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): SEPTEMBER 16, 1998
------------------------
WESTBRIDGE CAPITAL CORP.
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(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
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(Address of Principal Executive Offices) (Zip Code)
(817) 878-3300
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(Registrant's Telephone Number, Including Area Code)
N/A
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(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].
NY1:#318027v2
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Item 3. Bankruptcy or Receivership
On September 16, 1998 (the "Petition Date"), Westbridge
Capital Corp. (the "Company") filed a petition for relief under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), Case No.
98-2105 (the "Chapter 11 Case"), along with a proposed plan of reorganization
which has been pre-negotiated with certain creditors of the Company (the
"Pre-Negotiated Plan") and a proposed disclosure statement in connection
therewith (the "Disclosure Statement"). The Company also filed a number of first
day motions in connection with the case. The case has been assigned to United
States Bankruptcy Court Judge Mary Walrath. A copy of the Pre-Negotiated Plan is
attached hereto as Exhibit 2. On September 16, 1998 the Company issued the press
release attached hereto as Exhibit 99 announcing the commencement of the
Company's chapter 11 case.
On the Petition Date, Credit Suisse First Boston Corporation
("CSFB") and other creditors of the Company, which together hold approximately
50% in principal amount of the Company's 11% Senior Subordinated Notes due 2002
and 7-1/2% Convertible Subordinated Notes due 2004 (collectively, the "Notes"),
signed and delivered to the Company lock-up agreements (the "Lock-Up
Agreements") making certain undertakings and representations for the benefit of
the Company. Pursuant to the Lock-Up Agreements, each institution has agreed,
among other things, that subject to the terms and conditions set forth therein
(i) it will support and vote in favor of the Plan and (ii) it will not, directly
or indirectly, sell or otherwise transfer any of its Notes or any interest or
participation therein, other than to a person who agrees in writing to be
subject to the terms and undertakings contained in the Lock-Up Agreements. The
foregoing summary of the Lock-Up Agreements does not purport to be complete and
is subject to, and qualified in its entirety by, the Lock-Up Agreements. A copy
of the Lock-Up Agreement executed by CSFB is attached hereto as Exhibit 10.1 and
incorporated herein by reference.
Pursuant to the Pre-Negotiated Plan, it is contemplated that
the Company will make certain cash distributions to the holders of its 11%
Senior Subordinated Notes. In order to provide the Company with sufficient funds
to make such cash distributions, the Pre-Negotiated Plan provides that the
Company will issue to the holders of its 7-1/2% Convertible Subordinated Notes
as of May 20, 1998 rights (the "Purchase Rights") to purchase shares of a newly
created series of convertible preferred stock (the "New Preferred Stock"). To
ensure that sufficient shares of New Preferred Stock are purchased from the
Company, CSFB has also entered into a Stock Purchase Agreement with the Company
(the "Purchase Agreement") pursuant to which CSFB has agreed to purchase all of
the shares of New Preferred Stock which are not otherwise purchased pursuant to
the Purchase Rights. The New Preferred Stock to be purchased pursuant to the
Purchase Rights will initially be convertible into approximately 41.4% of the
common stock of the Company to be issued on the effective date of, and pursuant
to, the Pre-Negotiated Plan. Dividends on the New Preferred Stock will accrue at
an annual rate of 10.25% and will be paid in shares of preferred stock of the
Company having the same terms as the New Preferred Stock. The New Preferred
Stock will be subject to mandatory redemption on the fifth anniversary of the
effective date of the Plan. The foregoing summary of the New Preferred Stock
does not purport to be complete and is subject to, and qualified in its entirety
by, the Purchase Agreement, a copy of which is attached hereto as Exhibit 10.2
and incorporated herein by reference.
Pursuant to the Pre-Negotiated Plan, it is contemplated that
the Company will issue new common stock and new warrants to the holders of its
7-1/2% Convertible Subordinated Notes and existing preferred and common
stockholders.
At a first day hearing conducted on September 17, 1998, the
Bankruptcy Court entered various first day orders granting the Company authority
to, among other things: retain certain bankruptcy professionals, maintain
existing bank accounts, cash management systems and investment guidelines, and
use existing business forms. The Bankruptcy Court also established a bar date
for filing proofs of claim against the Company and established a date to
consider the adequacy of the Company's Disclosure Statement.
Copies of the first day orders and other pleadings filed in
the case may be obtained for a nominal cost directly from Logan & Company, 615
Washington Street, Hoboken, NJ 07030, Telephone No.
(201) 798-1031, Facsimile No. (201) 798-9114.
Item 5. Other Events
In connection with the filing of the Pre-Negotiated Plan, the
Company also entered into employment agreements with Patrick J. Mitchell, who
was elected Chairman of the Board and Chief Executive Officer of the Company on
September 15, 1998 and retains his positions as President and Chief Operating
Officer, and Patrick H. O'Neill, the Company's Executive Vice President, General
Counsel and Secretary. Copies of the employment agreements with Mr. Mitchell and
Mr. O'Neill are attached hereto as Exhibits 10.3 and 10.4, respectively.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
2 Plan of Reorganization of Westbridge Capital Corp. Under Chapter 11 of
Title 11 of the United States Code
10.1 Lock-Up Agreement, dated as of September 16, 1998, by and among the Company
and Credit Suisse First Boston Corporation.
10.2 Stock Purchase Agreement, dated as of September 16, 1998, between the
Company and Credit Suisse First Boston Corporation.
10.3 Employment Agreement, dated as of September 15, 1998, by and among the
Company, Westbridge Management Corp. and Mr. Patrick J. Mitchell.
10.4 Employment Agreement, dated as of September 15, 1998, by and among the
Company, Westbridge Management Corp. and Mr. Patrick H. O'Neill.
99 Press release announcing the commencement of the Company's chapter 11 case.
<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: September 18, 1998 By: /S/ PATRICK J. MITCHELL
------------------------
Patrick J. Mitchell
Chairman and Chief Executive Officer
(On Behalf of the Registrant and as
Principal Financial and Accounting
Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- ---------------------------------------------------------------
2 Plan of Reorganization of Westbridge Capital Corp. Under Chapter 11 of
Title 11 of the United States Code
10.1 Lock-Up Agreement, dated as of September 16, 1998, by and among the
Company and Credit Suisse First Boston Corporation
10.2 Stock Purchase Agreement, dated as of September 16, 1998, between the
Company and Credit Suisse First Boston Corporation
10.3 Employment Agreement, dated as of September 15, 1998, by and among the
Company, Westbridge Management Corp. and Mr. Patrick J. Mitchell
10.4 Employment Agreement, dated as of September 15, 1998, by and among the
Company, Westbridge Management Corp. and Mr. Patrick H. O'Neill
99 Press release announcing the commencement of the Company's chapter 11
case.
Doc#:DS5:39778.10
EXHIBIT 2
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
In re: ) Chapter 11
)
WESTBRIDGE CAPITAL CORP., ) Case No. 98-2105
)
Debtor. )
)
)
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
September 16, 1998
<PAGE>
Doc#:DS5:39778.10
CONFIDENTIAL
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 any Claim or Equity Interest,
ALLOWED 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 Restated Guaranty, dated
AGREEMENT 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 of Reorganized
BY-LAWS 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
INCORPORATION in 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 in 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.
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 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 ________, 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 Record
Date.
DEBTOR means Westbridge Capital Corp., a Delaware corporation,
also referred to 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.
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 Record 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 stock or common stock or
INTEREST 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 fifth day
prior to the Confirmation Date and concluding on the
fourth day after the Confirmation Date, or, if such
date 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.
GENERAL UNSECURED CLAIM means any Unsecured Claim other than
a 11% Note Claim, CSFB 11% Note Claim or 7 1/2%
Convertible Note Claim.
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 7-A means the aggregate
DISTRIBUTION AMOUNT number of shares of New Common Stock to be distributed
on the Initial Distribution Date to all holders of
Allowed Group 7-A Claims which shall be computed as
follows: (a) a fraction, (i) the numerator of which is
the Allowed Amount of Group 7-A Claims and (ii) the
denominator of which is the Allowed Amount of Group 7-A
Claims and the Allowed Amount of Group 7-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 7-B means the aggregate number of shares of New Common
DISTRIBUTION AMOUNT Stock to be distributed on the Initial Distribution
Date to all holders of Allowed Group 7-B Claims which
shall be computed as follows: (a) a fraction, (i) the
numerator of which is the Allowed Amount of Group 7-B
Claims and (ii) the denominator of which is the Allowed
Amount of Group 7-A Claims and the Allowed Amount of
Group 7-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 AGREEMENT means the "Pledged Collateral" as defined in the
COLLATERAL Pledge Agreement dated as
of June 6, 1997 between Westbridge and LaSalle, as
amended.
LASALLE LETTER OF CREDIT means that certain Irrevocable
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 LaSalle
CREDIT COLLATERAL (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, each dated
AGREEMENTS 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 of Reorganized
PREFERRED STOCK 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 to such term in Section V.F of
STOCK OPTIONS the Plan.
OLD COMMON STOCK means the common stock, par value $.10 per
share, issued by Westbridge and outstanding on the
Petition Date.
OLD NOTEHOLDER means any Claim for damages or rescission arising from
SECURITIES CLAIM or out of the purchase or sale of 11% Notes or 7 1/2%
Convertible Notes, or for reimbursement, contribution
or indemnification on account of such a Claim,
including Putative Class Action Claims asserted by any
current or former holder of 11% Notes or 7 1/2%
Convertible Notes.
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 STOCKHOLDER means a Claim for damages or rescission arising out of
SECURITIES CLAIM the purchase or sale of Old Common Stock, or for
reimbursement, contribution or indemnification on
account of such a Claim, including any
Putative Class Action Claims asserted by any current or
former holder of Old 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 United States District Court for
the Northern District of Texas, 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.
PUTATIVE CLASS ACTION means the Claims asserted
CLAIMS against Westbridge in the Putative Class Action.
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 and 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 has the meaning assigned to
RESERVE such term in Section VI.C of the Plan.
STOCK PURCHASE 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 6 Claims in
Group 6-B or acquired by holders of Allowed Class 7
Claims in Group 7-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
RIGHTS such term in Section VII.C of the Plan.
SUBORDINATION means the value of that
REDISTRIBUTION portion of Group 7-B's allocation of New Common Stock
AMOUNT equal to the difference between (x) the value of the
Cash and New Convertible Preferred Stock to be
distributed to holders of Allowed Class 6 Claims under
the Plan and (y) the value of the Cash and New
Convertible Preferred Stock which holders of Allowed
Claims in Class 6 would be entitled to receive under
the Plan without giving effect to the Claims of the
holders of Allowed Claims in Class 6 against holders of
Allowed Claims in Group 7-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 means the unsecured Claims of the 7 1/2% Convertible
NOTE 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
NOTE INDENTURE Indenture, dated as 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.
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 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#:DS5:39778.10
CONFIDENTIAL
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
. 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)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 PLAN2. UNIMPAIRED CLASSES OF
CLAIMS (DEEMED TO HAVE ACCEPTED THE PLAN AND, THEREFORE, )OT ENTITLED
TO VOTE ON THE PLAN
(a) CLASS 1: PRIORITY NON-TAX CLAIMS.
Class 1 consists of all Priority Non-Tax Claims.
<PAGE>
(b) CLASS 2: LASALLE CLAIMS.
Class 2 consists of the LaSalle Claims.
(c) CLASS 3: CONVENIENCE CLAIMS.
Class 3 consists of all Convenience Claims.
(d) CLASS 4: SECURED CLAIMS.
Class 4 consists of all Secured Claims.
(e) CLASS 5: INTERCOMPANY CLAIMS.
Class 5 consists of all Intercompany Claims.
3. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (ENTITLED TO VOTE ON THE
PLAN)3. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (ENTITLED TO VOTE ON
THE PLAN)
(a) CLASS 6: 11% NOTE CLAIMS.
Class 6 consists of all 11% Note Claims. Class 6 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 6-A: Group 6-A consists of all 11%
Note Claims other than CSFB 11% Note Claims.
(ii) GROUP 6-B: Group 6-B consists of all CSFB
11% Note Claims.
(b) CLASS 7: UNSECURED CLAIMS.
Class 7 consists of all Unsecured Claims (other than
11% Note Claims and CSFB 11% Note Claims). Class 7 Unsecured
Claims have been divided into separate groups described
below. Together, all of the groups of Unsecured Claims
(other than 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
General Unsecured Claims.
(ii) GROUP 7-B: Group 7-B consists of all 7 1/2%
Convertible Note Claims.
<PAGE>
(c) CLASS 8: OLD NOTEHOLDER SECURITIES CLAIMS.
Class 8 consists of all Old Noteholder Securities
Claims.
(d) CLASS 9: OLD PREFERRED STOCK INTERESTS.
Class 9 consists of all Old Preferred Stock
Interests.
(e) 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.
(f) CLASS 11: OLD STOCKHOLDER SECURITIES CLAIMS.
Class 11 consists of all Old Stockholder Securities
Claims.
4. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS (DEEMED TO HAVE
REJECTED THE PLAN AND, THEREFORE, NOT ENTITLED TO VOTE ON THE PLAN)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 12: UNVESTED OLD RESTRICTED COMMON STOCK
INTERESTS.
Class 12 consists of all Unvested Old Restricted
Common Stock Interests.
(b) CLASS 13: OLD WARRANT INTERESTS.
Class 13 consists of all Old Warrant Interests.
(c) CLASS 14: OLD OPTION INTERESTS.
Class 14 consists of all Old Option Interests.
III.
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
<PAGE>
1 ADMINISTRATIVE CLAIMS
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 CLAIM2A
--------------------------
(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) DISTRIBUTION. The 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 - UNSECURED 11% NOTE CLAIMS
-----------------------------------
(a) DISTRIBUTIONS.
(i) GROUP 6-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 6-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 6-A AND GROUP 6-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 6 in the
aggregate amount of $22,114,445 as of the Petition Date, plus simple
interest accruing 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 6 is impaired under the
Plan. The holders of Allowed Claims in Class 6 are entitled to vote to accept
or reject the Plan.
7 CLASS 7 - OTHER UNSECURED CLAIMS
--------------------------------
(a) DISTRIBUTIONS.
(i) GROUP 7-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
7-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.
<PAGE>
(ii) GROUP 7-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 7-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 7-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 __, 1998, shall be entitled to
participate, at their option, in the purchase of New Convertible
Preferred Stock.
(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.
8 CLASS 8-OLD NOTEHOLDER SECURITIES CLAIMS
<PAGE>
(a) DISTRIBUTIONS. The holders of Class 8 Claims shall retain,
and shall be entitled to assert following the Effective Date, their
Class 8 Claims against the Debtor to the extent of any recoveries
available to the Debtor in respect of the National Union Policy;
PROVIDED, HOWEVER, that the holders of Class 8 Claims shall be
entitled to no other distribution under the Plan in respect of such
Claims and such Claims shall otherwise be discharged on the Effective
Date. If any holders of Class 8 Claims object to the treatment of
Class 8 Claims under the Plan, or, if permitted by the Court to vote,
reject the Plan, (i) the Debtor shall seek the estimation of such
Claims under section 502(c) of the Bankruptcy Code for allowance
purposes at zero, and (ii) if such Claims are estimated at zero, the
holders of such Claims shall receive no distributions whatsoever on
account of such Claims. Alternatively, if any holders of Class 8
Claims object to the treatment of Class 8 Claims under the Plan or, if
permitted by the Court to vote, reject the Plan, and (i) the Debtor
shall have sought estimation of such Claims for allowance purposes at
zero, but (ii) (x) such Claims are estimated at greater than zero and
(y) the Court requires that the Debtor establish the Securities
Litigation Reserve to comply with section 1129(b) of the Bankruptcy
Code, the holders of such Claims shall receive from the Securities
Litigation Reserve their Pro Rata share of New Common Stock
representing up to 6% of all issued and outstanding New Common Stock
on the Effective Date and New Warrants to purchase up to 7% of all
issued and outstanding New Common Stock on a fully diluted basis,
PROVIDED, HOWEVER, that in no event shall such holders receive New
Common Stock and New Warrants of a value in excess of the amount of
all such holders' claims (if greater than zero) established at the
estimation hearing to be conducted by the Court; PROVIDED, FURTHER
HOWEVER, that (x) any recoveries received by holders of Class 8 Claims
which represent proceeds of the National Union Policy shall be deemed
to reduce the amount of the Claims held by Class 8 as estimated by the
Court on a dollar for dollar basis and (y) the holders of Class 8
Claims shall not receive any distributions from the Securities
Litigation Reserve until such time as the proceeds of the National
Union Policy shall have been exhausted or coverage under the National
Union Policy shall have been irrevocably denied. The holders of Class
8 Claims shall in no event receive distributions (including proceeds
of the National Union Policy) on account of their Claims in excess of
the amount of their Claims as estimated (if necessary) by the Court.
Any New Common Stock or New Warrants held in the Securities Litigation
Reserve the value of which is in excess of the amount of the Class 8
Claims as established at any estimation hearing conducted by the Court
(less any recoveries received by holders of Class 8 Claims which
represent proceeds of the National Union Policy) shall be released and
distributed to the holders of Class 9 and 10 Interests and Class 11
Claims, in descending order of priority as their interests may
otherwise be provided for by this Plan.
(b) IMPAIRMENT AT 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.
(i) If (x) no holders of Class 8 Claims object to the
treatment of Class 8 Claims under the Plan or, if permitted by the
Court to vote, do not reject the Plan, or (y) the Court does not
require that the Debtor establish the Securities Litigation Reserve,
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.
<PAGE>
(ii) (x) If any holders of Class 8 Claims object to
the treatment of Class 8 Claims under the Plan or, if permitted by
the Court to vote, reject the Plan and (y) the Court requires that
the Debtor establish the Securities Litigation Reserve, on each
Subsequent Distribution Date, each holder of an Allowed Class 9 Old
Preferred Stock Interest shall receive from the Securities Litigation
Reserve its Pro Rata share of (a) (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 less (b) any New Common Stock and New Warrants which have been
distributed to holders of Class 8 Claims, PROVIDED that such holders
shall not receive any distributions until such time (if ever) as the
New Common Stock and New Warrants have been released from the
Securities Litigation Reserve in accordance with Section IV.8(a).
(iii) All distributions to holders of Class 8 Claims
from the Securities Litigation Reserve shall first reduce
distributions to holders of Class 10 Interests and Class 11 Claims
prior to any reduction in distributions to Class 9 Interests.
(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.
(i) If (x) no holder of Class 8 Claims or Class 11
Claims object to their respective treatment under the Plan or, if
permitted by the Court to vote, reject the Plan or (y) the Court does
not require that the Debtor establish the Securities Litigation
Reserve, 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.
<PAGE>
(ii) (x) If any holder of Class 8 Claims or Class 11
Claims object to their respective treatment under the Plan, or, if
permitted by the Court to vote, reject the Plan and (y) the Court
requires that the Debtor to establish the Securities Litigation
Reserve, on each Subsequent Distribution Date, each holder of an
Allowed Class 10 Old Common Stock Interest and an Allowed Class 10
Old Restricted Common Stock Interest shall receive from the
Securities Litigation Reserve its Pro Rata share of (a) (x) New
Common Stock representing 2% of all issued and outstanding shares of
New Common Stock on the Effective Date and (b) New Warrants to
purchase up to 5% of all issued and outstanding shares of New Common
Stock on a fully diluted basis less (y) any New Common Stock and New
Warrants which have been distributed to holders of Class 8 and/or 11
Claims, PROVIDED that such holders shall not receive any
distributions until such time (if ever) as the New Common Stock and
New Warrants have been released from the Securities Litigation
Reserve in accordance with Section IV.8(a). If necessary, the Debtor
shall request that the Court determine the "Pro Rata" distribution as
between Classes 10 and 11, if any, of New Common Stock and New
Warrants from the Securities Litigation Reserve.
(iii) All distributions to holders of Class 8 Claims
from the Securities Litigation Reserve shall first reduce
distributions to holders of Class 10 Interests and Class 11 Claims
prior to any reduction in distributions to Class 9 Interests.
(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 - OLD STOCKHOLDER SECURITIES CLAIMS
--------------------------------------------
(a) DISTRIBUTIONS.
<PAGE>
(i) The holders of Class 11 Claims shall retain, and
shall be entitled to assert, following the Effective Date, their
Class 11 Claims against the Debtor to the extent of any recoveries
available to the Debtor in respect of the National Union Policy;
PROVIDED, HOWEVER, that the holders of Class 11 Claims shall be
entitled to no other distribution under the Plan in respect of such
Claims and such Claims shall otherwise be discharged on the Effective
Date. If any holders of Class 11 Claims object to the treatment of
Class 11 Claims under the Plan or, if permitted by the Court to vote,
reject the Plan, (i) the Debtor shall seek the estimation of such
Claims under section 502(c) of the Bankruptcy Code for allowance
purposes at zero, and (ii) the holders of such Claims shall receive
no distributions whatsoever on account of such Claims. Alternatively,
if any holders of Class 11 Claims object to the treatment of Class 11
Claims under the Plan, or, if permitted by the Court to vote, reject
the Plan, and (i) the Debtor shall have sought estimation of such
Claims for allowance purposes at zero, but (ii) (x) such Claims are
estimated at greater than zero and (y) the Court requires that the
Debtor establish the Securities Litigation Reserve to comply with
section 1129(b) of the Bankruptcy Code, the holders of such Claims
(together with the holders in Class 10 of Old Common Stock Interests
and Old Restricted Common Stock Interests) shall receive from the
Securities Litigation Reserve their Pro Rata share of New Common
Stock representing up to 2% of all issued and outstanding New Common
Stock on the Effective Date and New Warrants to purchase up to 5% of
all issued and outstanding New Common Stock on a fully diluted basis,
PROVIDED, HOWEVER, that in no event shall such holders receive New
Common Stock and New Warrants of a value in excess of the amount of
all such holders' claims (if greater than zero) established at the
estimation hearing to be conducted by the Court; PROVIDED, FURTHER
HOWEVER, that (x) any recoveries received by holders of Class 11
Claims which represent proceeds of the National Union Policy shall be
deemed to reduce the amount of the Claims held by Class 11 as
estimated by the Court on a dollar for dollar basis and (y) the
holders of Class 11 Claims shall not receive any distributions from
the Securities Litigation Reserve until such time as the proceeds of
the National Union Policy shall have been exhausted or coverage under
the National Union Policy shall have been irrevocably denied. The
holders of Class 11 Claims shall in no event receive distributions
(including proceeds of the National Union Policy) on account of their
Claims in excess of the amount of their Claims as estimated (if
necessary) by the Court. If necessary, the Debtor shall request that
the Court determine the "Pro Rata" distribution as between Classes 10
and 11, if any, of New Common Stock and New Warrants from the
Securities Litigation Reserve.
(ii) All distributions to holders of Class 8 Claims
from (x) the National Union Policy shall reduce distributions to
holders of Class 11 Claims on a dollar for dollar basis and (y) the
Securities Litigation Reserve shall first reduce distributions to
holders of Class 10 Interests and Class 11 Claims prior to any
reduction in distributions to Class 9 Interests.
(b) IMPAIRMENT AND VOTING. Class 11 is impaired under the Plan.
The holders of Allowed Class 11 Old Stockholder Securities Claims are
entitled to vote to accept or reject the Plan.
12 CLASS 12 - 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 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.
<PAGE>
13 CLASS 13 - 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 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.
14 CLASS 14 - 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 14 is impaired under the Plan.
The holders of Allowed Class 14 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
A0 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.
B0 CORPORATE ACTION
AMENDED WESTBRIDGE CERTIFICATE OF INCORPORATION AND AMENDED WESTBRIDGE
BY-LAWS. THE adoption of the Amended Westbridge Certificate of Incorporation and
Amended 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.
C0 SECURITIES TO BE ISSUED PURSUANT TO THE PLAN
1 NEW COMMON STOCK
<PAGE>
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, subject to the following two
sentences, issue and distribute 6,500,000 of such authorized shares to the
holders of Allowed Claims or Allowed Interests in Class 7 and/or Classes 8, 9,
10 and 11 in accordance with this Plan. If (a) any holders of Class 8 Claims
object to the treatment of Class 8 Claims under the Plan, or if permitted to
vote by the Court, reject the Plan, (b) the Court shall have required that the
Debtor establish the Securities Litigation Reserve to comply with section
1129(b) of the Bankruptcy Code and (c) the Court shall not have estimated such
Class 8 Claims at zero by such date, the Debtor shall not distribute any New
Common Stock to holders of Allowed Claims or Interests in Classes 8, 9, 10 and
11 on the Initial Distribution Date, but shall instead deposit all of the New
Common Stock allocated to the holders of the Allowed Claims and Interests in
Classes 8, 9, 10 and 11 into the Securities Litigation Reserve in accordance
with Section VI.C.7(a). If (a) any holders of Class 11 Claims (but not Class 8
Claims) object to the treatment of Class 11 Claims under the Plan, or if
permitted to vote by the Court, reject the Plan, (b) the Court shall have
required that the Debtor establish the Securities Litigation Reserve to comply
with section 1129(b) of the Bankruptcy Code and (c) the Court shall not have
estimated such Class 11 Claims at zero by such date, the Debtor shall not
distribute any New Common Stock to holders of Allowed Claims or Interests in
Classes 10 and 11 on the Initial Distribution Date, but shall instead deposit
all of the New Common Stock allocated to the holders of the Allowed Claims and
Interests in Classes 10 and 11 into the Securities Litigation Reserve in
accordance with Section VI.C.7(a). 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
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
<PAGE>
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. If (a) any holders of Class 8 Claims object to the treatment of
Class 8 Claims under the Plan, or if permitted to vote by the Court, reject the
Plan, (b) the Court shall have required that the Debtor establish the Securities
Litigation Reserve to comply with section 1129(b) of the Bankruptcy Code and (c)
the Court shall not have estimated such Class 8 Claims at zero by such date, the
Debtor shall not distribute any New Warrants to holders of Allowed Claims or
Interests in Classes 8, 9, 10 and 11 on the Initial Distribution Date, but shall
instead deposit all of the New Warrants allocated to the holders of the Allowed
Claims and Interests in Classes 8, 9, 10 and 11 into the Securities Litigation
Reserve in accordance with Section VI.C.7(a). If (a) any holders of Class 11
Claims (but not Class 8 Claims) object to the treatment of Class 11 Claims under
the Plan, or if permitted to vote by the Court, reject the Plan, (b) the Court
shall have required that the Debtor establish the Securities Litigation Reserve
to comply with section 1129(b) of the Bankruptcy Code and (c) the Court shall
not have estimated such Class 11 Claims at zero by such date, the Debtor shall
not distribute any New Warrants to holders of Allowed Claims or Interests in
Classes 10 and 11 on the Initial Distribution Date, but shall instead deposit
all of the New Warrants allocated to the holders of the Allowed Claims and
Interests in Classes 10 and 11 into the Securities Litigation Reserve in
accordance with Section VI.C.7(a).
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.
D0 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.
E0 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.
F0 OFFICER AND DIRECTOR STOCK OPTIONS
<PAGE>
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
AO VOTING OF CLAIMS & 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.
BO 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.
C0 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).
(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.
<PAGE>
(c) DISTRIBUTION OF UNCLAIMED PROPERTY. Any distribution of Cash under the
Plan which is unclaimed after the later to occur of (a) two 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 two years after distribution shall be added to the Reserve and entitlement by
the holder of a Claim to such distribution shall be extinguished and forever
barred.
(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.
2 DISPUTED GENERAL UNSECURED CLAIMS
(a) DISTRIBUTIONS WITHHELD FOR DISPUTED GENERAL UNSECURED CLAIMS.
<PAGE>
(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.
(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.
<PAGE>
3 SURPLUS DISTRIBUTIONS TO HOLDERS OF ALLOWED UNSECURED CLAIMSA
SURPLUS DISTRIBUTIONS T. 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 two 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.7 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, 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.
(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").
<PAGE>
(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.
7 SECURITIES LITIGATION RESERVE
(a) ESTABLISHMENT AND MAINTENANCE OF RESERVE. If (x) any holders of Class 8
Claims object to the treatment of Class 8 Claims under the Plan, or if permitted
to vote by the Court, reject the Plan, and (y) the Court requires that the
Debtor do so to comply with section 1129(b) of the Bankruptcy Code, on the
Initial Distribution Date, Reorganized Westbridge shall place into reserve New
Common Stock representing 6% of all issued and outstanding New Common Stock as
of the Effective Date and New Warrants to purchase up to 7% of the New Common
Stock on a fully diluted basis (the "SECURITIES LITIGATION RESERVE").
Alternatively, if (x) any holders of Class 11 Claims (but not Class 8 Claims)
object to the treatment of Class 11 Claims under the Plan, or if permitted to
vote by the Court, reject the Plan, and (y) the Court requires that the Debtor
do so to comply with section 1129(b) of the Bankruptcy Code, on the Initial
Distribution Date, Reorganized Westbridge shall place into the Securities
Litigation Reserve New Common Stock representing 2% of all issued and
outstanding New Common Stock as of the Effective Date and New Warrants to
purchase up to 5% of the New Common Stock on a fully diluted basis.
<PAGE>
(b PROPERTY HELD IN RESERVE. Cash held in the Securities Litigation
Reserve, if any (including dividends paid on New Common Stock held in the
Securities Litigation 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 Claims or Interests in Classes 8,
9, 10 and 11. Cash held in the Securities Litigation Reserve shall not
constitute property of Reorganized Westbridge. Reorganized Westbridge shall
invest the Cash held in the Securities Litigation Reserve in a manner consistent
with investment guidelines included in the Plan Supplement. Reorganized
Westbridge shall pay, or cause to be paid, out of the funds held in the
Securities Litigation Reserve, any tax imposed on the Securities Litigation
Reserve by any governmental unit with respect to income generated by the
property held in the Securities Litigation Reserve. The yield earned on such
invested Cash (net of applicable taxes) shall be distributed to each holder of
Allowed Claims or Interests who receive New Common Stock and New Warrants from
the Securities Litigation Reserve on the last Subsequent Distribution Date under
the Plan, based upon each holder's Pro Rata share. New Common Stock and New
Warrants held in the Securities Litigation Reserve shall be held in trust by
Reorganized Westbridge for the benefit of potential claimants of such securities
and shall not constitute property of Reorganized Westbridge.
(c DISTRIBUTIONS UPON ESTIMATION OF CLASS 8 AND CLASS 11 CLAIMS. Upon
estimation (if necessary) of the Class 8 Claims by the Court, holders of Class 8
Claims and/or Allowed Class 9 and 10 Interests and Class 11 Claims, as
applicable, shall receive distributions of New Common Stock and New Warrants
from the Securities Litigation Reserve on the next Subsequent Distribution Date
that follows the Quarter during which such estimation occurred in accordance
with Sections IV.8, IV.9, IV.10 and IV.11. Subject to estimation of the Class 8
Claims (if necessary) by the Court, upon estimation (if necessary) of the Class
11 Claims by the Court, holders of Class 11 Claims and Class 10 Interests, as
applicable, shall receive distributions of New Common Stock and New Warrants
from the Securities Litigation Reserve on the next Subsequent Distribution Date
that follows the Quarter during which such estimation occurred in accordance
with Sections IV.10 and IV.11 of the Plan.
8. CANCELLATION AND SURRENDER OF EXISTING SECURITIES AND
AGREEMENTS
<PAGE>
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.
9. 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.
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.
<PAGE>
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.
D. DISCHARGE OF WESTBRIDGE.
<PAGE>
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. PRESERVATION OF RIGHTS. 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. WAIVER OF CAUSES OF ACTION. 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
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, 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.
<PAGE>
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.
1. EXCULPATION. 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.
<PAGE>
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.
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.
<PAGE>
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 (i) 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 and (ii)
any officers and directors of the Debtor who are beneficiaries under the
Indemnification Escrow shall retain their rights to receive funds from the
Indemnification Escrow on and after the Effective Date in accordance with the
terms thereof.
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.
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.
<PAGE>
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:
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.
<PAGE>
TO THE CREDITORS COMMITTEE: [ ]
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 7 Claims in
Group 7-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.
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.
<PAGE>
B. EFFECTIVENESS OF THE PLAN.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 7 Claims in Group 7-A does not exceed
$5,000,000; (6) each of the conditions to the Stock Purchase Agreement other
than the occurence 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; and
(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.
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
<PAGE>
In the event that the Effective Date does not occur on or before
sixty (60) 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.
XIII.
NEW CONVERTIBLE PREFERRED STOCK PURCHASE
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 6 Claims in Group 6-A.
B. PURCHASE RIGHT. Under the Plan, each Eligible Holder (as defined below)
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 6 Claims in Group 6-A.
1. ELIGIBILITY. 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 __, 1998 (each such holder,
an "ELIGIBLE HOLDER"). The Purchase Right is nontransferable.
<PAGE>
(a 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.6(a)(ii). "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 __, 1998) of Class
7 Allowed Claims in Group 7-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").
(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").
<PAGE>
(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.
(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
September 16, 1998
WESTBRIDGE
CAPITAL CORP.
By:
/S/ PATRICK J. MITCHELL
Name: Patrick J. Mitchell
Title: President
<PAGE>
Doc#:DS5:39778.10
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>
Doc#:DS5:39778.10
CONFIDENTIAL
EXHIBIT B TO PLAN
SUMMARY OF TERMS OF
NEW WARRANTS
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.
<PAGE>
EXHIBIT C TO PLAN
STOCK PURCHASE AGREEMENT
Included as Exhibit 10.2 filed hereto
<PAGE>
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>
Doc#:DS5:39778.10
CONFIDENTIAL
iv
TABLE OF CONTENTS
<TABLE>
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PAGE #
<S> <C>
I. DEFINITIONS AND CONSTRUCTION OF TERMS...................................................... 1
II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.............................................. 18
INTRODUCTION............................................................................... 18
1. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN).............................. 18
2. UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE ACCEPTED THE
PLAN AND, THEREFORE, NOT ENTITLED TO VOTE ON THE PLAN........................... 18
3. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (ENTITLED TO VOTE
ON THE PLAN).................................................................... 19
4. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS (DEEMED
TO HAVE REJECTED THE PLAN AND, THEREFORE, NOT ENTITLED TO
VOTE ON THE PLAN)............................................................... 20
III. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS......................... 20
1. ADMINISTRATIVE CLAIMS............................................................... 20
2. PROFESSIONAL COMPENSATION AND REIMBURSEMENT CLAIMS.................................. 21
3. PRIORITY TAX CLAIMS................................................................. 21
IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS................................................... 22
1. CLASS 1 - PRIORITY NON-TAX CLAIMS................................................... 22
2. CLASS 2 - LASALLE CLAIM............................................................. 22
3. CLASS 3 - CONVENIENCE CLAIMS........................................................ 22
4. CLASS 4 - SECURED CLAIMS............................................................ 23
5. CLASS 5 - INTERCOMPANY CLAIMS....................................................... 23
6. CLASS 6 - UNSECURED 11% NOTE CLAIMS................................................. 24
7. CLASS 7 - OTHER UNSECURED CLAIMS.................................................... 24
8. CLASS 8-OLD NOTEHOLDER SECURITIES CLAIMS............................................ 25
9. CLASS 9 - OLD PREFERRED STOCK INTERESTS............................................. 26
10.CLASS 10 - OLD COMMON STOCK INTERESTS AND OLD RESTRICTED
COMMON STOCK INTERESTS.......................................................... 27
11.CLASS 11 - OLD STOCKHOLDER SECURITIES CLAIMS........................................ 28
12.CLASS 12 - UNVESTED OLD RESTRICTED COMMON STOCK INTERESTS........................... 29
13.CLASS 13 - OLD WARRANT INTERESTS.................................................... 30
14.CLASS 14 - OLD OPTION INTERESTS..................................................... 30
V. PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENT OF REORGANIZED WESTBRIDGE......... 30
A. DIRECTORS AND OFFICERS OF REORGANIZED WESTBRIDGE....................................... 30
1. THE INITIAL BOARD OF DIRECTORS...................................................... 30
2. MANAGEMENT OF REORGANIZED WESTBRIDGE................................................ 30
3. OFFICERS............................................................................ 31
B. CORPORATE ACTION....................................................................... 31
C. SECURITIES TO BE ISSUED PURSUANT TO THE PLAN........................................... 31
1. NEW COMMON STOCK.................................................................... 31
2. NEW CONVERTIBLE PREFERRED STOCK..................................................... 32
3. THE NEW WARRANTS.................................................................... 32
4. SECURITIES LAWS MATTERS............................................................. 33
D. RETENTION AND INCENTIVE BONUS PROGRAM.................................................. 33
E. MARKETING AGENT STOCK OPTIONS.......................................................... 33
F. OFFICER AND DIRECTOR STOCK OPTIONS..................................................... 33
VI. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS
UNDER THE PLAN AND TREATMENT OF DISPUTED,
CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE
CLAIMS, CLAIMS AND EQUITY INTERESTS........................................................ 34
A. VOTING OF CLAIMS AND EQUITY INTERESTS.................................................. 34
B. NONCONSENSUAL CONFIRMATION............................................................. 34
C. DISTRIBUTIONS.......................................................................... 34
1. METHOD OF DISTRIBUTION UNDER THE PLAN............................................... 34
2. DISPUTED GENERAL UNSECURED CLAIMS................................................... 35
3. SURPLUS DISTRIBUTIONS TO HOLDERS OF ALLOWED UNSECURED CLAIMS........................ 36
4. OBJECTIONS TO AND RESOLUTION OF ADMINISTRATIVE CLAIMS
AND CLAIMS; ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE.......................... 37
5. HART-SCOTT-RODINO ACT FILING REQUIREMENTS........................................... 38
6. ALLOCATION OF CONSIDERATION......................................................... 38
7. SECURITIES LITIGATION RESERVE....................................................... 38
8. Cancellation and Surrender of Existing Securities
and Agreements.................................................................. 39
VII. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN..................................... 40
A. REGISTRATION RIGHTS AGREEMENT.......................................................... 40
B. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN REORGANIZED WESTBRIDGE.......... 40
C. TERMINATION OF SUBORDINATION RIGHTS.................................................... 41
D. DISCHARGE OF WESTBRIDGE................................................................ 41
E. INJUNCTION............................................................................. 42
F. PRESERVATION/WAIVER OF CAUSES OF ACTION................................................ 42
1. PRESERVATION OF RIGHTS.............................................................. 42
2. WAIVER OF CAUSES OF ACTION.......................................................... 43
G. VOTES SOLICITED IN GOOD FAITH.......................................................... 43
H. ADMINISTRATIVE CLAIMS INCURRED AFTER THE CONFIRMATION DATE............................. 43
I. WESTBRIDGE'S LIMITED RELEASE........................................................... 43
J. EXCULPATION, RELEASE AND INJUNCTION OF RELEASED PARTIES................................ 44
1. EXCULPATION......................................................................... 44
2. INJUNCTION.......................................................................... 44
K. RELEASE OF OFFICERS AND DIRECTORS; WAIVER OF CLAIMS.................................... 45
1. WAIVER OF CLAIMS; COVENANT NOT TO SUE............................................... 45
2. LIMITED RELEASES.................................................................... 46
L. TERM OF BANKRUPTCY INJUNCTION OR STAYS................................................ 46
VIII. RETENTION OF JURISDICTION.................................................................. 47
IX. MISCELLANEOUS PROVISIONS................................................................... 48
A. PAYMENT OF STATUTORY FEES.............................................................. 48
B. DISSOLUTION OF CREDITORS COMMITTEE..................................................... 48
C. MODIFICATION OF THE PLAN............................................................... 48
D. GOVERNING LAW.......................................................................... 48
E. FILING OR EXECUTION OF ADDITIONAL DOCUMENTS............................................ 48
F. WITHHOLDING AND REPORTING REQUIREMENTS................................................. 49
G. EXEMPTION FROM TRANSFER TAXES.......................................................... 49
H. WAIVER OF FEDERAL RULE OF CIVIL PROCEDURE 62(A)........................................ 49
I. HEADINGS............................................................................... 49
J. EXHIBITS/SCHEDULES..................................................................... 49
K. NOTICES................................................................................ 49
L. PLAN SUPPLEMENT........................................................................ 50
M. CONFLICT............................................................................... 50
X. EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................................... 50
XI. BENEFIT PLANS.............................................................................. 51
XII. EFFECTIVENESS OF THE PLAN.................................................................. 51
A. CONFIRMATION OF THE PLAN............................................................... 51
B. EFFECTIVENESS OF THE PLAN.............................................................. 52
1. CONDITIONS PRECEDENT TO EFFECTIVENESS............................................... 52
2. WAIVER OF CONDITIONS................................................................ 52
3. EFFECT OF FAILURE OF CONDITIONS..................................................... 52
4. VACATUR OF CONFIRMATION ORDER....................................................... 53
XIII. NEW CONVERTIBLE PREFERRED STOCK PURCHASE................................................... 53
A. Stock Purchase Agreement............................................................... 53
B. PURCHASE RIGHT. ...................................................................... 53
1. ELIGIBILITY......................................................................... 53
</TABLE>
<PAGE>
Doc#:DS5:63211.4
EXHIBIT 10-1
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
NY1:#3179319v10
NY1:#3179319v10
EXHIBIT 10.2
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
NY1:#3183326v5
NY1:#3183326v5
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
NY1:#3183326v5
SCHEDULE I
INITIAL HOLDERS
<PAGE>
APPENDIX III
LOCK-UP AGREEMENT
Included as Exhibit 10.1 filed hereto
<PAGE>
PATRICK J. MITCHELL EMPLOYMENT AGREEMENT - PAGE 1 OF 23
EXHIBIT 10.3
PATRICK J. MITCHELL
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement"), dated as of September 15, 1998, is
made by and among Westbridge Capital Corp., a Delaware corporation, having its
principal offices at 110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
("WBC"), Westbridge Management Corp., a Delaware corporation, having its
principal offices at 110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
(the "Corporation"), and Mr. Patrick J. Mitchell (the "Executive"), residing at
2713 Heritage Hills Drive, Fort Worth, Texas 76109.
RECITALS
1. The Corporation and WBC each desire to retain the Executive as a
director of the Corporation and WBC and to employ him as the Chairman of the
Board, President and Chief Executive Officer of WBC and the Corporation, and to
enter into an agreement embodying the terms of those relationships which upon
proper execution shall supercede all prior written employment agreements between
the parties.
2. The Executive is willing to serve as the Chairman of the Board,
President and Chief Executive Officer of WBC and the Corporation on the terms
set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the Corporation,
WBC, and the Executive hereby agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" means any person or entity controlling,
controlled by or under common control with WBC or the Corporation.
1.2 "Annual Compensation" means the Executive's highest Base
Salary and Annual Bonus during the Term of Employment.
1.3 "Board" means the Board of Directors of WBC.
1.4 "Cause" means (a) Executive's material breach of any term
or condition of this Agreement; (b) Executive's (i) personal dishonesty, willful
misconduct or intentional breach of fiduciary duty, in each such case involving
WBC, the Corporation or any Affiliate's property, personnel or business
operations, in each case materially detrimental to the goodwill of WBC, the
Corporation or any Affiliate, or materially damaging to WBC's, the Corporation's
or any Affiliate's relationships with its respective customers, clients or
employees; or (ii) intentional failure to perform the current material duties of
his employment or his other material obligations hereunder, or any other
intentional act by Executive which in either case is materially detrimental to
the goodwill of WBC, the Corporation or any Affiliate, or materially damaging to
WBC's, the Corporation's or any Affiliate's relationships with its customers,
clients or employees; (c) Executive's conviction or entry of a no-contest plea
with respect to a felony; (d) Executive's material misappropriation (or
attempted material misappropriation) of any of WBC's, the Corporation's or any
Affiliate's, funds or property or of a business opportunity of WBC, the
Corporation or any Affiliate (including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of
WBC, the Corporation or any Affiliate) materially detrimental to the goodwill of
WBC, the Corporation or any Affiliate, or materially damaging to WBC's, the
Corporation's or any Affiliate's relationships with its respective customers,
clients or employees; or (e) Executive's gross negligence in connection with the
performance of Executive's obligations hereunder which is materially detrimental
to the goodwill of WBC and the Corporation or any Affiliate, or materially
damaging to WBC's, the Corporation's or any Affiliate's relationships with its
customers, clients or employees.
1.5 "Date of Termination" means (a) in the case of a
termination for which a Notice of Termination is required, the date of actual
receipt of such Notice of Termination or, if later, the date specified therein
(in no event, however, shall such date be later than seven (7) days after the
date of actual receipt of such notice), as the case may be, and (b) in all other
cases, the actual date on which the Executive's employment terminates during the
Term of Employment.
1.6 "Disability" means mental or physical impairment or
incapacity rendering the Executive substantially unable to perform his duties
under this Agreement for a period of no longer than 180 days out of any 360 day
period during the Term of Employment.
1.7 "Good Reason" means and shall be deemed to exist if,
without the prior express written consent of the Executive, (a) the Executive is
assigned any duties or responsibilities inconsistent in any material respect
with the scope of the duties or responsibilities associated with the Executive's
titles or positions, as set forth and described in Section 4 of this Agreement;
(b) the Executive suffers a reduction in the duties, responsibilities, titles,
positions, or effective authority associated with such titles and positions, as
set forth and described in Section 4 of this Agreement; (c) the Executive is not
appointed to, or is removed from, the offices or positions provided for in
Section 4 of this Agreement; (d) the Executive's Base Salary is decreased by WBC
or the Corporation, or the Executive's benefits under employee benefit or health
or welfare plans or programs of WBC or the Corporation are decreased, except as
provided in Section 5.1 hereof or as a result of a good faith change in benefits
applicable to all employees of WBC and the Corporation, or the Executive fails
to timely receive his Base Salary, Retention Bonus, Incentive Bonus, Annual
Bonus, LTIP Award, expense reimbursement, or any other benefit to which he is
entitled under this Agreement; (e) WBC and the Corporation fail to obtain the
full assumption of this Agreement by a successor entity in accordance with
Section 11.2 of this Agreement; (f) WBC and the Corporation fail to maintain, or
cause to be maintained, adequate directors and officers liability insurance
coverage for the Executive or fail to comply with Section 4.3 of this Agreement;
(g) WBC and the Corporation purport to terminate the Executive's employment for
Cause and such purported termination of employment is not effected in accordance
with the requirements of this Agreement; or (h) there occurs a Change in
Control.
1.8 "Term of Employment" has the meaning ascribed to it
in Section 3.
1.9 "Change in Control" means (a) the acquisition, (i) after
the effective date of that certain Plan of Reorganization of WBC Under Chapter
11 of the United States Bankruptcy Code, most of the essential terms of which
were negotiated between WBC and its Ad Hoc Committee of Bondholders prior to the
date of this Agreement (the "WBC Chapter 11 Plan"), or (ii) if the above
mentioned WBC Chapter 11 Plan, or a substantially similar version thereof, is
not filed and effectuated, then such acquisition after the date of this
Agreement by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 34% of more of either (A) the outstanding
shares of common stock of WBC (the "Common Stock"), or (B) the combined voting
power of the voting securities of WBC entitled to vote generally in the election
of directors (the "Voting Securities"); PROVIDED, HOWEVER, the following
acquisitions shall not constitute a Change in Control: (x) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or WBC or Affiliate, or (y) any acquisition by any corporation if,
immediately following such acquisition, more than 66% of the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation (entitled to vote
generally in the election of directors) is beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who,
immediately prior to such acquisition, were the beneficial owners of the Common
Stock and the Voting Securities in substantially the same proportions,
respectively, as their ownership, immediately prior to such acquisition, of the
Common Stock and Voting Securities; or (b) individuals who, (i) on the 30th day
after the effective date of that certain WBC Chapter 11 Plan, or (ii) if the
above mentioned WBC Chapter 11 Plan, or a substantially similar version thereof,
is not filed and effectuated, then on the date of this Agreement, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; PROVIDED, HOWEVER, that any individual becoming a
director subsequent to the date of this Agreement whose election, or nomination
for election by WBC's shareholders, was approved by a vote of at least a
majority of the directors then serving and comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents;
or (c) approval by the new shareholders of WBC, after the effective date of the
aforementioned WBC Chapter 11 Plan, of a subsequent reorganization, merger or
consolidation, other than a subsequent reorganization, merger or consolidation
with respect to which all or substantially all of the individuals and entities
who were the beneficial owners, immediately prior to such reorganization, merger
or consolidation, of the Common Stock and Voting Securities beneficially owned,
directly or indirectly, immediately after such reorganization, merger or
consolidation, more than 66% of the then outstanding common stock and voting
securities (entitled to vote generally in the election of directors) of the
corporation resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership, immediately
prior to such reorganization, merger or consolidation, of the Common Stock and
the Voting Securities; or (d) if the above mentioned WBC Chapter 11 Plan is not
filed and effectuated, then approval by the shareholders of WBC of (i) a
complete liquidation or dissolution of WBC, or (ii) the sale or other
disposition of all or substantially all of the assets of WBC, other than to a
direct or indirect wholly-owned subsidiary of WBC. For purposes of this
Agreement and without limiting the generality of the preceding sentence, the
sale or other disposition of WBC of more than 50% of the common stock or the
voting securities (entitled to vote generally in the election of directors) of
WBC shall be deemed to constitute a sale or other disposition of substantially
all the assets of WBC.
2. EMPLOYMENT. Subject to the terms and provisions set forth in this
Agreement, WBC hereby agrees that the Executive shall be the highest ranking
officer of WBC and the Corporation with the title of Chairman of the Board,
President and Chief Executive Officer, during the Term of Employment and each of
WBC and the Corporation agrees during the Term of Employment to employ the
Executive as President and Chief Executive Officer of each of WBC and the
Corporation, and the Executive hereby accepts such employment.
3. TERM OF EMPLOYMENT. The term of employment under this Agreement
shall commence on September 15, 1998, (the "Commencement Date") and shall
continue until the earlier to occur of two (2) years from the date of this
Agreement (the "Expiration Date") or the date on which the Executive is
terminated or resigns pursuant to Section 6 hereof; provided, that if WBC has
given 90 days' notice to the Executive prior to the Expiration Date that WBC
desires to extend this Agreement, then the Term of Employment hereunder shall be
extended for one year.
4. POSITIONS, RESPONSIBILITIES AND DUTIES.
4.1 POSITIONS. During the Term of Employment, the Executive
(i) shall be employed and serve as President and Chief Executive Officer of each
of WBC and the Corporation, as well as President and Chief Executive Officer or
higher position and title of each of the Affiliates; (ii) shall be elected and
serve as a director of the Corporation; and (iii) if elected by WBC's
shareholders, shall be a director of WBC. In such positions, the Executive shall
have the duties, responsibilities and authority normally associated with the
office and position of president and chief executive officer of a
publicly-traded corporation. The Executive shall report solely and directly to
the Board. All officers and other senior employees of the Corporation and WBC
shall report solely and directly to the Executive or the Executive's designees.
The Executive shall perform his duties and responsibilities hereunder at his
current office address of 110 West Seventh Street, Suite 1100, Fort Worth, Texas
76102. Notwithstanding the above, the Executive shall not be required to perform
any duties and responsibilities which would be likely to result in a
non-compliance with or violation of any applicable law or regulation.
4.2 DUTIES. During the Term of Employment, the Executive shall
use his best efforts to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement, including, without limitation,
establishing both short and long-range strategic growth plans for WBC, the
Corporation, and Affiliates in an effort to achieve WBC's consolidated financial
targets and shall devote substantially all of his business time, skill and
attention to such services; PROVIDED, HOWEVER, that the Executive shall be
allowed, to the extent such activities do not substantially interfere with the
full performance by the Executive of his duties and responsibilities hereunder,
to (a) manage the Executive's personal, financial and legal affairs, and (b)
serve on civil or charitable boards or committees. The Executive shall at all
times comply with and be subject to WBC's and the Corporation's policies,
procedures, directives, and regulations as established by the Board from time to
time.
4.3 WORKING CONDITIONS. WBC and the Corporation will provide
the Executive with a private office, secretarial and stenographic services, and
any other facilities and services as are currently in place or otherwise
suitable to the Executive's position or required for the performance of his
duties.
5. COMPENSATION AND OTHER BENEFITS.
5.1 BASE SALARY. During the Term of Employment, the Executive
shall receive a base salary of no less than $400,000.00 per annum ("Base
Salary") payable in equal semi-monthly installments. Such Base Salary shall be
reviewed annually for increase in the sole discretion of the Board or the
Executive Committee thereof. Any such salary increase shall then be the "Base
Salary" for purposes of this Agreement. The Executive's Base Salary may only be
reduced pursuant to a plan or program instituted in good faith implementing a
general proportionate reduction in the base salary rate of all of the officers
of WBC and the Corporation, but in any event not more than 20% of Executive's
Base Salary.
5.2 RETENTION BONUS. In recognition of and as compensation for
Executive's job performance from November 17, 1997 through the date of the
execution of this Agreement, Executive has earned and shall be entitled to
receive a one time bonus (the "Retention Bonus") paid by WBC and the Corporation
according to the following formulas.
(a) In the event that the WBC Chapter 11 Plan or a
substantially similar version thereof is confirmed and becomes
effective, then Executive shall be entitled to receive the following:
(1) A cash payment of $296,000, 50% of which shall be
payable on the effective date of such WBC Chapter 11 Plan, or
a substantially similar version thereof, and the remaining 50%
shall be payable on the first anniversary of the effective
date of such WBC Chapter 11 Plan, or a substantially similar
version thereof; and
(2) Issuance on the effective date of such WBC
Chapter 11 Plan, or a substantially similar version thereof,
of 0.29% of the new common stock of WBC to be issued pursuant
to such WBC Chapter 11 Plan, or a substantially similar
version thereof. In recognition of the federal income tax
consequences of the equity consideration of this part of the
Retention Bonus, WBC and the Corporation shall use their
reasonable best efforts to make such equity consideration
federal income tax neutral for Executive.
(b) In the event that, prior to the effective date of the WBC
Chapter 11 Plan, or a substantially similar version thereof, WBC enters
into a transaction which (1) would prevent the WBC Chapter 11 Plan, or
a substantially similar version thereof, from being confirmed and
becoming effective, and (2) would result in a distribution to each
holder of an Allowed Claim (capitalized terms not otherwise defined in
this Section 5.2(b) shall have the meaning ascribed to such terms in
the WBC Chapter 11 Plan) against or Equity Interest in WBC the receipt
of distributions of value equal to or greater than those at the high
end range provided for by the WBC Chapter 11 Plan, then Executive shall
be entitled to receive the following:
(1) A cash payment of $296,000, 50% of which shall be
payable on the date of the closing of such transaction, and
the remaining 50% payable on the first anniversary date of the
closing of such transaction; and
(2) A cash payment of $104,000 on the date of the
closing of such transaction, in lieu of the equity
consideration which would have been otherwise payable pursuant
to Section 5.2(a)(2) above.
5.3 SHORT-TERM INCENTIVE. For each fiscal year of WBC (in
addition to the Base Salary), the Executive shall be eligible to receive an
annual cash bonus ("Annual Bonus") determined by the Board or a committee
thereof. Such Annual Bonus shall be payable to the Executive at such time as
such bonuses or similar bonuses are paid to other members of the Corporation's
or WBC's senior management.
5.4 RETIREMENT PLANS. During the Term of Employment, the
Executive shall be entitled to participate as of the Commencement Date in all
incentive, pension, retirement, savings, 401(k) and other employee pension
benefit plans and programs maintained by WBC and/or the Corporation from time to
time for the benefit of senior executives and/or other employees.
5.5 WELFARE BENEFIT PLANS. During the Term of Employment, the
Executive, the Executive's spouse, if any, and their eligible dependents, if
any, shall be entitled to participate as of the Commencement Date in and be
covered under all the welfare benefit plans or programs maintained by the
Corporation and WBC from time to time including, without limitation, all medical
hospitalization, dental, disability, life, accidental death and dismemberment
and travel accident insurance plans and programs. Executive shall also earn and
receive a minimum of six (6) weeks vacation each year with year-end accrual of
unused vacation not to exceed twelve (12) weeks.
5.6 LONG-TERM INCENTIVE PLAN. The Executive shall be entitled
to participate in the Senior Management Incentive Bonus Plan ("Incentive
Bonus"), as negotiated previously and hereinafter provided in the aforementioned
WBC Chapter 11 Plan, attached hereto as Exhibit "A," and by this reference
incorporated fully herein, as well as any other long-term incentive plan or
program, which other plan or program is hereby adopted by the boards of WBC and
the Corporation ("LTIP Award") based on the achievement of reasonable corporate
objectives determined in good faith by WBC or the Corporation. An LTIP Award may
be in the form of performance shares, performance units, stock options,
restricted stock, or other types of awards deemed appropriate by the Board, the
Executive Committee or such other committees of the Board.
5.7 EXPENSE REIMBURSEMENT. During the Term of Employment, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in promoting WBC and/or its Affiliates and in
otherwise performing his duties and responsibilities hereunder.
6. TERMINATION.
6.1 TERMINATION DUE TO DEATH OR DISABILITY. A determination of
whether the Executive is Disabled shall be made by WBC, the Corporation or any
Affiliate in its sole, but good faith, discretion upon its own initiative after
obtaining certification from a duly licensed physician or upon request of the
Executive or a person acting on his behalf. The Executive shall cooperate with
any necessary medical examination in connection with a determination of
Disability. Upon seven (7) days prior written notice to the Executive, WBC and
the Corporation may terminate the Executive's employment hereunder due to
Disability. In the event of the Executive's death or a termination of the
Executive's employment by WBC and the Corporation due to Disability, the
Executive, his estate or his legal representative, as the case may be, shall be
entitled to receive from WBC and the Corporation without duplication the
following:
(a) a lump sum payment of the Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) at the time of
such termination through the Date of Termination;
(b) a lump sum payment of any Incentive Bonus, Annual Bonus and LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) a lump sum payment of the unpaid cash portion of the Retention
Bonus, together with the immediate performance of the Retention Bonus
obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement of all expenses incurred, but not yet paid prior to
such death or Disability;
(f) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and/or the Corporation;
(g) in the case of death, any other compensation and benefits as may
be provided in accordance with the terms and provisions of any applicable
plans and programs of WBC or the Corporation, except any other severance
benefit of WBC or the Corporation; and
(h) in the case of Disability, (i) continuation of the Executive's
health and welfare benefits (as described in Section 5.5 of this Agreement)
at the level in effect (as provided for by Section 5.5) on the Date of
Termination through the end of the one year period following the
termination of the Executive's employment due to Disability (or the
Corporation and/or WBC shall provide the economic equivalent thereof), and
(ii) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable plans and programs of WBC
and the Corporation, except any other severance benefit of WBC or the
Corporation.
6.2 TERMINATION BY WBC AND THE CORPORATION FOR CAUSE. WBC and
the Corporation may terminate the Executive's employment hereunder for Cause as
provided in this Section 6.2. If WBC and the Corporation terminate the
Executive's employment hereunder for Cause, the Executive shall be entitled to
receive from WBC and the Corporation without duplication the following:
(a) a lump sum payment of the Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) at the time of
such termination through the Date of Termination;
(b) a lump sum payment of any Incentive Bonus, Annual Bonus and LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) a pro rata lump sum payment of the unpaid cash portion of the
Retention Bonus, together with the immediate performance of the Retention
Bonus obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement for all expenses incurred, but not yet paid prior to
such termination of employment; and
(f) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans and
programs of WBC and the Corporation, except any other severance benefit of
WBC or the Corporation.
In any case described in this Section 6.2, the Executive shall be given
written notice authorized by a vote of at least a majority of the members of the
Board that WBC and the Corporation intend to terminate the Executive's
employment hereunder for Cause. Such written notice, given in accordance with
Section 6.7 of this Agreement, shall specify the particular act or acts, or
failure to act, which is or are the basis for the decision to so terminate the
Executive's employment for Cause. Except with respect to the grounds set forth
in Section 1.4(c), as to which the following shall not apply, the Executive
shall be given the opportunity within thirty (30) calendar days after the
receipt of such notice to meet with the Board to defend such act or acts, or
failure to act, and the Executive shall be given thirty (30) business days after
such meeting to correct such act or failure to act. Upon failure of the
Executive, as fairly and reasonably determined by the Board, within such latter
thirty (30) day period, to correct such act or failure to act, or if the
Executive fails to meet with the Board after being provided an opportunity to do
so, the Executive's employment by WBC and the Corporation shall be automatically
terminated under this Section 6.2 for Cause as of the date determined under
Section 1.5 of this Agreement.
6.3 TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
Upon seven (7) days prior written notice to the affected party, WBC and the
Corporation may terminate the Executive's employment hereunder without Cause and
the Executive may terminate his employment hereunder for Good Reason. If WBC and
the Corporation terminate the Executive's employment hereunder without Cause,
other than due to death or Disability, or if the Executive terminates his
employment for Good Reason, the Executive shall be entitled to receive from WBC
and the Corporation without duplication the following:
(a) a lump sum payment equal in amount to 117% of the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement),
and (ii) the highest of either the Incentive Bonus or Annual Bonus awarded
to the Executive within five (5) years prior to the Date of Termination;
(b) a lump sum payment of any Base Salary accrued or Annual Bonus,
Incentive Bonus, and LTIP Award awarded but not yet paid as of the Date of
Termination;
(c) a lump sum payment of the unpaid cash portion of the Retention
Bonus, together with the immediate performance of the Retention Bonus
obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement of all expenses incurred, but not yet paid prior to
such termination of employment;
(f) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and the Corporation; and
(g) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs of the Corporation and WBC, except any other severance benefit of
WBC or the Corporation.
In the case of termination by Executive for Good Reason pursuant to
this Section 6.3, WBC and the Corporation shall be given written notice that the
Executive intends to terminate his employment hereunder for Good Reason. Such
written notice, given in accordance with Section 6.7 of this Agreement, shall
specify the particular act or acts, or failure to act, which is or are the basis
for the decision to so terminate the Executive's employment for Good Reason.
Upon failure of WBC and the Corporation, as fairly and reasonably determined by
the Executive, within such latter thirty (30) day period, to correct such act or
failure to act, or if WBC and the Corporation fail to meet with the Executive
after being provided an opportunity to do so, the Executive's employment by WBC
and the Corporation shall be automatically terminated under this Section 6.3 for
Good Reason as of the date determined under Section 1.5 of this Agreement.
6.4 VOLUNTARY TERMINATION. The Executive may effect, upon
seven (7) days prior written notice to WBC and the Corporation, a Voluntary
Termination of his employment hereunder. A "Voluntary Termination" shall mean a
termination of employment by the Executive on his own initiative other than (a)
a termination due to death or Disability, or (b) a termination for Good Reason.
A Voluntary Termination shall not be a breach of this Agreement. If the
Executive's employment hereunder is so terminated, the Executive shall be
entitled to receive from WBC and the Corporation the following:
(a) a lump sum payment of Base Salary at the rate in effect (as
provided for by Section 5.1 of this Agreement) at the time of such
termination through the Date of Termination;
(b) a lump sum payment of any Annual Bonus, Incentive Bonus, or LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) reimbursement for expenses incurred, but not yet paid prior to the
Date of Termination; and
(d) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable employee benefit
plans or programs maintained by WBC and the Corporation, except any other
severance benefit of WBC or the Corporation.
6.5 TERMINATION BY EXPIRATION. If this Agreement expires
pursuant to Section 3 hereof, the Executive shall be entitled to receive on the
Expiration Date from WBC and the Corporation the following:
(a) a lump sum payment equal in amount to 117% of the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement),
and (ii) the highest of either the Incentive Bonus or Annual Bonus awarded
to the Executive within five (5) years prior to the Expiration Date;
(b) a lump sum payment of any Base Salary accrued or Annual Bonus,
Incentive Bonus, and LTIP Award awarded but not yet paid as of the
Expiration Date;
(c) a lump sum payment of accrued but unused vacation through the
Expiration Date;
(d) reimbursement of all expenses incurred, but not yet paid prior to
such termination of employment;
(e) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and the Corporation; and
(f) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs of the Corporation and WBC, except any other severance benefit of
WBC or the Corporation.
6.6 NO MITIGATION; NO OFFSET. In the event of any termination
of employment under this Section 6, the Executive shall be under no obligation
to seek other employment and there shall be no offset against any amounts due
the Executive under this Agreement on account of any remuneration attributable
to any subsequent employment that the Executive may obtain. Any amounts due
under this Section 6 are in the nature of severance payments, or liquidated
damages, or both, and are not in the nature of a penalty.
6.7 NOTICE OF TERMINATION. Any termination by WBC and the
Corporation for Cause or by the Executive for Good Reason shall be communicated
by a notice of termination to the other party hereto given in accordance with
Section 13.3 of this Agreement (the "Notice of Termination"). The Notice of
Termination shall be given, in the case of a termination for Cause, within
ninety (90) business days after a director of the Corporation (excluding the
Executive) knew or should have known of the events giving rise to such purported
termination, and in the case of a termination by the Executive for Good Reason,
within ninety (90) days of the Executive's having actual knowledge of the events
giving rise to such termination, except in the case of termination for Good
Reason resulting from a Change in Control then within one hundred eighty (180)
days of the effective date of such Change in Control. Such notice shall (a)
indicate the specific termination provision in this Agreement relied upon, (b)
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, and (c) if the termination date is other than the date of receipt of
such notice, specify the date on which the Executive's employment is to be
terminated (which date shall not be earlier than the date on which such notice
is actually given).
6.8 CERTAIN OTHER PAYMENTS. Notwithstanding any other
provisions of this Agreement, in the event that any payment or benefit received
or to be received by the Executive in connection with a Change in Control or the
termination of the Executive's employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with WBC and the
Corporation or any of their Affiliates (all such payments and benefits being
hereinafter called the "Total Payments") would subject the Executive to the
excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor section thereto (the "Excise Tax"), and
if, and only if, such Total Payments less the Excise Tax is less than the
maximum amount of the Total Payments which could be payable to the Executive
without the imposition of the Excise Tax, then and only then, and only to the
extent necessary to eliminate the imposition of the Excise Tax (and after taking
into account any reduction in the Total Payments provided by reason of Section
280G of the Code in any such other plan, arrangement or agreement), (A) any cash
payments hereunder shall first be reduced (if necessary, to zero), and (B) all
other non-cash payments hereunder shall next be reduced. For purposes of this
limitation (i) no portion of the Total Payments the receipt or enjoyment of
which the Executive shall have effectively waived in writing prior to the Date
of Termination shall be taken into account, (ii) no portion of the Total
Payments shall be taken into account which in the opinion of tax counsel
selected by WBC's independent auditors and reasonably acceptable to the
Executive does not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code, including by reason of Section 280G(b)(4)(A) of
the Code, (iii) all payments shall be reduced only to the extent necessary so
that the Total Payments (other than those referred to in clauses (i) or (ii)) in
their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions under Code Section 280G, in the opinion of
the tax counsel referred to in clause (ii); and (iv) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by WBC's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
6.9 PAYMENT. Except as otherwise provided in this Agreement,
any payments to which the Executive shall be entitled to under this Section 6,
including, without limitation, any economic equivalent of any benefit, shall be
made immediately on the Date of Termination. If the amount of any payment due to
the Executive cannot be finally determined within thirty (30) days after the
Date of Termination, such amount shall be estimated on a good faith basis by WBC
and the estimated amount shall be paid no later than thirty (30) days after such
Date of Termination. As soon as practicable thereafter, the final determination
of the amount due shall be made and any adjustment requiring a payment to or
from the Executive shall be made as promptly as practicable.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided or maintained by WBC and/or
the Corporation for which the Executive may qualify, nor shall anything herein
limit or otherwise prejudice such rights as the Executive may have under any
other existing or future agreements with the Corporation, WBC, and/or any
Affiliate of either, including, without limitation, any stock option agreements
or plans. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plans or programs of the Corporation, WBC and/or
any Affiliate of either at or subsequent to the Date of Termination shall be
payable in accordance with such plans or programs. Notwithstanding the
foregoing, payments to the Executive under Section 6 hereof shall be in lieu of
payments under any severance plan or program.
8. FULL SETTLEMENT. WBC's and the Corporation's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off (except set-off for a fixed and liquidated obligation),
counterclaim, recoupment, defense or other right which WBC and/or the
Corporation and/or any Affiliates may have against the Executive or others.
Notwithstanding anything contained herein to the contrary, the obligations of
WBC and the Corporation hereunder shall be subject to Executive having executed
and delivered an instrument to WBC and the Corporation irrevocably waiving and
releasing WBC, the Corporation, and each Affiliate from any and all obligations
or liabilities to Executive arising from or in connection with Executive's
employment with WBC and the Corporation or the termination of such employment
and any and all claims Executive may have under federal, state or local
statutes, regulations or ordinances or under any common law principles or breach
of contract or the covenant of good faith and fair dealing, defamation, wrongful
discharge, intentional infliction of emotional distress or promissory estoppel.
9. LEGAL FEES AND OTHER EXPENSES. In the event that a claim for payment
or benefits under this Agreement is disputed, the Executive shall be reimbursed
for all attorney fees and expenses incurred by the Executive in pursuing such
claim, provided that the Executive is successful as to at least part of the
disputed claim by reason of litigation, arbitration or settlement. In addition,
the Executive shall be paid or reimbursed for all legal fees and expenses
incurred by the Executive in connection with the review, preparation and
negotiation of this Agreement and/or any other agreements or plans referenced
herein.
10. CONFIDENTIAL INFORMATION AND NONSOLICITATION.
10.1 CONFIDENTIAL INFORMATION. The Executive shall not, during
the Term of Employment and thereafter, without the prior express written consent
of WBC and/or the Corporation, disclose any confidential information, knowledge
or data relating to WBC , the Corporation, or any Affiliate of either and their
respective businesses, which (a) was obtained by the Executive in the course of
the Executive's employment with WBC and the Corporation, and (b) which is not
information, knowledge or data otherwise in the public domain (other than by
reason of a breach of this provision by the Executive), unless required to do so
by a court of law or equity or by any governmental agency or other authority.
10.2 NO SOLICITATION. The Executive hereby agrees that, if his
employment hereunder is terminated by WBC and the Corporation for Cause or by
the Executive under Section 6.4 of this Agreement, he shall not, for twelve (12)
months after the Date of Termination, directly or indirectly, divert, solicit or
take away the patronage of (a) any customers or agents of the Corporation, WBC
or any Affiliate of either as of the relevant Date of Termination, or (b) any
prospective customers or agents of the Corporation, WBC or any Affiliate whose
business the Corporation and/or WBC was actively soliciting on the relevant Date
of Termination, and with which the Executive had business contact while employed
by the Corporation and WBC. The Executive agrees that, under the circumstances
and conditions described above and for the same period of time, the Executive
shall not, directly or indirectly, induce or solicit any employees or agents of
the Corporation, WBC or any Affiliate of either to leave or terminate their
employment or agency relationship with the Corporation or WBC. The Corporation
and WBC agrees that (i) any announcement made by the Executive, at any press
conference or in any press release or through individual notices, shall not, in
and of itself, constitute an attempt directly or indirectly to induce, divert,
solicit or take away customers or employees, (ii) any such announcement creates
no presumption with respect to any such inducement, diversion, solicitation or
taking, and (iii) in all cases both the burden of production of evidence and the
ultimate burden of persuasion with respect to any allegations or claims that
this Section 10.2 has been breached or violated by the Executive shall be borne
by WBC and the Corporation. Executive agrees that all restrictions and
agreements contained in this Section 10, including without limitation, those
relating to duration and restricted territory, are necessary and fundamental to
the protection of the business of WBC, the Corporation or any Affiliate, and are
reasonable and valid, and all defenses to the strict enforcement thereof by
Executive are hereby waived. Executive agrees that the remedy at law for such
breach of this Agreement will be inadequate, and that the damages from such
breach are not readily susceptible to being measured in monetary terms.
Accordingly, Executive agrees that upon breach of this Section 10, WBC, the
Corporation or any Affiliate shall be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened further breach.
Nothing in this Agreement shall be deemed to limit WBC's, the Corporation's or
any Affiliate's remedies at law or in equity for any breach by Executive or any
of the provisions of this Agreement that may be pursued or availed of by WBC,
the Corporation or any Affiliate.
11. SUCCESSORS.
11.1 THE EXECUTIVE. This Agreement is personal to the
Executive and, without the prior express written consent of WBC and the
Corporation, shall not be assignable by the Executive, except that the
Executive's rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition,
intestate succession or pursuant to a domestic relations order. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs,
beneficiaries and/or legal representatives.
11.2 WBC AND THE CORPORATION. This Agreement shall inure to
the benefit of and be binding upon WBC, the Corporation, and their respective
successors and assigns. WBC shall require any successor to all or substantially
all of the Corporation's and its Affiliates' business and/or assets, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as WBC and the Corporation would be required to perform if no
such succession had taken place.
12. INDEMNIFICATION. WBC and the Corporation agree that if the
Executive is made a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director or officer of
WBC, the Corporation, and/or any Affiliate of either or is or was serving at the
request of the Corporation, WBC and/or any Affiliate as a director, officer,
member, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including, without limitation, service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is alleged action in an official capacity as a director, officer, member,
employee or agent while serving as a director, officer, member, employee or
agent, he shall be indemnified and held harmless by WBC and the Corporation to
the fullest extent authorized by applicable law, as the same exists or may
hereafter be amended, against all Expenses incurred or suffered by the Executive
in connection therewith, and such indemnification shall continue as to the
Executive even if the Executive has ceased to be an officer, director or agent,
or is no longer employed by WBC and the Corporation and shall inure to the
benefit of his heirs, executors and administrators; provided, however, that
Executive shall not be indemnified for any act or omission that constitutes
gross negligence or willful misconduct.
13. MISCELLANEOUS.
13.1 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, applied without
reference to the principles of conflict of laws.
13.2 AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
13.3 NOTICES. All notices and other communications hereunder
shall be in writing and shall be given by hand-delivery to the other parties or
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Mr. Patrick J. Mitchell
2713 Heritage Hills Drive
Fort Worth, Texas 76109
If to the Corporation: Westbridge Management Corp.
110 West Seventh Street, Suite 300
Fort Worth, Texas 76102
Attention: General Counsel
If to WBC: Westbridge Capital Corp.
110 West Seventh Street, Suite 300
Fort Worth, Texas 76102
Attention: General Counsel
or to such other address as any party hereto shall have furnished to the others
in writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
13.4 WITHHOLDING. WBC and the Corporation may withhold from
any amounts payable under this Agreement such federal, state or local income
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.
13.5 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
13.6 CAPTIONS. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
13.7 BENEFICIARIES/REFERENCES. The Executive shall be entitled
to select (and change) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive's death, and
may change such election, in either case by giving WBC or the Corporation
written notice thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s).
13.8 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
13.9 REPRESENTATIONS. WBC and the Corporation each represents
and warrants that it is fully authorized and empowered to enter into this
Agreement. The Executive represents and warrants that the performance of the
Executive's duties under this Agreement will not violate any agreement between
the Executive and any other person, firm, partnership, corporation, or
organization.
13.10 SURVIVORSHIP. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement or the
Executive's Term of Employment hereunder for any reason to the extent necessary
to the intended provision of such rights and the intended performance of such
obligations.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and WBC, as well as the Corporation have each caused this Agreement to be
executed in its name on its behalf, and attested to by their respective
Secretaries, all as of the day and year first above written.
Westbridge Management Corp.
Attest: By: /S/ PATRICK H. O'NEILL
Patrick H. O'Neill
Title: Secretary
/S/ LINDA MERCER
Westbridge Capital Corp.
Attest: By: /S/ PATRICK H. O'NEILL
Patrick H. O'Neill
/S/ LINDA MERCER Title: Secretary
/S/ PATRICK J. MITCHELL
Patrick J. Mitchell
<PAGE>
August 13, 1998
PERSONAL AND CONFIDENTIAL
Mr. Patrick J. Mitchell
2713 Heritage Hills Drive
Fort Worth, Texas 76102
Re: Incentive Bonus
Dear Patrick:
As you may know, a decision has been made to pursue the restructuring
of Westbridge Capital Corp. (the "Company"). You are a valued senior officer and
employee of the Company and Westbridge Management Corp. ("WBMC"), and the
Company's Board of Directors (the "Board") wants you to remain with the Company
and continue to provide leadership and make continued valuable contributions to
the Company's business, as well as the business of WBMC, until such
restructuring and reorganization of the Company has been completed.
This letter agreement (this "Incentive Bonus Agreement") sets forth all
of the terms of an arrangement that the Board has established under which you
will be eligible to receive a 1998 Incentive Bonus payable upon the completion
of the preparation of the Company's fiscal 1998 audited financial statements.
This Incentive Bonus Agreement is not an employment agreement. It does not
change any of the terms and conditions of your Employment Agreement with the
Company and WBMC.
INCENTIVE BONUS
If your employment with the Company and WBMC has not been terminated
for Cause as defined in Paragraph 1.4 of the Patrick J. Mitchell Employment
Agreement prior to the date of the issuance of the Company's fiscal 1998 audited
financial statements, you will receive a cash incentive bonus (the "Cash
Incentive Bonus") payable within 10 business days after the date on which the
Company announces publicly it's financial results for the fiscal year ended
December 31, 1998. The amount of your Cash Incentive Bonus, if any, will be
determined using the following formula:
$400,000 X 30% X (Net Income Factor) = Cash Incentive Bonus
The Net Income Factor is based on the Company's fiscal 1998 Normal Net
Income and will be determined in accordance with the table below. Normal Net
Income shall be defined as income before income taxes and minority interests
plus reorganization expenses, non-LaSalle Bank interest expense, and non-LaSalle
Bank debt amortization costs, calculated in accordance with generally accepted
accounting principles.
FISCAL 1998 NORMAL NET INCOME ($ IN 000S) COMPANY NET INCOME FACTOR
- ----------------------------------------- -------------------------
Less than $2,001 0%
Greater than $2,000 but Less than $3,599 50%
Greater than $3,598 but Less than $6,001 75%
Greater than $6,000 but Less than $8,251 100%
Greater than $8,250 but Less than $10,351 125%
Greater than $10,350 but Less than $12,351 150%
Greater than $12,350 but Less than $14,251 175%
Greater than $14,250 200%
In addition to the Cash Incentive Bonus, if your employment with the
Company and WBMC has not been terminated for Cause as defined in Paragraph 1.4
of the Patrick J. Mitchell Employment Agreement prior to the date of the
issuance of the Company's fiscal 1998 audited financial statements, you will
receive an additional Incentive Bonus payable in new Common Stock of the
reorganized Company (the "Stock Incentive Bonus"). The number of shares of
Common Stock that you will be eligible to receive as a Stock Incentive Bonus
shall be equal to the Applicable Stock Percentage of the new Common Stock of the
reorganized Company on a fully diluted basis (as determined below) multiplied by
59%.
FISCAL 1998 NORMAL NET INCOME ($ IN 000S) APPLICABLE STOCK PERCENTAGE
- ----------------------------------------- ---------------------------
Less than $2,001 0.000%
Greater than $2,000 but Less than $3,599 0.250%
Greater than $3,598 but Less than $6,001 0.375%
Greater than $6,000 but Less than $8,251 0.500%
Greater than $8,250 but Less than $10,351 0.625%
Greater than $10,350 but Less than $12,351 0.750%
Greater than $12,350 but Less than $14,251 0.875%
Greater than $14,250 1.000%
In recognition of the federal income tax consequences of the Stock
Incentive, the Company and WBMC will make such Stock Incentive federal income
tax neutral for recipient.
MISCELLANEOUS
Payments to be made to you or on your behalf under this Agreement, if
any, shall be reduced by applicable taxes and withholdings.
Neither the Company nor their shareholders are under any obligation,
express or implied, by virtue of this letter or otherwise, to effect any
restructuring at any time.
Please indicate your agreement with the foregoing by signing both
copies of this letter where indicated below and returning one fully executed
copy to me.
I personally want to thank you again for the outstanding contribution
that you have made to the success of the Company, and I look forward to your
valuable assistance in effecting the restructuring. This is a time when we all
need to pull together.
Sincerely yours,
Westbridge Capital Corp.
By: /S/ PATRICK H. O'NEILL
Patrick H. O'Neill
Accepted and Agreed to:
/S/ PATRICK J. MITCHELL
Patrick J. Mitchell
PATRICK H. O'NEILL EMPLOYMENT AGREEMENT - PAGE 1 OF 23
EXHIBIT 10.4
PATRICK H. O'NEILL
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement"), dated as of September 15, 1998, is
made by and among Westbridge Capital Corp., a Delaware corporation, having its
principal offices at 110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
("WBC"), Westbridge Management Corp., a Delaware corporation, having its
principal offices at 110 West Seventh Street, Suite 300, Fort Worth, Texas 76102
(the "Corporation"), and Mr. Patrick H. O'Neill (the "Executive"), residing at
4001 Briarhaven Court, Fort Worth, Texas 76109.
RECITALS
1. The Corporation and WBC each desire to retain the Executive as an
employee of the Corporation and WBC and to employ him as the Executive Vice
President, General Counsel, and Secretary of WBC and the Corporation, and to
enter into an agreement embodying the terms of those relationships which upon
proper execution shall supercede all prior written employment agreements between
the parties.
2. The Executive is willing to serve as the Executive Vice President,
General Counsel, and Secretary of WBC and the Corporation on the terms set forth
herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the Corporation,
WBC, and the Executive hereby agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" means any person or entity controlling,
controlled by or under common control with WBC or the Corporation.
1.2 "Annual Compensation" means the Executive's highest Base
Salary and Annual Bonus during the Term of Employment.
1.3 "Board" means the Board of Directors of WBC.
1.4 "Cause" means (a) Executive's material breach of any term
or condition of this Agreement; (b) Executive's (i) personal dishonesty, willful
misconduct or intentional breach of fiduciary duty, in each such case involving
WBC, the Corporation or any Affiliate's property, personnel or business
operations, in each case materially detrimental to the goodwill of WBC, the
Corporation or any Affiliate, or materially damaging to WBC's, the Corporation's
or any Affiliate's relationships with its respective customers, clients or
employees; or (ii) intentional failure to perform the current material duties of
his employment or his other material obligations hereunder, or any other
intentional act by Executive which in either case is materially detrimental to
the goodwill of WBC, the Corporation or any Affiliate, or materially damaging to
WBC's, the Corporation's or any Affiliate's relationships with its customers,
clients or employees; (c) Executive's conviction or entry of a no-contest plea
with respect to a felony; (d) Executive's material misappropriation (or
attempted material misappropriation) of any of WBC's, the Corporation's or any
Affiliate's, funds or property or of a business opportunity of WBC, the
Corporation or any Affiliate (including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of
WBC, the Corporation or any Affiliate) materially detrimental to the goodwill of
WBC, the Corporation or any Affiliate, or materially damaging to WBC's, the
Corporation's or any Affiliate's relationships with its respective customers,
clients or employees; or (e) Executive's gross negligence in connection with the
performance of Executive's obligations hereunder which is materially detrimental
to the goodwill of WBC and the Corporation or any Affiliate, or materially
damaging to WBC's, the Corporation's or any Affiliate's relationships with its
customers, clients or employees.
1.5 "Date of Termination" means (a) in the case of a
termination for which a Notice of Termination is required, the date of actual
receipt of such Notice of Termination or, if later, the date specified therein
(in no event, however, shall such date be later than seven (7) days after the
date of actual receipt of such notice), as the case may be, and (b) in all other
cases, the actual date on which the Executive's employment terminates during the
Term of Employment.
1.6 "Disability" means mental or physical impairment or
incapacity rendering the Executive substantially unable to perform his duties
under this Agreement for a period of no longer than 180 days out of any 360 day
period during the Term of Employment.
1.7 "Good Reason" means and shall be deemed to exist if,
without the prior express written consent of the Executive, (a) the Executive is
assigned any duties or responsibilities inconsistent in any material respect
with the scope of the duties or responsibilities associated with the Executive's
titles or positions, as set forth and described in Section 4 of this Agreement;
(b) the Executive suffers a reduction in the duties, responsibilities, titles,
positions, or effective authority associated with such titles and positions, as
set forth and described in Section 4 of this Agreement; (c) the Executive is not
appointed to, or is removed from, the offices or positions provided for in
Section 4 of this Agreement; (d) the Executive's Base Salary is decreased by WBC
or the Corporation, or the Executive's benefits under employee benefit or health
or welfare plans or programs of WBC or the Corporation are decreased, except as
provided in Section 5.1 hereof or as a result of a good faith change in benefits
applicable to all employees of WBC and the Corporation, or the Executive fails
to timely receive his Base Salary, Retention Bonus, Incentive Bonus, Annual
Bonus, LTIP Award, expense reimbursement, or any other benefit to which he is
entitled under this Agreement; (e) WBC and the Corporation fail to obtain the
full assumption of this Agreement by a successor entity in accordance with
Section 11.2 of this Agreement; (f) WBC and the Corporation fail to maintain, or
cause to be maintained, adequate directors and officers liability insurance
coverage for the Executive or fail to comply with Section 4.3 of this Agreement;
(g) WBC and the Corporation purport to terminate the Executive's employment for
Cause and such purported termination of employment is not effected in accordance
with the requirements of this Agreement; or (h) there occurs a Change in
Control.
1.8 "Term of Employment" has the meaning ascribed to it in
Section 3.
1.9 "Change in Control" means (a) the acquisition, (i) after
the effective date of that certain Plan of Reorganization of WBC Under Chapter
11 of the United States Bankruptcy Code, most of the essential terms of which
were negotiated between WBC and its Ad Hoc Committee of Bondholders prior to the
date of this Agreement (the "WBC Chapter 11 Plan"), or (ii) if the above
mentioned WBC Chapter 11 Plan, or a substantially similar version thereof, is
not filed and effectuated, then such acquisition after the date of this
Agreement by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 34% of more of either (A) the outstanding
shares of common stock of WBC (the "Common Stock"), or (B) the combined voting
power of the voting securities of WBC entitled to vote generally in the election
of directors (the "Voting Securities"); PROVIDED, HOWEVER, the following
acquisitions shall not constitute a Change in Control: (x) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or WBC or Affiliate, or (y) any acquisition by any corporation if,
immediately following such acquisition, more than 66% of the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation (entitled to vote
generally in the election of directors) is beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who,
immediately prior to such acquisition, were the beneficial owners of the Common
Stock and the Voting Securities in substantially the same proportions,
respectively, as their ownership, immediately prior to such acquisition, of the
Common Stock and Voting Securities; or (b) individuals who, (i) on the 30th day
after the effective date of that certain WBC Chapter 11 Plan, or (ii) if the
above mentioned WBC Chapter 11 Plan is not filed and effectuated, then on the
date of this Agreement, constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; PROVIDED, HOWEVER,
that any individual becoming a director subsequent to the date of this Agreement
whose election, or nomination for election by WBC's shareholders, was approved
by a vote of at least a majority of the directors then serving and comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents; or (c) approval by the new shareholders of
WBC, after the effective date of the aforementioned WBC Chapter 11 Plan, of a
subsequent reorganization, merger or consolidation, other than a subsequent
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, immediately prior to such reorganization, merger or consolidation, of
the Common Stock and Voting Securities beneficially owned, directly or
indirectly, immediately after such reorganization, merger or consolidation, more
than 66% of the then outstanding common stock and voting securities (entitled to
vote generally in the election of directors) of the corporation resulting from
such reorganization, merger or consolidation in substantially the same
proportions as their respective ownership, immediately prior to such
reorganization, merger or consolidation, of the Common Stock and the Voting
Securities; or (d) if the above mentioned WBC Chapter 11 Plan, or a
substantially similar version thereof, is not filed and effectuated, then
approval by the shareholders of WBC of (i) a complete liquidation or dissolution
of WBC, or (ii) the sale or other disposition of all or substantially all of the
assets of WBC, other than to a direct or indirect wholly-owned subsidiary of
WBC. For purposes of this Agreement and without limiting the generality of the
preceding sentence, the sale or other disposition of WBC of more than 50% of the
common stock or the voting securities (entitled to vote generally in the
election of directors) of WBC shall be deemed to constitute a sale or other
disposition of substantially all the assets of WBC.
2. EMPLOYMENT. Subject to the terms and provisions set forth in this
Agreement, WBC hereby agrees that the Executive shall be the chief legal officer
of WBC and the Corporation and report exclusively to the Chairman of the Board,
President and Chief Executive Officer of WBC and the Corporation with the title
of Executive Vice President, General Counsel, and Secretary during the Term of
Employment and each of WBC and the Corporation agrees during the Term of
Employment to employ the Executive as Executive Vice President, General Counsel,
and Secretary of each of WBC and the Corporation, and the Executive hereby
accepts such employment.
3. TERM OF EMPLOYMENT. The term of employment under this Agreement
shall commence on September 15, 1998, (the "Commencement Date") and shall
continue until the earlier to occur of two (2) years from the date of this
Agreement (the "Expiration Date") or the date on which the Executive is
terminated or resigns pursuant to Section 6 hereof; provided, that if WBC has
given 90 days' notice to the Executive prior to the Expiration Date that WBC
desires to extend this Agreement, then the Term of Employment hereunder shall be
extended for one year.
4. POSITIONS, RESPONSIBILITIES AND DUTIES.
4.1 POSITIONS. During the Term of Employment, the Executive
(i) shall be employed and serve as Executive Vice President, General Counsel,
and Secretary of each of WBC and the Corporation, as well as the equivalent or
higher title and position of each of the Affiliates; and (ii) shall be elected
and serve as a director of the Corporation. In such positions, the Executive
shall have the duties, responsibilities and authority normally associated with
the office and position of executive vice president, general counsel, and
secretary of a publicly-traded corporation. The Executive shall report solely
and directly to the President and Chief Executive Officer. The Executive shall
perform his duties and responsibilities hereunder at his current office located
at 110 West Seventh Street, Suite 1100, Fort Worth, Texas 76102. Notwithstanding
the above, the Executive shall not be required to perform any duties and
responsibilities which would be likely to result in a non-compliance with or
violation of any applicable law or regulation.
4.2 DUTIES. During the Term of Employment, the Executive shall
use his best efforts to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement, including, without limitation,
the responsibilities normally associated with the highest ranking legal officer
and secretary and shall devote substantially all of his business time, skill and
attention to such services; PROVIDED, HOWEVER, that the Executive shall be
allowed all time reasonably required for a period of one year from the
Commencement Date in order to wind up, complete and resolve the current
caseload, current client matters, and other current business of the Law Offices
of Patrick H. O'Neill, P.C. and further, to the extent other activities do not
substantially interfere with the full performance by the Executive of his duties
and responsibilities hereunder, Executive shall be also allowed to (a) manage
the Executive's personal, financial and legal affairs, and (b) serve on civil or
charitable boards or committees. The Executive shall at all times comply with
and be subject to WBC's and the Corporation's policies, procedures, directives,
and regulations as established by the Board from time to time.
4.3 WORKING CONDITIONS. WBC and the Corporation will provide
Executive with a private office, furnishings, library, equipment, services of
associate general counsels, paralegals, administrative assistants, secretaries,
facilities and services as are currently in place or otherwise suitable to
Executive's position or required for the establishment and maintenance of a
corporate law department or otherwise in performance of Executive's duties.
5. COMPENSATION AND OTHER BENEFITS.
5.1 BASE SALARY. During the Term of Employment, the Executive
shall receive a base salary of no less than $275,000.00 per annum ("Base
Salary") payable in equal semi-monthly installments. Such Base Salary shall be
reviewed annually for increase in the sole discretion of the Board or the
Executive Committee thereof. Any such salary increase shall then be the "Base
Salary" for purposes of this Agreement. The Executive's Base Salary may only be
reduced pursuant to a plan or program instituted in good faith implementing a
general proportionate reduction in the base salary rate of all of the officers
of WBC and the Corporation, but in any event not more than 20% of Executive's
Base Salary.
5.2 RETENTION BONUS. In recognition of and as compensation for
Executive's job performance from November 17, 1997 through the date of the
execution of this Agreement, Executive has earned and shall be entitled to
receive a one time bonus (the "Retention Bonus") paid by WBC and the Corporation
according to the following formulas.
(a) In the event that the WBC Chapter 11 Plan or a
substantially similar version thereof is confirmed and becomes
effective, then Executive shall be entitled to receive the following:
(1) A cash payment of $204,000, 50% of which shall be
payable on the effective date of such WBC Chapter 11 Plan, or
a substantially similar version thereof, and the remaining 50%
shall be payable on the first anniversary of the effective
date of such WBC Chapter 11 Plan, or a substantially similar
version thereof; and
(2) Issuance on the effective date of such WBC
Chapter 11 Plan, or a substantially similar version thereof,
of 0.21% of the new common stock of WBC to be issued pursuant
to such WBC Chapter 11 Plan, or a substantially similar
version thereof. In recognition of the federal income tax
consequences of the equity consideration of this part of the
Retention Bonus, WBC and the Corporation shall use reasonable
best efforts to make such equity consideration federal income
tax neutral for Executive.
(b) In the event that, prior to the effective date of the WBC
Chapter 11 Plan, or a substantially similar version thereof, WBC enters
into a transaction which (1) would prevent the WBC Chapter 11 Plan, or
a substantially similar version thereof, from being confirmed and
becoming effective, and (2) would result in a distribution to each
holder of an Allowed Claim (capitalized terms not otherwise defined in
this Section 5.2(b) shall have the meaning ascribed to such terms in
the WBC Chapter 11 Plan) against or Equity Interest in WBC the receipt
of distributions of value equal to or greater than those at the high
end range provided for by the WBC Chapter 11 Plan, then Executive shall
be entitled to receive the following:
(1) A cash payment of $204,000, 50% of which shall be
payable on the date of the closing of such transaction, and
the remaining 50% payable on the first anniversary date of the
closing of such transaction; and
(2) A cash payment of $71,000 on the date of the
closing of such transaction, in lieu of the equity
consideration which would have been otherwise payable pursuant
to Section 5.2(a)(2) above.
5.3 SHORT-TERM INCENTIVE. For each fiscal year of WBC (in
addition to the Base Salary), the Executive shall be eligible to receive an
annual cash bonus ("Annual Bonus") determined by the Board or a committee
thereof. Such Annual Bonus shall be payable to the Executive at such time as
such bonuses or similar bonuses are paid to other members of the Corporation's
or WBC's senior management.
5.4 RETIREMENT PLANS. During the Term of Employment, the
Executive shall be entitled to participate as of the Commencement Date in all
incentive, pension, retirement, savings, 401(k) and other employee pension
benefit plans and programs maintained by WBC and/or the Corporation from time to
time for the benefit of senior executives and/or other employees.
5.5 WELFARE BENEFIT PLANS. During the Term of Employment, the
Executive, the Executive's spouse, if any, and their eligible dependents, if
any, shall be entitled to participate as of the Commencement Date in and be
covered under all the welfare benefit plans or programs maintained by the
Corporation and WBC from time to time including, without limitation, all medical
hospitalization, dental, disability, life, accidental death and dismemberment
and travel accident insurance plans and programs. Executive shall also earn and
receive a minimum of five (5) weeks vacation each year with year-end accrual of
unused vacation not to exceed ten (10) weeks.
5.6 LONG-TERM INCENTIVE PLAN. The Executive shall be entitled
to participate in the Senior Management Incentive Bonus Plan ("Incentive
Bonus"), as negotiated previously and hereinafter provided in the aforementioned
WBC Chapter 11 Plan, attached hereto as Exhibit "A," and by this reference
incorporated fully herein, as well as any other long-term incentive plan or
program, which other plan or program is hereby adopted by the boards of WBC and
the Corporation ("LTIP Award") based on the achievement of reasonable corporate
objectives determined in good faith by WBC or the Corporation. An LTIP Award may
be in the form of performance shares, performance units, stock options,
restricted stock, or other types of awards deemed appropriate by the Board, the
Executive Committee or such other committees of the Board.
5.7 EXPENSE REIMBURSEMENT. During the Term of Employment, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in promoting WBC and/or its Affiliates and in
otherwise performing his duties and responsibilities hereunder.
6. TERMINATION.
6.1 TERMINATION DUE TO DEATH OR DISABILITY. A determination of
whether the Executive is Disabled shall be made by WBC, the Corporation or any
Affiliate in its sole, but good faith, discretion upon its own initiative after
obtaining certification from a duly licensed physician or upon request of the
Executive or a person acting on his behalf. The Executive shall cooperate with
any necessary medical examination in connection with a determination of
Disability. Upon seven (7) days prior written notice to the Executive, WBC and
the Corporation may terminate the Executive's employment hereunder due to
Disability. In the event of the Executive's death or a termination of the
Executive's employment by WBC and the Corporation due to Disability, the
Executive, his estate or his legal representative, as the case may be, shall be
entitled to receive from WBC and the Corporation without duplication the
following:
(a) a lump sum payment of the Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) at the time of
such termination through the Date of Termination;
(b) a lump sum payment of any Incentive Bonus, Annual Bonus and LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) a lump sum payment of the unpaid cash portion of the Retention
Bonus, together with the immediate performance of the Retention Bonus
obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement of all expenses incurred, but not yet paid prior to
such death or Disability;
(f) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and/or the Corporation;
(g) in the case of death, any other compensation and benefits as may
be provided in accordance with the terms and provisions of any applicable
plans and programs of WBC or the Corporation, except any other severance
benefit of WBC or the Corporation; and
(h) in the case of Disability, (i) continuation of the Executive's
health and welfare benefits (as described in Section 5.5 of this Agreement)
at the level in effect (as provided for by Section 5.5) on the Date of
Termination through the end of the one year period following the
termination of the Executive's employment due to Disability (or the
Corporation and/or WBC shall provide the economic equivalent thereof), and
(ii) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable plans and programs of WBC
and the Corporation, except any other severance benefit of WBC or the
Corporation.
6.2 TERMINATION BY WBC AND THE CORPORATION FOR CAUSE. WBC and
the Corporation may terminate the Executive's employment hereunder for Cause as
provided in this Section 6.2. If WBC and the Corporation terminate the
Executive's employment hereunder for Cause, the Executive shall be entitled to
receive from WBC and the Corporation without duplication the following:
(a) a lump sum payment of the Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) at the time of
such termination through the Date of Termination;
(b) a lump sum payment of any Incentive Bonus, Annual Bonus and LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) a pro rata lump sum payment of the unpaid cash portion of the
Retention Bonus, together with the immediate performance of the Retention
Bonus obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement for all expenses incurred, but not yet paid prior to
such termination of employment; and
(f) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans and
programs of WBC and the Corporation, except any other severance benefit of
WBC or the Corporation.
In any case described in this Section 6.2, the Executive shall be given
written notice authorized by a vote of at least a majority of the members of the
Board that WBC and the Corporation intend to terminate the Executive's
employment hereunder for Cause. Such written notice, given in accordance with
Section 6.7 of this Agreement, shall specify the particular act or acts, or
failure to act, which is or are the basis for the decision to so terminate the
Executive's employment for Cause. Except with respect to the grounds set forth
in Section 1.4(c), as to which the following shall not apply, the Executive
shall be given the opportunity within thirty (30) calendar days after the
receipt of such notice to meet with the Board to defend such act or acts, or
failure to act, and the Executive shall be given thirty (30) business days after
such meeting to correct such act or failure to act. Upon failure of the
Executive, as fairly and reasonably determined by the Board, within such latter
thirty (30) day period, to correct such act or failure to act, or if the
Executive fails to meet with the Board after being provided an opportunity to do
so, the Executive's employment by WBC and the Corporation shall be automatically
terminated under this Section 6.2 for Cause as of the date determined under
Section 1.5 of this Agreement.
6.3 TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
Upon seven (7) days prior written notice to the affected party, WBC and the
Corporation may terminate the Executive's employment hereunder without Cause and
the Executive may terminate his employment hereunder for Good Reason. If WBC and
the Corporation terminate the Executive's employment hereunder without Cause,
other than due to death or Disability, or if the Executive terminates his
employment for Good Reason, the Executive shall be entitled to receive from WBC
and the Corporation without duplication the following:
(a) a lump sum payment equal in amount to 117% of the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement),
and (ii) the highest of either the Incentive Bonus or Annual Bonus awarded
to the Executive within five (5) years prior to the Date of Termination;
(b) a lump sum payment of any Base Salary accrued or Annual Bonus,
Incentive Bonus, and LTIP Award awarded but not yet paid as of the Date of
Termination;
(c) a lump sum payment of the unpaid cash portion of the Retention
Bonus, together with the immediate performance of the Retention Bonus
obligation set forth in Paragraph 5.2(a)(2) or 5.2(b) as applicable;
(d) a lump sum payment of accrued but unused vacation through the Date
of Termination;
(e) reimbursement of all expenses incurred, but not yet paid prior to
such termination of employment;
(f) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and the Corporation; and
(g) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs of the Corporation and WBC, except any other severance benefit of
WBC or the Corporation.
In the case of termination by Executive for Good Reason pursuant to
this Section 6.3, WBC and the Corporation shall be given written notice that the
Executive intends to terminate his employment hereunder for Good Reason. Such
written notice, given in accordance with Section 6.7 of this Agreement, shall
specify the particular act or acts, or failure to act, which is or are the basis
for the decision to so terminate the Executive's employment for Good Reason.
Upon failure of WBC and the Corporation, as fairly and reasonably determined by
the Executive, within such latter thirty (30) day period, to correct such act or
failure to act, or if WBC and the Corporation fail to meet with the Executive
after being provided an opportunity to do so, the Executive's employment by WBC
and the Corporation shall be automatically terminated under this Section 6.3 for
Good Reason as of the date determined under Section 1.5 of this Agreement.
6.4 VOLUNTARY TERMINATION. The Executive may effect, upon
seven (7) days prior written notice to WBC and the Corporation, a Voluntary
Termination of his employment hereunder. A "Voluntary Termination" shall mean a
termination of employment by the Executive on his own initiative other than (a)
a termination due to death or Disability, or (b) a termination for Good Reason.
A Voluntary Termination shall not be a breach of this Agreement. If the
Executive's employment hereunder is so terminated, the Executive shall be
entitled to receive from WBC and the Corporation the following:
(a) a lump sum payment of Base Salary at the rate in effect (as
provided for by Section 5.1 of this Agreement) at the time of such
termination through the Date of Termination;
(b) a lump sum payment of any Annual Bonus, Incentive Bonus, or LTIP
Award awarded but not yet paid as of the Date of Termination;
(c) reimbursement for expenses incurred, but not yet paid prior to the
Date of Termination; and
(d) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable employee benefit
plans or programs maintained by WBC and the Corporation, except any other
severance benefit of WBC or the Corporation.
6.5 TERMINATION BY EXPIRATION. If this Agreement expires
pursuant to Section 3 hereof, the Executive shall be entitled to receive on the
Expiration Date from WBC and the Corporation the following:
(a) a lump sum payment equal in amount to 117% of the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement),
and (ii) the highest of either the Incentive Bonus or Annual Bonus awarded
to the Executive within five (5) years prior to the Expiration Date;
(b) a lump sum payment of any Base Salary accrued or Annual Bonus,
Incentive Bonus, and LTIP Award awarded but not yet paid as of the
Expiration Date;
(c) a lump sum payment of accrued but unused vacation through the
Expiration Date;
(d) reimbursement of all expenses incurred, but not yet paid prior to
such termination of employment;
(e) immediate and accelerated vesting of all stock options and
restricted stock grants previously awarded to the Executive under any plan
or program maintained or established by WBC and the Corporation; and
(f) any other compensation and benefits as may be provided in
accordance with the terms and provisions of any applicable plans or
programs of the Corporation and WBC, except any other severance benefit of
WBC or the Corporation.
6.6 NO MITIGATION; NO OFFSET. In the event of any termination
of employment under this Section 6, the Executive shall be under no obligation
to seek other employment and there shall be no offset against any amounts due
the Executive under this Agreement on account of any remuneration attributable
to any subsequent employment that the Executive may obtain. Any amounts due
under this Section 6 are in the nature of severance payments, or liquidated
damages, or both, and are not in the nature of a penalty.
6.7 NOTICE OF TERMINATION. Any termination by WBC and the
Corporation for Cause or by the Executive for Good Reason shall be communicated
by a notice of termination to the other party hereto given in accordance with
Section 13.3 of this Agreement (the "Notice of Termination"). The Notice of
Termination shall be given, in the case of a termination for Cause, within
ninety (90) business days after the Chief Executive Officer, President, or a
director of the Corporation (excluding the Executive) knew or should have known
of the events giving rise to such purported termination, and in the case of a
termination by the Executive for Good Reason, within ninety (90) days of the
Executive's having actual knowledge of the events giving rise to such
termination, except in the case of termination for Good Reason resulting from a
Change in Control then within one hundred eighty (180) days of the effective
date of such Change in Control. Such notice shall (a) indicate the specific
termination provision in this Agreement relied upon, (b) set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, and (c) if the
termination date is other than the date of receipt of such notice, specify the
date on which the Executive's employment is to be terminated (which date shall
not be earlier than the date on which such notice is actually given).
6.8 CERTAIN OTHER PAYMENTS. Notwithstanding any other
provisions of this Agreement, in the event that any payment or benefit received
or to be received by the Executive in connection with a Change in Control or the
termination of the Executive's employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with WBC and the
Corporation or any of their Affiliates (all such payments and benefits being
hereinafter called the "Total Payments") would subject the Executive to the
excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor section thereto (the "Excise Tax"), and
if, and only if, such Total Payments less the Excise Tax is less than the
maximum amount of the Total Payments which could be payable to the Executive
without the imposition of the Excise Tax, then and only then, and only to the
extent necessary to eliminate the imposition of the Excise Tax (and after taking
into account any reduction in the Total Payments provided by reason of Section
280G of the Code in any such other plan, arrangement or agreement), (A) any cash
payments hereunder shall first be reduced (if necessary, to zero), and (B) all
other non-cash payments hereunder shall next be reduced. For purposes of this
limitation (i) no portion of the Total Payments the receipt or enjoyment of
which the Executive shall have effectively waived in writing prior to the Date
of Termination shall be taken into account, (ii) no portion of the Total
Payments shall be taken into account which in the opinion of tax counsel
selected by WBC's independent auditors and reasonably acceptable to the
Executive does not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code, including by reason of Section 280G(b)(4)(A) of
the Code, (iii) all payments shall be reduced only to the extent necessary so
that the Total Payments (other than those referred to in clauses (i) or (ii)) in
their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions under Code Section 280G, in the opinion of
the tax counsel referred to in clause (ii); and (iv) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by WBC's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
6.9 PAYMENT. Except as otherwise provided in this Agreement,
any payments to which the Executive shall be entitled to under this Section 6,
including, without limitation, any economic equivalent of any benefit, shall be
made immediately on the Date of Termination. If the amount of any payment due to
the Executive cannot be finally determined within thirty (30) days after the
Date of Termination, such amount shall be estimated on a good faith basis by WBC
and the estimated amount shall be paid no later than thirty (30) days after such
Date of Termination. As soon as practicable thereafter, the final determination
of the amount due shall be made and any adjustment requiring a payment to or
from the Executive shall be made as promptly as practicable.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided or maintained by WBC and/or
the Corporation for which the Executive may qualify, nor shall anything herein
limit or otherwise prejudice such rights as the Executive may have under any
other existing or future agreements with the Corporation, WBC, and/or any
Affiliate of either, including, without limitation, any stock option agreements
or plans. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plans or programs of the Corporation, WBC and/or
any Affiliate of either at or subsequent to the Date of Termination shall be
payable in accordance with such plans or programs. Notwithstanding the
foregoing, payments to the Executive under Section 6 hereof shall be in lieu of
payments under any severance plan or program.
8. FULL SETTLEMENT. WBC's and the Corporation's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off (except set-off for a fixed and liquidated obligation),
counterclaim, recoupment, defense or other right which WBC and/or the
Corporation and/or any Affiliates may have against the Executive or others.
Notwithstanding anything contained herein to the contrary, the obligations of
WBC and the Corporation hereunder shall be subject to Executive having executed
and delivered an instrument to WBC and the Corporation irrevocably waiving and
releasing WBC, the Corporation, and each Affiliate from any and all obligations
or liabilities to Executive arising from or in connection with Executive's
employment with WBC and the Corporation or the termination of such employment
and any and all claims Executive may have under federal, state or local
statutes, regulations or ordinances or under any common law principles or breach
of contract or the covenant of good faith and fair dealing, defamation, wrongful
discharge, intentional infliction of emotional distress or promissory estoppel.
9. LEGAL FEES AND OTHER EXPENSES. In the event that a claim for payment
or benefits under this Agreement is disputed, the Executive shall be reimbursed
for all attorney fees and expenses incurred by the Executive in pursuing such
claim, provided that the Executive is successful as to at least part of the
disputed claim by reason of litigation, arbitration or settlement. In addition,
the Executive shall be paid or reimbursed for all legal fees and expenses
incurred by the Executive in connection with the review, preparation and
negotiation of this Agreement and/or any other agreements or plans referenced
herein.
10. CONFIDENTIAL INFORMATION AND NONSOLICITATION.
10.1 CONFIDENTIAL INFORMATION. The Executive shall not, during
the Term of Employment and thereafter, without the prior express written consent
of WBC and/or the Corporation, disclose any confidential information, knowledge
or data relating to WBC , the Corporation, or any Affiliate of either and their
respective businesses, which (a) was obtained by the Executive in the course of
the Executive's employment with WBC and the Corporation, and (b) which is not
information, knowledge or data otherwise in the public domain (other than by
reason of a breach of this provision by the Executive), unless required to do so
by a court of law or equity or by any governmental agency or other authority.
10.2 NO SOLICITATION. The Executive hereby agrees that, if his
employment hereunder is terminated by WBC and the Corporation for Cause or by
the Executive under Section 6.4 of this Agreement, he shall not, for twelve (12)
months after the Date of Termination, directly or indirectly, divert, solicit or
take away the patronage of (a) any customers or agents of the Corporation, WBC
or any Affiliate of either as of the relevant Date of Termination, or (b) any
prospective customers or agents of the Corporation, WBC or any Affiliate whose
business the Corporation and/or WBC was actively soliciting on the relevant Date
of Termination, and with which the Executive had business contact while employed
by the Corporation and WBC. The Executive agrees that, under the circumstances
and conditions described above and for the same period of time, the Executive
shall not, directly or indirectly, induce or solicit any employees or agents of
the Corporation, WBC or any Affiliate of either to leave or terminate their
employment or agency relationship with the Corporation or WBC. The Corporation
and WBC agrees that (i) any announcement made by the Executive, at any press
conference or in any press release or through individual notices, shall not, in
and of itself, constitute an attempt directly or indirectly to induce, divert,
solicit or take away customers or employees, (ii) any such announcement creates
no presumption with respect to any such inducement, diversion, solicitation or
taking, and (iii) in all cases both the burden of production of evidence and the
ultimate burden of persuasion with respect to any allegations or claims that
this Section 10.2 has been breached or violated by the Executive shall be borne
by WBC and the Corporation. Executive agrees that all restrictions and
agreements contained in this Section 10, including without limitation, those
relating to duration and restricted territory, are necessary and fundamental to
the protection of the business of WBC, the Corporation or any Affiliate, and are
reasonable and valid, and all defenses to the strict enforcement thereof by
Executive are hereby waived. Executive agrees that the remedy at law for such
breach of this Agreement will be inadequate, and that the damages from such
breach are not readily susceptible to being measured in monetary terms.
Accordingly, Executive agrees that upon breach of this Section 10, WBC, the
Corporation or any Affiliate shall be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened further breach.
Nothing in this Agreement shall be deemed to limit WBC's, the Corporation's or
any Affiliate's remedies at law or in equity for any breach by Executive or any
of the provisions of this Agreement that may be pursued or availed of by WBC,
the Corporation or any Affiliate.
11. SUCCESSORS.
11.1 THE EXECUTIVE. This Agreement is personal to the
Executive and, without the prior express written consent of WBC and the
Corporation, shall not be assignable by the Executive, except that the
Executive's rights to receive any compensation or benefits under this Agreement
may be transferred or disposed of pursuant to testamentary disposition,
intestate succession or pursuant to a domestic relations order. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs,
beneficiaries and/or legal representatives.
11.2 WBC AND THE CORPORATION. This Agreement shall inure to
the benefit of and be binding upon WBC, the Corporation, and their respective
successors and assigns. WBC shall require any successor to all or substantially
all of the Corporation's and its Affiliates' business and/or assets, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as WBC and the Corporation would be required to perform if no
such succession had taken place.
12. INDEMNIFICATION. WBC and the Corporation agree that if the
Executive is made a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director or officer of
WBC, the Corporation, and/or any Affiliate of either or is or was serving at the
request of the Corporation, WBC and/or any Affiliate as a director, officer,
member, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including, without limitation, service with
respect to employee benefit plans, whether or not the basis of such Proceeding
is alleged action in an official capacity as a director, officer, member,
employee or agent while serving as a director, officer, member, employee or
agent, he shall be indemnified and held harmless by WBC and the Corporation to
the fullest extent authorized by applicable law, as the same exists or may
hereafter be amended, against all Expenses incurred or suffered by the Executive
in connection therewith, and such indemnification shall continue as to the
Executive even if the Executive has ceased to be an officer, director or agent,
or is no longer employed by WBC and the Corporation and shall inure to the
benefit of his heirs, executors and administrators; provided, however, that
Executive shall not be indemnified for any act or omission that constitutes
gross negligence or willful misconduct.
13. MISCELLANEOUS.
13.1 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, applied without
reference to the principles of conflict of laws.
13.2 AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
13.3 NOTICES. All notices and other communications hereunder
shall be in writing and shall be given by hand-delivery to the other parties or
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Mr. Patrick H. O'Neill
4001 Briarhaven Court
Fort Worth, Texas 76109
If to the Corporation: Westbridge Management Corp.
110 West Seventh Street, Suite 300
Fort Worth, Texas 76102
Attention: President and Chief
Operating Officer
If to WBC: Westbridge Capital Corp.
110 West Seventh Street, Suite 300
Fort Worth, Texas 76102
Attention: President and Chief
Operating Officer
or to such other address as any party hereto shall have furnished to the others
in writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
13.4 WITHHOLDING. WBC and the Corporation may withhold from
any amounts payable under this Agreement such federal, state or local income
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.
13.5 SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
13.6 CAPTIONS. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
13.7 BENEFICIARIES/REFERENCES. The Executive shall be entitled
to select (and change) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive's death, and
may change such election, in either case by giving WBC or the Corporation
written notice thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s).
13.8 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
13.9 REPRESENTATIONS. WBC and the Corporation each represents
and warrants that it is fully authorized and empowered to enter into this
Agreement. The Executive represents and warrants that the performance of the
Executive's duties under this Agreement will not violate any agreement between
the Executive and any other person, firm, partnership, corporation, or
organization.
13.10 SURVIVORSHIP. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement or the
Executive's Term of Employment hereunder for any reason to the extent necessary
to the intended provision of such rights and the intended performance of such
obligations.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and WBC, as well as the Corporation have each caused this Agreement to be
executed in its name on its behalf, and attested to by their respective
Secretaries, all as of the day and year first above written.
Westbridge Management Corp.
Attest: By: /S/ PATRICK J. MITCHELL
Patrick J. Mitchell
/S/ LINDA MERCER Title: President and Chief Executive Officer
Westbridge Capital Corp.
Attest: By: /S/ PATRICK J. MITCHELL
Patrick J. Mitchell
/S/ LINDA MERCER Title: President and Chief Executive Officer
/S/ PATRICK H. O'NEILL
Patrick H. O'Neill
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August 13, 1998
PERSONAL AND CONFIDENTIAL
Mr. Patrick H. O'Neill
4001 Briarhaven Court
Fort Worth, Texas 76109
Re: Incentive Bonus
Dear Pat:
As you may know, a decision has been made to pursue the restructuring
of Westbridge Capital Corp. (the "Company"). You are a valued senior officer and
employee of the Company and Westbridge Management Corp. ("WBMC"), and the
Company's Board of Directors (the "Board") wants you to remain with the Company
and continue to provide leadership and make continued valuable contributions to
the Company's business, as well as the business of WBMC, until such
restructuring and reorganization of the Company has been completed.
This letter agreement (this "Incentive Bonus Agreement") sets forth all
of the terms of an arrangement that the Board has established under which you
will be eligible to receive a 1998 Incentive Bonus payable upon the completion
of the preparation of the Company's fiscal 1998 audited financial statements.
This Incentive Bonus Agreement is not an employment agreement. It does not
change any of the terms and conditions of your Employment Agreement with the
Company and WBMC.
INCENTIVE BONUS
If your employment with the Company and WBMC has not been terminated
for Cause as defined in Paragraph 1.4 of the Patrick H. O'Neill Employment
Agreement prior to the date of the issuance of the Company's fiscal 1998 audited
financial statements, you will receive a cash incentive bonus (the "Cash
Incentive Bonus") payable within 10 business days after the date on which the
Company announces publicly it's financial results for the fiscal year ended
December 31, 1998. The amount of your Cash Incentive Bonus, if any, will be
determined using the following formula:
$275,000 X 30% X (Net Income Factor) = Cash Incentive Bonus
The Net Income Factor is based on the Company's fiscal 1998 Normal Net
Income and will be determined in accordance with the table below. Normal Net
Income shall be defined as income before income taxes and minority interests
plus reorganization expenses, non-LaSalle Bank interest expense, and non-LaSalle
Bank debt amortization costs, calculated in accordance with generally accepted
accounting principles.
FISCAL 1998 NORMAL NET INCOME ($ IN 000S) COMPANY NET INCOME FACTOR
- ----------------------------------------- -------------------------
Less than $2,001 0%
Greater than $2,000 but Less than $3,599 50%
Greater than $3,598 but Less than $6,001 75%
Greater than $6,000 but Less than $8,251 100%
Greater than $8,250 but Less than $10,351 125%
Greater than $10,350 but Less than $12,351 150%
Greater than $12,350 but Less than $14,251 175%
Greater than $14,250 200%
In addition to the Cash Incentive Bonus, if your employment with the
Company and WBMC has not been terminated for Cause as defined in Paragraph 1.4
of the Patrick H. O'Neill Employment Agreement prior to the date of the issuance
of the Company's fiscal 1998 audited financial statements, you will receive an
additional Incentive Bonus payable in new Common Stock of the reorganized
Company (the "Stock Incentive Bonus"). The number of shares of Common Stock that
you will be eligible to receive as a Stock Incentive Bonus shall be equal to the
Applicable Stock Percentage of the new Common Stock of the reorganized Company
on a fully diluted basis (as determined below) multiplied by 41%.
FISCAL 1998 NORMAL NET INCOME ($ IN 000S) APPLICABLE STOCK PERCENTAGE
- ----------------------------------------- ---------------------------
Less than $2,001 0.000%
Greater than $2,000 but Less than $3,599 0.250%
Greater than $3,598 but Less than $6,001 0.375%
Greater than $6,000 but Less than $8,251 0.500%
Greater than $8,250 but Less than $10,351 0.625%
Greater than $10,350 but Less than $12,351 0.750%
Greater than $12,350 but Less than $14,251 0.875%
Greater than $14,250 1.000%
In recognition of the federal income tax consequences of the Stock
Incentive, the Company and WBMC will make such Stock Incentive federal income
tax neutral for recipient.
MISCELLANEOUS
Payments to be made to you or on your behalf under this Agreement, if
any, shall be reduced by applicable taxes and withholdings.
Neither the Company nor their shareholders are under any obligation,
express or implied, by virtue of this letter or otherwise, to effect any
restructuring at any time.
Please indicate your agreement with the foregoing by signing both
copies of this letter where indicated below and returning one fully executed
copy to me.
I personally want to thank you again for the outstanding contribution
that you have made to the success of the Company, and I look forward to your
valuable assistance in effecting the restructuring. This is a time when we all
need to pull together.
Sincerely yours,
Westbridge Capital Corp.
By: /S/ PATRICK J. MITCHELL
Patrick J. Mitchell
Accepted and Agreed to:
/S/ PATRICK H. O'NEILL
Patrick H. O'Neill
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-more-
EXHIBIT 99
FOR: WESTBRIDGE CAPITAL CORP. (NYSE: WBC)
FROM: Westbridge Capital Corp.
110 West Seventh Street, Suite 300
Fort Worth, Texas 76102
(817) 878-3300
CORPORATE CONTACT:
Joe Bailey
Investor Relations
(817) 877-3048
FOR IMMEDIATE RELEASE:
September 16, 1998
WESTBRIDGE REACHES AGREEMENT WITH PRINCIPAL NOTEHOLDERS; FILES PLAN OF
REORGANIZATION ALONG WITH CHAPTER 11 PETITION TO FACILITATE HOLDING COMPANY
RESTRUCTURING
FORT WORTH, Texas, September 16....Westbridge Capital Corp. (NYSE:WBC), filed
today a voluntary Chapter 11 petition and a prearranged plan of reorganization
(the "Plan") in the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court"). The filing of the Plan successfully culminates several
months of negotiations between the Company and an ad hoc committee (the
"Committee") of holders of its 11% Senior Subordinated Notes (the "Senior
Notes") and 7-1/2% Convertible Subordinated Notes (the "Convertible Notes"). The
Company expects to successfully exit Chapter 11 by year-end 1998.
Patrick J. Mitchell, President said, "after careful review of all transactional
and restructuring alternatives, this plan of reorganization is indicative of the
confidence that the Committee has in the Company and its new management team. We
have been working very diligently with the Committee to achieve a reorganization
of the holding company capital structure that will further the goal of restoring
profitability and maximizing the value to all of Westbridge's stakeholders."
Mr. Mitchell said that Credit Suisse First Boston Corporation ("CSFB"), a
significant noteholder, has been an important ally in this entire process. Under
the terms of the proposed plan, it is expected that CSFB will become the largest
shareholder of the reorganized company.
Westbridge's proposed plan of reorganization provides for the recapitalization
of existing debt and equity interests in Westbridge and the issuance of new
equity securities and warrants. Key terms of the proposed plan include the
following; however, reference to the plan should be made for a complete
description of its terms.
Realignment and deleveraging of Westbridge's current capital structure.
The distribution of new convertible preferred stock to CSFB in exchange
for its Senior Notes.
Cash payment in full of the Senior Notes held by creditors other than
CSFB.
The distribution of new common stock and warrants to (a) Westbridge's
general unsecured creditors, (b) holders of Westbridge's Convertible Notes,
(c) holders of Westbridge's Series A Convertible Redeemable Exchangeable
Preferred Stock, and (d) holders of Westbridge's old common stock.
A Stock Option Program for management to purchase, in the aggregate, up to
10% of the shares of new common stock of the Company on a fully diluted
basis, thereby providing incentives to return the Company to profitability
and to maximize stakeholder value.
A Marketing Agent Stock Option Program for the Company's marketing agents
to purchase, in the aggregate, up to 3% of the shares of new common stock
of the Company on a fully diluted basis, thereby providing incentives to
generate future sales of the Company's new insurance products.
In order to provide the Company with sufficient funds to make the cash
distributions which are expected to be paid to the holders of its Senior Notes
under the Company's
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proposed plan of reorganization, the Company has entered into a Stock Purchase
Agreement with CSFB pursuant to which CSFB has agreed, subject to the conditions
contained therein, to purchase all of the shares of the new convertible
preferred stock which are not otherwise distributed under the Plan.
Westbridge has also been in continuous communication with LaSalle National Bank,
the Company's working capital lender, and various state insurance authorities
during its restructuring process. The Company believes that such entities
generally endorse and support the Company's efforts to restore its financial
viability through the proposed plan of reorganization.
Mr. Mitchell continued, "we have maintained our confidence for some time now
that, given the time and cooperation of our bondholders, state insurance
authorities, employees and other stakeholders, we would develop and implement a
strategic business plan and restructuring of the holding company capital
structure which will help restore Westbridge to profitability."
Mr. Mitchell emphasized, "the Chapter 11 filing affects the holding company
only. While the Company completes its restructuring, daily operations at
Westbridge and its subsidiaries will continue without interruption. Our
policyholders, vendors and employees will not be affected."
The effectiveness of the proposed plan is conditioned on, among other things,
approval by the Bankruptcy Court.
As part of the restructuring, the Company has also named Patrick J. Mitchell as
its new Chief Executive Officer and Chairman of the Board. Mr. Mitchell replaces
Martin E. Kantor, who had been Chief Executive Officer of the Company since
January 1, 1977. Prior to being named as Chief Executive Officer, Mr. Mitchell
was the Company's President and Chief Operating Officer, and will retain these
posts in addition to his new responsibilities.
The Company, through its insurance subsidiaries, underwrites and markets
individual medical expense and supplemental health insurance products through a
controlled general agency. The Company also markets HMO/PPO plans of nationally
recognized nonaffiliated managed care companies.
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(FORWARD-LOOKING STATEMENTS: The Private Securities Litigation Reform
Act of 1995 provides a "safe harbor" for forward-looking statements.
This press release contains forward-looking statements regarding the
intent, belief or current expectations of the Company and members of
its senior management team with respect to the timing of, completion of
and scope of the current restructuring, proposed reorganization plan,
and strategic business plan as well as the assumptions upon which such
statements are based. While the Company believes that its expectations
are based on reasonable assumptions within the bounds of its knowledge
of its business and operations, prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance, and involve risks and uncertainties, and that actual
results may differ materially from those contemplated by such
forward-looking statements. Important factors known to management that
could cause actual results to differ materially from those contemplated
by the forward-looking statements in this press release include, but
are not limited to, the effect of economic and market conditions,
further adverse developments with respect to the Company's liquidity
position or operations of the Company's various businesses, prosecution
of the Chapter 11 case, adverse developments in the timing or results
of the Company's current strategic business plan (including the time
line to emerge from Chapter 11), the difficulty in controlling health
care costs and integrating new operations, the ability of the Company
to realize anticipated general and administrative expense savings and
overhead reductions presently contemplated, the ability of the Company
to return the Company's operations to profitability, the level and
nature of any restructuring charges, and the possible negative effects
of prospective health care reform. Additional factors that would cause
actual results to differ materially from those contemplated within this
press release can also be found in the Company's Form 8-K periodic
filings during 1998, Form 10-Q for the quarters ended June 30, 1998 and
March 31, 1998, and the Company's Form 10-K for the year ended December
31, 1997.)
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