and hereby does, indemnify and hold harmless, to the
extent permitted by law, the seller of any Registrable Securities covered by any
Registration Statement filed to effect such registration, its directors and
officers or general and limited partners (and the directors and officers
thereof), each other Person who participates as an underwriter, if any, in the
offering or sale of such securities and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
and expenses (including any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably withheld) to which
such seller or any such director, officer, general or limited partner,
underwriter or controlling Person may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such securities were
registered under the Securities Act or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary Prospectus, together
with the documents incorporated by reference therein (as amended or supplemented
if the Company shall have filed with the SEC any amendment thereof or supplement
thereto), if used prior to the effective date of such Registration Statement, or
contained in the Prospectus, together with the documents incorporated by
reference therein (as amended or supplemented if the Company shall have filed
with the SEC any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) any violation
by the Company of any federal, state or common law rule or regulation applicable
to the Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will reimburse such
seller and each such director, officer, general or limited partner, underwriter
and controlling Person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, however, that the Company
shall not be liable to any such seller or any such director, officer, general or
limited partner, underwriter or controlling Person in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
Registration Statement or amendment thereof or supplement thereto or in any such
preliminary, final or summary Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any such seller
or any such director, officer, general or limited partner, underwriter or
controlling Person, for use in the preparation thereof; and provided further,
that the Company will not be liable to any Person who participates as an
underwriter in any underwritten offering or sale of Registrable Securities, or
to any Person who is a seller in any non-underwritten offering or sale of
Registrable Securities, or any other Person, if any, who controls such
underwriter or seller within the meaning of the Securities Act, under the
indemnity agreement in this paragraph (a) with respect to any preliminary
Prospectus or the final Prospectus (including any amended or supplemented
preliminary or final Prospectus), as the case may be, to the extent that any
such loss, claim, damage or liability of such underwriter, seller or controlling
Person results from the fact that such underwriter or seller sold Registrable
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final Prospectus or of the
final Prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously furnished copies thereof to such underwriter or
seller and such final Prospectus, as then amended or supplemented, has corrected
any such misstatement or omission. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such seller or
any such director, officer, general or limited partner, underwriter or
controlling Person and shall survive the transfer of such securities by such
underwriter or seller.
(b) Indemnification by the Sellers. In consideration of the Company's
including any Registrable Securities in any Registration Statement filed in
accordance with Section 2 or 5 hereof, the prospective seller of such
Registrable Securities hereby agrees to indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 6)
the Company and its directors and officers and each person controlling the
Company within the meaning of the Securities Act and all other prospective
sellers and their directors, officers, general and limited partners and
respective controlling Persons with respect to any statement or alleged
statement in or omission or alleged omission from such Registration Statement,
any preliminary, final or summary Prospectus contained therein, or any amendment
or supplement, but only to the extent such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or its representatives by or on
behalf of such seller for use in the preparation of such Registration Statement,
preliminary, final or summary Prospectus or amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any of the prospective sellers or any of
their respective directors, officers, general or limited partners or controlling
Persons and shall survive the transfer of such securities by such seller. Any
Holder's liability hereunder shall be limited to the amount of proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party; provided, however, that if, in any
indemnified party's reasonable judgment, a conflict of interest between such
indemnified party and the indemnifying party exists in respect of such claim,
then such indemnified party shall have the right to participate in the defense
of such claim and to employ one firm of attorneys at the indemnifying party's
expense to represent such indemnified party. Once the indemnifying party has
assumed the defense of any claim, no indemnified party will consent to entry of
any judgment or enter into any settlement without the indemnifying party's
consent to such judgment or settlement, which shall not be unreasonably
withheld.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 6 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(e) Contribution. If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
paragraph (a), (b) or (d) of this Section 6, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in such paragraph (a),
(b) or (d) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other
hand in connection with statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statements or omission. The Company agrees, and
the Holders (in consideration of the Company's including any Registrable
Securities in any Registration Statement filed in accordance with Section 2 or 5
hereof) shall be deemed to have agreed, that it would not be just and equitable
if contributions pursuant to this paragraph (e) were to be determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the first sentence of this
paragraph (e). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
paragraph (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim (which shall be limited as provided in paragraph (c) of this
Section 6 if the indemnifying party has assumed the defense of any such action
in accordance with the provisions thereof) which is the subject of this
paragraph (e). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
paragraph (e) of notice of the commencement of any action against such party in
respect of which a claim for contribution may be made against an indemnifying
party under this paragraph (e), such indemnified party shall notify the
indemnifying party in writing of the commencement thereof if the notice
specified in paragraph (c) of this Section 6 has not been given with respect to
such action; provided, however, that the omission so to notify the indemnifying
party shall not relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise under this paragraph (e), except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. Notwithstanding anything in this paragraph (e) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
paragraph (e) to contribute any amount in excess of the proceeds received by
such indemnifying party from the sale of Registrable Securities in the offering
to which the losses, claims, damages or liabilities of the indemnified parties
relate.
(f) Survival. The provisions of this Section 6 will survive
indefinitely, notwithstanding any transfer of the Registrable Securities by any
Holder.
7. Rules 144 and 144A.
The Company shall file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, and shall take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitations of the exemptions provided by Rule 144. Upon the request of any
Holder, the Company shall deliver to such Holder a written statement stating
whether it has complied with such information and requirements. Upon request,
the Company shall furnish to each Holder such information as shall be reasonably
required pursuant to Rule 144A(d)(4)(i) to permit such Holder to dispose of its
Registrable Securities in a transaction pursuant to Rule 144A.
8. Underwritten Registrations.
(a) Selection of Underwriters. If any of the Registrable Securities
covered by any Demand Registration are to be sold in an underwritten offering,
the underwriter or underwriters and managing underwriter or managing
underwriters that will administer the offering shall be selected by, and the
terms of any underwriting agreement and other underwriting arrangements shall be
approved by, the Company; provided, however, that such underwriters and managing
underwriters shall be subject to the approval of the Holders of a majority in
aggregate amount of Registrable Securities included in such offering, which
approval shall not be unreasonably withheld.
(b) Agreements of Selling Holders. No Holder shall sell any of its
Registrable Securities in any underwritten offering pursuant to a registration
hereunder unless such Holder (i) agrees to sell such Registrable Securities on
the basis provided in any underwriting agreement or other underwriting
arrangements approved by the Persons entitled hereunder to approve such
agreements or arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting agreements or other underwriting
arrangements.
9. Certain Company Representations, Warranties and Covenants.
(a) No Existing Agreements. The Company represents and warrants to the
Initial Holders that there is not in effect on the date hereof any agreement by
the Company (other than this Agreement) pursuant to which any holders of the
securities of the Company to be issued pursuant to the Plan have a right to
cause the Company to register or qualify such securities under the Securities
Act or any securities or blue sky laws of any jurisdiction.
(b) Future Agreements. Without the prior consent of each Holder that
holds Registrable Securities, the Company shall not hereafter agree with the
holders of any securities issued or to be issued by the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction unless the rights so granted, if exercised, would not
materially conflict with, be materially inconsistent with or violate the
provisions of this Agreement.
(c) Transfers; Removal of Legend. Following the Closing Date, upon
delivery to the Company by a Holder of a certificate, in form and substance
reasonably satisfactory to the Company and duly executed by an authorized
officer of the Holder, to the effect that the Registrable Securities have been
transferred (i) pursuant to a registration statement that has been declared
effective by the SEC and was, at the time of such sale or other transfer,
effective under the Securities Act or (ii) without registration pursuant to a
transaction which complies with the requirements of Rule 144, the Company will,
or will instruct its transfer agent to, issue upon surrender of the certificates
representing such Registrable Securities, one or more new certificates
evidencing the Registrable Securities so transferred, which new certificates
will not bear a restrictive legend to the effect that the securities represented
by such certificates have not been registered under the Securities Act and
applicable state securities laws and may not be sold or otherwise transferred in
the absence of such registration or an exemption therefrom. Other than with
respect to any sale or other transfer for which any such certificate has been
received by the Company or for which the Company has received a reasonably
satisfactory opinion of counsel to the effect that such sale or other transfer
is not required to be registered under the Securities Act or applicable state
securities laws, the Company or the Company's transfer agent at the Company's
instruction may refuse to transfer Registrable Securities on the transfer books
of the Company and any such transfer shall be null and void. The holder of
certificates representing Registrable Securities bearing a restrictive legend
shall also be entitled to receive certificates not bearing such legend, upon
furnishing the Company with a reasonably satisfactory opinion of counsel to the
effect that such legend may be removed under the Securities Act and applicable
state securities laws.
10. Holdback Agreements.
(a) Restrictions on Public Sales by Holders. To the extent not
inconsistent with applicable law, each Holder that is timely notified in writing
by the managing underwriter or underwriters shall not effect any public sale or
distribution (including a sale pursuant to Rule 144) of any of their shares of
Common Stock if any other shares of Common Stock (or any securities of the
Company convertible into or exchangeable for or exercisable for shares of Common
Stock) are being registered by the Company for sale in an underwritten offering
(other than pursuant to an employee stock option, stock purchase, stock bonus or
similar plan, pursuant to a merger, an exchange offer or a transaction of the
type specified in Rule 145(a) under the Securities Act or pursuant to a "shelf"
registration), except as part of such registration, during the 10-day period
prior to the effective date of the applicable registration statement, or during
the period beginning on such effective date and ending on the later of (i) the
completion of the distribution of such securities pursuant to such offering and
(ii) 90 days after such effective date (or such shorter time period as the
managing underwriter or underwriters shall deem appropriate).
(b) Restrictions on Public Sales by the Company. The Company shall not
effect any public sale or distribution of any shares of Common Stock (other than
pursuant to an employee stock option, stock purchase, stock bonus or similar
plan, pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act or pursuant to a "shelf"
registration), or any securities of the Company convertible into or exchangeable
or exercisable for shares of Common Stock, except as part of such registration,
during the 10-day period prior to the effective date of a Demand Registration to
be effected as an underwritten offering, or during the period beginning on such
effective date and ending on the later of (i) the completion of the distribution
of such securities pursuant to such offering and (ii) 90 days after such
effective date (or such shorter time period as the managing underwriter or
underwriters shall deem appropriate).
11. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the Holders of a majority of the Registrable Securities then outstanding.
Holders shall be bound from and after the date of the receipt of a written
notice from the Company setting forth such amendment or waiver by any consent
authorized by this paragraph (a), whether or not the certificates representing
such Registrable Securities shall have been marked to indicate such consent.
(b) Successors, Assigns and Transferees. The provisions of this
Agreement shall be binding upon and shall inure to the benefit of the Company,
the Holders and their respective successors, assigns and transferees.
(c) Integration. The provisions of this Agreement and the documents
referred to herein or delivered pursuant hereto that form a part hereof contain
the entire understanding of the Company and the Initial Holders with respect to
its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein. The
provisions of this Agreement supersede all prior agreements and understandings
between the Company and the Initial Holders with respect to its subject matter.
(d) Notices. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first class mail, telex,
telecopier or hand delivery:
if to the Company, to:
----------------------
110 West Seventh Street
Suite #300
Fort Worth, Texas 76102
Attention: General Counsel
Telecopier: (817) 878-3672
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Attention: Robert S. Reder, Esq.
Telecopier: (212) 530-5219
If to any Holder, to the address of such Holder as shown in the stock
record books of the Company.
All such notices and communications shall be deemed to have been given
or made (i) when delivered by hand, (ii) five Business Days after being
deposited in the mail, postage prepaid, (iii) when telexed answer-back received
or (iv) when telecopied, receipt acknowledged.
(e) Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit, expand or otherwise affect
the meaning of the provisions hereof.
(f) Severability. In the event that any one or more of the provisions,
paragraphs, subparagraphs, sentences, clauses, subclauses, phrases or words
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability thereof in every other respect and of the remaining
provisions, paragraphs, subparagraphs, sentences, clauses, subclauses, phrases
and words hereof shall not be in any way impaired, it being intended that all
rights, powers and privileges of the Company and the Holders hereunder shall be
enforceable to the fullest extent permitted by law.
(g) Governing Law. The provisions of this Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
Delaware, without regard to the principles of conflicts of laws thereof, as if
it were a contract between the Company and the Initial Holders made and to be
performed entirely within that State.
(h) Termination. The provisions of this Agreement shall terminate, and
thereby become null and void, at the end of the Demand Registration Period;
provided, however, that the provisions of Section 6 shall survive the
termination of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
--------------------------
By:_______________________
Name:
Title:
[INITIAL HOLDERS]
By:_______________________
Name:
Title:
<PAGE>
NY1:#3183326v5
SCHEDULE I
Initial Holders
Doc#:DS5:63211.4
APPENDIX III
LOCK-UP AGREEMENT
<PAGE>
AGREEMENT
This Agreement (the "Agreement"), dated as of September 15,
1998, by and among Westbridge Capital Corp., a Delaware corporation
("Westbridge"), and each of the undersigned holders (each, a "Consenting
Holder") of debt securities (each, a "Claim") issued by Westbridge under one of
the instruments listed on Schedule I (the "Existing Agreements").
WITNESSETH:
WHEREAS, Westbridge and an Ad Hoc Committee of Westbridge
Creditors (the "Committee") have engaged in good faith negotiations with the
objective of reaching an agreement with regard to restructuring the indebtedness
outstanding under the Existing Agreements;
WHEREAS, Westbridge and the Consenting Holders now desire to
implement a financial restructuring of Westbridge (the "Financial
Restructuring") on terms substantially in accordance with the draft plan of
reorganization attached hereto as Appendix I (the "Draft Plan").
WHEREAS, in order to implement the Financial Restructuring,
Westbridge has agreed, on the terms and conditions of this Agreement, to prepare
and file a disclosure statement (the "Disclosure Statement") and plan of
reorganization (the "Pre-Negotiated Plan") in a case (the "Chapter 11 Case")
filed under chapter 11 of title 11 of the United States Code (the "Bankruptcy
Code") and to use its best efforts to have such Disclosure Statement approved
and such Pre-Negotiated Plan confirmed by the Bankruptcy Court for the District
of Delaware (the "Bankruptcy Court"), in each case as expeditiously as possible
under the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the
local rules of the Bankruptcy Court (collectively, the "Rules"); and
WHEREAS, in order to expedite the implementation of the
Financial Restructuring, each of the Consenting Holders is prepared to commit,
on the terms and subject to the conditions of this Agreement to vote to accept
the Pre-Negotiated Plan and to perform its other obligations hereunder.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Westbridge and each Consenting Holder hereby agree as follows:
1. Forbearance. So long as no "Agreement Termination
Event" or "Westbridge Termination Event" (each as defined in Section 4 of this
Agreement) shall have occurred and be continuing, each of the Consenting Holders
hereby agrees to forbear from the exercise of any rights or remedies it may have
under the Existing Agreements, applicable law or otherwise with respect to any
default arising under the Existing Agreements during the period commencing on
the date hereof and ending on the date on which this Agreement is terminated in
accordance with its terms.
<PAGE>
Doc#:DS5:63211.4
2. Voting: Restriction on Transfer. Each of the Consenting Holders
represents that, as of the date hereof, it is the beneficial owner of, and/or
the investment adviser or manager for the beneficial owners (with the power to
vote and dispose of such Claims on behalf of such beneficial owners) of, the
Claims set forth on Schedule 2 hereto (for each such Consenting Holder, the
"Relevant Claims"). Each of the Consenting Holders agrees that, subject to the
conditions that (i) the Disclosure Statement shall have been approved by the
Bankruptcy Court; (ii) the Disclosure Statement as so approved is not materially
inconsistent with the draft disclosure statement provided by Westbridge to the
Consenting Holders on or about September 14, 1998 (the "Draft Disclosure
Statement"); (iii) the material terms of the Pre-Negotiated Plan are the terms
set forth in the Draft Plan; (iv) the material terms of each of the employment
agreements between Westbridge and each of Patrick J. Mitchell and Patrick H.
O'Neill, respectively, and each of the Definitive Agreements (as defined below)
and any amendment thereto shall be reasonably satisfactory to it; and (v) the
material terms of any amendment to the Settlement Agreement and Mutual Release,
dated as of September 15, 1998, among Westbridge, Martin E. Kantor and National
Life Insurance Company entered into after such date shall be reasonably
satisfactory to it; it shall (a) timely vote its Relevant Claims (and, so long
as no Agreement Termination Event or Westbridge Termination Event shall have
occurred, not revoke or withdraw such vote) to accept the Pre-Negotiated Plan,
(b) not take any action directly or indirectly to delay, prevent or frustrate
confirmation of the Pre-Negotiated Plan, and (c) refrain from supporting
directly or indirectly any other proposed plan of reorganization or
recapitalization transaction for Westbridge; provided, however, that nothing
contained herein shall limit the ability of any Consenting Holder to consult
with Westbridge, or to appear and be heard, concerning any matter arising in the
Chapter 11 Case.
Each of the Consenting Holders hereby agrees that, so long as this
Agreement has not been terminated, it shall not sell, transfer or assign any of
the Relevant Claims or any option thereon or any right or interest (voting or
otherwise) therein, unless the transferee thereof agrees in writing to be bound
by all the terms of this Agreement by executing a counterpart signature page of
this Agreement and the transferor provides Westbridge with a copy thereof.
<PAGE>
3. Westbridge Agreements. Subject in each case to the proper
exercise by Westbridge of its fiduciary duties, Westbridge hereby agrees to use
its best efforts to obtain an order of the Bankruptcy Court approving the
Disclosure Statement (the "Disclosure Statement Order") and thereafter to take
all reasonable steps necessary and desirable to obtain an order of the
Bankruptcy Court confirming the Pre-Negotiated Plan (the "Confirmation Order")
and to consummate the Pre-Negotiated Plan, in each case, as expeditiously as
possible under the Bankruptcy Code and the Rules. Westbridge further agrees to
(a) consult with the Committee and Credit Suisse First Boston Corporation
("CSFB") or their respective representatives prior to taking any significant
action in connection with the Chapter 11 Case and (b) obtain the prior approval
of the Committee and CSFB or their respective representatives of the form and
substance of any material pleading, motion, order or agreement to be filed with
the Bankruptcy Court that relate to matters likely to (i) affect the form or
value of the consideration to be distributed under the Pre-Negotiated Plan or
(ii) substantially delay the effectiveness thereof, including, without
limitation, each of the Definitive Documents, the Pre-Negotiated Plan, the
Disclosure Statement, the Confirmation Order and the Disclosure Statement Order,
in each case subject to the need to respond immediately to matters which may
arise an emergency basis. In the event of any matter so arising on an emergency
basis, Westbridge shall notify the Committee and CSFB of any actions taken or
proposed to be taken with respect thereto as expeditiously as possible.
4. Termination of Agreement. Except as set forth in Section 14
hereof, this Agreement shall terminate automatically upon the occurrence of any
"Westbridge Termination Event" or any "Agreement Termination Event" (as
hereinafter defined), unless the occurrence of such Agreement Termination Event
is waived in writing by Consenting Holders holding or managing at least
fifty-one percent (51%) of the Relevant Claims; provided, that no such waiver
shall extend the time for performance of any of Westbridge's obligations under
Section 3 hereof to a date after January 15, 1999 without the consent of all of
the Consenting Holders. If any Agreement Termination Event occurs (and has not
been waived) or any Westbridge Termination Event occurs at the time when
permission of the Bankruptcy Court shall be required for a Consenting Holder to
change or withdraw (or cause to be changed or withdrawn) its votes to accept the
Pre-Negotiated Plan, Westbridge shall not, subject to its fiduciary duties as a
debtor in possession, oppose any attempt by such Consenting Holder to change or
withdraw (or cause to be changed or withdrawn) such votes at such time. Upon the
occurrence of an Agreement Termination Event or a Westbridge Termination Event,
each of the Consenting Holders shall have all rights and remedies available to
it under the Existing Agreements, applicable law or otherwise with respect to
any default under the Existing Agreements that may have occurred at any time
prior to such event and which default is still continuing.
An "Agreement Termination Event" shall mean any of the following:
(a) The Effective Date (as defined therein) of the Pre-Negotiated Plan
shall have occurred;
(b) The Chapter 11 Case to implement the Financial Restructuring
through confirmation of the Pre-Negotiated Plan shall not have been
commenced by September 30, 1998;
(c) The Disclosure Statement or a version thereof which is not
materially inconsistent with the Draft Plan shall not have been approved by
the Bankruptcy Court by November 30, 1998;
(d) The Pre-Negotiated Plan or a version thereof which is not
materially inconsistent with the Draft Plan shall not have been confirmed
by the Bankruptcy Court and substantially consummated in accordance with
its terms by January 30, 1999;
<PAGE>
(e) Westbridge breaches any material provision of this Agreement,
including, but not limited to, ceasing to use its best efforts to obtain
approval of the Disclosure Statement and/or confirmation and consummation
of the Pre-Negotiated Plan;
(f) (i) A material adverse change in the operations or business of
Westbridge and its subsidiaries (taken as a whole) shall have occurred
since the date hereof other than commencement of the Chapter 11 Case or
(ii) any event affecting generally and materially adversely the industry in
which Westbridge and its subsidiaries (taken as a whole) conduct their
business which would materially and adversely affect the ability of
Westbridge and its subsidiaries (taken as a whole) to operate their
business;
(g) Westbridge shall have received a bona fide written plan proposal
from a credible third party, which proposal shall not be subject to
material conditions that would materially delay the effectiveness of the
Pre-Negotiated Plan, and which proposal shall include, among others, the
following terms: (i) each holder of an 11% Note Claim shall receive cash in
an amount equal to the Allowed amount of such Claim; (ii) each holder of a
Credit Suisse 11% Note Claim shall receive Cash in an amount equal to the
Allowed amount of such Claim; and (iii) taking into account all other
elements of such proposal, each other holder of an Allowed Claim against or
Equity interest in Westbridge shall receive distributions of a value equal
to or greater than those at the high end of the range provided for by the
Pre-Negotiated Plan as described in the Draft Disclosure Statement; or
(h) Any of the conditions set forth in clauses (i) through (v) of
Section 2 hereof shall not have been satisfied by Westbridge.
In addition, Westbridge shall have the right to terminate this
Agreement by the giving of written notice thereof to each of the Consenting
Holders, upon the receipt by Westbridge of binding commitments reasonably
satisfactory to the Consenting Holders in all material respects for new debt
and/or equity financing from one or more creditworthy entities in amounts
sufficient to repay all amounts outstanding under the Existing Agreements in
full and in cash (a "Westbridge Termination Event"). Upon the occurrence of any
Agreement Termination Event, unless such Agreement Termination Event is waived
in accordance with the terms hereof, or upon the occurrence of a Westbridge
Termination Event, this Agreement shall terminate and no party hereto shall have
any continuing liability or obligation to any other party hereunder, except as
otherwise provided in Section 13; provided, that, no such termination shall
relieve any party from liability for its breach or non-performance of its
obligations hereunder prior to the date of such termination.
<PAGE>
5. Good Faith Negotiation of Financial Restructuring Documents.
Westbridge and each Consenting Holder which is a member of the Committee hereby
further covenants and agrees to negotiate the definitive documents (the
"Definitive Agreements") relating to the Financial Restructuring, including,
without limitation, the form of the New Common Stock, New Convertible Preferred
Stock, New Warrants, Employee and Director Stock Options and Agent Options (as
defined in the Financial Restructuring), in good faith.
6. Representations and Warranties. Westbridge, on the one hand, and
each of the Consenting Holders on the other, represents and warrants to each
other that the following statements are true, correct and complete as of the
date hereof.
(a) Power and Authority. It has all requisite corporate or other power
and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations under,
this Agreement;
(b) Authorization. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by
all necessary corporate or other action on its part;
(c) No Conflicts. The execution, delivery and performance by it of
this Agreement do not and shall not (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries or its
Certificate of Incorporation, bylaws or other organizational documents or
those of any of its subsidiaries or (ii) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under
any material contractual obligation to which it or any of its subsidiaries
is a party or under its certificate of incorporation, by-laws or other
organizational documents;
(d) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or
filing with, consent or approval of, or notice to, or other action to, with
or by, any Federal, state or other governmental authority or regulatory
body, except such filings and approvals as may be required under applicable
state insurance laws and regulations, such filings as may be necessary
and/or required for disclosure by the Securities and Exchange Commission
and in connection with the commencement of the Chapter 11 Case, the
approval of the Disclosure Statement and confirmation of the Pre-Negotiated
Plan; and
(e) Binding Obligation. This Agreement is the legally valid and
binding obligation of it, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or limiting
creditor's rights generally or by equitable principles relating to
enforceability.
<PAGE>
7. Further Acquisition of Securities. This Agreement shall in no
way be construed to preclude the Consenting Holders from acquiring additional
Claims. However, any such additional Claims so acquired shall automatically be
deemed to be Relevant Claims and to be subject to the terms of this Agreement.
The Consenting Holders shall in each case promptly advise Westbridge of the
acquisition of any such additional Claims and Westbridge shall prepare and
circulate to the relevant Consenting Holder a revised and restated version of
Schedule 2 hereto with respect to such Consenting Holder.
8. Effectiveness; Amendments; Consenting Holders. This Agreement
shall not become effective and binding on the parties hereto unless and until
counterpart signature pages hereto shall have been executed and delivered by
Westbridge and Consenting Holders holding Claims which constitute in the
aggregate at least a majority of the principal amount of the indebtedness
outstanding under each of the Existing Agreements. Once effective, this
Agreement may not be modified (except as provided in Section 4), amended or
supplemented as to any Consenting Holder except in writing signed by Westbridge
and such Consenting Holder.
9. Disclosure of Individual Holdings. Unless required by applicable
law or regulation, Westbridge shall not disclose any Consenting Holder's
holdings of Relevant Claims, without the prior written consent of such
Consenting Holder, and if such announcement or disclosure is so required by law
or regulation, Westbridge shall afford the Consenting Holders a reasonable
opportunity to review and comment upon any such announcement or disclosure prior
to Westbridge's making such announcement or disclosure. The foregoing shall not
prohibit Westbridge from disclosing the approximate aggregate holdings of Claims
by the Consenting Holders as a group.
10. Impact of Appointment to Creditors Committee. Notwithstanding
anything herein to the contrary, in the event that any Consenting Holder is
appointed to and serves on an official committee of creditors in the Chapter 11
Case, the terms of this Agreement shall not be construed so as to limit such
Consenting Holder's exercise (in its sole discretion) of its fiduciary duties to
any person arising from its service on such committee, and any such exercise (in
the sole discretion of such Consenting Holder) of such fiduciary duties shall
not be deemed to constitute a breach of the terms of this Agreement (but the
fact of such service on such committee shall not otherwise affect the continuing
validity or enforceability of this Agreement). So long as no Agreement
Termination Event or Westbridge Termination Event shall have occurred and this
Agreement remains in effect, the foregoing shall not modify or limit the
obligations of the Consenting Holders to vote their Relevant Claims and to take
the other actions set forth in Section 2 hereof.
<PAGE>
11. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in any federal court of
competent jurisdiction in the District of Delaware. By execution and delivery of
this Agreement, each of the parties hereto hereby irrevocably accepts and
submits itself to the nonexclusive jurisdiction of such courts, generally and
unconditionally, with respect to any such action, suit or proceeding.
Notwithstanding the foregoing consent to Delaware jurisdiction, upon the
commencement of the Chapter 11 Case, each of the parties hereto hereby agrees
that the Bankruptcy Court shall have exclusive jurisdiction of all matters
arising out of or in connection with this Agreement.
12. Specific Performance. It is understood and agreed by each of
the parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any party (other than a breach by Westbridge of
Section 13 hereof) and each nonbreaching party shall be entitled to specific
performance and injunctive or other equitable relief as a remedy of any such
breach.
13. Fees and Expenses. Westbridge shall reimburse each Consenting
Holder which is a member of the Committee for all of its out of pocket costs and
expenses incurred through the Commencement Date in respect of the fees and
expenses of the Committee's financial and legal advisors in accordance with
Westbridge's respective agreements with such firms (the "Expenses"). In
addition, in the event any party brings an action against any other party based
upon a breach by such other party of its obligations hereunder, the prevailing
party shall be entitled to all reasonable expenses incurred, including
reasonable attorneys', accountants' and financial advisers' fees in connection
with such action.
14. Survival. Notwithstanding the sale of the Relevant Claims in
accordance with Section 2 hereof or the termination of the Consenting Holders'
obligations hereunder in accordance with Section 4 hereof, Westbridge's
obligations and agreements set forth in Sections 9 and 13 (with respect to
Expenses incurred through the date of such termination) hereof shall survive
such termination and shall continue in full force and effect for the benefit of
the Consenting Holders in accordance with the terms hereof.
15. Headings. The headings of the sections, paragraphs and
subsections of this Agreement. are inserted for convenience only and shall not
affect the interpretation hereof.
16. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of the parties and their respective successors, assigns,
heirs, executors, administrators and representatives. The agreements,
representations and obligations of the Consenting Holders under this Agreement
are, in all respects, several and not joint.
17. Prior Negotiations. This Agreement and Appendix 1 supersede all
prior negotiations with respect to the subject matter hereof.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
<PAGE>
19. No Third-Party Beneficiaries. Unless expressly stated herein,
this Agreement shall be solely for the benefit of the parties hereto and no
other person or entity shall be a third-party beneficiary hereof.
20. Consideration. It is hereby acknowledged by the parties hereto
that no consideration shall be due or paid to the Consenting Holders for their
agreement to vote to accept the Pre-Negotiated Plan in accordance with the terms
and conditions of this Agreement other than Westbridge's agreement to commence
the Chapter 11 Case, to use its best efforts to obtain approval of the
Disclosure Statement and to take all steps necessary and desirable to confirm
and consummate the Pre-Negotiated Plan in accordance with the terms and
conditions of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
WESTBRIDGE CAPITAL CORP.
By: /s/ Patrick J. Mitchell
Name: Patrick J. Mitchell
Title: President
111 Seventh Street, Suite 306
Fort Worth, Texas 76102
Telephone: (817) 878-3300
Facsimile: (817) 878-3672
CONSENTING HOLDER
[Fill in the name of entity below);
--------------------------------
By: /s/ Alex Lagetko
Name: Alex Lagetko
Title: Director
Credit Suisse First Boston Corporation
11 Madison Avenue, 4th Floor
New York, New York 10010
Telephone: (212) 325-3810
Facsimile: (212) 325-8290
EXHIBIT D TO PLAN
LIST OF OFFICERS AND DIRECTORS
Stephen D. Davidson
Dennis A. Weverka
James W. Thigpen
Michael D. Norris
Margaret A. Megless
<PAGE>
EXHIBIT E TO PLAN
LIST OF EMPLOYMENT AGREEMENTS
* Employment Contract between Westbridge Capital Corp. and Stephen
D. Davidson
* Employment Contract between Westbridge Capital Corp. and Michael
D. Norris
* Employment Contract between Westbridge Capital Corp. and Dennis
A. Weverka
* Employment Contract between Westbridge Capital Corp and Margie A.
Megless
* Employment Agreement, dated as of April 1, 1996, by and among
Westbridge Capital Corp., National Foundation Life Insurance
Company and James W. Thigpen
* Employment Agreement, dated as of April 1, 1996, by and among
Westbridge Capital Corp., National Foundation Life Insurance
Company and Martin E. Kantor
<PAGE>
EXHIBIT F TO PLAN
CLAIMS AGREEMENT
<PAGE>
MEMORANDUM OF UNDERSTANDING
Re: Karabedian, et al, v. Westbridge Capital Corp., et al.
Civil Action No. 3 97 CV 3087-L, United States District
Court, Northern District of Texas, Dallas Division
1. Rabin & Peckel LLP, on behalf of their co-plaintiffs' attorneys
representing plaintiffs ("Plaintiffs"), Milbank, Tweed, Hadley & McCloy, on
behalf of defendants Westbridge Capital Corp., Martin E. Kantor and Patrick J.
Mitchell (together with defendant James W. Thigpen, the "Westbridge
Defendants"), A.I. Management and Professional Liability Claim Adjusters, on
behalf of National Union Fire Insurance Company of Pittsburgh, Pennsylvania (the
Westbridge Defendants' insurer ("National Union")), and Haynes and Boone, LLP,
on behalf of defendants Forum Capital Markets L.P. and Raymond James &
Associates, Inc. (the "Underwriter Defendants") (the Westbridge Defendants and
the Underwriter Defendants collectively, the "Defendants"), enter into this
Memorandum of Understanding to set forth the basic terms of settlement between
Plaintiffs and the Defendants which were agreed to by telephone on August 27,
1998 and October 23, 1998.
2. Westbridge Capital Corp. and National Union together agree to pay to
Plaintiffs a total of $1 million and the Underwriter Defendants agree to pay to
Plaintiffs $100,000 in complete settlement of the claims asserted in this
action. Funding of the settlement shall not occur before November 15, 1998, with
the sole exception of $50,000 to be paid by National Union into the "Notice
Account" to pay for notice to the class.
3. Plaintiffs agree to accept payment of $1,100,000 in complete settlement
of the claims asserted in this action.
4. Plaintiffs shall enter into a stipulation of dismissal with prejudice
and give to the Defendants a release or releases of all claims asserted in the
amended complaint or which could have been asserted in the amended complaint
arising out of the transactions described.
5. The Westbridge Defendants and the Underwriter Defendants shall give to
each other mutual releases of all claims arising out of said transactions or
this action.
6. The Defendants shall cooperate with Plaintiffs to provide two employees
to be selected by Plaintiffs for depositions and any and all non-privileged
documents requested by Plaintiffs for examination and copying in order to permit
Plaintiffs to confirm that the terms of this settlement are fair.
7. The settlement is subject to an agreed number of opt-outs in number and
amount.
8. This settlement is subject to the certification of the class described
in the amended complaint and approval of the District Court and the Bankruptcy
Court in which Westbridge Capital Corp. has filed a case for relief under
chapter 11 of the Bankruptcy Code. Plaintiffs shall support any motion in the
Bankruptcy Court for approval of this settlement or confirmation of any chapter
11 plan which incorporates its terms.
9. National Union shall have the right to terminate this Memorandum of
Understanding at any point in time up to the filing with the District Court of a
Stipulation of Settlement in the Karabedian case in the event there are, in
National Union's determination, material changes to the terms of the release of
the directors and officers of Westbridge provided for in the Plan of
Reorganization of Westbridge filed with the Bankruptcy Court. In the event:
(a) this Memorandum of Understanding is terminated by National Union; or
(b) settlement of the Karabedian case is not reached in accordance with the
terms of this Memorandum of Understanding
then this Memorandum of Understanding shall be of no further force or effect and
the parties shall revert to their respective positions immediately prior to the
execution of this Memorandum of Understanding.
10. Neither the negotiation, nor the terms, conditions and other provisions
nor the performance of this Memorandum of Understanding shall be:
(a) deemed or construed in any manner whatsoever to be an admission of
liability by any party to this Memorandum of Understanding; or
(b) used by any party to this Memorandum of Understanding for any purpose
other than the enforcement of the provision hereof;
provided, however, that nothing in this paragraph shall affect the viability of
the provisions set forth herein.
11. The terms of this Memorandum of Understanding shall be reduced to
writing in formal settlement documents and shall not be binding until the formal
settlement documents are executed.
12. This Memorandum of Understanding may be executed in counterparts.
Dated: October 26, 1998
/s/ Brian P. Murray
RABIN & PECKEL LLP
Attorneys for Plaintiffs
/s/ Russell E. Brooks
MILBANK, TWEED, HADLEY & McCLOY
Attorneys for Westbridge Capital Corp.,
Martin E. Kantor and Patrick J. Mitchell
/s/ Michael E. Adler
A.I. MANAGEMENT AND PROFESSIONAL
LIABILITY CLAIM ADJUSTERS
/s/ Noel M. Hensley
HAYNES AND BOONE, LLP
Attorneys for Forum Capital Markets L.P. and
Raymond James & Associates, Inc.
Doc#:DS5:161270.2
EXHIBIT B
<PAGE>
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: )
) Chapter 11
WESTBRIDGE CAPITAL CORP., )
a Delaware corporation, ) Case No. 98-2105 (MFW)
)
Debtor. )
NOTICE OF ENTRY OF ORDER CONFIRMING FIRST AMENDED PLAN OF
REORGANIZATION OF WESTBRIDGE CAPITAL CORP.
DATED OCTOBER 30, 1998, AS MODIFIED
TO ALL CREDITORS, EQUITY SECURITY HOLDERS, AND OTHER PARTIES IN INTEREST OF
WESTBRIDGE CAPITAL CORP.
("WESTBRIDGE")
PLEASE TAKE NOTICE that on December 17, 1998, the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") entered the Findings
of Fact, Conclusions of Law, and Order (the "Confirmation Order") under 11
U.S.C. ss.ss. 1129(a) And (b) and Fed. R. Bankr. P. 3020 Confirming First
Amended Plan of Reorganization of Westbridge Capital Corp. dated October 30,
1998, as modified (the "Plan") (unless otherwise defined, capitalized terms used
in this notice shall have the meanings ascribed to them in the Plan).
PLEASE TAKE FURTHER NOTICE that, pursuant to 11 U.S.C. ss. 1141(a), the
provisions of the Plan (including the exhibits to, and all documents and
agreements executed pursuant to, the Plan) and the Confirmation Order shall bind
(i) the Debtor and its estate, (ii) Reorganized Westbridge, (iii) all holders of
claims against and interests in the Debtor, whether or not impaired under the
Plan and whether or not, if impaired, such holders accepted the Plan or received
or retained any property under the Plan, (iv) any other party-in-interest, (v)
any person making an appearance in the Debtor's Chapter 11 Case, and (vi) each
of the foregoing's respective heirs, successors, assigns, trustees, executors,
administrators, affiliates, officers, directors, agents, representatives,
attorneys, beneficiaries, or guardians.
PLEASE TAKE FURTHER NOTICE that, except as otherwise provided in the Plan,
or in any contract, instrument, release, or other agreement or document entered
into in connection with the Plan, each of the executory contracts and unexpired
leases to which the Debtor is a party, to the extent such contracts or leases
are executory contracts or unexpired leases, will be assumed by the Debtor as of
the Effective Date, except those contracts or leases which (i) are executory
contracts or unexpired leases which were the subject of a motion to reject
pending on the Confirmation Date, (ii) have previously been assumed or rejected
by the Debtor, (iii) employment agreements, if any, terminated prior to or in
connection with the Plan, (iv) are the employment agreements set forth on
Exhibit E to the Plan, and (v) have expired or terminated pursuant to their own
terms during the pendency of the Chapter 11 Case.
<PAGE>
Doc#:DS5:161270.2
PLEASE TAKE FURTHER NOTICE that (i) Claims for payment of an administrative
expense of a kind specified in sections 503(b)(1) and (2) of the Bankruptcy Code
and entitled to priority under section 507(a)(1) of the Bankruptcy Code
("Administrative Claims"), except for all applications for final allowance of
compensation and reimbursement of professional fees and expenses pursuant to
sections 327, 328, 330, 331, or 1103 of the Bankruptcy Code, not paid prior to
the Confirmation Date shall be forever barred and shall not be enforceable
against the Debtor, its estate, Reorganized Westbridge, or their respective
successor or properties unless a proof of Claim for such Administrative Claim is
filed and served on Reorganized Westbridge and counsel for Reorganized
Westbridge on or before 4:00 P.M. (Wilmington Delaware time) on January 17, 1999
and (ii) all applications for final allowance of professional fees pursuant to
sections 327, 328, 330, 331 or 1103 of the Bankruptcy Code must be filed and
served on Reorganized Westbridge and counsel for Reorganized Westbridge on or
before 4:00 p.m. (Wilmington Delaware time) on March 22, 1999.
PLEASE TAKE FURTHER NOTICE that any party in interest wishing to obtain a
copy of the Confirmation Order may request such copy at his own expense by
contacting Victoria Watson Counihan, Young Conaway Stargatt & Taylor LLP, 11th
Floor, Rodney Square North, P.O. Box 391, Wilmington, Delaware 19899-0391, at
(302) 571-6600. Copies of the Confirmation Order may also be reviewed during
regular business hours at the United States Bankruptcy Court for the District of
Delaware, Marine Midland Plaza, 824 Market Street, Wilmington, Delaware 19801.
Dated: Wilmington, Delaware BY ORDER OF THE BANKRUPTCY COURT
December 17, 1998 Mary F. Walrath, United States Bankruptcy Judge
YOUNG CONAWAY STARGATT & TAYLOR, LLP
James L. Patton, Jr. (No. 2202)
Victoria Watson Counihan (No. 3488)
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6600
and
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
Alan W. Kornberg
Andrew N. Rosenberg
W. Andrew P. Logan III
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
Attorneys for Westbridge Capital Corp.,
debtor and debtor in possession
EXHIBIT C
<PAGE>
YOUNG CONAWAY STARGATT & TAYLOR, LLP
WRITER'S DIRECT DIAL NUMBER
(302) 571-6702
E-MAIL: [email protected]
December 16, 1998
BY HAND DELIVERY
Honorable Mary F. Walrath
United States Bankruptcy Court
for District of Delaware
824 Market Street
Wilmington, DE 19801
Re: Westbridge Capital Corporation; Case No. 98-2105 (MFW)
Dear Judge Walrath:
In update to the Affidavit of Patrick J. Mitchell in Support
of Confirmation of Debtor's First Amended Plan of Reorganization, which was
filed yesterday, and pursuant to section 1129(a)(5) of the Bankruptcy Code, the
initial board of directors of the reorganized debtor will consist of the
following persons:
1. Patrick J. Mitchell
2. Michael A. Kramer
3. Richard H. Hershman
4. Robert A. Pieser
5. John H. Gutfreund
Counsel is available at the Court's convenience should Your
Honor have any questions.
Respectfully,
/s/ Victoria Watson Counihan
Victoria Watson Counihan
<PAGE>
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Honorable Mary F. Walrath
December 16, 1998
Page 3
VWC:hs
Via Telecopier Unless Otherwise Indicated
cc: Mr. Patrick J. Mitchell (President, Westbridge Capital Corp.)
Alan W. Kornberg, Esquire (Co-Counsel to Debtor)
Scott D. Cousins, Esquire (Official Committee of Unsecured Creditors)
Fred Hodara, Esquire (Official Committee of Unsecured Creditors)
Maria D. Giannirakis, Esquire (United States Trustee)
Craig A. Barbarosh, Esquire (Bank One Trust Company)
Philip Trainer, Esquire (Bank One Trust Company)
Susan R. Sherrill, Esquire (U.S. Securities & Exchange Commission)
Eric D. Schwartz, Esquire (LaSalle)
George T. Plumb, Esquire (LaSalle)
Thomas L. Ambro, Esqsuire (Credit Suisse First Boston)
Michael Sage, Esquire (Credit Suisse First Boston)
Joanne B. Wills, Esquire (Forum Capital Markets, L.P.)
(w/enc.)
Joel A. Waite, Esquire
James L. Patton, Jr., Esquire
(w/o encl.)
