SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



                  For Quarterly Period Ended September 30, 1998


                          Commission File Number 1-8538



                            WESTBRIDGE CAPITAL CORP.
                   ------------------------------------------
             (Exact name of Registrant as specified in its Charter)


        DELAWARE                                                73-1165000
--------------------------                           --------------------------
(State of Incorporation)                    (I.R.S. Employer Identification No.)

110 West Seventh Street, Suite 300, Fort Worth, Texas                76102
--------------------------------------------------------           ---------
(Address of Principal Executive Offices)                          (Zip Code)

                                  817-878-3300
                  -------------------------------------------
              (Registrant's Telephone Number, including Area Code)


                                 Not Applicable
               -------------------------------------------------
   (Former Name, Address and Former Fiscal Year, if changed since Last Report)


Indicate,  by check  mark  whether  the  Registrant:  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES X NO_____



Common Stock - Par Value $.10   7,035,809 Shares Outstanding at November 5, 1998


<PAGE>






                                        2

                                                                       Form 10-Q



                            WESTBRIDGE CAPITAL CORP.


This quarterly  report,  filed pursuant to Rule 13a-13 and 15d-13 of the General
Rules and Regulations under the Securities Exchange Act of 1934, consists of the
following information as specified in Form 10-Q:

<TABLE>
<CAPTION>

                                                                                Page(s)


PART I - FINANCIAL INFORMATION

<S>                                                                             <C>                      
     Item 1 -  Financial Statements

     1.   Consolidated Balance Sheets at September 30, 1998, December 31,
          1997 and September 30, 1997.                                            3-4

     2.   Consolidated Statement of Operations for the Three and Nine
          Months Ended September 30, 1998 and 1997.                                 5

     3.   Consolidated Statement of Cash Flows for the Three and Nine
          Months Ended September 30, 1998 and 1997.                               6-7

     4.   Notes to Consolidated Financial Statements.                             8-10

     Item 2 -  Management's Discussion and Analysis of Financial Condition and
               Results of Operations                                             11-24


PART II - OTHER INFORMATION

         Item 1 - Legal Proceedings                                                 25

         Item 3 - Defaults Upon Senior Securities                                   25

         Item 6 - Exhibits and Reports on Form 8-K                                  26
</TABLE>

<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                                     ASSETS



<TABLE>
<CAPTION>
                                                        September 30,         December 31,          September 30,
                                                            1998                  1997                  1997
                                                      ------------------    ------------------    ------------------
                                                         (unaudited)            (audited)            (unaudited)
                                                      ------------------    ------------------    ------------------


<S>                                                  <C>                   <C>                   <C>
Investments:
   Fixed Maturities:
     Available-for-sale, at market value
       (amortized cost $116,066, $122,840
       and $130,407)                                    $     124,603         $     128,749         $     133,998
   Equity securities, at market                                 2,620                 4,770                 5,573
   Mortgage loans on real estate                                  324                   389                   398
   Investment real estate                                           -                   566                   816
   Policy loans                                                   280                   284                   277
   Short-term investments and certificates
     of deposit                                                 9,072                12,654                 2,853
                                                      ------------------    ------------------    ------------------

       Total Investments                                      136,899               147,412               143,915

Cash                                                            1,540                 1,030                 6,060
Accrued investment income                                       2,203                 2,453                 2,588
Receivables from agents, net of allowance
   for doubtful accounts                                       12,998                20,503                20,915
Deferred policy acquisition costs                              13,509                19,165                84,771
Leasehold improvements and equipment, at
   cost, net of accumulated depreciation and
   amortization                                                 1,653                 1,141                 1,327
Due from reinsurers                                             1,780                 3,219                 2,877
Commissions receivable                                          2,589                 1,389                 3,477
Deferred debt costs, net of accumulated
   amortization                                                 3,239                 4,046                 4,438
Other assets                                                    2,682                 2,498                 6,756
                                                      ------------------    ------------------    ------------------

       Total Assets                                     $     179,092         $     202,856         $     277,124
                                                      ==================    ==================    ==================
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' (DEFICIT) EQUITY


<TABLE>
<CAPTION>
                                                            September 30,         December 31,          September 30,
                                                                1998                  1997                  1997
                                                          ------------------    ------------------    ------------------
                                                             (unaudited)            (audited)            (unaudited)
                                                          ------------------    ------------------    ------------------

<S>                                                      <C>                   <C>                   <C>
Liabilities:
   Policy liabilities and accruals:
     Future policy benefits                                 $      54,120           $    55,811         $      55,985
     Claims                                                        45,522                51,784                53,090
                                                          ------------------    ------------------    ------------------
                                                                   99,642               107,595               109,075

Accounts payable and accruals                                       3,626                 3,846                 6,180
Commission advances payable                                         1,774                 4,702                 6,306
Accrued dividends and interest payable                             10,840                 4,972                 2,907
Other liabilities                                                   7,268                 5,612                 6,002
Deferred income taxes, net                                              -                     -                     -
Notes payable                                                       7,618                13,100                13,110
Senior subordinated notes, net of unamortized
   discount, due 2002                                              19,523                19,447                19,422
Convertible subordinated notes, due 2004                           70,000                70,000                70,000
                                                          ------------------    ------------------    ------------------

       Total Liabilities                                          220,291               229,274               233,002
                                                          ------------------    ------------------    ------------------

Redeemable Series A Preferred Stock                                11,935                19,000                19,000
                                                          ------------------    ------------------    ------------------

Stockholders' (Deficit) Equity:
   Common stock ($.10 par value, 30,000,000
     shares authorized; 7,035,793, 6,195,439
     and 6,224,039 shares issued)                                     703                   620                   622
   Capital in excess of par value                                  37,641                30,843                31,098
   Accumulated other comprehensive income,
     net of tax                                                     5,594                 4,649                 2,972
   Retained deficit                                              (97,072)              (81,530)               (9,400)
                                                          ------------------    ------------------    ------------------
                                                                 (53,134)              (45,418)                25,292
Less - Aggregate of shares held in treasury and
   investment by affiliate in Westbridge Capital Corp.
   common stock (28,600 at September 30, 1997),
   at cost                                                              -                     -                 (170)
                                                          ------------------    ------------------    ------------------

     Total Stockholders' (Deficit) Equity                        (53,134)              (45,418)                25,122
                                                          ------------------    ------------------    ------------------

       Total Liabilities, Redeemable Preferred
         Stock and Stockholders' (Deficit) Equity           $     179,092           $   202,856         $     277,124
                                                          ==================    ==================    ==================
</TABLE>




The accompanying notes are an integral part of these financial statements.


<PAGE>


                                       26

                            WESTBRIDGE CAPITAL CORP.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                      Three Months Ended                    Nine Months Ended
                                                         September 30,                        September 30,
                                                 ------------------------------      --------------------------------
                                                     1998             1997               1998              1997
                                                 -------------    -------------      -------------    ---------------

<S>                                             <C>              <C>                <C>             <C>
Revenues:
   Premiums:
     First-year                                  $      4,289     $      8,618       $     15,979     $     30,447
     Renewal                                           28,989           31,832             89,989           91,845
                                                 -------------    -------------      -------------    ---------------
                                                       33,278           40,450            105,968          122,292
   Net investment income                                2,929            3,207              9,287            7,963
   Fee and service income                               4,085            4,525             12,184           12,133
   Net realized gain on investments                     1,576              223              2,105              355
                                                 -------------    -------------      -------------    ---------------
                                                       41,868           48,405            129,544          142,743
                                                 -------------    -------------      -------------    ---------------
Benefits, claims and expenses:
   Benefits and claims                                 23,696           52,544             77,544          109,026
   Amortization of deferred policy
     acquisition costs                                  1,448            9,292              3,396           22,622
   Commissions                                          6,884            4,993             25,083           11,960
   General and administrative expenses                  6,833            8,667             20,733           23,935
   Recognition of premium deficiency                    4,948                -              4,948                -
   Reorganization expense                               1,606                -              3,706            3,100
   Taxes, licenses and fees                             1,234            1,533              3,965            4,615
   Interest expense                                     1,882            2,096              6,186            5,022
                                                 -------------    -------------      -------------    ---------------
                                                       48,531           79,125            145,561          180,280
                                                 -------------    -------------      -------------    ---------------
Loss before income taxes                               (6,663)         (30,720)           (16,017)         (37,537)
Provision for (benefit from) income taxes                 244          (10,752)              (995)         (13,138)
                                                 -------------    -------------      -------------    ---------------
Loss before extraordinary item                         (6,907)         (19,968)           (15,022)         (24,399)
Extraordinary loss from early
   extinguishment of debt, net of tax                       -                -                  -           (1,007)
                                                 -------------    -------------      -------------    ---------------
   Net loss                                      $     (6,907)     $   (19,968)       $   (15,022)    $    (25,406)
                                                 =============    =============      =============    ===============

Preferred stock dividends                                 111              392                520            1,180
                                                 -------------    -------------      -------------    ---------------
Loss applicable to common
   stockholders                                  $     (7,018)     $   (20,360)       $   (15,542)     $   (26,586)
                                                 =============    =============      =============    ===============

Earnings per common share:
   Basic:
     Loss before extraordinary item              $      (1.01)     $     (3.29)       $     (2.39)     $     (4.18)
     Extraordinary item                                     -                -                  -             (.16)
                                                 -------------    -------------      -------------    ---------------
       Net loss                                  $      (1.01)     $     (3.29)       $     (2.39)     $     (4.34)
                                                 =============    =============      =============    ===============
   Diluted:
     Loss before extraordinary item              $      (1.01)     $     (3.29)       $     (2.39)     $     (4.18)
     Extraordinary item                                     -                -                  -             (.16)
                                                 -------------    -------------      -------------    ---------------
       Net loss                                  $      (1.01)     $     (3.29)       $     (2.39)     $     (4.34)
                                                 =============    =============      =============    ===============

Weighted average shares outstanding:
   Basic                                                6,938            6,189              6,507            6,125
                                                 =============    =============      =============    ===============
   Diluted                                              6,938            6,189              6,507            6,125
                                                 =============    =============      =============    ===============
</TABLE>


The accompanying notes are an integral part of these financial statements.

<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                              Three Months Ended               Nine Months Ended
                                                                September 30,                    September 30,
                                                         -----------------------------    -----------------------------
                                                             1998            1997            1998             1997
                                                         -------------    ------------    ------------     ------------

<S>                                                     <C>              <C>             <C>              <C>
Cash Flows From Operating Activities:
   Loss applicable to common stockholders                $    (7,018)     $   (20,360)     $  (15,542)      $  (26,586)
   Adjustments to reconcile net loss to net cash
     provided by (used for) operating activities:
   Recognition of premium deficiency                           4,948                -           4,948                -
   Amortization of deferred policy acquisition costs           1,448            9,292           3,396           22,622
   Depreciation expense                                          121              119             336              356
   Decrease (increase) in receivables from agents              2,353              718           7,505           (2,604)
   Addition to deferred policy acquisition costs              (1,425)          (6,586)         (2,688)         (23,522)
   Decrease (increase) in due from reinsurers                    129            1,154           1,439           (1,421)
   (Increase) decrease in commissions receivable                (372)           2,079          (1,200)             (71)
   Decrease (increase) in deferred debt costs                    171               70             807           (1,622)
   Decrease (increase) in other assets                           333           (1,991)           (184)          (2,318)
   (Decrease)   increase  in  policy   liabilities  and       (4,562)          22,080          (7,953)          15,685
accruals
   Increase (decrease) in accounts payable and accruals          520               68            (220)           4,373
   (Decrease) increase in commission advances payable         (1,603)          (2,911)         (2,928)           1,938
   Increase in accrued dividends and interest payable          1,763            1,302           5,868            2,218
   Increase (decrease) in other liabilities                      115           (2,328)          1,656            4,302
   Decrease in deferred income taxes, net                          -           (8,735)              -          (10,299)
   Other, net                                                     15              291            (298)            (503)
                                                         -------------    ------------    ------------     ------------
   Net Cash Used For Operating Activities                     (3,064)          (5,738)         (5,058)         (17,452)
                                                         -------------    ------------    ------------     ------------

Cash Flows From Investing Activities:
   Proceeds from investments sold:
     Fixed maturities, called or matured                       1,538            6,144           6,664            8,905
     Fixed maturities, sold                                      671            2,814          12,014           15,822
     Short-term investments, sold or matured                   2,833                -           4,138            9,740
     Other investments, sold or matured                        1,015               14           1,646              367
   Cost of investments acquired                               (2,135)         (13,258)        (12,564)         (73,558)
   Additions to leasehold improvements and equipment,
     net of retirements                                          (85)            (175)           (848)            (372)
                                                         -------------    ------------    ------------     ------------
   Net Cash Provided By (Used For) Investing Activities        3,837           (4,461)         11,050          (39,096)
                                                         -------------    ------------    ------------     ------------

Cash Flows From Financing Activities:
   Issuance of notes payable                                   1,256            6,019           4,230           15,102
   Repayment of notes payable                                 (2,690)          (3,273)         (9,712)         (23,202)
   Issuance of convertible notes                                   -                -               -           70,000
   Issuance of common stock                                        -               51               -              140
   Repurchase and cancellation of common stock                     -             (299)              -             (445)
                                                         -------------    ------------    ------------     ------------
   Net Cash (Used For) Provided By Financing Activities       (1,434)           2,498          (5,482)          61,595
                                                         -------------    ------------    ------------     ------------
   Decrease (increase) In Cash During Period                    (661)          (7,701)            510            5,047
   Cash at Beginning Of Period                                 2,201           13,761           1,030            1,013
                                                         -------------    ------------    ------------     ------------
   Cash at End Of Period                                 $     1,540      $     6,060     $     1,540      $     6,060
                                                         =============    ============    ============     ============

Supplemental Disclosures Of Cash Flow Information:
   Cash paid during the periods for:
     Interest                                            $       137      $       880     $       664      $     3,001
     Income taxes                                        $       300      $        70     $       793      $       118
</TABLE>



The accompanying notes are an integral part of these financial statements.

<PAGE>



                            WESTBRIDGE CAPITAL CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)


SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES


During the three months ended September 30, 1998, one thousand three hundred and
twenty-five  (1,325)  shares of the Company's  Series A  Convertible  Redeemable
Exchangeable  Preferred  Stock ("Series A Preferred  Stock") were converted into
shares of Westbridge's  common stock, par value $.10 per share ("Common Stock").
The converted  shares of Series A Preferred  Stock had an aggregate  liquidation
preference of $1,325,000 and were converted into 157,551 shares of Common Stock.

During the nine months ended  September 30, 1998,  seven thousand and sixty-five
(7,065)  shares of the Company's  Series A Preferred  Stock were  converted into
shares of Westbridge's  Common Stock. The converted shares of Series A Preferred
Stock had an aggregate  liquidation  preference of $7,065,000 and were converted
into 840,071 shares of Common Stock




The accompanying notes are an integral part of these financial statements.

<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - FINANCIAL STATEMENTS

General.  The  accompanying  unaudited  consolidated  financial  statements  for
Westbridge  Capital Corp.  ("Westbridge"  and,  together  with its  consolidated
subsidiaries,   the  "Company")  have  been  prepared  in  accordance  with  the
instructions  to Form 10-Q and Rule 10-01 of  Regulation  S-X and do not include
all of the information and footnotes required by generally  accepted  accounting
principles  ("GAAP")  for  complete  financial  statements.  In the  opinion  of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Certain reclassifications
have been made to 1997 amounts in order to conform to 1998  financial  statement
presentation.

Operating  results  for  the  nine  months  ended  September  30,  1998  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1998. These financial statements should be read in conjunction with
the  consolidated  financial  statements  and  notes  thereto  included  in  the
Company's  Annual Report on Form 10-K for the year ended  December 31, 1997, the
Company's  Quarterly  Reports on Form 10-Q for the three  months ended March 31,
1998 and June 30, 1998,  and the Company's  periodic  filings on Form 8-K during
1998.

Recognition of Premium  Deficiency.  During the nine months ended  September 30,
1998,  the Company  continued to  experience  adverse loss ratios and  declining
persistency  on its  old  Medical  Expense  and  Medicare  Supplement  products,
although the loss ratios for the third quarter of 1998  reflected an improvement
over the first and second  quarters of 1998. As a result of these  factors,  the
Company  undertook  a  revaluation  of the  recoverability  of  Deferred  Policy
Acquisition  Costs ("DPAC") in the third  quarter.  Based on the results of this
review,  the Company determined that a premium deficiency existed and recorded a
non-cash  charge to expense of  approximately  $5.0  million for the quarter and
nine months ended  September  30,  1998.  This  adjustment  had no impact on the
Company's cash position or on the statutory capital and surplus of the Insurance
Subsidiaries (as defined herein) as of September 30, 1998.

Generally accepted accounting  principles require the immediate recognition of a
premium  deficiency  by charging  the  unamortized  DPAC to  expense.  A premium
deficiency occurs when the projected present value of future premiums associated
with these policies will not be adequate to cover the projected present value of
future  payments for benefits and related  amortization of DPAC. The combination
of adverse claim loss ratios and declining  policy  persistency  during the nine
months ended September 30, 1998 affected the future profit margins  available to
absorb amortization of DPAC.

NOTE 2 - COMMITMENTS AND CONTINGENCIES

In the normal course of business operations,  National Foundation Life Insurance
Company  ("NFL"),  National  Financial  Insurance  Company  ("NFIC"),   American
Insurance  Company of Texas  ("AICT"),  and Freedom  Life  Insurance  Company of
America  ("FLICA"),  Westbridge's  primary  insurance  subsidiaries  ("Insurance
Subsidiaries"),  are  routinely  involved in various  claims  disputes and other
business  related  disputes.  In the opinion of management,  the  disposition of
these matters will have no material adverse effect on the Company's consolidated
financial position.

NOTE 3 - RECENT DEVELOPMENTS

On  September  16,  1998  (the  "Petition   Date"),   the  Company  commenced  a
reorganization  case (the "Chapter 11 Case") by filing a voluntary  petition for
relief under Chapter 11, Title 11 of the United States Code in the United States
Bankruptcy  Court for the  District of Delaware  (the  "Bankruptcy  Court").  In
addition,  on September 16, 1998,  the Company filed a disclosure  statement (as
amended,  the "Disclosure  Statement") and a proposed plan of reorganization (as
amended, the "Plan") with the Bankruptcy Court. The Disclosure Statement and the
Plan were subsequently amended on October 28, 1998. The filing of the Disclosure
Statement and Plan culminated months of negotiations  between the Company and an
ad hoc  committee  (the  "Ad  Hoc  Committee")  of  holders  of its  11%  Senior
Subordinated  Notes (the  "Senior  Notes") and 7-1/2%  Convertible  Subordinated
Notes (the "Convertible  Notes"). On October 30, 1998, the Company's  Disclosure
Statement was approved by entry of an order by the Bankruptcy Court. The Company
will be distributing  its Disclosure  Statement and Plan,  along with ballots to
vote to accept or reject the Plan and certain  other  materials  approved by the
Bankruptcy  Court,  to  the  holders  of  allowed  claims  and  equity  security
interests.  A summary of the key terms of the Plan is provided in  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations -
Recent Developments" contained in this Report.

NOTE 4 - EARNINGS PER SHARE

In February  1997,  the FASB issued SFAS No. 128,  "Earnings Per Share,"  ("SFAS
128") that revises the  standards for  computing  earnings per share  previously
found in APB Opinion No. 15,  "Earnings  Per Share."  SFAS 128  established  two
measures of earnings per share: "basic earnings per share" and "diluted earnings
per share." Basic earnings per share is computed by dividing income available to
common  shareholders by the weighted average number of common shares outstanding
during the period.  Diluted  earnings per share reflect the  potential  dilution
that could occur if  securities  or other  contracts  to issue common stock were
converted or exercised. SFAS 128 requires dual presentation of basic and diluted
earnings per share on the face of the income  statement  for all  entities  with
potential  dilutive  securities  outstanding.  Diluted  weighted  average shares
exclude all convertible securities for loss periods.

The  Company  adopted  SFAS 128 for the year  ended  December  31,  1997 and has
restated the earnings per share computations for the three and nine months ended
September 30, 1997 to conform to this pronouncement.

NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On January 1, 1998, the Company adopted SFAS No. 130,  "Reporting  Comprehensive
Income," ("SFAS 130"). This pronouncement  requires  comprehensive income (loss)
and its  components  to be reported  either in a separate  financial  statement,
combined and included with the statement of income or included in a statement of
changes in stockholders' equity. Comprehensive income (loss) equals the total of
net income (loss) and all other  non-owner  changes in equity.  For the Company,
comprehensive  income  (loss) will equal its  reported  consolidated  net income
(loss)  plus  the  change  in  the  unrealized  appreciation  (depreciation)  of
marketable  securities  from the previously  reported  period.  Currently,  this
accumulated other comprehensive income, net of tax, is reported in the Company's
Consolidated Balance Sheets as a separate component of stockholders' equity.

Comprehensive income (loss) is as follows, in thousands:

<TABLE>
<CAPTION>
                                                         Three Months Ended                 Nine Months Ended
                                                           September 30,                      September 30,
                                                  -------------------------------    -------------------------------
                                                       1998              1997             1998              1997
                                                  -------------    --------------    -------------    --------------

<S>                                               <C>              <C>               <C>              <C>         
Loss applicable to common shareholders            $    (7,018)     $   (20,360)      $   (15,542)     $   (26,586)
Other comprehensive income (loss):
  Unrealized holding gains arising during
     period, net of tax                                 1,120              210              2,193           2,146
  Less:  reclassification adjustment for
     gains included in net income, net
     of tax                                            (1,024)            (145)           (1,248)            (231)
                                                  -------------    --------------    -------------    --------------
Comprehensive loss, net of tax                    $    (6,922)     $   (20,295)      $   (14,597)     $   (24,671)
                                                  =============    ==============    =============    ==============
</TABLE>

Also in June 1997, the FASB issued SFAS No. 131,  "Disclosures about Segments of
an Enterprise and Related  Information," ("SFAS 131"). This pronouncement,  also
effective for calendar year 1998  financial  statements,  requires  companies to
report segment  information  consistent with the way executive  management of an
entity  disaggregates its operations  internally to assess  performance and make
decisions regarding resource allocations. Among the information to be disclosed,
SFAS 131  requires  an entity to report a  measure  of  segment  profit or loss,
certain  specific  revenue and expense items and segment  assets.  SFAS 131 also
requires reconciliations of total segment revenues, total segment profit or loss
and total  segment  assets to the  corresponding  amounts  shown in the entity's
consolidated  financial  statements.  The  adoption of SFAS 131 in 1998 will not
change the number or designation of the reportable  segments currently disclosed
in the Company's Consolidated Financial Statements.

In December 1997, the Accounting  Standards Executive Committee issued Statement
of Position  ("SOP") 97-3,  "Accounting by Insurance and Other  Enterprises  for
Insurance-Related  Assessments,"  which  provides  guidance  on  accounting  for
insurance-related  assessments.  The  Company  is  required  to  adopt  SOP 97-3
effective January 1, 1999.  Previously issued financial statements should not be
restated  unless the SOP is adopted  prior to the  effective  date and during an
interim  period.  The  adoption  of SOP 97-3 is not  expected to have a material
impact on the Company's results of operations, liquidity or financial position.






<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RECENT DEVELOPMENTS

Voluntary Petition for Relief Under Chapter 11 of the U.S. Bankruptcy

On  September  16,  1998  (the  "Petition   Date"),   the  Company  commenced  a
reorganization  case (the "Chapter 11 Case") by filing a voluntary  petition for
relief under Chapter 11, Title 11 of the United States Code in the United States
Bankruptcy  Court for the  District of Delaware  (the  "Bankruptcy  Court").  In
addition,  on September 16, 1998,  the Company filed a disclosure  statement (as
amended,  the "Disclosure  Statement") and a proposed plan of reorganization (as
amended, the "Plan") with the Bankruptcy Court. The Disclosure Statement and the
Plan were subsequently amended on October 28, 1998. The filing of the Disclosure
Statement and Plan culminated months of negotiations  between the Company and an
ad hoc  committee  (the  "Ad  Hoc  Committee")  of  holders  of its  11%  Senior
Subordinated  Notes (the  "Senior  Notes") and 7-1/2%  Convertible  Subordinated
Notes (the "Convertible  Notes"). On October 30, 1998, the Company's  Disclosure
Statement was approved by entry of an order by the Bankruptcy Court. The Company
will be distributing  its Disclosure  Statement and Plan,  along with ballots to
vote to accept or reject the Plan and certain  other  materials  approved by the
Bankruptcy  Court,  to  the  holders  of  allowed  claims  and  equity  security
interests.

Key  Terms  of the  Plan.  The  following  summary  of the  Plan  omits  certain
information set forth in the Plan. Any statements  contained  herein  concerning
the Plan are not necessarily  complete,  and in each such instance  reference is
made to the Plan,  a copy of which is filed as an exhibit to this  Report.  Each
such  statement is qualified in its entirety by such  reference.  On October 30,
1998, the Bankruptcy  Court  determined that the Disclosure  Statement  contains
adequate  information to permit a creditor or equity  security holder to make an
informed decision about the Plan. The Plan will now be presented to Westbridge's
impaired creditors and equity security holders for acceptance or rejection.

Westbridge's Plan 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 Plan include the following:

*    Realignment and deleveraging of Westbridge's current capital structure.

*    The distribution of new convertible  preferred stock to Credit Suisse First
     Boston ("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 Preferred  Stock,  and (d) holders of
     Westbridge's old common stock.

*    The  settlement  of a putative  class  action  brought on behalf of certain
     purchasers  and sellers of  Westbridge's  Convertible  Notes and old common
     stock during the period October 31, 1996 through October 31, 1997, which is
     currently  pending in the United  States  District  Court for the  Northern
     District of Texas.

*    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  Westbridge  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  Plan,  the  Company  has  entered  into a Stock  Purchase
Agreement  with  CSFB,  a  significant  noteholder,  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.  Under the terms of the Plan,  it is expected  that
CSFB will become the largest shareholder of reorganized Westbridge.

Emergence  from the Chapter 11 Case. In order for the Company to reorganize  and
emerge from Chapter 11 protection,  the Bankruptcy  Court must confirm a plan of
reorganization.  The Company will be distributing  its Disclosure  Statement and
Plan,  along with ballots to vote to accept or reject the Plan and certain other
materials  approved by the  Bankruptcy  Court,  to the holders of all classes of
impaired  creditors and equity  security  interests.  The  Bankruptcy  Court has
scheduled  a hearing to confirm  the Plan on  December  17,  1998.  Among  other
things,  to confirm a plan the  Bankruptcy  Court is generally  required to find
that (a) each  impaired  class of creditors  and equity  security  holders will,
pursuant to the Plan,  receive at least as much as the class would have received
in liquidation  of the Company,  (b) each impaired class of creditors and equity
security  holders  has  accepted  the  Plan  by  the  requisite  vote,  and  (c)
confirmation of the Plan is not likely to be followed by the liquidation or need
for further  financial  restructuring  of the Company.  If any impaired class of
creditors and equity  security  holders does not accept a plan and assuming that
all other  requirements  of the Bankruptcy Code are met, the plan proponents may
invoke the so-called "cram-down"  provisions of the Bankruptcy Code, whereby the
Bankruptcy Court may confirm a plan  notwithstanding  the  non-acceptance of the
plan by an impaired  class of creditors  and equity  security  holders if, among
other things, the plan is fair and equitable and does not discriminate  unfairly
with respect to each impaired class of claims or interests that has not accepted
the plan. The Official Creditors'  Committee has expressed support for the Plan.
The effectiveness of the Plan is subject to various conditions precedent.

Determination of Premium Deficiency

During the nine months  ended  September  30,  1998,  the Company  continued  to
experience  adverse  loss ratios and  declining  persistency  on its old Medical
Expense and Medicare Supplement products, although the loss ratios for the third
quarter of 1998 reflected an improvement  over the first and second  quarters of
1998. As a result of these factors,  the Company  undertook a revaluation of the
recoverability  of  Deferred  Policy  Acquisition  Costs  ("DPAC")  in the third
quarter.  Based on the results of this  review,  the Company  determined  that a
premium  deficiency  existed  and  recorded  a  non-cash  charge to  expense  of
approximately  $5.0 million for the quarter and nine months ended  September 30,
1998.  This  adjustment  had no impact on the Company's  cash position or on the
statutory capital and surplus of the Insurance  Subsidiaries as of September 30,
1998.

Generally accepted accounting  principles require the immediate recognition of a
premium  deficiency  by charging  the  unamortized  DPAC to  expense.  A premium
deficiency occurs when the projected present value of future premiums associated
with these policies will not be adequate to cover the projected present value of
future  payments for benefits and related  amortization of DPAC. The combination
of adverse claim loss ratios and declining  policy  persistency  during the nine
months ended September 30, 1998 affected the future profit margins  available to
absorb amortization of DPAC.

The Insurance  Subsidiaries will continue to incur operating losses on these old
lines of business  until such time as the necessary  rate increases can be fully
implemented.  There  can be no  assurance  that the  full  extent  of such  rate
increase  requests  will be approved or that the impact of these rate  increases
will result in profitability on such old lines.



FORWARD-LOOKING STATEMENTS:

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for  forward-looking  statements.  The  preceding  statements  and certain other
statements  contained in the Notes to the Consolidated  Financial Statements and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations are forward-looking statements.  These forward-looking statements are
based on 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 Report 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,   actions  that  may  be  taken  by  insurance   regulatory
authorities,  unexpected  developments  which may occur in 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 report can also
be found in the  Company's  reports to the  Securities  and Exchange  Commission
("SEC") on Form 8-K 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.  Subsequent  written or oral  statements  attributable  to the  Company or
persons  acting on its behalf are expressly  qualified in their  entirety by the
cautionary  statements  in this  Quarterly  Report  and  those in the  Company's
reports  previously  filed with the SEC. Copies of these filings may be obtained
by contacting the Company or the SEC.


BUSINESS OVERVIEW

The Company  derives its revenue  primarily  from  premiums  from its  insurance
products and, to a  significantly  lesser extent,  from fee and service  income,
income  earned on  invested  assets,  and gains on the sales or  redemptions  of
invested assets.  The Company's  primary expenses include benefits and claims in
connection with its insurance products,  amortization of DPAC,  commissions paid
on policy renewals,  general and administrative  expenses associated with policy
and  claims  administration,  taxes,  licenses  and  fees  and  interest  on its
indebtedness  under the Credit Agreement.  In addition to the foregoing expenses
and prior to the filing of the Chapter 11 Case,  Westbridge was obligated to pay
interest on its Senior Notes and Convertible  Notes, and dividends on its Series
A Preferred Stock if, and when, declared by the Board of Directors.

Fee and service income is generated from (i) commissions received by the Company
for sales of unaffiliated managed care products  underwritten  primarily by HMOs
and other managed care  organizations,  (ii) telemarketing  services,  and (iii)
printing services.

Benefits  and claims are  comprised  of (i) claims  paid,  (ii) changes in claim
reserves for claims  incurred  (whether or not  reported),  and (iii) changes in
policy  benefit  reserves  based on  actuarial  assumptions  of  future  benefit
obligations not yet incurred on policies in force.

Under generally accepted accounting  principles,  a DPAC asset is established to
properly  match the costs of writing new business  against the  expected  future
revenues or gross profits from the policies.  These costs, which are capitalized
and  amortized,   consist  of  first-year   commissions  in  excess  of  renewal
commissions and certain home office expenses  related to selling,  policy issue,
and underwriting. The DPAC for accident and health policies and traditional life
policies are amortized over future premium revenues of the business to which the
costs are related.  The rate of amortization  depends on the expected pattern of
future premium  revenues for the block of policies.  The scheduled  amortization
for a block of policies is  established  when the policies are issued.  However,
the  actual  amortization  of DPAC  will  reflect  the  actual  persistency  and
profitability of the business.  For example,  if actual policy  terminations are
higher  than  expected  or if  future  losses  are  anticipated,  DPAC  could be
amortized more rapidly than  originally  scheduled or  written-off,  which would
reduce  earnings  in  the  applicable  period.  See  "Results  of  Operations  -
Amortization of DPAC". Also included in DPAC is the cost of insurance  purchased
relating to acquired blocks of business.

Acquisitions.  Since 1992,  the Company has from time to time acquired  seasoned
blocks of business to supplement its revenue. These acquisitions included blocks
of insurance  policies from American Integrity  Insurance Company ("AII"),  Life
and Health Insurance  Company of America ("LHI"),  Dixie National Life Insurance
Company ("DNL"), NFIC, AICT and FLICA.

Premiums. The following table shows the premiums, in thousands,  received by the
Company   as  a   result   of   internal   sales   and   acquisitions.   Certain
reclassifications  have been made to 1997  amounts  in order to  conform to 1998
presentation.

<TABLE>
<CAPTION>
                                                          Three Months Ended                 Nine Months Ended
                                                             September 30,                      September 30,
                                                   ------------- -- --------------    ------------- -- --------------
                                                        1998             1997              1998             1997
                                                   -------------    --------------    -------------    --------------
<S>                                               <C>              <C>               <C>              <C>
Company-Issued Policies:
     First-year premiums                           $      4,183     $      8,569      $     15,623     $     29,860
     Renewal premiums                                    19,426           20,964            59,879           57,759
                                                   -------------    --------------    -------------    --------------
     Total Company-issued policy premiums                23,609           29,533            75,502           87,619
                                                   -------------    --------------    -------------    --------------

Acquired Policies:
     AII                                                  1,522            1,772             4,656            5,464
     LHI                                                    329              377             1,021            1,171
     DNL                                                    635              706             2,013            2,140
     NFIC and AICT                                        4,608            5,026            14,306           15,935
     FLICA and others                                     2,575            3,036             8,470            9,963
                                                   -------------    --------------    -------------    --------------
     Total acquired policy premiums                       9,669           10,917            30,466           34,673
                                                   -------------    --------------    -------------    --------------

     Total Premiums                                $     33,278     $     40,450      $    105,968     $    122,292
                                                   =============    ==============    =============    ==============
</TABLE>

Generally,  as a result of acquisitions of policies in force and the transfer of
assets and liabilities relating thereto, the Company receives higher revenues in
the form of premiums and net investment  income and experiences  higher expenses
in the form of  benefits  and  claims,  amortization  of DPAC,  commissions  and
general and  administrative  expenses.  The Company  expects that premiums,  net
investment  income,  net  realized  gains on  investments,  benefits and claims,
amortization  of DPAC,  commissions  and  general  and  administrative  expenses
attributable  to these  acquired  policies will continue to decline over time as
the acquired policies lapse.


YEAR 2000 ISSUES

The Company has  initiated  an  enterprise-wide  program  designed to  determine
whether all of its Information  Technology ("I/T"), such as computer systems and
related software  applications,  and non-I/T systems, such as facsimile machines
and copy machines,  will function  properly as the millennium  (the "Year 2000")
approaches.  The Year 2000 problem is pervasive  and complex as virtually  every
computer operation will be affected in some way by the rollover of the two-digit
year value to 00. The issue is whether computer systems will properly  recognize
date-sensitive  information  when the year changes to 2000.  Systems that do not
properly  recognize such  information  could generate  erroneous data or cause a
system to fail.

The Company is highly reliant upon computer systems and software, as are many of
the  Company's  principal  businesses  with which it  interacts.  The  Company's
ability to service its  policyholders  and agents is dependent upon accurate and
timely transaction  reporting.  Transaction  reporting in turn is dependent upon
the  Company's  highly  complex  interdependent  computer  hardware,   software,
telecommunications  and desktop applications,  and the information obtained from
its critical business partners.

The Company's overall Year 2000 remediation  effort has focused on preparing the
computer systems, infrastructure and facilities for the Year 2000. The following
phases  encompass the Year 2000 plan:  (i)  assessment of all business  critical
systems,  including I/T and non-I/T  systems,  (ii)  remediation or upgrading of
business critical systems, (iii) testing of remediated and updated systems, (iv)
implementation of remediated and updated systems, and (v) contingency planning.

The Company has engaged certain outside vendors and dedicated  certain employees
on a full time  basis to help in the full array of its Year 2000  efforts.  This
includes  system  assessment and  monitoring  advice,  actual code  remediation,
communication  and  consultation  with  critical  business  partners and testing
resources.

Under the Company's enterprise-wide  remediation program, the most effective I/T
systems  solution  will be to purchase a new, more modern,  Year 2000  compliant
system. This replacement effort is well underway, on schedule,  and targeted for
implementation in the third quarter of 1999.

The cost of the I/T  systems  replacement  will be  capitalized  as an asset and
amortized over the expected useful life of the system. The cost to remediate the
existing I/T systems will be charged to operating expense as incurred.

The Company has also  completed  the  assessment  of its non-I/T  systems and is
currently  remediating  and  upgrading  those  systems.  This  component  of the
enterprise-wide   remediation  program  is  on  schedule  and  is  targeted  for
completion  in the  fourth  quarter  of 1999.  The  non-I/T  systems  have  been
prioritized to remediate critical systems early in 1999 and non-critical systems
later in the year.

Another  significant  component  of the  Company's  enterprise-wide  remediation
effort is to determine  whether critical  business partners and vendors are Year
2000  compliant.  The assessment and testing of the Year 2000 readiness of these
critical  business  partners and vendors have been integrated with the Company's
I/T and non-I/T  Year 2000 system  strategies.  As a part of this  process,  the
Company  has  written  letters and  corresponded  with its  outside  vendors and
critical  business  partners to determine whether they are also prepared for the
Year 2000.

The Company's contingency plan is to make the existing I/T systems, which are to
be replaced,  Year 2000  compliant.  This effort is currently in the remediation
and testing  phases of the project and is scheduled  to be completed  during the
second  quarter of 1999.  The  Company's  contingency  plan has  identified  and
prioritized  the Year  2000  exposures  within  the  existing  I/T  systems.  By
remediating  these I/T exposures on a priority basis,  the Company is working to
limit its Year 2000  contingency  risk to lower  priority  I/T  exposures in the
event that the Company's  most  reasonably  likely worst case Year 2000 scenario
were to occur.

The most  reasonably  likely worst case Year 2000 scenario would be that certain
functions within the Company's  existing I/T systems would  incorrectly  process
policy information such as policy paid-to dates,  premium billings,  commissions
and claims.  Under this scenario,  the Company anticipates these issues would be
both isolated and temporary.

The Company  expects to incur  internal  staff costs as well as  consulting  and
other  expenses  of  approximately  $4.0 to $5.0  million  related  to  computer
systems,  infrastructure,  and facilities  enhancements necessary to prepare for
the Year 2000.  For the nine months ending  September 30, 1998,  the Company has
incurred approximately $0.3 million in expenses associated with this effort.

The Company  expects its Year 2000 program to be  completed in a timely  manner;
however,  the Year 2000  computer  problem  creates  risk for the  Company  from
unforeseen problems in its own computer systems and from third parties with whom
the Company deals on financial transactions. Such potential, unforeseen problems
in the Company's  and/or third parties'  computer  systems could have a material
impact on the Company's ability to conduct its business.


RESULTS OF OPERATIONS

Three Months and Nine Months Ended September 30, 1998 Compared With Same Periods
Ended September 30, 1997

Premiums

Three months ended  September 30, 1998.  Premiums  decreased  $7.2  million,  or
17.8%, from $40.5 million to $33.3 million as a result of declining  persistency
of inforce  policies and a reduction in the Company's  marketing  results.  This
decrease  resulted  from a decrease in first-year  premiums from  Company-issued
policies  of $4.4  million,  or 51.2%,  a  decrease  in  renewal  premiums  from
Company-issued  policies  of $1.5  million,  or 7.2%,  and a decrease in renewal
premiums from acquired policies of $1.3 million, or 11.9%.

The  decrease  in   first-year   premiums  from   Company-issued   policies  was
attributable  to a decrease  in Medical  Expense  premiums of $2.6  million,  or
41.9%, a decrease in Medicare Supplement premiums of $1.5 million, or 88.2%, and
a decrease in Specified Disease and other premiums of $0.3 million, or 42.9%.

The decrease in renewal premiums from  Company-issued  policies was attributable
to a decrease  in Medicare  Supplement  premiums of $1.3  million,  or 18.1%,  a
decrease in Medical  Expense  premiums of $0.4  million,  or 3.9%, a decrease in
other  premiums of $0.2  million,  and was offset by an  increase  in  Specified
Disease premiums of $0.4 million, or 12.5%.

The decrease in renewal  premiums from acquired  policies was  attributable to a
decrease of $0.5 million,  or 18.5%,  from the policies  acquired from FLICA,  a
decrease of $0.3 million,  or 6.0%,  from the policies  acquired in the NFIC and
AICT  acquisition,  and a decrease of $0.5 million,  or 20.0%, from the policies
acquired from AII and other acquisitions.

Nine months ended  September 30, 1998.  Premiums  decreased  $16.3  million,  or
13.3%,  from  $122.3  million  to  $106.0  million  as  a  result  of  declining
persistency  of inforce  policies  and a reduction  in the  Company's  marketing
results.  This decrease  resulted  from a decrease in  first-year  premiums from
Company-issued  policies  of $14.3  million,  or 47.8%,  a  decrease  in renewal
premiums from acquired  policies of $3.9  million,  or 11.5%,  and a decrease in
first-year  premiums from acquired  policies of $0.2 million,  or 33.3%, and was
offset by an increase in renewal premiums from  Company-issued  policies of $2.1
million, or 3.6%.

The  decrease  in   first-year   premiums  from   Company-issued   policies  was
attributable  to a decrease  in Medical  Expense  premiums of $7.8  million,  or
37.5%, a decrease in Medicare Supplement premiums of $6.2 million, or 81.6%, and
a decrease in other  premiums of $0.4 million,  and was offset by an increase in
Specified Disease premiums of $0.1 million, or 9.1%.

The decrease in renewal  premiums from acquired  policies was  attributable to a
decrease of $1.6 million,  or 10.1%,  from the policies acquired in the NFIC and
AICT  acquisition,  a decrease  of $1.2  million,  or 14.0%,  from the  policies
acquired from FLICA, and a decrease of $1.1 million, or 11.6%, from the policies
acquired from AII and other acquisitions.

The decrease in first-year premiums from acquired policies was attributable to a
decrease of $0.2 million, or 40.0%, from the policies acquired from FLICA.

The increase in renewal premiums from  Company-issued  policies was attributable
to an increase in Medical  Expense  premiums of $2.5  million,  or 9.1%,  and an
increase in Specified Disease premiums of $0.6 million,  or 6.4%, and was offset
by a decrease in Medicare Supplement premiums of $1.0 million, or 5.0%.


Net Investment  Income.  Net investment income decreased $0.3 million,  or 9.4%,
from $3.2 million to $2.9 million for the three months ended September 30, 1998.
The decrease in net investment income is due to a lower average  investment base
during the three months ended  September 30, 1998 as compared to the same period
a year ago. Net investment  income increased $1.3 million,  or 16.3%,  from $8.0
million to $9.3  million for the nine  months  ended  September  30,  1998.  The
increase was attributable to a higher average investment base resulting from the
net proceeds  received from the Company's sale of its  Convertible  Notes during
the second quarter of 1997 and from higher average portfolio yields.

Fee and Service Income. Fee and service income decreased $0.4 million,  or 8.9%,
from $4.5 million to $4.1 million for the three months ended September 30, 1998.
The  Company's  sales of  unaffiliated  managed care  products were lower in the
third quarter of 1998 than in the same period in the prior year. Fee and service
income increased $0.1 million,  or 0.8%, from $12.1 million to $12.2 million for
the  nine  months  ended   September  30,  1998.  This  increase  was  primarily
attributable  to  commissions  earned  during  the  first  quarter  of  1998  on
unaffiliated managed care product sales.

Benefits  and Claims.  During the nine months  ended  September  30,  1998,  the
Insurance Subsidiaries continued to experience adverse loss ratios and declining
persistency on certain old Medical Expense and Medicare Supplement products. The
Insurance  Subsidiaries  have  developed  new  insurance  products with stricter
underwriting procedures and lower agent commissions.  In addition, the Insurance
Subsidiaries  are  implementing  rate increases to the extent  approved by state
regulatory  authorities or offering higher deductible benefit options on certain
old  lines of  business  in order to  mitigate  the  effect  of  adverse  claims
experience on such old lines. The Insurance Subsidiaries have also implemented a
policyholder  retention  program  designed to mitigate  the impact of  declining
persistency on such old lines  receiving rate  increases.  However,  the Company
expects that the Insurance  Subsidiaries will continue to incur operating losses
on these old lines of business  until such time as the necessary  rate increases
can be fully implemented. There can be no assurance that the full extent of such
rate  increase  requests  will be  approved  or that the  impact  of these  rate
increases will result in profitability on such old lines.

Three months ended  September 30, 1998.  Benefits and claims  expense  decreased
$28.9 million, or 54.9%, from $52.6 million to $23.7 million.  This decrease was
attributable  to a decrease in benefits and claims  expense from  Company-issued
and acquired  policies of $23.5  million and $5.4  million,  or 57.0% and 47.4%,
respectively.

The decrease in benefits and claims  expense  from  Company-issued  policies was
primarily attributable to a decrease in Medical Expense claims of $16.2 million,
or 59.6%,  and a decrease  in Medicare  Supplement  claims of $5.8  million,  or
53.7%, and a decrease in Specified Disease and other claims of $1.5 million,  or
48.4%.

The decrease in benefits and claims expense from acquired policies was primarily
attributable to a decrease of $3.3 million, or 52.4%, from the policies acquired
in the NFIC and AICT acquisition, a decrease of $1.0 million, or 76.9%, from the
policies  acquired from LHI and DNL, a decrease of $0.4  million,  or 28.6% from
the policies  acquired from AII, and a decrease of $0.7 million,  or 29.1%, from
the policies acquired from FLICA.

Nine months ended  September  30, 1998.  Benefits and claims  expense  decreased
$31.6 million, or 29.0%, from $109.1 million to $77.5 million. This decrease was
attributable  to a decrease in benefits and claims  expense from  Company-issued
policies of $22.4 million,  or 28.2%,  and a decrease from acquired  policies of
$9.2 million, or 31.1%.

The decrease in benefits and claims  expense  from  Company-issued  policies was
primarily attributable to a decrease in Medical Expense claims of $13.1 million,
or 27.3%, a decrease in Medicare  Supplement  claims of $8.7 million,  or 34.5%,
and a decrease in Specified Disease claims of $0.6 million, or 9.8%.

The decrease in benefits and claims expense from acquired policies was primarily
attributable to a decrease of $6.3 million, or 37.5%, from the policies acquired
in the NFIC and AICT acquisition, a decrease of $1.5 million, or 28.8%, from the
policies  acquired from FLICA,  a decrease of $0.8 million,  or 20.0%,  from the
policies  acquired from AII, and a decrease of $0.6 million,  or 16.7%, from the
policies acquired from LHI and DNL.

Amortization of DPAC. The Company  recognized a $5.0 million  non-cash charge of
DPAC during the third quarter of 1998 (see "Recent Developments - Recognition of
Premium  Deficiency")  and  recognized a $65.0 million  non-cash  charge of DPAC
during  the fourth  quarter  of 1997.  As a result,  the  Company  is  currently
recording commission expense on such old lines of business that would ordinarily
be deferred  and  amortized as a component of DPAC.  For  comparative  purposes,
current  period DPAC  amortization  is lower than prior  periods and  commission
expense is higher than prior periods.

Three months ended  September  30, 1998.  Amortization  of DPAC  decreased  $7.9
million,  or  84.9%,  from $9.3  million  to $1.4  million.  This  variance  was
attributable to decreases of $5.4 million and $3.3 million,  from Company-issued
Medical Expense products and Medicare Supplement products, respectively, and was
offset by increases  of $0.6  million and $0.2 million in acquired  policies and
Specified Disease products, respectively.

Nine months ended  September  30, 1998.  Amortization  of DPAC  decreased  $19.2
million,  or 85.0%,  from  $22.6  million to $3.4  million.  This  variance  was
attributable to decreases of $13.1 million,  $6.1 million and $0.2 million, from
Company-issued  Medical Expense  products,  Company-issued  Medicare  Supplement
products, and acquired policies,  respectively, and was offset by an increase of
$0.2 million from Specified Disease and other products.

Commissions

Three months ended September 30, 1998.  Commissions  increased $2.2 million,  or
46.8%,  from $4.7 million to $6.9 million.  This variance was  attributable to a
decrease in the commissions that would ordinarily be deferred and amortized as a
component  of DPAC and an  increase in the  amounts  that are being  expensed as
commissions on a current basis.  The increase was attributable to an increase in
commissions  of $1.6 million on  Company-issued  policies and $0.6  million,  or
26.1%, on sales of unaffiliated insurance products.

Nine months ended September 30, 1998.  Commissions  increased $13.2 million,  or
110.9%, from $11.9 million to $25.1 million. This variance was attributable to a
decrease in the commissions that would ordinarily be deferred and amortized as a
component  of DPAC and an  increase in the  amounts  that are being  expensed as
commissions on a current basis.  The increase was attributable to an increase in
commissions  of $12.2 million on  Company-issued  policies and $1.3 million,  or
17.3%, on sales of unaffiliated insurance products, and was offset by a decrease
in commissions on sales of acquired policies of $0.3 million, or 8.1%.

General and Administrative  Expenses.  For the three months ending September 30,
1998, general and administrative expenses decreased $1.9 million, or 21.8%, from
$8.7 million to $6.8  million.  For the nine months  ending  September 30, 1998,
general and administrative expenses decreased $3.2 million, or 13.4%, from $23.9
million  to $20.7  million.  These  decreases  were  primarily  attributable  to
corporate overhead reduction  initiatives that were implemented beginning in the
fourth quarter of 1997.

Recognition of Premium Deficiency. For the quarter ended September 30, 1998, the
Company  recorded a non-cash  charge to expense of  approximately  $5.0 million.
This  adjustment  has no impact on the Company's  cash position at September 30,
1998 and does not impact the  statutory  capital  and  surplus of the  Insurance
Subsidiaries. See "Recent Developments - Recognition of Premium Deficiency".

Reorganization  Expense.  The  Company  is  responsible  for  paying the fees of
certain professional advisors in connection with the Chapter 11 Case. During the
three  and  nine  months  ended   September  30,  1998,  the  Company   incurred
approximately $1.6 million and $3.7 million,  respectively,  in expenses related
to these efforts.  During the nine months ended  September 30, 1997, the Company
incurred  approximately  $3.1 million in  reorganization  expenses related to an
internal reorganization of management.

Taxes,  Licenses and Fees. Taxes,  licenses and fees decreased $0.3 million,  or
20.0% from $1.5 million to $1.2 million for the three months ended September 30,
1998.  Taxes,  licenses and fees  decreased  $0.6 million,  or 13.0%,  from $4.6
million to $4.0 million for the nine months  ended  September  30,  1998.  These
decreases are attributable to the declining premium base for which premium taxes
are levied.

Interest Expense.  Commensurate with the filing of the Chapter 11 Case, interest
on  the  Company's   Convertible   Notes  ceases  to  accumulate.   Accordingly,
pre-petition  accrued  interest  totaled  approximately  $7.3  million  on  such
Convertible Notes as of September 30, 1998.

Under the terms of the Plan,  interest on the Senior  Notes  continues to accrue
post-petition at the rate of 11% per annum.  Accordingly,  pre-petition  accrued
interest totaled  approximately $2.1 million and post-petition  accrued interest
totaled  approximately  $0.1 million on such Senior  Notes as of  September  30,
1998.

Interest  expense  decreased  $0.2 million,  or 9.5%,  from $2.1 million to $1.9
million  for the  three  months  ended  September  30,  1998  due to the stay of
interest on the  Convertible  Notes as of the Petition  Date.  Interest  expense
increased $1.2 million, or 24.0%, from $5.0 million to $6.2 million for the nine
months ended September 30, 1998 due to the accrued but unpaid  interest  expense
related to the issuance of $70.0  million  aggregate  principal of the Company's
Convertible Notes in the second quarter of 1997.

Provision for (benefit from) Income Taxes.  During 1997, the benefit from income
taxes was  calculated  by  applying  the 35%  statutory  federal tax rate to the
Company's pre-tax income for the three and nine months ended September 30, 1997.
The change in the benefit from income taxes during 1998 is directly attributable
to the net loss  recorded by the  Company  for the three and nine  months  ended
September 30, 1998. As a result, net operating loss carryforwards  ("NOLs") were
generated that will be available for offset against taxable income  generated in
future reporting periods. The Company has determined that it is more likely than
not that it will be unable to utilize  all of these  NOLs  prior to the  related
expiration  dates.  In this  connection,  the Company  has  recorded a valuation
allowance  that  significantly  reduces  its benefit  from income  taxes for the
current  year from the amount that would have been  derived by applying  the 35%
statutory  federal tax rate to the Company's pre-tax loss for the three and nine
months ended September 30, 1998.

Extraordinary  Item.  During the second quarter ended June 30, 1997, the Company
recognized  an  extraordinary  loss on the early  extinguishment  of debt in the
amount of $1.0 million,  net of taxes. This extraordinary  charge was related to
the termination and recapture of a block of reinsured insurance policies and the
recognition of unamortized  financing  fees  associated  with the prepayment and
refinancing of the Company's revolving credit facility.

Preferred Stock Dividends.  Commensurate with the filing of the Chapter 11 Case,
dividends  on the  Company's  Series A  Preferred  Stock  cease  to  accumulate.
Accordingly, the Company has recorded approximately $1.3 million of pre-petition
accrued dividends on such Series A Preferred Stock as of September 30, 1998.

During the three months ended  September  30, 1998,  one thousand  three hundred
twenty-five  (1,325)  shares of the  Company's  Series A  Preferred  Stock  were
converted into 157,551 shares of the Company's Common Stock. As a result of this
conversion of shares,  the Company was no longer required to hold an accrual for
the unpaid,  cumulative  preferred stock dividends associated with the converted
shares.

The Company's  charge for preferred  stock  dividends for the three months ended
September 30, 1998  represents  the  accumulated  preferred  dividends on 11,935
shares of Series A Preferred  Stock from July 1, 1998 through the Petition  Date
reduced by the accrual of dividends  from October 31, 1997 to June 30, 1998 that
was foregone as a result of the share conversion during the quarter.

FINANCIAL CONDITION

Liquidity, Capital Resources and Statutory Capital and Surplus

Westbridge

Westbridge  is an  insurance  holding  company,  the  principal  assets of which
consist of the capital stock of its operating  subsidiaries and invested assets.
Accordingly,  Westbridge's  sources of funds are comprised of dividends from its
operating subsidiaries,  advances and management fees from non-insurance company
subsidiaries,  and  tax  contributions  under  a  tax  sharing  agreement  among
Westbridge  and its  subsidiaries.  In  addition,  for  the  nine  months  ended
September 30, 1998, Westbridge made capital contributions totaling approximately
$5.5 million to its Insurance Subsidiaries. As of September 30, 1998, Westbridge
had approximately $10.5 million in unrestricted cash and invested assets.

Dividends  paid by the Insurance  Subsidiaries  are determined by and subject to
the regulations of the insurance laws and practices of the insurance departments
of their respective state of domicile. NFL, a Delaware domestic company, may not
declare or pay dividends from any source other than earned  surplus  without the
Delaware Insurance  Commissioner's approval. The Delaware Insurance Code defines
earned surplus as the amount equal to the unassigned funds as set forth in NFL's
most recent statutory annual statement including surplus arising from unrealized
gains or revaluation of assets.  Delaware life insurance companies may generally
pay ordinary  dividends or make  distributions  of cash or other property within
any twelve  month  period  with a fair  market  value  equal to or less than the
greater of 10% of surplus as regards  policyholders as of the preceding December
31 or the net gain from  operations  for the twelve month  period  ending on the
preceding  December 31.  During 1998,  NFL is  precluded  from paying  dividends
without the prior approval of the Delaware Insurance  Commissioner as its earned
surplus is negative.  Further,  NFL has agreed to obtain prior  approval for any
future dividends.

NFIC and AICT, Texas domestic companies, may make dividend payments from surplus
profits or earned surplus  arising from its business.  The Texas  Insurance Code
defines earned surplus as unassigned surplus not including any unrealized gains.
Texas life  insurance  companies may  generally  pay ordinary  dividends or make
distributions  of cash or other  property  within any twelve month period with a
fair market value equal to or less than the greater of 10% of surplus as regards
policyholders  as of the preceding  December 31 or the net gain from  operations
for the twelve month period  ending on the  preceding  December 31. Any dividend
exceeding  the  applicable  threshold is considered  extraordinary  and requires
prior  approval of the Texas  Insurance  Commissioner.  NFIC's and AICT's earned
surplus  is  negative,  and as such,  each  company  is  precluded  from  paying
dividends  during  1998  without  the  prior  approval  of the  Texas  Insurance
Commissioner.

FLICA, a Mississippi  domestic company, may make dividend payments only from its
actual  net  surplus  computed  as  required  by  law in  its  statutory  annual
statement.  Mississippi  life  insurance  companies  may  generally pay ordinary
dividends  or make  distributions  of cash or other  property  within any twelve
month period with a fair market value not exceeding the lesser of 10% of surplus
as regards  policyholders  as of the preceding  December 31 or the net gain from
operations for the twelve month period ending on the preceding  December 31. Any
dividend  exceeding the applicable  threshold  amount requires prior approval of
the Mississippi Insurance Commissioner. FLICA is precluded from paying dividends
to NFL during 1998  without  the prior  approval  of the  Mississippi  Insurance
Commissioner  as it  recorded  a net loss  from  operations  for the year  ended
December 31, 1997.

Generally,  all states  require  insurance  companies  to  maintain  capital and
surplus  that is  reasonable  in  relation  to their  existing  liabilities  and
adequate to their financial needs. Delaware, Texas and Mississippi also maintain
discretionary  powers relative to the declaration and payment of dividends based
upon an insurance company's financial position. In light of the statutory losses
incurred by the Insurance Subsidiaries during 1997 and for the nine months ended
September 30, 1998, Westbridge does not expect to receive any dividends from its
Insurance Subsidiaries for the foreseeable future.

After a long and careful review of Westbridge's  existing business and prospects
as an ongoing business, Westbridge, in consultation with its legal and financial
advisors  and  the Ad Hoc  Committee  and  its  legal  and  financial  advisors,
concluded  that  recoveries  to creditors  and equity  security  holders will be
maximized by Westbridge's continued operation as a going concern under the terms
of the Plan.  To  achieve  that  higher  value,  the Plan  contemplates  (i) the
distribution  of cash to the  holders  of the  Senior  Notes and the sale of new
convertible  preferred  stock to CSFB  and,  at  their  option,  holders  of the
Convertible Note claims as of May 20, 1998 to fund such distributions,  (ii) the
issuance of new  convertible  preferred stock to CSFB as a holder of Senior Note
claims,  (iii) the  issuance  of new common  stock to the  holders of  unsecured
claims,  including,  but not limited to, the holders of Convertible Note claims,
(iv) the  issuance  of new common  stock and new  warrants to the holders of old
Series A  Preferred  Stock and old common  stock,  (v) the  cancellation  of old
common stock, old warrants,  old Series A Preferred Stock, old restricted common
stock and old incentive stock options, (vi) the settlement of the Putative Class
Action lawsuit, and (vii) the continuation of the Credit Agreement unabated.

In order for the Company to  reorganize  and emerge from Chapter 11  protection,
the Bankruptcy Court must confirm a plan of reorganization.  The Company will be
distributing  its Disclosure  Statement and Plan,  along with ballots to vote to
accept or reject the Plan and certain other materials approved by the Bankruptcy
Court,  to the holders of all classes of impaired  creditors and equity security
interests.  The Bankruptcy  Court has scheduled a hearing to confirm the Plan on
December 17, 1998. Among other things, to confirm a plan the Bankruptcy Court is
generally  required to find that (a) each impaired class of creditors and equity
security  holders  will,  pursuant to the Plan,  receive at least as much as the
class would have received in liquidation of the Company, (b) each impaired class
of creditors and equity security  holders has accepted the Plan by the requisite
vote  and (c)  confirmation  of the Plan is not  likely  to be  followed  by the
liquidation or need for further financial  restructuring of the Company.  If any
impaired class of creditors and equity  security  holders does not accept a plan
and assuming that all other  requirements  of the  Bankruptcy  Code are met, the
plan  proponents  may  invoke  the  so-called  "cram-down"   provisions  of  the
Bankruptcy Code, whereby the Bankruptcy Court may confirm a plan notwithstanding
the  non-acceptance  of the plan by an impaired  class of  creditors  and equity
security holders if, among other things, the plan is fair and equitable and does
not  discriminate  unfairly  with  respect to each  impaired  class of claims or
interests that has not accepted the plan. The Official Creditors'  Committee has
expressed  support  for the Plan.  The  effectiveness  of the Plan is subject to
various conditions precedent.

During the  pendency of the Chapter 11 Case,  Westbridge's  primary  obligations
will consist of reorganization expenses and the funding of the ongoing statutory
capital requirements of its Insurance Subsidiaries.  Assuming Westbridge emerges
from the Bankruptcy Court protection as described above, its primary obligations
will consist of supporting the ongoing  statutory  capital  requirements  of its
Insurance Subsidiaries.

Insurance Subsidiaries

The primary  sources of cash for the  Insurance  Subsidiaries  are  premiums and
income on invested assets.  Additional cash is periodically  provided by capital
contributions  from  Westbridge and from the sale of short-term  investments and
could, if necessary,  be provided through the sale of long-term  investments and
blocks  of  business.  The  Insurance  Subsidiaries'  primary  uses for cash are
benefits  and claims,  commissions,  general and  administrative  expenses,  and
taxes, licenses and fees.

During the nine months ended  September  30, 1998,  the  Insurance  Subsidiaries
continued to experience adverse loss ratios and declining persistency on certain
old Medical Expense and Medicare Supplement products. The Insurance Subsidiaries
have developed new insurance products with stricter underwriting  procedures and
lower  agent   commissions.   In  addition,   the  Insurance   Subsidiaries  are
implementing   rate  increases  to  the  extent  approved  by  state  regulatory
authorities or offering higher  deductible  benefit options on certain old lines
of business in order to mitigate the effect of adverse claims experience on such
old lines.  The Insurance  Subsidiaries  have also  implemented  a  policyholder
retention  program  designed to mitigate the impact of declining  persistency on
such old lines receiving rate increases.  However,  the Company expects that the
Insurance  Subsidiaries  will  continue to incur  operating  losses on these old
lines of business  until such time as the necessary  rate increases can be fully
implemented.  There  can be no  assurance  that the  full  extent  of such  rate
increase  requests  will be approved or that the impact of these rate  increases
will result in profitability on such old lines.

For the nine  months  ended  September  30,  1998,  the  Insurance  Subsidiaries
received  capital  contributions   totaling   approximately  $5.5  million  from
Westbridge.  To the extent that the Insurance  Subsidiaries  experience  further
statutory operating losses, additional capital may be required.

In the ordinary course of business, the Company advances commissions on policies
written by its general agencies and their agents.  The Company is reimbursed for
these advances from the commissions earned over the respective policy's life. In
the event  that  policies  lapse  prior to the time the  Company  has been fully
reimbursed, the general agency or the individual agents, as the case may be, are
responsible  for  reimbursing  the  Company for the  outstanding  balance of the
commission  advance.  For the nine months ended September 30, 1998 and 1997, the
Company has recorded a provision for uncollectible  commission advances totaling
$0.7 million and $2.5 million, respectively.

The Company finances the majority of its obligations to make commission advances
through  Westbridge  Funding  Corporation  ("WFC"),  an  indirect   wholly-owned
subsidiary of Westbridge.  On June 6, 1997, WFC entered into a Credit  Agreement
(the "Credit  Agreement")  with LaSalle National Bank  ("LaSalle").  This Credit
Agreement provides WFC with a three-year,  $20.0 million revolving loan facility
(the "Receivables Financing"),  the proceeds of which are used to purchase agent
advance  receivables  from the  Insurance  Subsidiaries  and certain  affiliated
marketing companies. WFC's obligations under the Credit Agreement are secured by
liens upon substantially all of WFC's assets. In connection with this commission
advancing  program,  at  September  30, 1998,  the  Company's  receivables  from
subagents totaled  approximately $9.8 million and approximately $7.6 million was
outstanding under the Credit Agreement.  The Credit Agreement terminates on June
5, 2000, at which time the outstanding principal and interest thereunder will be
due and  payable.  WFC is current  with  respect to its  principal  and interest
payments under this Credit Agreement.

WFC's  obligations under the Credit Agreement have been guaranteed by Westbridge
under the Guaranty  Agreement,  and Westbridge has pledged all of the issued and
outstanding  shares of the capital stock of WFC, NFL and NFIC as collateral  for
that  guaranty.  Westbridge's  obligations  under the Guaranty  Agreement  would
continue following confirmation of the Plan. LaSalle has agreed to waive certain
events of default occasioned by the Chapter 11 Case; however,  certain events of
default under the Credit Agreement are continuing.

The Company also receives commission advances from an unaffiliated  managed care
organization and in turn advances  commissions to its general agencies and their
agents.  At September  30, 1998,  the Company's  receivables  from its subagents
related to these advances totaled  approximately  $3.2 million,  and the Company
owed approximately $1.8 million to an unaffiliated managed care organization.

Consolidated

The Company's consolidated net cash used for operations totaled $5.1 million and
$17.5  million  for  the  nine  months  ended   September  30,  1998  and  1997,
respectively. The variance in the amount of net cash used for operations between
1998 and 1997 was  primarily  the result of (a) amounts  remitted to  reinsurers
during 1997 terminating certain reinsurance arrangements,  and (b) the reduction
in the Company's marketing results for its underwritten products, which resulted
in a decrease in net cash used for operations  related to the funding of agents'
debit balances.

Net cash provided by (used for)  investing  activities for the nine months ended
September  30,  1998  and  1997  totaled  $11.1  million  and  $(39.1)  million,
respectively.  The increase in net cash provided by investing activities between
1998  and  1997  was  primarily  related  to  funding  the  Company's  operating
activities for the same period. Further, the significant cash outflow to acquire
investments  in 1997 was related to the  investment of the net proceeds from the
issuance of the Company's Convertible Notes.

Net cash (used for) provided by financing  activities totaled $(5.5) million and
$61.6  million  for  the  nine  months  ended   September  30,  1998  and  1997,
respectively.  Cash flows for  financing  activities  for the nine months  ended
September 30, 1998 were related to the net borrowings and repayments  associated
with the Company's  Receivables  Financing program.  The Company's net financing
cash outflows  declined as a result of the reduction in the Company's  marketing
results for its underwritten  products,  which in turn resulted in a decrease in
cash  flows used to finance  agents'  debit  balances.  Cash flows  provided  by
financing  activities  for the nine months ended  September  30, 1997,  included
approximately  $70.0 million in cash inflows  resulting from the issuance of the
Company's  Convertible  Notes that was offset, in part, by cash payments of $7.0
million  to  retire a note  payable  associated  with a  recaptured  reinsurance
agreement,  $1.0 million to retire a note with a related party, and $0.1 million
in net  borrowings  and  repayments  associated  with the Company's  Receivables
Financing program.

The Company had no significant high-yield, unrated or less than investment grade
fixed maturity securities in its investment  portfolio as of September 30, 1998,
and it is the  Company's  policy not to exceed  more than 5% of total  assets in
such  securities.  Changes in interest  rates may affect the market value of the
Company's investment  portfolio.  The Company's principal objective with respect
to the management of its investment portfolio is to meet its future policyholder
benefit  obligations.   In  the  event  the  Company  was  forced  to  liquidate
investments prior to maturity, investment yields could be compromised.

Inflation  will affect  claim costs on the  Company's  Medicare  Supplement  and
Medical Expense products.  Costs associated with a hospital stay and the amounts
reimbursed by the Medicare  program are each  determined,  in part, based on the
rate of inflation.  If hospital and other  medical costs that are  reimbursed by
the Medicare program increase,  claim costs on the Medicare  Supplement products
will  increase.  Similarly,  as the hospital and other medical  costs  increase,
claim costs on the  Medical  Expense  products  will  increase.  The Company has
somewhat   mitigated  its  exposure  to  inflation  by   incorporating   certain
limitations on the maximum  benefits which may be paid under its policies and by
filing for premium rate increases as necessary.

In December 1992, the NAIC adopted the Risk-Based Capital for Life and/or Health
Insurers  Model Act  ("the  Model  Act").  The  Model  Act  provides  a tool for
insurance regulators to determine the levels of statutory capital and surplus an
insurer must  maintain in relation to its  insurance  and  investment  risks and
whether  there is a need for possible  regulatory  attention.  The Model Act (or
similar  legislation  or  regulation)  has been  adopted  in  states  where  the
Insurance Subsidiaries are domiciled.

The Model Act provides  four levels of  regulatory  attention,  varying with the
ratio of the insurance company's total adjusted capital (defined as the total of
its statutory  capital and surplus,  asset  valuation  reserve and certain other
adjustments) to its risk-based  capital  ("RBC").  If a company's total adjusted
capital is less than 100 percent but greater  than or equal to 75 percent of its
RBC, or if a negative  trend (as defined by the  regulators)  has  occurred  and
total  adjusted  capital is less than 125  percent of RBC (the  "Company  Action
Level"),  the company must submit a  comprehensive  plan aimed at improving  its
capital position to the regulatory  authority proposing corrective actions. If a
company's  total  adjusted  capital is less than 75 percent but greater  than or
equal to 50 percent of its RBC (the "Regulatory  Action Level"),  the regulatory
authority  will perform a special  examination of the company and issue an order
specifying the corrective  actions that must be followed.  If a company's  total
adjusted capital is less than 50 percent but greater than or equal to 35 percent
of its RBC (the "Authorized Control Level"),  the regulatory  authority may take
any action it deems  necessary,  including  placing the company under regulatory
control.  If a company's  total adjusted  capital is less than 35 percent of its
RBC (the "Mandatory  Control  Level"),  the regulatory  authority must place the
company under its control.  The NAIC's  requirements are effective on a state by
state basis if, and when,  they are adopted by the  regulators in the respective
states. The Insurance Departments of the States of Delaware and Mississippi have
each adopted the NAIC's Model Act. At September 30, 1998, total adjusted capital
for NFL, a  Delaware  domiciled  company,  and FLICA,  a  Mississippi  domiciled
company, exceeded the respective Company Action Levels.

The Texas Department of Insurance  ("TDI") has adopted its own RBC requirements,
the stated purpose of which is to require a minimum level of capital and surplus
to absorb  the  financial,  underwriting  and  investment  risks  assumed  by an
insurer.  Texas' RBC  requirements  differ from those adopted by the NAIC in two
principal  respects:  (i) they use different  elements to determine  minimum RBC
levels in their  calculation  formulas  and (ii) they do not  stipulate  "Action
Levels" (like those adopted by the NAIC) where corrective  actions are required.
However,  the  Commissioner  of the TDI  does  have the  power  to take  similar
corrective  actions if a company does not maintain the required minimum level of
statutory  capital and  surplus.  NFIC and AICT are  domiciled in Texas and must
comply with Texas RBC  requirements.  At September 30, 1998, AICT's RBC exceeded
the  minimum  level  prescribed  by the TDI;  however,  NFIC's RBC was below the
minimum level prescribed by the TDI.

As a result of the  statutory  losses  sustained by the  Insurance  Subsidiaries
during 1997, material  transactions are subject to approval by the department of
insurance in each domiciliary state.


<PAGE>


PART II

Item 1 - Legal  Proceedings (See Part I - Note 2 to the  Consolidated  Financial
Statements).

         On December 17, 1997, a purported  class action  complaint,  naming the
         Company,  two current directors of the Company,  one former director of
         the Company and two underwriters of the Company's  Convertible Notes as
         defendants,  was  filed in the  United  States  District  Court for the
         Northern   District  of  Texas  on  behalf  of  persons  who  purchased
         securities  of the Company  during the period  October 31, 1996 through
         October 31, 1997.  The  complaint  alleges that the Company  materially
         overstated  its  earnings  due  to  the  Company's   establishment   of
         inadequate  reserves for pending insurance claims.  The plaintiff seeks
         unspecified money damages and certain costs and expenses.  On April 30,
         1998, the defendants  filed separate  motions to dismiss the complaint.
         On June 15,  1998,  the  plaintiff  filed a motion for leave to file an
         amended  complaint,  which  plaintiff  asked  the  court to accept as a
         response to the defendants' motions to dismiss.

         In October 1998, a preliminary  settlement agreement was reached by and
         among the  parties  to the  complaint.  The  settlement  is  subject to
         certain conditions,  including the certification of the class described
         in the amended  complaint  and approval of the  District  Court and the
         Bankruptcy  Court.  The  settlement  will not involve an  admission  of
         liability  by any party and is not binding  until the  parties  execute
         formal  settlement  documents.  In the  event  that a final  settlement
         agreement  is not  reached,  the Company  intends to continue to defend
         this action vigorously.

Item 3 - Defaults Upon Senior Securities

         As  described  in  "Management's  Discussion  and Analysis of Operating
         Results and Financial  Condition Recent  Developments" on September 16,
         1998,  Westbridge  filed a petition for relief under  Chapter 11 of the
         United  States  Bankruptcy  Code  with the  Bankruptcy  Court.  Also on
         September 16, 1998, Westbridge filed its Disclosure Statement and Plan,
         and on October 28, 1998 filed its proposed  first amended  plan,  which
         sets forth the manner in which claims  against and equity  interests in
         Westbridge  will  be  treated.  On  October  30,  1998,  the  Company's
         Disclosure  Statement  was  approved  by  entry  of  an  order  by  the
         Bankruptcy  Court.  The Company  will be  distributing  its  Disclosure
         Statement and Plan,  along with ballots to vote to accept or reject the
         Plan and certain other materials  approved by the Bankruptcy  Court, to
         the holders of allowed claims and equity security interests.

         (a)  Debt Securities

              Effective  November 3, 1997,  Westbridge  suspended  the scheduled
              interest  payments on its Senior Notes and its Convertible  Notes.
              The failure to make the scheduled interest payments resulted in an
              event of default under the  Indentures  relating to such Notes and
              also  resulted in an event of default  under the Credit  Agreement
              with  LaSalle.  LaSalle  has  agreed  to waive  certain  events of
              default occasioned by the Chapter 11 Case; however, certain events
              of  default  under  the  Credit   Agreement  are  continuing.   In
              connection with the Company's debt securities, which are comprised
              of the Senior Notes,  Convertible Notes and Credit Agreement,  the
              Plan  contemplates  (i) the distribution of cash to the holders of
              the Senior Notes and the sale of new  convertible  preferred stock
              to CSFB and,  at their  option,  holders of the  Convertible  Note
              claims  as of May 20,  1998 to fund such  distributions,  (ii) the
              issuance of new convertible preferred stock to CSFB as a holder of
              Senior Note claims,  (iii) the issuance of new common stock to the
              holders of unsecured  claims,  including,  but not limited to, the
              holders of Convertible  Note claims,  and (iv) the continuation of
              the Credit Agreement unabated.

         (b)  Series A Preferred Stock

              Effective  October 31, 1997,  Westbridge  suspended payment of the
              scheduled dividends on its Series A Preferred Stock. In connection
              with the Company's equity interest holders,  including the holders
              of its old Series A Preferred Stock, the Plan contemplates (i) the
              issuance  of new common  stock and new  warrants to the holders of
              old Series A Preferred  Stock and old common  stock,  and (ii) the
              cancellation  of old  common  stock,  old  warrants,  old Series A
              Preferred  Stock,  old  restricted  common stock and old incentive
              stock options.

Item 6 - Exhibits and Reports on Form 8-K

         (a)  Exhibits

              Exhibit 10.32First Amended Plan of Reorganization

              Exhibit 27  Financial  Data  Schedule,  (included  in  electronic
              filing only).

         (b)  Reports on Form 8-K

              Reports on Form 8-K dated  September  21, 1998 in response to Item
              3,  Bankruptcy  or  Receivership,  to  report  the  filing  of the
              petition  for  relief  under  Chapter 11 of Title 11 of the United
              States   Bankruptcy   Court  in  the  District  of  Delaware.   In
              conjunction  with this  filing,  the Company  also  submitted  the
              proposed  plan of  reorganization  which was  pre-negotiated  with
              certain creditors of the Company, a proposed disclosure  statement
              and a number of first day motions; Item 5, Other Events, to report
              the Company  entered into  employment  agreements  with Patrick J.
              Mitchell,  who  was  elected  Chairman  of  the  Board  and  Chief
              Executive  Officer of the Company and  retains  his  positions  as
              President,  Chief Operating Officer,  and Chief Financial Officer;
              and Patrick H. O'Neill,  the Company's  Executive Vice  President,
              General  Counsel and Secretary;  and Item 7, Financial  Statements
              and  Exhibits,  to provide the  required  exhibits  related to the
              pre-arranged plan of  reorganization  under Chapter 11 of Title 11
              of the United States Code.


<PAGE>


                                                                       Form 10-Q



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 thereunto duly authorized.


                                    WESTBRIDGE CAPITAL CORP.





                                    /s/ Patrick J. Mitchell
                                    Patrick J. Mitchell
                                    Chairman and Chief Executive Officer
                                    (On Behalf of the Registrant and as
                                    Principal Financial and Accounting Officer)




Dated at Fort Worth, Texas
November 10, 1998







<PAGE>


                                       27


                                                                   EXHIBIT 10.32




                         UNITED STATES BANKRUPTCY COURT
                              DISTRICT OF DELAWARE



In re:                    )                          Chapter 11
                          )
WESTBRIDGE CAPITAL CORP., )                          Case No. 98-2105 (MFW)
)                         )
                 Debtor.  )
                          )
                          )


        FIRST AMENDED PLAN OF REORGANIZATION OF WESTBRIDGE CAPITAL CORP.
                     UNDER CHAPTER 11 OF THE BANKRUPTCY CODE




                              PAUL, WEISS, RIFKIND, WHARTON & GARRISON
                              Alan W. Kornberg
                              Andrew N. Rosenberg
                              W. Andrew P. Logan III
                              1285 Avenue of the Americas
                              New York, New York  10019-6064
                              (212) 373-3000

                                                -and-

                              YOUNG CONAWAY STARGATT & TAYLOR, LLP
                              James L. Patton, Jr.
                              1110 N. Market Street
                              P.O. Box 391
                              Rodney Square North, 11th Floor
                              Wilmington, Delaware 19801
                              (302) 571-6600

                              Attorneys for Westbridge Capital Corp.


Dated:     Wilmington, Delaware
           October 30, 1998


<PAGE>



                                             Table of Contents

<TABLE>
<CAPTION>
                                                                                                    Page #


<S>                                                                                                   <C>
I.         DEFINITIONS AND CONSTRUCTION OF TERMS......................................................   1
           A.  Definitions............................................................................   1
           B.  Interpretation, Application of Definitions and Rules of Construction. .................  18

II.        CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS..............................................  19
           Introduction...............................................................................  19
               1. Unclassified Claims (not entitled to vote on the Plan)..............................  19
               2. Unimpaired Classes Of Claims (deemed to have accepted the Plan 
                  and, therefore, not entitled to vote on the Plan....................................  19
               3. Impaired Classes of Claims and Interests (entitled to vote on the Plan).............  20
               4. Impaired Classes Of Claims And Equity Interests (deemed to have rejected the
                  Plan and, therefore, not entitled to vote on the Plan)..............................  21

III.       TREATMENT OF ADMINISTRATIVEEXPENSE CLAIMS AND PRIORITY TAX CLAIMS..........................  21
               1. Administrative Claims...............................................................  21
               2. Professional Compensation And Reimbursement Claims..................................  21
               3. Priority Tax Claims.................................................................  22

IV.        TREATMENT OF CLAIMS ANDEQUITY INTERESTS....................................................  22
               1. Class 1 - Priority Non-Tax Claims...................................................  22
               2. Class 2 - LaSalle Claim.............................................................  23
               3. Class 3 - Convenience Claims........................................................  23
               4. Class 4 - Secured Claims............................................................  24
               5. Class 5 - Intercompany Claims.......................................................  24
               6. Class 6 - Securities Litigation Claims..............................................  24
               7. Class 7 - Unsecured 11% Note Claims.................................................  25
               8. Class 8 - Other Unsecured Claims....................................................  25
               9. Class 9 - Old Preferred Stock Interests.............................................  27
               10.Class 10 - Old Common Stock Interests and Old Restricted Common Stock Interests.....  27
               11.Class 11 - Unvested Old Restricted Common Stock Interests...........................  27
               12.Class 12 - Old Warrant Interests....................................................  28
               13.Class 13 - Old Option Interests.....................................................  28

V.         PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENTOF REORGANIZED WESTBRIDGE..........  28
           A.  Directors and Officers of Reorganized Westbridge.......................................  28
               1. The Initial Board of Directors......................................................  28
               2. Management of Reorganized Westbridge................................................  28
               3. Officers............................................................................  29
           B.  Corporate Action.......................................................................  29
               1. Amended Westbridge Certificate of Incorporation and Amended             
                  Westbridge By-Laws..................................................................  29
           C.  Securities to Be Issued Pursuant to the Plan...........................................  29
               1. New Common Stock....................................................................  29
               2. New Convertible Preferred Stock.....................................................  29
               3. The New Warrants....................................................................  30
               4. Securities Laws Matters.............................................................  30
           D.  Retention and Incentive Bonus Program..................................................  30
           E.  Marketing Agent Stock Options..........................................................  30
           F.  Officer and Director Stock Options.....................................................  31

VI.        PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN AND TREATMENT OF DISPUTED,
           CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS.............  31
           A.  Voting of Claims and Equity Interests..................................................  31
           B.  Nonconsensual Confirmation.............................................................  31
           C.  Distributions..........................................................................  31
               1. Method of Distribution Under the Plan...............................................  31
               2. Disputed General Unsecured Claims...................................................  33
               3. Surplus Distributions to Holders of Allowed Unsecured Claims........................  34
               4. Objections To And Resolution Of Administrative Claims and Claims;
                  Administrative and Priority Claims Reserve..........................................  34
               5. Hart-Scott-Rodino Act Filing Requirements...........................................  35
               6. Allocation of Consideration.........................................................  35
               7. Cancellation and Surrender of Existing Securities and Agreements....................  36
               8. Trustee Fees........................................................................  36

VII.       IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN.....................................  37
           A.  Registration Rights Agreement..........................................................  37
           B.  Continued Corporate Existence and Vesting of Assets in Reorganized Westbridge..........  37
           C.  Termination of Subordination Rights....................................................  37
           D.  Discharge of Westbridge................................................................  38
           E.  Injunction.............................................................................  38
           F.  Preservation/Waiver of Causes of Action................................................  38
               1. Preservation of Rights..............................................................  39
               2. Waiver of Causes of Action..........................................................  39
           G.  Votes Solicited in Good Faith..........................................................  39
           H.  Administrative Claims Incurred after the Confirmation Date.............................  40
           I.  Westbridge's Limited Release...........................................................  40
           J.  Exculpation, Release and Injunction of Released Parties................................  40
               1. Exculpation.........................................................................  40
               2. Injunction..........................................................................  41
           K.  Release of Officers and Directors; Waiver of Claims....................................  41
               1. Waiver of Claims; Covenant Not To Sue...............................................  41
               2. Limited Releases....................................................................  42
               3. Limitation of Governmental Releases.................................................  43
           L.  Term of Bankruptcy Injunction or Stays.................................................  43
           M.  Preservation of Insurance..............................................................  43
           N.  Officers' and Directors' Indemnification Rights........................................  43
           O.  The Securities Litigation Settlement Fund..............................................  43
               1. Payment of Securities Litigation Settlement Payment.................................  43
               2. Administration......................................................................  44
               3. Allocation of Assets................................................................  44

VIII.      RETENTION OF JURISDICTION..................................................................  44

IX.        MISCELLANEOUS PROVISIONS...................................................................  45
           A.  Payment of Statutory Fees..............................................................  45
           B.  Dissolution of Creditors Committee.....................................................  45
           C.  Modification of the Plan...............................................................  45
           D.  Governing Law..........................................................................  46
           E.  Filing or Execution of Additional Documents............................................  46
           F.  Withholding and Reporting Requirements.................................................  46
           G.  Exemption From Transfer Taxes..........................................................  46
           H.  Waiver of Federal Rule of Civil Procedure 62(a)........................................  46
           I.  Headings...............................................................................  46
           J.  Exhibits/Schedules.....................................................................  47
           K.  Notices................................................................................  47
           L.  Plan Supplement........................................................................  47
           M.  Conflict...............................................................................  48

X.         EXECUTORY CONTRACTS AND UNEXPIRED LEASES...................................................  48

XI.        BENEFIT PLANS..............................................................................  48

XII.       EFFECTIVENESS OF THE PLAN..................................................................  49
           A.  Confirmation of the Plan...............................................................  49
           B.  Effectiveness of the Plan..............................................................  49
               1. Conditions Precedent to Effectiveness...............................................  49
               2. Waiver of Conditions................................................................  50
               3. Effect of Failure of Conditions.....................................................  50
               4. Vacatur of Confirmation Order.......................................................  50
               5. Survival of the Final Settlement Agreement..........................................  51

XIII.      NEW CONVERTIBLE PREFERRED STOCK PURCHASE...................................................  51
           A.  Stock Purchase Agreement...............................................................  51
           B.  Purchase Right.  ......................................................................  51
               1. Eligibility.........................................................................  51

</TABLE>



<PAGE>







Westbridge Capital Corp. proposes the following plan of reorganization under 
section 1121(a) of the Bankruptcy Code.

                                                    I.

                                   DEFINITIONS AND CONSTRUCTION OF TERMS

           A.     Definitions.  Unless otherwise defined herein, or the context
otherwise requires, the following terms shall have the respective meanings set 
forth below:


Ad-Hoc              Committee means the unofficial committee that was formed by
                    certain holders of the 11% Notes and 7 1/2% Convertible
                    Notes prior to the Petition Date.

Administrative      means any right to payment constituting a cost or expense of
Claim               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       means, with reference to any Claim or Equity Interest, (a)
or Allowed Interest 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 as
Agreement           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 Incorporation
Certificate of      of Westbridge, which shall be in substantially the form
Incorporation       contained in the Plan Supplement.


Ballots             means each of the ballot forms distributed with the
                    Disclosure Statement to each holder of an Impaired Claim or
                    Equity Interest (other than to holders of Impaired Claims or
                    Equity Interests deemed to have rejected the Plan or
                    otherwise not entitled to vote on the Plan) upon which is to
                    be indicated, among other things, acceptance or rejection of
                    the Plan.


Bankruptcy Code     means title 11 of the United States Code, 11 U.S.C. ss.ss.
                    101 et seq., as in effect on the date hereof.


Bankruptcy Rules    means the Federal Rules of Bankruptcy Procedure as
                    promulgated by the United States Supreme Court under section
                    2075 of title 28 of the United States Code, and local rules
                    of the Court, as the context may require.


Bonus Program       has the meaning assigned to such term in Section V.D of the
                    Plan.


Business Day        means any day on which commercial banks are open for
                    business, and not authorized to close, in the City of New
                    York, New York except any day designated as a legal holiday
                    by Bankruptcy Rule 9006(a).


Cash                means legal tender of the United States of America and
                    equivalents thereof.


Causes of Action    means all claims, choses in action and causes of action
                    (including those assertable derivatively), now owned or
                    hereafter acquired by Westbridge, and the Cash and non-Cash
                    proceeds thereof, whether arising under the Bankruptcy Code
                    or other Federal, state or foreign law, including, without
                    limitation, any causes of action arising under sections 510,
                    544, 547, 548, 549, 550, 551 or any other section of the
                    Bankruptcy Code.

Chapter 11 Case     means the chapter 11 case commenced by the Debtor.



Claims Agreement    means the Memorandum of Understanding, dated October 26,
                    1998, a copy of which is attached hereto as Exhibit F.

Confirmation Date   means the date on which the Confirmation Order is entered by
                    the Court.


Confirmation        means the hearing to consider confirmation of the Plan
Hearing             pursuant to section 1128 of the Bankruptcy Code.


Confirmation Order  means the order entered by the Court confirming the Plan
                    pursuant to section 1129 of the Bankruptcy Code.


Convenience Claim   means a Claim that would otherwise be classified as a Class
                    7 Unsecured Claim, other than a Claim arising out of or in
                    connection with the ownership of the 7 1/2% Convertible
                    Notes, that is (a) $2,000 or less or (b) more than $2,000 if
                    the holder has elected, on a timely cast Ballot, to accept
                    $2,000 in Cash in full satisfaction, discharge, and release
                    of such Claim.


Court               means, (a) the United States Bankruptcy Court for the
                    District of Delaware, having jurisdiction over the Chapter
                    11 Case; (b) to the extent there is no reference pursuant to
                    section 157 of title 28 of the United States Code, the
                    United States District Court for the District of Delaware;
                    and (c) any other court having jurisdiction over the Chapter
                    11 Case.


Credit Agreement    means that certain Credit Agreement dated as of June 6, 1997
                    between Westbridge Funding Corp. and LaSalle, as amended.


Creditors Committee means the Official Committee of Unsecured Creditors
                    appointed by the United States Trustee in the Chapter 11
                    Case on October 2, 1998, as constituted from time to time.


CSFB                means Credit Suisse First Boston Corporation.



CSFB 11% Note       means any 11% Note Claims held by CSFB as of the Petition
Claims              Date.


Debtor              means Westbridge Capital Corp., a Delaware corporation,
                    also referred to herein as "Westbridge."



Debtor              means the Debtor in its capacity as debtor in possession in
in Possession       the Chapter 11 Case pursuant to sections 1107(a) and 1108 of
                    the Bankruptcy Code.


Disclosure          means the written disclosure statement that relates to
Statement           this Plan, as approved by the Court pursuant to
                    section 1125 of the Bankruptcy Code, as such disclosure
                    statement may be amended, modified or supplemented from
                    time to time.



Disputed            means any Claim, or Equity Interest, or any portion thereof,
                    that is not an Allowed Claim or Allowed Interest, including,
                    but not limited to, Claims or Interests (a)(i) that have not
                    been Scheduled by the Debtor or (ii) have been Scheduled at
                    zero or as contingent, unliquidated or disputed, (b) that
                    are the subject of a proof of claim that differs in nature,
                    amount or priority from the Debtor's Schedules, and (c) the
                    allowance or disallowance of which is not yet the subject of
                    a Final Order.


District Court      means the United States District Court for the Northern
                    District of Texas, which court has jurisdiction over the
                    Putative Class Action.


District Court      means any order or orders entered by the District Court
Order               approving the Securities Litigation Settlement and Final
                    Settlement Agreement.


Effective Date      means the first Business Day on which all of the conditions
                    specified in Section XII.B.1 of the Plan have been satisfied
                    or waived in accordance with Section XII.B.2 of the Plan;
                    provided, however, that if a stay of the Confirmation Order
                    is in effect on such date, the Effective Date will be the
                    first Business Day after such stay is no longer in effect.

11% Note Claims     means the unsecured Claims of the 11% Noteholders arising
                    under or as a result of the 11% Notes, except that any such
                    Claims held by CSFB as of the Petition Date shall be deemed
                    to be CSFB 11% Note Claims.


11% Noteholders     means holders of the 11% Notes.



11% Notes           means the 11% Senior Subordinated Notes, due 2002, of
                    Westbridge, issued and outstanding under the 11% Note
                    Indenture.


11% Note Indenture  means that certain Indenture, dated as of February 15, 1995,
                    between Westbridge, as issuer, and Bank One Trust Company,
                    N.A. (successor by merger to Liberty Bank and Trust Company
                    of Oklahoma City, N.A.), as Trustee, pursuant to which the
                    11% Notes were issued, together with any amendment or
                    supplement thereto.


Eligible Holder     has the meaning assigned to such term in Section XIII.B.1 of
                    the Plan.


Equity Interest     means any share of preferred stock or common stock or other
or Interest         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            has the meaning assigned to such term in Section XIII.B.1(c)
Instructions        of the Plan.


Exercise Notice     means the form of exercise notice which will provide for the
                    exercise of the Purchase Rights pursuant to Section XIII of
                    the Plan.


Exercise Price      has the meaning assigned to such term in Section XIII.B.1(b)
                    of the Plan.


Exercise Period     means the period commencing on the thirtieth day prior to
                    the Confirmation Date and concluding on the first day after
                    the Confirmation Date, or, if either of such dates is not a
                    Business Day, the next following Business Day.

Exercising Holder   has the meaning assigned to such term in Section XIII.B.1(c)
                    of the Plan.


Face Amount         means (a) when used in reference to a Disputed Claim, the
                    full stated amount claimed by the holder of such Claim in
                    any proof of claim timely filed with the Court or otherwise
                    deemed timely filed by any Final Order of the Court or other
                    applicable bankruptcy law, and (b) when used in reference to
                    an Allowed Claim, the allowed amount of such Claim.


Final Order         means an order or judgment of the Court, or other court of
                    competent jurisdiction, as entered on the docket in the
                    Chapter 11 Case, the operation or effect of which has not
                    been stayed, reversed or amended, and as to which order or
                    judgment (or any revision, modification, or amendment
                    thereof) the time to appeal or seek review or rehearing has
                    expired and as to which no appeal or petition for review or
                    rehearing was filed or, if filed, remains pending.


Final Settlement    means the definitive Settlement Agreement to be executed by
Agreement           the parties to the Claims Agreement implementing the terms
                    of the Claims Agreement and Securities Litigation
                    Settlement.


General Unsecured   means any Unsecured Claim (including any Underwriter Claims)
Claim               other than a 11% Note Claim, CSFB 11% Note Claim or 7 1/2%
                    Convertible Note Claim.


Government          has the meaning assigned to such term in Section VII.K.3 of
                    the Plan.


Guaranty Agreement  means that certain Guaranty Agreement dated as of June 6,
                    1997 by Westbridge in favor of LaSalle.


HSR Act             means the Hart-Scott-Rodino Antitrust Improvements Act of
                    1976, as amended.


Impaired            means, when used with reference to a Claim or Interest, a
                    Claim or Interest that is impaired within the meaning of
                    section 1124 of the Bankruptcy Code.


Indemnification     means the $250,000 fund (less any withdrawals therefrom)
Escrow              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             means the Effective Date or as soon thereafter as
Distribution Date   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       means the aggregate number of shares of New Common Stock to
8-A Distribution    be distributed on the Initial Distribution Date to all
Amount              holders of Allowed Group 8-A Claims which shall be computed
                    as follows: (a) a fraction, (i) the numerator of which is
                    the Allowed Amount of Group 8-A Claims and (ii) the
                    denominator of which is the Allowed Amount of Group 8-A
                    Claims and the Allowed Amount of Group 8-B Claims times (b)
                    the number of shares of New Common Stock which is equal to
                    94% of all issued and outstanding New Common Stock on the
                    Effective Date.


Initial Group       means the aggregate number of shares of New Common Stock to
8-B Distribution    be distributed on the Initial Distribution Date to all
Amount              holders of Allowed Group 8-B Claims which shall be computed
                    as follows: (a) a fraction, (i) the numerator of which is
                    the Allowed Amount of Group 8-B Claims and (ii) the
                    denominator of which is the Allowed Amount of Group 8-A
                    Claims and the Allowed Amount of Group 8-B Claims times (b)
                    the number of shares of New Common Stock which is equal to
                    94% of all issued and outstanding New Common Stock on the
                    Effective Date less (c) the Subordination Redistribution
                    Amount.


Intercompany Claim  means any Claim held by a Subsidiary of the Debtor against
                    the Debtor, including, without limitation, (a) any account
                    reflecting intercompany book entries by such Subsidiary with
                    respect to the Debtor, (b) any Claim not reflected in book
                    entries that is held by such Subsidiary, and (c) any
                    derivative Claim asserted or assertable by or on behalf of
                    such Subsidiary against the Debtor.


LaSalle             means LaSalle National Bank.



LaSalle Claim       means all Claims against the Debtor of LaSalle (i) under the
                    LaSalle Credit Agreement and Guaranty and (ii) in respect of
                    the Debtor's reimbursement obligations to LaSalle in
                    connection with the LaSalle Letter of Credit.

LaSalle Credit      means the "Pledged Collateral" as defined in the Pledge
Agreement           Agreement dated as of June 6, 1997 between Westbridge and
Collateral          LaSalle, as amended.


LaSalle Letter of   means that certain Irrevocable Standby Letter of Credit No.
Credit              9200102116 issued by LaSalle in favor of National Financial
                    Insurance Company.


LaSalle Letter of   means the trust account established at LaSalle (Account No.
Credit Collateral   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          means those certain employment agreements, each dated as of
Employment          September 15, 1998, between the Debtor and Patrick J.
Agreements          Mitchell and Patrick H. O'Neill, respectively.


National Union      means that certain Directors, Officers and Corporate
Policy              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           has the meaning assigned to such term in Section XIII.B.1(c)
Acceptance          of the Plan.


Officer and         has the meaning assigned to such term in Section V.F of the
Director Stock      Plan.
Options


Old Common Stock    means the common stock, par value $.10 per share, issued by
                    Westbridge and outstanding on the Petition Date.



Old Options         means any options, calls, subscriptions or similar rights or
                    other agreements or commitments, contractual or otherwise,
                    other than Old Warrants, obligating Westbridge to issue,
                    transfer or sell any shares of Old Common Stock.


Old Preferred Stock means all shares of Westbridge's Series A Cumulative
                    Convertible Redeemable Exchangeable Preferred Stock
                    outstanding on the Petition Date.

Old Restricted      means all shares of Old Common Stock granted pursuant to the
Common Stock        Restricted Stock Plan dated as of April 19, 1996, other than
                    Unvested Old Restricted Common Stock.


Old Warrants        means any warrants obligating Westbridge to issue, transfer
                    or sell any shares of Old Common Stock.


Payment Date        has the meaning assigned to such term in Section XIII.B.1(e)
                    of the Plan.


Petition Date       means September 16, 1998, the date on which the Debtor filed
                    its petition for relief commencing the Chapter 11 Case.


Plan                means this Plan as it may be amended or modified, from time
                    to time, together with all addenda, exhibits, schedules, or
                    other attachments, if any.


Plan Supplement     means the forms of documents specified in Section IX.L of
                    the Plan.


Pro Rata            means, at any time, the proportion that (x) with respect to
                    Claims, the Face Amount of a Claim in a particular Class
                    bears to the aggregate Face Amount of all Claims (including
                    Disputed Claims) in such Class and (y) with respect to
                    Interests, the number of shares or other equity interests
                    held by a particular holder in a particular Class bears to
                    the aggregate number of all shares and other equity
                    interests in a particular Class, unless in each case the
                    Plan provides otherwise.


Pro Rata Percentage has the meaning assigned to such term in Section XIII.B.1(a)
                    of the Plan.


Priority Non-Tax    means Claims entitled to priority under the Plan pursuant to
Claim               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      means the putative class action civil lawsuit pending in the
Action              District Court , styled James C. Karabedian, et al. v.
                    Westbridge Capital Corp., Martin E. Kantor, James W.
                    Thigpen, Patrick J. Mitchell, Forum Capital Markets L.P.,
                    and Raymond James & Associates, Inc., Civ. Action No. 3:97
                    CV 3087-T.


Quarter             means the period beginning on the Effective Date and ending
                    on the immediately succeeding March 31, June 30, September
                    30, or December 31, and each three-month period thereafter,
                    as the context may require.


Record Date         means the record date for purposes of making distributions
                    under the Plan on account of Allowed Claims and Allowed
                    Interests, which date shall be the fifth (5th) Business Day
                    preceding the Confirmation Date.


Registration        means a registration rights agreement by Reorganized
Rights Agreement    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         means Westbridge, or any successor thereto by merger,
Westbridge          consolidation, or otherwise, on and after the Effective
                    Date.


Reserve             has the meaning assigned to such term in Section VI.C.2(a)
                    of the Plan.


Schedules           means the schedules of assets and liabilities, statements of
                    financial affairs, and lists of holders of Claims and Equity
                    Interests filed with the Court by Westbridge, including any
                    amendments or supplements thereto.


Scheduled           means, with respect to any Claim or Interest, the status and
                    amount, if any, of such Claim or Interest as set forth in
                    the Schedules.


Secured Claim       means a Claim that is secured by a security interest in or
                    lien upon property, or the proceeds of the sale of such
                    property, in which the Debtor has an interest, to the extent
                    of the value as of the Effective Date, or such later date as
                    is established by the Court, of such interest or lien
                    determined by a Final Order of the Court pursuant to section
                    506 of the Bankruptcy Code or as otherwise agreed upon in
                    writing by the Debtor and the holder of such Claim.


Securities          means a Claim arising from the purchase or sale of shares of
Litigation Claim    Old Common Stock of Westbridge or 11% Notes or 7-1/2%
                    Convertible Notes at any time between October 31, 1996 and
                    October 31, 1997, but excluding (i) all Class 7, 8 and 10
                    Claims and Interests and (ii) any Claims which are excluded
                    from the Securities Litigation Settlement pursuant to the
                    District Court Order or Final Settlement Agreement.


Securities          means a holder of a Securities Litigation Claim.
Litigation Claimant


Securities          means the settlement of the Putative Class Action described
Litigation          in the Claims Agreement.
Settlement

Securities          has the meaning set forth in Section VII.O.1 of the Plan.
Litigation
Settlement Fund

Stock Purchase      means that certain Stock Purchase Agreement, dated as of
Agreement           September 15, 1998, between the Debtor and CSFB, pursuant to
                    which CSFB has agreed, subject to the terms and conditions
                    contained therein, to purchase all of the New Convertible
                    Preferred Stock (other than the New Convertible Preferred
                    Stock distributed to holders of Allowed Class 7 Claims in
                    Group 7-B or acquired by holders of Allowed Class 8 Claims
                    in Group 8-B who exercise the Purchase Right), a copy of
                    which Stock Purchase Agreement is attached to the Plan as
                    Exhibit C. -



Subordination       has the meaning assigned to such term in Section VII.C of
Related Rights      the Plan.


Subordination       means the value of that portion of Group 8-B's allocation of
Redistribution      New Common Stock equal to the difference between (x) the
Amount              value of the Cash and New Convertible Preferred Stock to be
                    distributed to holders of Allowed Class 7 Claims under the
                    Plan and (y) the value of the Cash and New Convertible
                    Preferred Stock which holders of Allowed Claims in Class 7
                    would be entitled to receive under the Plan without giving
                    effect to the Claims of the holders of Allowed Claims in
                    Class 7 against holders of Allowed Claims in Group 8-B
                    arising from the contractual subordination, "make whole,"
                    default interest, post-petition interest, and other similar
                    provisions set forth in the 11% Note Indenture and the 7
                    1/2% Convertible Note Indenture.


Subsequent          means the twentieth day after the end of the Quarter
Distribution Date   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             has the meaning assigned to such term in Section VI.C.3 of
Distributions       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  means the 7 1/2% Convertible Subordinated Notes, due 2004,
 Notes              of Westbridge issued and outstanding under the 7 1/2%
                    Convertible Note Indenture.


7 1/2% Convertible 
Note Indenture      means that certain 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.


Underwriter         means Forum Capital Markets, L.P. or Raymond James &
                    Associates, Inc.

Underwriter Claim   means a Claim asserted by an Underwriter for reimbursement,
                    contribution or indemnification (including pursuant to any
                    indemnification agreement) on account of or relating to a
                    Claim for damages or rescission arising out of the purchase
                    or sale of 7 1/2% Convertible Notes or 11%, to the extent
                    that such Claims arise in connection with the Putative Class
                    Action and the Final Settlement Agreement.


Unsecured Claim     means any Claim that is not a Secured Claim, Administrative
                    Claim, Convenience Claim, Priority Tax Claim or Priority
                    Non-Tax Claim.


Unvested Old        means all shares of Old Restricted Common Stock which were
Restricted Common   not vested as of the Petition Date under the Restricted
Stock               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>





           B.   Interpretation,   Application  of   Definitions   and  Rules  of
Construction. Wherever from the context it appears appropriate, each term stated
in either the singular or the plural shall include both the singular and plural,
and pronouns  stated in the  masculine,  feminine or neuter gender shall include
the masculine,  feminine and neuter,  such meanings to be applicable to both the
singular and plural forms of the terms  defined.  Capitalized  terms in the Plan
that are not defined  herein shall have the same meaning  assigned to such terms
by the  Bankruptcy  Code or  Bankruptcy  Rules,  as the case may be.  The  words
"herein,"  "hereof," and  "hereunder" and other words of similar import refer to
the Plan as a whole and not to any particular  section or subsection in the Plan
unless expressly  provided  otherwise.  All gender references shall be deemed to
refer to both genders. The words "includes" and "including" are not limiting and
mean that the  things  specifically  identified  are set forth for  purposes  of
illustration,  clarity  or  specificity  and  do not  in  any  respect  qualify,
characterize  or limit the  generality of the class within which such things are
included.  Captions and headings to articles, sections and exhibits are inserted
for convenience of reference only, are not a part of this Plan, and shall not be
used to interpret this Plan. The rules of construction  set forth in section 102
of the Bankruptcy Code shall apply to this Plan. In computing any period of time
prescribed or allowed by this Plan,  the  provisions of Bankruptcy  Rule 9006(a)
shall apply.


                                       II.

                  CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS

           Introduction.  All Claims and Equity Interests, except Administrative
Claims and  Priority Tax Claims,  are placed in the Classes set forth below.  In
accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims
and Priority Tax Claims, as described below, have not been classified.

           A Claim or Equity  Interest is placed in a  particular  Class only to
the extent that the Claim or Equity  Interest  falls within the  description  of
that Class, and is classified in other Classes to the extent that any portion of
the Claim or Equity Interest falls within the description of such other Classes.
A Claim is also  placed in a  particular  Class  for the  purpose  of  receiving
distributions  pursuant  to the Plan only to the  extent  that such  Claim is an
Allowed  Claim in that  Class and such  Claim has not been  paid,  released,  or
otherwise settled prior to the Effective Date.

           1.     Unclassified Claims (not entitled to vote on the Plan)

                  (a)      Administrative Claims.

                  (b)      Priority Tax Claims.

           2.  Unimpaired  Classes Of Claims  (deemed to have  accepted the Plan
and, therefore, not entitled to vote on the Plan)

                  (a)      Class 1:  Priority Non-Tax Claims.

                           Class 1 consists of all Priority Non-Tax Claims.

                  (b)      Class 2:  LaSalle Claims.

                           Class 2 consists of the LaSalle Claims.

                  (c)      Class 3:  Convenience Claims.

                           Class 3 consists of all Convenience Claims.



<PAGE>


                  (d)      Class 4:  Secured Claims.

                           Class 4 consists of all Secured Claims.

                  (e)      Class 5:  Intercompany Claims.

                           Class 5 consists of all Intercompany Claims.

                  (f)      Class 6:  Securities Litigation Claims.

                           Class 6 consists of all Securities Litigation Claims.

           3.     Impaired Classes of Claims and Interests (entitled to 
                  vote on the Plan)

                  (a)      Class 7:  11% Note Claims.

               Class 7 consists of all 11% Note Claims. Class 7 Claims have been
          divided into separate groups described below. Together, all of the
          groups of 11% Note Claims constitute a single Class of Claims for
          voting purposes under the Plan and the Bankruptcy Code.

                           (i)      Group  7-A:  Group 7-A consists of all 11% 
                                    Note Claims other than CSFB 11% Note Claims.

                           (ii)     Group 7-B:  Group 7-B consists of all CSFB
                                    11% Note Claims.

                  (b)      Class 8:  Unsecured Claims.

               Class 8 consists of all Unsecured Claims (other than 11% Note
          Claims and CSFB 11% Note Claims). Class 8 Unsecured Claims have been
          divided into separate groups described below. Together, all of the
          groups of Unsecured Claims (other than 11% Note Claims and CSFB 11%
          Note Claims) constitute a single Class of Claims for voting purposes
          under the Plan and the Bankruptcy Code.

                           (i)      Group 8-A:  Group 8-A consists of all 
                                    General Unsecured Claims.

                           (ii)     Group 8-B:  Group 8-B consists of all 7 1/2%
                                    Convertible Note Claims.

                  (c)      Class 9:  Old Preferred Stock Interests.

               Class 9 consists of all Old Preferred Stock Interests.



<PAGE>


                  (d)      Class 10:  Old Common Stock Interests and Old 
                           Restricted Common Stock Interests.

               Class 10 consists of all Old Common Stock Interests and Old
          Restricted Common Stock Interests.

           4. Impaired  Classes Of Claims And Equity  Interests  (deemed to have
rejected the Plan and, therefore, not entitled to vote on the Plan)

                  (a)      Class 11:  Unvested Old Restricted Common Stock 
                           Interests.

                           Class 11 consists of all Unvested Old Restricted 
                           Common Stock Interests.

                  (b)      Class 12:  Old Warrant Interests.

                           Class 12 consists of all Old Warrant Interests.

                  (c)      Class 13:  Old Option Interests.

                           Class 13 consists of all Old Option Interests.

                                      III.

                           TREATMENT OF ADMINISTRATIVE
                     EXPENSE CLAIMS AND PRIORITY TAX CLAIMS

           1.     Administrative Claims



<PAGE>


         Except to the extent that any entity entitled to payment of any Allowed
Administrative Claim agrees to a different treatment,  each holder of an Allowed
Administrative  Claim  shall  receive  Cash in an amount  equal to such  Allowed
Administrative  Claim on the  later  of the  Effective  Date  and the date  such
Administrative  Claim  becomes  an  Allowed  Administrative  Claim,  or as  soon
thereafter as is practicable;  provided,  however,  that Allowed  Administrative
Claims representing  liabilities  incurred in the ordinary course of business by
the Debtor in  Possession or  liabilities  arising under loans or advances to or
other obligations incurred by the Debtor in Possession (to the extent authorized
and approved by the Court if such  authorization and approval was required under
the  Bankruptcy  Code)  shall  be paid  in full  and  performed  by  Reorganized
Westbridge in the ordinary  course of business in accordance  with the terms and
subject to the conditions of any agreements governing,  instruments  evidencing,
or other documents relating to, such transactions.

           2.     Professional Compensation And Reimbursement Claims

         All entities seeking an award by the Court of compensation for services
rendered  or  reimbursement  of expenses  incurred  through  and  including  the
Confirmation Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of
the  Bankruptcy  Code (a) shall file their  respective  final  applications  for
allowances of compensation for services  rendered and  reimbursement of expenses
incurred  through  the  Confirmation  Date by the date that is 60 days after the
Effective  Date or such  other  date as may be  fixed  by the  Court  and (b) if
granted, such an award by the Court shall be paid in full in such amounts as are
Allowed  by the Court  (i) on the date  such  Administrative  Claim  becomes  an
Allowed  Administrative  Claim,  or as soon thereafter as is practicable or (ii)
upon such other terms as may be mutually  agreed upon  between such holder of an
Administrative Claim and the Debtor in Possession or, on and after the Effective
Date, Reorganized Westbridge.

           3.     Priority Tax Claims

         Except to the extent that a holder of an Allowed Priority Tax Claim has
been paid by the Debtor  prior to the  Effective  Date or agrees to a  different
treatment,  each holder of an Allowed  Priority Tax Claim shall receive,  at the
sole  option of  Reorganized  Westbridge,  (a) Cash in an  amount  equal to such
Allowed  Priority Tax Claim on the later of the Effective Date and the date such
Priority Tax Claim becomes an Allowed  Priority Tax Claim, or as soon thereafter
as is  practicable,  or (b) equal annual Cash  payments in an  aggregate  amount
equal to such Allowed  Priority  Tax Claim,  together  with  interest at a fixed
annual rate equal to 8-1/4%,  over a period through the sixth anniversary of the
date of assessment of such Allowed  Priority Tax Claim, or upon such other terms
determined by the Court to provide the holder of such Allowed Priority Tax Claim
deferred Cash payments having a value,  as of the Effective Date,  equal to such
Allowed  Priority  Tax Claim.  Each holder of a Priority  Tax Claim which is not
payable on or before the Effective Date will survive  confirmation  of the Plan,
remain  unaffected  thereby,  and be paid as and when due,  except to the extent
that a holder of such Claim agrees to a different treatment.



<PAGE>


                                       IV.

                             TREATMENT OF CLAIMS AND
                                EQUITY INTERESTS

               1.     Class 1 - Priority Non-Tax Claims
    
     (a) Distributions.  Each  Allowed  Claim in Class 1 shall be paid in full 
in Cash on the Effective  Date (if not before) except to the extent that any 
holder of such an Allowed Claim agrees to a different treatment.

     (b) Impairment and Voting. Class 1 shall be unimpaired under the Plan.
Holders of Allowed Claims in Class 1 are presumed to accept the Plan and are not
entitled to vote to accept or reject the Plan.

               2.     Class 2 - LaSalle Claim

     (a) Distributions. On or about the Effective Date, Reorganized Westbridge
shall execute and deliver to LaSalle the Amended Guarantee Agreement. The
Debtor's reimbursement obligations to LaSalle in respect of the LaSalle Letter
of Credit and LaSalle's Lien on the LaSalle Letter of Credit Collateral and
LaSalle Credit Agreement Collateral are hereby ratified and affirmed and shall
not be affected by the Plan. Accordingly, the LaSalle Claim shall be unimpaired
under section 1124 of the Bankruptcy Code, except to the extent that the holder
of such Claim agrees to a different treatment, and shall not be affected by the
Plan or the Chapter 11 Case.

     (b) Impairment and Voting. Class 2 shall be unimpaired under the Plan. The
holder of Allowed Claims in Class 2 is presumed to accept the Plan and is not
entitled to vote to accept or reject the Plan.

               3.     Class 3 - Convenience Claims

     (a) Distributions. Each holder of an Allowed Convenience Claim shall
receive Cash in an amount equal to 100% of such Allowed Convenience Claim on the
later of the Effective Date and the date such Convenience Claim becomes an
Allowed Convenience Claim, or as soon thereafter as is practicable.

     (b) Impairment and Voting. Class 3 shall be unimpaired under the Plan. The
holders of Allowed Claims in Class 3 are presumed to accept the Plan and are not
entitled to vote to accept or reject the Plan.



<PAGE>


     (c) Election to be Treated as a Convenience Claim. By checking the
appropriate box on a timely cast Ballot, the holder of an Allowed General
Unsecured Claim in an amount greater than $2,000 may elect to reduce the amount
of such holder's Allowed General Unsecured Claim to $2,000 and to receive a
distribution upon such Allowed Class 3 Convenience Claim in the amount of $2,000
as described above. Such an election shall constitute a waiver of the right to
collect, and a release of, the amount of the Allowed General Unsecured Claim in
excess of $2,000, and the holder of such Allowed Class 3 Convenience Claim shall
be deemed to have released the Debtor and its estate, and its property from any
and all liability for such excess amount. The holder of an Allowed General
Unsecured Claim which timely elects to reduce the amount of its Allowed Claim
shall be deemed to be the holder of an Allowed Class 3 Convenience Claim for
classification, voting and all other purposes under the Plan.

               4.     Class 4 - Secured Claims
    (a)  Distributions.
Except to the  extent  that a holder of an  Allowed  Secured  Claim  agrees to a
different treatment,  at the sole option of the Debtor, (i) each Allowed Secured
Claim shall be reinstated  and rendered  unimpaired  in accordance  with section
1124(2) of the Bankruptcy  Code,  notwithstanding  any contractual  provision or
applicable  nonbankruptcy  law that  entitles  the holder of an Allowed  Secured
Claim to demand or receive  payment of such Allowed  Secured  Claim prior to the
stated maturity of such Allowed Secured Claim from and after the occurrence of a
default,  (ii) each holder of an Allowed  Secured Claim shall receive Cash in an
amount  equal to such  Allowed  Secured  Claim,  including  any interest on such
Allowed  Secured  Claim  required to be paid  pursuant to section  506(b) of the
Bankruptcy  Code, on the later of the  Effective  Date and the date such Allowed
Secured  Claim becomes an Allowed  Secured  Claim,  or as soon  thereafter as is
practicable,  or (iii) each holder of an Allowed Secured Claim shall receive the
collateral  securing its Allowed  Secured Claim and any interest on such Allowed
Secured Claim  required to be paid pursuant to section  506(b) of the Bankruptcy
Code,  in full and complete  satisfaction  of such Allowed  Secured Claim on the
later of the Effective  Date and the date such Allowed  Secured Claim becomes an
Allowed Secured Claim, or as soon thereafter as is practicable.

     (b) Impairment and Voting. Class 4 shall be unimpaired under the Plan. The
holders of Allowed Claims in Class 4 are presumed to accept the Plan and are not
entitled to vote to accept or reject the Plan.

               5.     Class 5 - Intercompany Claims

     (a) Distributions. Intercompany Claims shall be unimpaired under section
1124 of the Bankruptcy Code, and shall not be affected by the Plan or the
Chapter 11 Case.

     (b) Impairment and Voting. Class 5 shall be unimpaired under the Plan. The
holders of Allowed Claims in Class 5 are presumed to accept the Plan and are not
entitled to vote to accept or reject the Plan.



<PAGE>


               6.     Class 6 - Securities Litigation Claims

     (a) Distributions. Each holder of a Class 6 Claim shall receive in respect
thereof all rights and distributions to which such holder is entitled as a
Securities Litigation Claimant pursuant to the Claims Agreement, the District
Court Order and the Final Settlement Agreement. A holder of a Class 6 Claim that
is provided for by this Section IV.6(a) shall not be entitled to receive any
additional payments or distributions by reason of Claims for the same loss or
damages filed against the Debtor.

     (b) Impairment and Voting. Class 6 shall be unimpaired under the Plan. The
holders of Claims in Class 6 are presumed to accept the Plan and are not
entitled to vote to accept or reject the Plan.

               7.     Class 7 - Unsecured 11% Note Claims
                      -----------------------------------

     (a) Distributions.

                           (i) Group 7-A. On the Initial Distribution Date or as
           soon thereafter as is practicable, each holder of an Allowed 11% Note
           Claim as of the Record Date shall  receive Cash in an amount equal to
           such Allowed 11% Note Claim as calculated  in accordance  with clause
           (iii) below.

                           (ii) Group 7-B. On the Initial  Distribution  Date or
           as soon thereafter as is practicable,  each holder of an Allowed CSFB
           11% Note Claim as of the Record Date shall  receive  New  Convertible
           Preferred Stock with a liquidation  preference  equal to such Allowed
           CSFB 11% Note Claim.

                           (iii)  Allowance  of Group 7-A and Group 7-B  Claims.
           On, and subject to the  occurrence  of, the Effective  Date, the CSFB
           11% Note Claims and the 11% Note Claims  shall be deemed  Allowed 11%
           Note  Claims  and  Allowed  CSFB  11% Note  Claims  in Class 7 in the
           aggregate  amount of $22,114,445 as of the Petition Date  (consisting
           of Allowed 11% Note Claims in the aggregate amount of  $14,421,935.31
           and  Allowed  CSFB  11%  Note  Claims  in  the  aggregate  amount  of
           $7,692,509.69),  plus simple interest  accruing at the rate per annum
           of eleven  percent (11%) on the principal  amount of the Allowed CSFB
           11% Note  Claims  and  Allowed  11% Note  Claims  from and  after the
           Petition Date to but not including the Effective Date.

     (b) Impairment and Voting. Class 7 is impaired under the Plan. The holders
of Allowed Claims in Class 7 are entitled to vote to accept or reject the Plan.


<PAGE>


               8.     Class 8 - Other Unsecured Claims

     (a) Distributions.

                           (i)   Group 8-A.

          (1) On the Initial Distribution Date or as soon thereafter as is
     practicable, each holder of an Allowed General Unsecured Claim as of the
     Record Date shall receive its Pro Rata share of the Initial Group 8-A
     Distribution Amount less the number of shares of New Common Stock in the
     Reserve.

          (2) On each Subsequent Distribution Date, each holder of an Allowed
     General Unsecured Claim as of the Record Date shall receive a Pro Rata
     share of the New Common Stock in the Surplus Distribution being made on
     such Subsequent Distribution Date.

                           (ii) Allowance of Underwriter Claims. On, and subject
                      to the occurrence of, the Effective  Date, the Underwriter
                      Claims shall be deemed Allowed General Unsecured Claims in
                      Group 8-A in an aggregate amount not to exceed $250,000.

                           (ii)  Group 8-B.

          (1) On the Initial Distribution Date or as soon thereafter as is
     practicable, each holder of an Allowed 7 1/2% Convertible Note Claim as of
     the Record Date shall receive its Pro Rata share of the Initial Group 8-B
     Distribution Amount less the number of shares of New Common Stock in the
     Reserve.

          (2) On each Subsequent Distribution Date, each holder of an Allowed 7
     1/2% Note Claim as of the Record Date shall receive its Pro Rata Share of
     New Common Stock in the Surplus Distribution being made on such Subsequent
     Distribution Date.

          (3) On, and subject to the occurrence of, the Effective Date, the 7
     1/2% Convertible Note Claims shall be deemed Allowed Unsecured Claims in
     Group 8-B in the aggregate amount of $77,260,416.

          (4) As set forth in Section XIII, holders of Allowed 7 1/2%
     Convertible Note Claims as of May 20, 1998, who remain holders of such 7
     1/2% Convertible Notes as of October 22, 1998, shall be entitled to
     participate, at their option, in the purchase of New Convertible Preferred
     Stock.


<PAGE>


     (b) Impairment and Voting. Class 8 is impaired under the Plan. The holders
of Allowed Claims in Class 8 are entitled to vote to accept or reject the Plan.

               9.     Class 9 - Old Preferred Stock Interests

     (a) Distributions. On the Initial Distribution Date or as soon thereafter
as is practicable, each holder of an Allowed Class 9 Old Preferred Stock
Interest shall receive its Pro Rata share of (i) New Common Stock representing
4% of all issued and outstanding shares of New Common Stock on the Effective
Date and (ii) New Warrants to purchase up to 2% of all issued and outstanding
shares of New Common Stock on a fully-diluted basis.

     (b) Impairment and Voting. Class 9 is impaired under the Plan. The holders
of Allowed Class 9 Old Preferred Stock Interests are entitled to vote to accept
or reject the Plan.

               10.    Class 10 - Old Common Stock Interests and Old Restricted
                      Common Stock Interests


     (a) Distributions. On the Initial Distribution Date or as soon thereafter
as is practicable, each holder of an Allowed Class 10 Old Common Stock Interest
and an Allowed Class 10 Old Restricted Common Stock Interest shall receive its
Pro Rata share of (i) New Common Stock representing 2% of all issued and
outstanding shares of New Common Stock on the Effective Date and (ii) New
Warrants to purchase up to 5% of all issued and outstanding shares of New Common
Stock on a fully-diluted basis.

     (b) Impairment of Voting. Class 10 is impaired under the Plan. The holders
of Allowed Class 10 Old Common Stock Interests and Allowed Class 10 Old
Restricted Common Stock Interests are entitled to vote to accept or reject the
Plan.

               11.    Class 11 - Unvested Old Restricted Common Stock Interests
                      ---------------------------------------------------------

     (a) Distributions. On the Effective Date, the Unvested Old Restricted
Common Stock shall be canceled and the holders of Unvested Old Restricted Stock
shall not be entitled to, and shall not, receive or retain any property or
interest in property on account of such Unvested Old Restricted Common Stock.

     (b) Impairment and Voting. Class 11 is impaired under the Plan. The holders
of Allowed Class 11 Interests are deemed to have rejected the Plan, and,
therefore, are not entitled to vote to accept or reject the Plan.



<PAGE>


               12.    Class 12 - Old Warrant Interests

     (a) Distributions. On the Effective Date, the Old Warrants shall be
canceled and the holders of Old Warrants shall not be entitled to, and shall
not, receive or retain any property or interest in property on account of such
Old Warrants.

     (b) Impairment and Voting. Class 12 is impaired under the Plan. The holders
of Allowed Class 12 Interests are deemed to have rejected the Plan, and,
therefore, are not entitled to vote to accept or reject the Plan.

               13.    Class 13 - Old Option Interests

     (a) Distributions. On the Effective Date, the Old Options shall be canceled
and the holders of Old Options shall not be entitled to, and shall not, receive
or retain any property or interest in property on account of such Old Options.

     (b) Impairment and Voting. Class 13 is impaired under the Plan. The holders
of Allowed Class 13 Interests are deemed to have rejected the Plan, and,
therefore, are not entitled to vote to accept or reject the Plan.

                                       V.

                         PROVISIONS REGARDING CORPORATE
                            GOVERNANCE AND MANAGEMENT
                            OF REORGANIZED WESTBRIDGE

           A.  Directors and Officers of Reorganized Westbridge

               1.     The Initial Board of Directors

               The initial board of directors of  Reorganized  Westbridge  shall
consist  of seven (7)  members,  four of whom shall be  selected  by CSFB or its
designee,  one of whom shall be selected by the  Creditors  Committee and two of
whom shall be selected by  Westbridge  or  Reorganized  Westbridge,  whose names
shall be disclosed on or before the date of the Confirmation Hearing.

               2.     Management of Reorganized Westbridge

               On the  Effective  Date,  the Board of Directors  of  Reorganized
Westbridge set forth in Section V.A.1 hereof, who shall be appointed pursuant to
the  Confirmation  Order,  shall  take  office  and be deemed  appointed  on the
Effective Date.

               3.     Officers

               The  officers of the Debtor  immediately  prior to the  Effective
Date shall serve as the initial officers of Reorganized  Westbridge on and after
the Effective  Date. Such officers shall serve in accordance with any employment
agreement with Reorganized Westbridge and applicable nonbankruptcy law.

               B.      Corporate Action

               1. 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.

           C.  Securities to Be Issued Pursuant to the Plan

               1.     New Common Stock

               On the Effective  Date, the issuance of 30,000,000  shares of New
Common Stock is hereby authorized without further act or action under applicable
law, regulation,  rule or order. The Debtor shall issue and distribute 6,500,000
of such authorized  shares to the holders of Allowed Claims or Allowed Interests
in Classes 8, 9 and 10 in  accordance  with this Plan.  Each share of New Common
Stock will entitle its holder to one vote. Holders of New Common Stock will have
the  right  to  participate  proportionately  in any  dividends  distributed  by
Reorganized Westbridge.

               2.     New Convertible Preferred Stock



<PAGE>


               On the  Effective  Date,  the  issuance  of 40,000  shares of New
Convertible  Preferred Stock is hereby authorized  without further act or action
under  applicable  law,  regulation,  rule or order.  The Debtor shall issue and
distribute  22,750 (such number to increase if the  Effective  Date occurs after
December 31, 1998) of such authorized shares in the aggregate to CSFB (under the
Stock  Purchase  Agreement  and as a holder  of the CSFB  11% Note  Claims)  and
holders  of 7 1/2%  Convertible  Notes  who  exercise  the  Purchase  Rights  in
accordance with this Plan. The complete terms of the New  Convertible  Preferred
Stock will be as set forth in the  Certificate  of  Designation  included in the
Plan Supplement.

               3.     The New Warrants

               On the Effective  Date,  the issuance of New Warrants to purchase
up to 7% of New  Common  Stock on a fully  diluted  basis is  hereby  authorized
without further act or action under applicable law,  regulation,  rule or order.
The New  Warrants  will  entitle  the  holders  thereof to receive  the right to
purchase,  pro rata, 7% of all issued and outstanding shares of New Common Stock
on a fully-diluted  basis.  The New Warrants will have an initial exercise price
based on an  enterprise  valuation of $95 million,  will be subject to customary
anti-dilution  provisions  and  will  expire  on the  fifth  anniversary  of the
Effective Date.

               4.     Securities Laws Matters

     (a) Registration Rights Agreement. Each Initial Holder receiving a
distribution of New Convertible Preferred Stock or New Common Stock representing
more than 10% of the aggregate New Convertible Preferred Stock or New Common
Stock issued on the Effective Date shall be entitled to become a party to the
Registration Rights Agreement.

     (b) Public Market. Westbridge and Reorganized Westbridge shall make all
reasonable efforts necessary to ensure an active and fully-valued public market
for the trading of the New Common Stock.

           D.  Retention and Incentive Bonus Program

               If not theretofore  adopted by the Debtor, on the Effective Date,
Reorganized  Westbridge or Westbridge  will have  implemented  the retention and
incentive  bonus  program  (the  "Bonus  Program")  in  substantially  the  form
contained in the Plan Supplement.

           E.  Marketing Agent Stock Options

               If not theretofore  adopted by the Debtor, on the Effective Date,
Reorganized  Westbridge will adopt a stock option plan which permits Reorganized
Westbridge to grant to its marketing  agents  options to acquire up to 3% of all
issued and outstanding  shares of New Common Stock on a fully diluted basis (the
"Agent  Options"),  which stock option plan shall be in  substantially  the form
contained in the Plan Supplement.



<PAGE>


           F.  Officer and Director Stock Options

               If not theretofore  adopted by the Debtor, on the Effective Date,
Reorganized  Westbridge will adopt a stock option plan which permits Reorganized
Westbridge to grant to its officers and  directors  options to acquire up to 10%
of all issued and  outstanding  shares of New  Common  Stock on a fully  diluted
basis (the "Officer and Director Stock Options"),  which stock option plan shall
be in substantially the form contained in the Plan Supplement.

                                       VI.

                         PROVISIONS REGARDING VOTING AND
                   DISTRIBUTIONS UNDER THE PLAN AND TREATMENT
                    OF DISPUTED, CONTINGENT AND UNLIQUIDATED
               ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS

           A. Voting of Claims and Equity  Interests.  Each holder of an Allowed
Claim or an Allowed  Equity  Interest in an  Impaired  Class of Claims or Equity
Interests  shall be entitled to vote  separately to accept or reject the Plan as
provided  in such  order as may be  entered  by the Court  establishing  certain
procedures with respect to the solicitation and tabulation of votes to accept or
reject the Plan, or any other order or orders of the Court.

           B.  Nonconsensual  Confirmation.  If any Impaired  Class of Claims or
Equity  Interests  entitled  to vote shall not accept the Plan by the  requisite
statutory  majorities  provided in sections 1126(c) or 1126(d) of the Bankruptcy
Code, as applicable, the Debtor reserves the right to have the Court confirm the
Plan under section 1129(b) of the Bankruptcy Code.

           C.  Distributions.

               1.     Method of Distribution Under the Plan

     (a) Date and Delivery of Distribution. Distributions under the Plan shall
be made by Reorganized Westbridge or its designee to the holders of Allowed
Administrative Claims, Allowed Claims or Allowed Equity Interests at the
addresses set forth on the Schedules, unless such addresses are superseded by
proofs of claim or transfers of claims filed pursuant to Bankruptcy Rule 3001
(or at the last known addresses of such holders if Westbridge or Reorganized
Westbridge has been notified in writing of a change of address).



<PAGE>


     (b) Distribution of Cash. Any payment of Cash by Reorganized Westbridge
pursuant to the Plan shall be made at the option and in the sole discretion of
Reorganized Westbridge, by (i) a check drawn on, or (ii) wire transfer from, a
domestic bank selected by Reorganized Westbridge.

     (c) Distribution of Unclaimed Property. Any distribution of Cash under the
Plan which is unclaimed after the later to occur of (a) five years after
distribution or (b) six months after the date on which such claimant's Claim is
allowed shall be transferred to Reorganized Westbridge notwithstanding state or
other escheat or similar laws to the contrary. Distributions under the Plan
consisting of New Common Stock or New Warrants that are unclaimed for a period
of five years after distribution shall be added to the Reserve and entitlement
by the holder of a Claim or Interest to such distribution shall be extinguished
and forever barred. The Debtor shall file with the Court a list of holders of
unclaimed distributions of Cash, New Common Stock and New Warrants on the third,
fourth and fifth anniversaries of the Effective Date.

     (d) Saturdays, Sundays, or Legal Holidays. If any payment or act under the
Plan is required to be made or performed on a date that is not a Business Day,
then the making of such payment or the performance of such act may be completed
on the next succeeding Business Day, and shall be deemed to have been completed
as of the required date.

     (e) Fractional Shares. No fractional shares of New Common Stock or New
Convertible Preferred Stock shall be distributed. When any distribution on
account of an Allowed Claim or Allowed Interest pursuant to the Plan would
otherwise result in the issuance of a number of shares of New Common Stock or
New Convertible Preferred Stock that is not a whole number, the actual
distribution of shares of New Common Stock or New Convertible Preferred Stock
shall be rounded as follows: (i) fractions of one-half or greater shall be
rounded to the next higher whole number and (ii) fractions of less than one-half
shall be rounded to the next lower whole number.

     (f) Distributions to Holders as of the Record Date. As at the close of
business on the Record Date, the claims register (for Claims) and transfer
ledger (for Equity Interests) shall be closed, and there shall be no further
changes in the record holders of any Claims or Equity Interests. The Debtor and
Reorganized Westbridge shall have no obligation to recognize any transfer of any
Claims or Equity Interests occurring after the Record Date. The Debtor and
Reorganized Westbridge shall instead be entitled to recognize and deal for
purposes under the Plan (except as to voting to accept or reject the Plan
pursuant to Section VI.A) with only those record holders stated on the claims
register (for Claims) and transfer ledgers (for Equity Interests) as of the
close of business on the Record Date.



<PAGE>


               2.     Disputed General Unsecured Claims

     (a) Distributions Withheld For Disputed General Unsecured Claims.

                           (i) Establishment And Maintenance Of Reserve.  On the
           Initial  Distribution  Date and each  Subsequent  Distribution  Date,
           Reorganized  Westbridge  shall  place into a reserve an amount of New
           Common Stock equal to 100% of the  distributions  to which holders of
           Disputed General Unsecured Claims would be entitled under the Plan as
           of such date if such Disputed  General  Unsecured Claims were Allowed
           General  Unsecured  Claims in their  Disputed Claim Face Amounts (the
           "Reserve").  Such  amounts  shall be  determined  by reference to the
           aggregate Face Amount of all Disputed  General  Unsecured Claims that
           have Face Amounts, plus an amount to be determined by the Court to be
           reserved for any given Disputed General  Unsecured Claims that do not
           have Face Amounts.

                           (ii)  Property  Held  in  Reserve.  Cash  held in the
           Reserve, if any (including dividends paid on New Common Stock held in
           the Reserve, if any), shall be deposited in a segregated bank account
           or accounts in the name of  Reorganized  Westbridge and designated as
           held in trust for the benefit of holders of Allowed General Unsecured
           Claims.  Cash held in the Reserve  shall not  constitute  property of
           Reorganized Westbridge.  Reorganized Westbridge shall invest the Cash
           held in the  Reserve  in a  manner  consistent  with  the  investment
           guidelines  to be  agreed  upon  by  the  Debtor  and  the  Creditors
           Committee,  which investment guidelines shall be included in the Plan
           Supplement.  Reorganized  Westbridge  shall pay, or cause to be paid,
           out of the funds held in the Reserve,  any tax imposed on the Reserve
           by any  governmental  unit with  respect to income  generated  by the
           property held in the Reserve.  The yield earned on such invested Cash
           (net of applicable  taxes) shall be  distributed to each holder of an
           Allowed  Unsecured  Claim on the last  Subsequent  Distribution  Date
           under the Plan,  based upon each holder's Pro Rata share.  New Common
           Stock  held in the  Reserve  shall be held in  trust  by  Reorganized
           Westbridge  for  the  benefit  of the  potential  claimants  of  such
           securities   and  shall  not   constitute   property  of  Reorganized
           Westbridge.



<PAGE>


                           (iii)   Distributions   Upon  Allowance  Of  Disputed
           General Unsecured Claims.  The holder of a Disputed General Unsecured
           Claim  that  becomes  an  Allowed  Claim  subsequent  to the  Initial
           Distribution  Date shall receive a  distribution  of New Common Stock
           from  the  Reserve  on the next  Subsequent  Distribution  Date  that
           follows the Quarter  during  which such  Disputed  General  Unsecured
           Claim  becomes an  Allowed  Claim  pursuant  to a Final  Order.  Such
           distributions  shall be made in  accordance  with the Plan based upon
           the distributions  that would have been made to such holder under the
           Plan if the  Disputed  General  Unsecured  Claim had been an  Allowed
           Claim on or prior to the Effective Date.

               3. Surplus  Distributions to Holders of Allowed Unsecured Claims.
The following consideration shall constitute surplus distributions (the "Surplus
Distributions")  pursuant  to the  Plan:  (i)  pursuant  to  Section  VI.C.1(c),
distributions  under the Plan to holders of Allowed  Unsecured  Claims  that are
unclaimed for a period of five years after distribution thereof; and (ii) to the
extent  that a Disputed  General  Unsecured  Claim is not  Allowed or becomes an
Allowed Claim in an amount less than the Disputed  Claim Face Amount,  shares of
New Common  Stock equal to the number of shares of New Common  Stock held in the
Reserve  on  account  of  such  excess.  The  Surplus   Distributions  shall  be
distributed to the holders of Allowed  Unsecured Claims pursuant to Section IV.8
of the Plan[^];  provided,  however,  that  Reorganized  Westbridge shall not be
under any obligation to make Surplus Distributions on a Subsequent  Distribution
Date unless the New Common Stock to be distributed on a Subsequent  Distribution
Date  consists  of  1,000  shares  of New  Common  Stock  or  more,  unless  the
distribution is the final Subsequent Distribution Date under the Plan.

               4.  Objections  To And  Resolution Of  Administrative  Claims and
Claims; Administrative and Priority Claims Reserve.

     (a) Objections To And Resolution of Administrative Claims and Claims.
Except as to applications for allowances of compensation and reimbursement of
expenses under sections 330 and 503 of the Bankruptcy Code, the Debtor,
Reorganized Westbridge, the Creditors Committee and CSFB shall have the
exclusive right to make and file objections to Administrative Claims and Claims
subsequent to the Confirmation Date. All objections shall be litigated to a
Final Order; provided, however, that Reorganized Westbridge, the Creditors
Committee and CSFB, jointly, shall have the authority to compromise, settle,
otherwise resolve or withdraw any objections, or otherwise settle or compromise
any Claim, without approval of the Court. Unless otherwise ordered by the Court,
the Debtor, Reorganized Westbridge, the Creditors Committee, or CSFB shall file
all objections to Administrative Claims and Claims that are the subject of
proofs of claims or requests for payment filed with the Court (other than
applications for allowances of compensation and reimbursement of expenses) and
serve such objections upon the holders of the Administrative Claim or Claim as
to which the objection is made as soon as is practicable, but in no event later
than 60 days after the Effective Date or such later date as may be approved by
the Court.

                      (b)  Administrative and Priority Claims Reserve.



<PAGE>


                           (i)  Establishment  of  Administrative  and  Priority
           Claims Reserve. On the Effective Date,  Reorganized  Westbridge shall
           place  into  reserve  an amount  of Cash  equal to (i) the sum of the
           aggregate Face Amount of all Disputed Administrative Claims, Disputed
           Priority Tax Claims,  and Disputed  Priority Non-Tax Claims that have
           Face Amounts, plus (ii) an amount to be determined by the Court to be
           reserved for any Disputed  Administrative  Claims,  Disputed Priority
           Tax Claims and Disputed Priority Non-Tax Claims that do not have Face
           Amounts (the "Administrative and Priority Claims Reserve").

                           (ii) Cash Held in Administrative  and Priority Claims
           Reserve.  Cash held in the Administrative and Priority Claims Reserve
           shall be deposited  in a  segregated  bank account or accounts in the
           name of  Reorganized  Westbridge  and designated as held in trust for
           the  benefit of holders of  Allowed  Administrative  Claims,  Allowed
           Priority Tax Claims and Allowed Priority Non-Tax Claims. Cash held in
           the  Administrative  and Priority Claims Reserve shall not constitute
           property of  Reorganized  Westbridge.  Reorganized  Westbridge  shall
           invest  the  Cash  held in the  Administrative  and  Priority  Claims
           Reserve  in a manner  consistent  with  investment  guidelines  to be
           included in the Plan Supplement. Reorganized Westbridge shall pay, or
           cause to be paid,  out of the funds  held in the  Administrative  and
           Priority Claims Reserve,  any tax imposed on the  Administrative  and
           Priority  Claims  Reserve by any  governmental  unit with  respect to
           income  generated  by Cash held in the  Administrative  and  Priority
           Claims  Reserve.  Any Cash held in the  Administrative  and  Priority
           Claims Reserve after all Administrative and Priority Claims have been
           Allowed or disallowed shall be transferred to and become the property
           of Reorganized Westbridge.

               5.     Hart-Scott-Rodino Act Filing Requirements

               Any  person or entity  who will  receive  a  distribution  of New
Convertible  Preferred  Stock  and/or  New  Common  Stock  under the Plan who is
required to file a pre-merger  notification  and report pursuant to the HSR Act,
shall not receive such  distribution  until the notification and waiting periods
under the HSR Act applicable to such person or entity shall have expired or been
terminated.

               6.     Allocation of Consideration

               The aggregate  consideration  to be distributed to the holders of
Allowed Claims in each Class under the Plan shall be treated as first satisfying
an amount  equal to the stated  principal  amount of the Allowed  Claim for such
holders and any  remaining  consideration  as  satisfying  accrued,  but unpaid,
interest and costs, if any, and attorneys' fees where applicable.


<PAGE>



     7. Cancellation and Surrender of Existing Securities and Agreements.

               As of the latest to occur of the  Effective  Date and the Initial
Distribution  Date, the 11% Notes,  the 7 1/2%  Convertible  Notes, the 11% Note
Indenture,  the 7 1/2% Convertible Note Indenture,  the Old Preferred Stock, the
Old Common Stock, the Old Restricted Stock, the Old Warrants and the Old Options
shall be deemed canceled and such  agreements and securities,  together with all
security interests, liens and instruments issued pursuant thereto, shall have no
further   legal   effect  other  than  as  evidence  of  any  right  to  receive
distributions under the Plan; provided, however, that the 11% Note Indenture and
7 1/2%  Convertible  Note  Indenture  shall  continue  in effect  solely for the
purposes of (i) allowing the applicable  Trustee to make the distributions to be
made on  account  of such  Claims  under  the  Plan,  and (ii)  permitting  such
applicable  Trustee to maintain any rights or liens it may have for fees,  costs
and expenses under the 11% Note Indenture and 7 1/2% Convertible Note Indenture.

               Notwithstanding  any other  provision of the Plan, as a condition
precedent  to  receiving  any  distribution  under  the Plan,  each  holder of a
promissory note, share certificate, or other instrument or security evidencing a
Claim or Equity Interest must surrender such promissory note, share certificate,
or other  instrument  or security to  Reorganized  Westbridge or its designee or
must  execute and deliver an  affidavit of loss and furnish an indemnity or bond
in substance and amount reasonably satisfactory to Reorganized Westbridge.

               Any holder of a Claim or Equity  Interest that fails to surrender
such  instrument  or security or to provide the affidavit and indemnity or bond,
before the later to occur of (i) the second  anniversary  of the Effective  Date
and (ii) six months  following the date such  holder's  Claim becomes an Allowed
Claim or Interest,  shall be deemed to have forfeited all rights, Claims, and/or
Equity  Interests and may not receive or participate in any  distribution  under
the Plan.

               8.     Trustee Fees

               On the  Effective  Date,  each Trustee shall receive an amount of
Cash  equal to the  amount  of  reasonable  fees and  expenses  of such  Trustee
(including the reasonable fees and expenses of the respective  counsel  retained
by each Trustee),  in accordance  with and to the extent provided for in the 11%
Note Indenture or 7 1/2%  Convertible  Note  Indenture,  as applicable,  whether
incurred prior or subsequent to the Petition Date, without  application by or on
behalf of such Trustee or their respective  counsel to the Court.  Distributions
made to the holders of Allowed  Claims  pursuant to the Plan will not be reduced
on account of such payments to each Trustee.



<PAGE>


                                      VII.

             IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN

           A.  Registration Rights Agreement

               On or before the  Effective  Date,  Reorganized  Westbridge  will
execute the Registration Rights Agreement without the requirement of any further
corporate action.

           B.  Continued Corporate Existence and Vesting of Assets in
               Reorganized Westbridge.

               Westbridge,  as Reorganized  Westbridge,  shall continue to exist
after the Effective Date with all powers of a corporation  under the laws of the
State of Delaware and without  prejudice to any right to alter or terminate such
existence  (whether by merger or  otherwise)  under such  applicable  state law.
Except as  otherwise  expressly  provided in the Plan,  on the  Effective  Date,
Reorganized  Westbridge  shall be vested with all of the  property of the estate
free and clear of all claims, liens,  encumbrances,  charges and other interests
of creditors and equity security holders,  provided that the security  interests
securing the LaSalle Credit  Agreement and LaSalle Letter of Credit shall not be
terminated or discharged;  and Reorganized Westbridge may operate its businesses
free of any restrictions imposed by the Bankruptcy Code, the Bankruptcy Rules or
by the Court, subject only to the terms and conditions of the Plan.

           C.  Termination of Subordination Rights

               All  Claims  of  the  11%  Noteholders  and  7  1/2%  Convertible
Noteholders  against  the Debtor and all rights and Claims  between or among the
11%  Noteholders  and 7 1/2%  Convertible  Noteholders  relating  in any  manner
whatsoever to claimed  subordination rights, rights to post-petition and default
interest,  or  similar  rights,  if  any  (collectively,  "Subordination-Related
Rights"),  shall be deemed satisfied by the distributions  under,  described in,
contemplated by, and/or  implemented by, this Plan to holders of such Claims and
such rights shall be deemed waived, released,  discharged,  and terminated as of
the latest to occur of the Effective Date and the Initial Distribution Date, and
all actions  related to the  enforcement  of such  Subordination-Related  Rights
shall be permanently enjoined.  Distributions under,  described in, contemplated
by, and/or implemented by, this Plan shall not be subject to levy,  garnishment,
attachment,  or like legal process by any holder of a Claim, including,  but not
limited to, holders of 11% Note Claims and 7 1/2%  Convertible  Note Claims,  by
reason of any claimed  Subordination-Related  Rights or otherwise,  so that each
holder  of  a  Claim  shall  have  and  receive  the  complete  benefit  of  the
distributions in the manner set forth and described in this Plan.



<PAGE>


           D.  Discharge of Westbridge.

               The rights  afforded  herein and the  treatment of all Claims and
Equity Interests  herein shall be in exchange for and in complete  satisfaction,
discharge,  and  release  of all  Claims  and  Equity  Interests  of any  nature
whatsoever,  including  any  interest  accrued on such Claims from and after the
Petition  Date,  against the  Debtor,  the Debtor in  Possession,  or any of its
assets or properties,  arising prior to the Effective Date.  Except as otherwise
expressly  specified  in the Plan,  the  Confirmation  Order shall act as of the
Effective  Date as a discharge of all debts of,  Claims  against,  liens on, and
Equity Interests in the Debtor,  its assets and properties,  arising at any time
before the entry of the  Confirmation  Order,  regardless  of whether a proof of
claim or interest  with respect  thereto was filed,  whether the Claim or Equity
Interest is Allowed,  or whether the holder  thereof votes to accept the Plan or
is entitled to receive a distribution thereunder.  After the Effective Date, any
holder of such  discharged  Claim or Equity  Interest  shall be  precluded  from
asserting against the Debtor,  Reorganized  Westbridge,  or any of its assets or
properties, any other or further Claim or Equity Interest based on any document,
instrument, act, omission,  transaction, or other activity of any kind or nature
that occurred before the entry of the Confirmation Order.

           E.  Injunction.

               Except  as  otherwise   expressly   provided  in  the  Plan,  the
Confirmation  Order,  or a separate  order of the Court,  all  entities who have
held,  hold, or may hold Claims against or Equity  Interests in the Debtor which
arose before or were held as of the Effective Date, are permanently enjoined, on
and after the Effective  Date,  from (a)  commencing or continuing in any manner
any action or other  proceeding  of any kind  against the Debtor with respect to
any such Claim or Equity Interest, (b) the enforcement,  attachment, collection,
or  recovery by any manner or means of any  judgment,  award,  decree,  or order
against  the  Debtor  on  account  of any such  Claim or  Equity  Interest,  (c)
creating,  perfecting,  or  enforcing  any  encumbrance  of any kind against the
Debtor or against the property or interests in property of the Debtor on account
of any such  Claim or Equity  Interest  and (d)  asserting  any right of setoff,
subrogation,  or  recoupment  of any kind  against any  obligation  due from the
Debtor or against the property or interests in property of the Debtor on account
of any such Claim or Equity Interest. Such injunction shall extend to successors
of the Debtor (including, without limitation,  Reorganized Westbridge) and their
respective properties and interests in property.

           F. Preservation/Waiver of Causes of Action.



<PAGE>


               1.  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.



<PAGE>


               Administrative  Claims incurred by Reorganized  Westbridge  after
the date and time of the entry of the  Confirmation  Order,  including  (without
limitation)  Claims for  professionals'  fees and expenses  incurred  after such
date,  shall  not be  subject  to  application  and may be  paid by  Reorganized
Westbridge  in the ordinary  course of business and without  application  for or
Court approval.

           I.  Westbridge's Limited Release.

               On the  Effective  Date,  Westbridge  on  behalf of  itself,  its
non-debtor   Subsidiaries   and  the   estate,   shall  be  deemed  to   release
unconditionally  all  of  their  respective  present  and  former  officers  and
directors,  except those  officers and  directors set forth on Exhibit D to this
Plan, from any and all Claims, obligations,  suits, judgments,  damages, rights,
Causes of Action and liabilities whatsoever,  whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or otherwise, based
in whole or in part upon actions taken in their respective  capacities described
above or any omission, transaction, event or other occurrence taking place on or
prior to the Effective  Date in any way relating to  Westbridge,  the Chapter 11
Case or the Plan,  except that (i) no individual  shall be released from (x) any
act or omission that constitutes  gross negligence or willful  misconduct or (y)
any  contractual  obligation of any such person to the Debtor or its  non-debtor
Subsidiaries,  and (ii) Reorganized Westbridge shall not relinquish or waive the
right to assert any of the foregoing as a legal or equitable defense or right of
set-off or recoupment  against any Claims of any such persons  asserted  against
Westbridge or its non-debtor Subsidiaries.

           J.  Exculpation, Release and Injunction of Released Parties.



<PAGE>


               1. 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.


           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 Releases. Effective as of the Confirmation Date, but subject to
the occurrence of the Effective Date, and except as otherwise expressly provided
in the Plan or the Confirmation Order, each of the Debtor's past and present
officers and directors and their respective property shall be released from any
and all Claims, obligations, rights, causes of action, and liabilities which any
holder of a Claim against or Equity Interest in the Debtor may be entitled to
assert in any case, whether for tort, fraud, contract, violations of federal or
state securities laws, or otherwise, whether known or unknown, whether foreseen
or unforeseen, existing or hereafter arising, based in whole or in part upon any
act or omission, transaction, event or other occurrence taking place on or
before the Effective Date in any way relating to the Debtor, the Chapter 11
Case, or the Plan.

     3. Limitation of Governmental Releases. Notwithstanding Sections VII.K.1.
and 2 of the Plan, the Plan shall not release, discharge, or exculpate any
non-debtor party from any debt owed to the United States Government and/or its
agencies, including the Pension Benefit Guaranty Corporation (the "Government"),
or from any liability arising under the Internal Revenue Code, the Employee
Retirement Income Security Act of 1974, as amended, or the environmental laws,
securities laws or criminal laws of the United States. In addition,
notwithstanding Sections VII.K.1 and 2 of the Plan, the Plan shall not enjoin or
prevent the Government from collecting any such liability from any such
non-debtor party.



<PAGE>


           L.   Term of Bankruptcy Injunction or Stays.

               All  injunctions  or stays  provided  for in the  Chapter 11 Case
under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence
on the  Confirmation  Date,  shall  remain in full  force and  effect  until the
Effective Date.

           M.  Preservation of Insurance.

               The  Debtor's  discharge  and release from all Claims as provided
herein,  except as necessary to be consistent with this Plan, shall not diminish
or impair the  enforceability  of any insurance  policy  (including the National
Union Policy) that may cover Claims against the Debtor,  Reorganized  Westbridge
(including,  without limitation, its past and present officers and directors) or
any other person or entity.

           N. Officers' and Directors' Indemnification Rights.

               Notwithstanding any other provisions of the Plan, the obligations
of the Debtor to  indemnify  its present  and former  directors,  officers,  and
employees  against any obligations,  liabilities,  costs or expenses pursuant to
the articles of  incorporation  or by-laws of the Debtor,  applicable state law,
specific agreement,  or any combination of the foregoing,  shall not survive the
Effective Date and shall be discharged, regardless of whether indemnification is
owed in connection  with an event occurring prior to, upon, or subsequent to the
Petition Date;  provided,  however,  that Reorganized  Westbridge shall take all
such actions as are  necessary or desirable to maintain in full force and effect
the  National  Union  Policy  until  such time as it may expire by its terms and
directors  and  officers  of the  Debtor  and its  Subsidiaries  covered  by the
National  Union Policy shall be entitled to make claims  thereunder  pursuant to
the terms thereof notwithstanding the provisions of this Section VII.N; provided
further,  however,  that the  Indemnification  Escrow shall be terminated on the
Effective   Date  and  the  Debtor  shall  retain  the  Cash  contained  in  the
Indemnification Escrow free and clear of any Claims or other rights or interests
of any Person.

           O.  The Securities Litigation Settlement Fund.

     1. Payment of Securities Litigation Settlement PaymentError! Bookmark not
defined.. Within five (5) days of the entry of the District Court Order by the
District Court (which date shall not be earlier than the Effective Date)
requiring the payment of such amount, the Debtor and National Union shall pay
the aggregate sum of $1,000,000 (the "Securities Litigation Settlement Fund")
pursuant to, and in accordance with the terms of, the Final Settlement Agreement
and the District Court Order; which payment shall be in full satisfaction and
discharge of the liabilities of the Debtor in respect of the Securities
Litigation Claims. The payment by the Debtor and National Union shall be
comprised of Cash paid by the Debtor and payments made by National Union under
the National Union Policy.


<PAGE>


     2. Administration. The Securities Litigation Settlement Fund shall be held
in accordance with the Final Settlement Agreement, subject to the jurisdiction
of the District Court. No distribution shall be made from the Securities
Litigation Settlement Fund except pursuant to the Final Settlement Agreement and
an order of the District Court.

     3. Allocation of Assets. The distribution of the Securities Litigation
Settlement Fund shall be made pursuant to the Final Settlement Agreement and the
District Court Order to be entered by the District Court prior to the Effective
Date, as the same may be amended, modified or supplemented from time to time by
the District Court in accordance with the terms of such District Court Order on
such notice as the District Court deems appropriate.

                                      VIII.

                            RETENTION OF JURISDICTION



<PAGE>


               The  Court  shall  have  exclusive  jurisdiction  of all  matters
arising out of, and related  to, the Chapter 11 Case and the Plan  pursuant  to,
and for the purposes of, section 105(a) and section 1142 of the Bankruptcy  Code
and for, among other things, the following  purposes:  (1) to hear and determine
applications for the assumption or rejection of executory contracts or unexpired
leases  pending on the date the Plan is  confirmed,  and the allowance of Claims
resulting  therefrom;  (2)  to  determine  any  other  applications,   adversary
proceedings,  and contested matters pending on the Effective Date; (3) to ensure
that distributions to holders of Allowed Claims and Allowed Equity Interests are
accomplished as provided herein;  (4) to resolve disputes as to the ownership of
any Claim or Equity  Interest;  (5) to hear and determine  timely  objections to
Administrative  Claims and Claims; (6) to enter and implement such orders as may
be  appropriate  in the event the  Confirmation  Order is for any reason stayed,
revoked,  modified or vacated;  (7) to issue such orders in aid of  execution of
the Plan, to the extent  authorized by section 1142 of the Bankruptcy  Code; (8)
to consider any modifications of the Plan, to cure any defect or omission, or to
reconcile  any  inconsistency  in any  order of the  Court,  including,  without
limitation, the Confirmation Order; (9) to resolve disputes concerning nondebtor
releases,  exculpations,  and  injunctions  contained  herein;  (10) to hear and
determine all applications  for  compensation  and  reimbursement of expenses of
professionals  under sections 330, 331, and 503(b) of the Bankruptcy  Code; (11)
to hear and determine  disputes  arising in connection with the  interpretation,
implementation, or enforcement of the Plan; (12) to hear and determine any issue
for  which  the  Plan  requires  a Final  Order of the  Court;  (13) to hear and
determine matters concerning state,  local, and federal taxes in accordance with
sections  346,  505,  and 1146 of the  Bankruptcy  Code;  (14) to hear any other
matter not  inconsistent  with the Bankruptcy  Code;  (15) to hear and determine
disputes arising in connection with  compensation and  reimbursement of expenses
of  professionals  for services  rendered  during the period  commencing  on the
Confirmation  Date through and including the  Effective  Date;  (16) to hear and
determine  disputes  arising in  connection  with any fees and  expenses  of any
Trustee for services  rendered through and including the Effective Date and (17)
to enter a final decree closing the Chapter 11 Case.

                                       IX.

                            MISCELLANEOUS PROVISIONS

           A.  Payment of Statutory Fees.

               All fees  payable on or before the  Effective  Date  pursuant  to
section 1930 of title 28 of the United  States Code,  as determined by the Court
at the Confirmation Hearing, shall be paid on or before the Effective Date.

           B.  Dissolution of Creditors Committee.

               The appointment of the Creditors Committee shall terminate on the
later of the sixtieth day  following  the  Effective  Date and the first date on
which there  exists a Final  Order with  respect to the  applications  for final
allowances of compensation  and  reimbursement  of expenses of the attorneys and
financial advisors to the Creditors Committee.

           C. Modification of the Plan.

               Westbridge  reserves the right, in accordance with the Bankruptcy
Code,  to  amend or to  modify  the  Plan,  with the  consent  of the  Creditors
Committee and CSFB prior to the entry of the Confirmation  Order. After entry of
the Confirmation Order, Reorganized Westbridge or Westbridge may amend or modify
the Plan, or remedy any defect or omission or reconcile any inconsistency in the
Plan in such a manner as may be necessary to carry out the purpose and intent of
the Plan.

           D.  Governing Law.

               Unless a rule of law or  procedure  is  supplied  by Federal  law
(including the Bankruptcy  Code and  Bankruptcy  Rules) or the Delaware  General
Corporation  Law,  the laws of the State of New York  (without  reference to the
conflicts  of  laws  provisions  thereof)  shall  govern  the  construction  and
implementation  of the  Plan  and any  agreements,  documents,  and  instruments
executed in connection with the Plan.

           E.  Filing or Execution of Additional Documents.



<PAGE>


               On or  before  the  Effective  Date,  Westbridge  or  Reorganized
Westbridge,  shall  file  with  the  Court  or  execute,  as  appropriate,  such
agreements and other  documents as may be necessary or appropriate to effectuate
and further evidence the terms and conditions of the Plan.

           F.  Withholding and Reporting Requirements.

               In  connection  with  the  Plan  and all  instruments  issued  in
connection  therewith and distributions  thereon,  Reorganized  Westbridge shall
comply with all withholding and reporting  requirements  imposed by any federal,
state, local, or foreign taxing authority and all distributions  hereunder shall
be subject to any such withholding and reporting requirements.

           G.  Exemption From Transfer Taxes.

               Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer  or  exchange  of  Equity  Securities  under the  Plan,  the  making or
assignment  of any lease or  sublease  or the  making or  delivery  of any other
instrument  whatsoever,  in furtherance of or in connection  with the Plan shall
not be subject to any stamp,  real estate  transfer,  recording or other similar
tax.

           H.  Waiver of Federal Rule of Civil Procedure 62(a).

     The Debtor may request that the Confirmation Order include (a) a finding
that Fed. R. Civ. P. 62(a) shall not apply to the Confirmation Order and (b)
authorization for the Debtor to consummate the Plan immediately after entry of
the Confirmation Order.

           I.  Headings.

               Headings used in the Plan are for  convenience and reference only
and shall not constitute a part of the Plan for any purpose.

           J.  Exhibits/Schedules.

               All Exhibits and Schedules to the Plan are incorporated  into and
constitute a part of the Plan as if set forth herein.

           K.  Notices.

               All  notices,  requests,  and demands  hereunder  to be effective
shall be in writing and unless otherwise  expressly  provided  herein,  shall be
deemed to have been duly given or made when  actually  delivered or, in the case
of notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows:



<PAGE>


     To the Debtor: Westbridge Capital Corp., 110 West Seventh Street, Fort
Worth, Texas 76102, attention: Patrick J. Mitchell, Tel.: (817) 878-3306/Fax:
(817) 878-3672, with a copy to Paul, Weiss, Rifkind, Wharton & Garrison, 1285
Avenue of the Americas, New York, New York 10019-6064, attention: Alan W.
Kornberg, Tel.: (212) 373-3000/Fax: (212) 757-3990.

     To the Creditors Committee: Stroock & Stroock & Lavan LLP, 180 Maiden Lane,
New York, New York 10038, attention: Fred S. Hodara, Tel: (212) 806-5400/ Fax:
(212) 806-6006.

     To CSFB: Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York
10038, attention: Michael J. Sage, Tel.: (212) 504-6000/Fax: (212) 504-6666.

           L.  Plan Supplement.

               Forms  of  the  documents  relating  to  the  Amended  Westbridge
Certificate of Incorporation,  the Amended Westbridge Bylaws,  Amended Guarantee
Agreement,  New Convertible  Preferred Stock, New Warrants,  Registration Rights
Agreement,  investment  guidelines referred to in Section  VI.C.2(a)(ii),  Agent
Options,  Officers and Director  Stock  Options and the Bonus  Program  shall be
contained in the Plan  Supplement and filed with the Clerk of the Court at least
10 days prior to the date of the Confirmation  Hearing. Upon its filing with the
Court,  the Plan  Supplement  may be inspected in the office of the Clerk of the
Court  during  normal  court hours.  Holders of Claims or Equity  Interests  may
obtain a copy of the Plan  Supplement  upon  written  request  to the  Debtor in
accordance with Section IX.K of the Plan.

           M.  Conflict.

               The  terms  of  this  Plan  shall  govern  in  the  event  of any
inconsistency  with  the  summaries  of the Plan  set  forth  in the  Disclosure
Statement.

                                       X.

                    EXECUTORY CONTRACTS AND UNEXPIRED LEASES



<PAGE>


               Other than (i) executory  contacts or unexpired  leases which are
the subject of a motion to reject  pending on the  Confirmation  Date,  and (ii)
employment  agreements,  if any,  terminated  prior to or in connection with the
Plan (including,  without limitation,  those employment  agreements set forth on
Exhibit E to this Plan),  all of the executory  contracts,  unexpired leases and
employment  agreements  that  exist  between  Westbridge  and  any  person,  are
specifically  assumed as of the Effective  Date pursuant to the Plan. All Claims
for damages  arising  from the  rejection  of  executory  contracts or unexpired
leases  must be filed with the Court in  accordance  with the terms of the order
authorizing such rejection or, if not rejected by separate order,  within thirty
(30) days from the entry of the Confirmation  Order. Any Claims not filed within
such time will be forever barred from assertion against  Westbridge,  its estate
and  Reorganized  Westbridge.  All Allowed  Claims arising from the rejection of
executory  contracts or  unexpired  leases shall be treated as Class 8 Claims in
Group  8-A or  Class  3  Claims  (Convenience  Claims),  as  the  case  may  be.
Reorganized Westbridge, except as otherwise agreed by the parties, will cure any
and all  undisputed  defaults  within 60 days of the  Effective  Date  under any
executory contract,  unexpired lease or employment agreement assumed pursuant to
the Plan in accordance  with section 365 of the  Bankruptcy  Code.  All disputed
defaults  that are required to be cured shall be cured either  within 30 days of
the entry of a Final Order  determining  the amount,  if any, of the Debtor's or
Reorganized  Westbridge's liability with respect thereto, or as may otherwise be
agreed to by the parties.

                                       XI.

                                  BENEFIT PLANS

               All  employment and severance  agreements  and policies,  and all
employee  compensation and benefit plans,  policies,  and programs of the Debtor
applicable generally to its employees, including agreements and programs subject
to section 1114 of the  Bankruptcy  Code,  as in effect on the  Effective  Date,
including,  without limitation, all savings plans, retirement plans, health care
plans,  disability plans,  severance  benefit plans,  incentive plans, and life,
accidental death, and dismemberment  insurance plans, shall be deemed to be, and
shall be treated as through they are, executory contracts that are assumed under
the Plan, but only to the extent that rights under such  agreements and programs
are held by the Debtor or individuals who are Reorganized  Westbridge  employees
as of the Effective Date, and the Debtor's obligations under such agreements and
programs to  individuals  who are employees of the Debtor on the Effective  Date
shall survive the Effective Date of this Plan,  without prejudice to Reorganized
Westbridge's  rights under applicable  non-bankruptcy  law to modify,  amend, or
terminate the foregoing arrangements, except for (i) such executory contracts or
plans  specifically  rejected pursuant to the Plan (to the extent such rejection
does not violate  section 1114 of the  Bankruptcy  Code) and (ii) such executory
contracts  or plans  as have  previously  been  terminated  (including,  without
limitation,  any employment  agreements set forth on Exhibit E to this Plan), or
rejected, pursuant to a Final Order, or specifically waived by the beneficiaries
of such plans, contracts, or programs.



<PAGE>


                                      XII.

                            EFFECTIVENESS OF THE PLAN

           A.  Confirmation of the Plan.

               The Plan can be  confirmed  either under  section  1129(a) of the
Bankruptcy  Code or in a  non-consensual  manner  under  section  1129(b) of the
Bankruptcy Code so long as the conditions of Section XII.B.1 have been satisfied
or waived pursuant to Section XII.B.2.

           B.  Effectiveness of the Plan.

               1.     Conditions Precedent to Effectiveness

               The Plan shall not become  effective unless and until it has been
confirmed and the  following  conditions  have been  satisfied in full or waived
pursuant to Section XII.B.2:  (1) the Confirmation  Order in a form satisfactory
to the Debtor, CSFB and the Creditors Committee shall have become a Final Order;
(2) the  Effective  Date shall have  occurred  within six months  following  the
Petition Date; (3) the Amended  Westbridge  Certificate of  Incorporation  shall
have been  properly  filed with the Secretary of State of the State of Delaware;
(4) all authorizations,  consents and regulatory approvals  (including,  without
limitation,  any approvals required under the HSR Act or state insurance laws or
regulations relating to the change in ownership of Westbridge upon the Effective
Date) required (if any) for the Plan's  effectiveness  shall have been obtained;
(5) the  aggregate  amount  of Class 8  Claims  in  Group  8-A  does not  exceed
$5,000,000;  (6) each of the  conditions to the Stock Purchase  Agreement  other
than the occurrence of the Effective Date shall have been satisfied or waived as
set forth  therein;  (7) the  aggregate  amount  of  Administrative  Claims  and
Priority Non-Tax Claims as of the Effective Date does not exceed $5,000,000; (8)
the Debtor,  CSFB and the Creditors  Committee shall each have approved the form
and substance of each of the Amended  Westbridge  Certificate of  Incorporation,
the Amended Westbridge Guarantee, the Amended Westbridge By-Laws, the New Common
Stock, the New Convertible  Preferred Stock, the New Warrants,  the Registration
Rights  Agreement,   the  Bonus  Program,  the  Agent  Options,  the  Management
Employment  Agreements and the Officer and Director  Stock Options;  and (9) the
District Court shall have entered the District  Court Order  approving the Final
Settlement  Agreement and any  amendments  thereof,  which  District Court Order
shall not  materially  modify or alter the Securities  Litigation  Settlement as
described in the Claims Agreement.



<PAGE>


               2.     Waiver of Conditions

               Westbridge  may waive any or all of the  conditions  set forth in
Section  XII.B.1  above at any time,  with the prior  consent  of the  Creditors
Committee  and CSFB,  without  leave of or order of the Court  and  without  any
formal action.

               3.     Effect of Failure of Conditions

               In the event that the Effective  Date does not occur on or before
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.

               5.  Survival  of  the  Final  Settlement  Agreement.   The  Final
Settlement  Agreement  shall  survive  consummation  of the Plan,  except to the
extent that any provision of the Final Settlement Agreement is inconsistent with
the  Plan,  in  which  case the  provisions  of the Plan  shall  supersede  such
inconsistent provision of the Final Settlement Agreement.

                                      XIII.

                    NEW CONVERTIBLE PREFERRED STOCK PURCHASE



<PAGE>


           A.  Stock  Purchase  Agreement.  As  provided  in the Stock  Purchase
Agreement,  CSFB has agreed to  purchase  all of the issued and  authorized  New
Convertible  Preferred  Stock not  distributable  to holders of Allowed CSFB 11%
Note Claims upon the terms and subject to the  conditions set forth below and in
the Stock Purchase Agreement. The aggregate proceeds received by the Debtor from
the exercise of such Purchase Rights shall be distributed under the Plan to fund
distributions to holders of Allowed Class 7 Claims in Group 7-A.

           B.  Purchase  Right.   Under  the  Plan,  each  holder  of  a  7-1/2%
Convertible  Note as of October 22, 1998 shall be issued the right (a  "Purchase
Right"),  on the terms and conditions  hereinafter  set forth,  to purchase upon
exercise  and  satisfaction  of other  conditions  its Pro Rata  Percentage  (as
defined below) of the New Convertible Preferred Stock not distributed to holders
of Allowed  CSFB 11% Note Claims at a purchase  price  equal to the  liquidation
preference of the New Convertible Preferred Common Stock. The aggregate proceeds
received  by the Debtor  from the  exercise  of such  Purchase  Rights  shall be
distributed  under the Plan to fund  distributions to holders of Allowed Class 7
Claims in Group 7-A. The Debtor will issue an aggregate of  14,836,413  Purchase
Rights  (which  amount is equal to one  Purchase  Right for every one  dollar of
liquidation  preference of New  Convertible  Preferred  Stock not distributed to
holders of Allowed CSFB 11% Note Claims).

     1. 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 22, 1998 (each such holder,
an "Eligible Holder"). The Purchase Right is nontransferable.

     (a) Purchase Right Amount. The Purchase Right shall entitle each Eligible
Holder to purchase New Convertible Preferred Stock with a liquidation preference
equal to the product of (1) such holder's Pro Rata Percentage multiplied by (2)
the liquidation preference as of the Effective Date of the New Convertible
Preferred Stock not distributable to holders of Allowed CSFB 11% Note Claims
under Section IV.7(a)(ii) (i.e., each single Purchase Right shall entitle each
Eligible Holder to purchase New Convertible Preferred Stock with a liquidation
preference of one dollar). "Pro Rata Percentage" means, with respect to any
Eligible Holder, its Pro Rata share (based on its holdings as of May 20, 1998
less any 7 1/2% Convertible Notes sold by it between May 20, 1998 and October
22, 1998) of Class 8 Allowed Claims in Group 8-B.

     (b) Exercise Price. The purchase price of the Purchase Right shall be equal
to the liquidation preference of the New Convertible Preferred Stock in respect
of which the Purchase Right is validly exercised (such amount, the "Exercise
Price").



<PAGE>


     (c) Exercise Notice. In order to exercise the Purchase Right, each Eligible
Holder must complete the Exercise Notice and return a properly completed and
duly executed Exercise Notice to the Debtor no later than 5:00 p.m. on the last
day of the Exercise Period. The Exercise Notice will not be deemed to have been
timely delivered unless it is actually received by the Debtor prior to the last
day of the Exercise Period at its address as set forth in the instructions
accompanying the Exercise Notice (the "Exercise Instructions"). In order to
facilitate the exercise of the Purchase Right, the Debtor has mailed to each
Eligible Holder a form of Exercise Notice, together with the Exercise
Instructions, following the Court's approval of the Disclosure Statement.
Promptly following the last day of the Exercise Period, the Debtor shall give
written notice to each Eligible Holder whose Exercise Notice was properly
completed, duly executed and timely received (an "Exercising Holder") of the
acceptance of its Exercise Notice and notice of the date on which the Exercise
Price is required to be received by the Debtor from such Eligible Holder (such
notice, a "Notice of Acceptance").

     (d) Determination of Validity. All questions as to eligibility of holders
entitled to participate in the Purchase Right, the conformity of any Exercise
Notice with the Exercise Instructions, the timeliness of the Debtor's receipt of
any Exercise Notice or the validity of any Exercise Notice shall be determined
by the Debtor in its sole discretion and its determination shall be final and
binding. In addition, the Debtor shall have the absolute right, in its sole
discretion, to reject any and all Exercise Notices determined by it not to be in
proper form or not to be in conformity with any of the Exercise Instructions. No
Exercise Notice shall be deemed to have validly delivered until all
irregularities with respect to it have been cured or waived. The Debtor shall
not be under any duty to give any holder notification of irregularities in the
Exercise Notice and shall not have any liability to any holder for any failure
to give such notice. The Debtor reserves the absolute right to waive any and all
irregularities in any Exercise Notice whether or not similar irregularities are
waived in the case of any other holder submitting an Exercise Notice. If any
Exercise Notice is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when executing the
Exercise Notice and, unless waived by the Debtor, proper evidence satisfactory
to the Debtor, in its reasonable discretion, of such person's authority so to
act must be submitted. A beneficial owner of 7 1/2% Convertible Notes that are
held by or registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or custodian is urged to contact such entity promptly
if such beneficial holder wishes to participate in the Purchase Right.



<PAGE>


     (e) Payment. Payment of the Exercise Price shall be due on the date
specified in the Notice of Acceptance (such date, the "Payment Date"), which
date shall be no less than three Business Days prior to the Effective Date.
Payment of the Exercise Price must be made by wire transfer of immediately
available funds to the Debtor's account identified in the Acceptance Notice or
by certified check delivered to the Debtor's address identified in the
Acceptance Notice, in each case so as to be received by the Debtor no later than
5:00 p.m. on the Payment Date. Payment shall be held in escrow by the Debtor
until the Effective Date. On the Effective Date, all monies shall be released to
the Debtor from such escrow and each Exercising Holder shall receive the
applicable number of shares of New Convertible Preferred Stock on the Initial
Distribution Date. In the event that any Exercising Holder shall fail to deliver
the Exercise Price to the Debtor on or before the Payment Date, such Exercising
Holder shall be deemed to have irrevocably waived its right to participate in
the Purchase Right and the Debtor's acceptance of its Exercise Notice shall be
automatically rescinded without notice and of no further force or effect. In the
event the Court does not confirm the Plan or the Effective Date does not occur,
the offer contained herein also shall be automatically rescinded without notice
and of no further force and effect and any money received by the Debtor
hereunder shall promptly be returned to the applicable Exercising Holder.

Dated:   Fort Worth, Texas
         October 27, 1998

                                      WESTBRIDGE CAPITAL CORP.

                                      By:/s/ Patrick J. Mitchell
                                      Name:  Patrick J. Mitchell
                                      Title:  President


<PAGE>



                                                               EXHIBIT A TO PLAN


                             SUMMARY OF TERMS OF NEW
                           CONVERTIBLE PREFERRED STOCK




New Convertible     100% of the issued and authorized New Convertible Preferred
Preferred Stock:    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.





<PAGE>


                                                               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




<PAGE>

              
                  STOCK  PURCHASE  AGREEMENT  (this  "Agreement"),  dated  as of
September  16,  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
                         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.
                    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.
                    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.
                    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 1.01
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.

                  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




<PAGE>







                                   APPENDIX I

                   (Included as Exhibit 10.32 to this Report)







<PAGE>














                                   APPENDIX II

                          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>








                                  APPENDIX III

                                LOCK UP AGREEMENT






<PAGE>



                                    AGREEMENT

                  This  Agreement (the  "Agreement"),  dated as of September 15,
1998,  by  and  among   Westbridge   Capital  Corp.,   a  Delaware   corporation
("Westbridge"),  and  each  of the  undersigned  holders  (each,  a  "Consenting
Holder") of debt securities  (each, a "Claim") issued by Westbridge under one of
the instruments listed on Schedule I (the "Existing Agreements").

                                   WITNESSETH:

                  WHEREAS,  Westbridge  and an Ad Hoc  Committee  of  Westbridge
Creditors (the  "Committee")  have engaged in good faith  negotiations  with the
objective of reaching an agreement with regard to restructuring the indebtedness
outstanding under the Existing Agreements;

                  WHEREAS,  Westbridge and the Consenting  Holders now desire to
implement   a   financial    restructuring   of   Westbridge   (the   "Financial
Restructuring")  on terms  substantially  in  accordance  with the draft plan of
reorganization attached hereto as Appendix I (the "Draft Plan").

                  WHEREAS,  in order to implement the  Financial  Restructuring,
Westbridge has agreed, on the terms and conditions of this Agreement, to prepare
and  file a  disclosure  statement  (the  "Disclosure  Statement")  and  plan of
reorganization  (the  "Pre-Negotiated  Plan") in a case (the  "Chapter 11 Case")
filed under  chapter 11 of title 11 of the United  States Code (the  "Bankruptcy
Code") and to use its best efforts to have such  Disclosure  Statement  approved
and such  Pre-Negotiated Plan confirmed by the Bankruptcy Court for the District
of Delaware (the "Bankruptcy  Court"), in each case as expeditiously as possible
under the  Bankruptcy  Code,  the Federal Rules of Bankruptcy  Procedure and the
local rules of the Bankruptcy Court (collectively, the "Rules"); and

                  WHEREAS,  in  order  to  expedite  the  implementation  of the
Financial  Restructuring,  each of the Consenting Holders is prepared to commit,
on the terms and subject to the  conditions of this  Agreement to vote to accept
the Pre-Negotiated Plan and to perform its other obligations hereunder.

                  NOW THEREFORE, in consideration of the premises and the mutual
covenants  and  agreements  set forth  herein,  and for other good and  valuable
consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
Westbridge and each Consenting Holder hereby agree as follows:

                  1.       Forbearance.  So long as no "Agreement Termination
Event" or "Westbridge  Termination  Event" (each as defined in Section 4 of this
Agreement) shall have occurred and be continuing, each of the Consenting Holders
hereby agrees to forbear from the exercise of any rights or remedies it may have
under the Existing  Agreements,  applicable law or otherwise with respect to any
default arising under the Existing  Agreements  during the period  commencing on
the date hereof and ending on the date on which this  Agreement is terminated in
accordance with its terms.



<PAGE>





             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



<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>




                                                               EXHIBIT F TO PLAN


                                CLAIMS AGREEMENT




<PAGE>




                           MEMORANDUM OF UNDERSTANDING


         Re:      Karabedian, et al, v. Westbridge Capital Corp., et al.
                  Civil Action No. 3 97 CV 3087-L, United States District
                  Court, Northern District of Texas, Dallas Division


         1.  Rabin & Peckel  LLP,  on behalf of their  co-plaintiffs'  attorneys
representing  plaintiffs  ("Plaintiffs"),  Milbank,  Tweed,  Hadley & McCloy, on
behalf of defendants  Westbridge Capital Corp.,  Martin E. Kantor and Patrick J.
Mitchell   (together  with   defendant   James  W.  Thigpen,   the   "Westbridge
Defendants"),  A.I.  Management and Professional  Liability Claim Adjusters,  on
behalf of National Union Fire Insurance Company of Pittsburgh, Pennsylvania (the
Westbridge  Defendants' insurer ("National Union")),  and Haynes and Boone, LLP,
on  behalf  of  defendants  Forum  Capital  Markets  L.P.  and  Raymond  James &
Associates,  Inc. (the "Underwriter  Defendants") (the Westbridge Defendants and
the Underwriter  Defendants  collectively,  the  "Defendants"),  enter into this
Memorandum of Understanding  to set forth the basic terms of settlement  between
Plaintiffs  and the  Defendants  which were agreed to by telephone on August 27,
1998 and October 23, 1998.
         2. Westbridge Capital Corp. and National Union together agree to pay to
Plaintiffs a total of $1 million and the Underwriter  Defendants agree to pay to
Plaintiffs  $100,000  in  complete  settlement  of the claims  asserted  in this
action. Funding of the settlement shall not occur before November 15, 1998, with
the sole  exception  of $50,000 to be paid by  National  Union into the  "Notice
Account" to pay for notice to the class.
         3.       Plaintiffs agree to accept payment of $1,100,000 in complete 
settlement of the claims asserted in this action.
         4.  Plaintiffs  shall  enter  into  a  stipulation  of  dismissal  with
prejudice  and give to the  Defendants  a  release  or  releases  of all  claims
asserted  in the  amended  complaint  or which  could have been  asserted in the
amended complaint arising out of the transactions described.
         5. The Westbridge Defendants and the Underwriter  Defendants shall give
to each other mutual releases of all claims arising out of said  transactions or
this action.
         6. The  Defendants  shall  cooperate  with  Plaintiffs  to provide  two
employees  to be  selected  by  Plaintiffs  for  depositions  and  any  and  all
non-privileged  documents requested by Plaintiffs for examination and copying in
order to permit  Plaintiffs  to confirm  that the terms of this  settlement  are
fair.
         7.       The settlement is subject to an agreed number of opt-outs in 
number and amount.
         8.       This settlement is subject to the certification of the class 
described in the amended complaint
and approval of the District Court and the Bankruptcy  Court in which Westbridge
Capital  Corp.  has filed a case for relief under  chapter 11 of the  Bankruptcy
Code.  Plaintiffs  shall support any motion in the Bankruptcy Court for approval
of this settlement or confirmation of any chapter 11 plan which incorporates its
terms.
         9. National Union shall have the right to terminate this  Memorandum of
Understanding at any point in time up to the filing with the District Court of a
Stipulation  of  Settlement  in the  Karabedian  case in the event there are, in
National Union's determination,  material changes to the terms of the release of
the  directors  and  officers  of  Westbridge   provided  for  in  the  Plan  of
Reorganization of Westbridge filed with the Bankruptcy Court. In the event:
         (a) this Memorandum of Understanding is terminated by National 
             Union; or
         (b) settlement of the Karabedian case is not reached in accordance 
             with the terms of this Memorandum of Understanding

then this Memorandum of Understanding shall be of no further force or effect and
the parties shall revert to their respective positions  immediately prior to the
execution of this Memorandum of Understanding.
         10.  Neither  the  negotiation,  nor the  terms,  conditions  and other
provisions nor the performance of this Memorandum of Understanding shall be:
         (a) deemed or construed in any manner whatsoever to be an 
             admission of liability by any party to this Memorandum of 
             Understanding; or

         (b) used by any party to this Memorandum of Understanding  for any
             purpose other than the enforcement of the provision hereof;
             provided, however, that nothing in this paragraph shall affect the
             viability of the provisions set forth herein.
         11.      The terms of this Memorandum of Understanding shall be reduced
to writing in formal settlement documents and shall not be binding until the 
formal settlement documents are executed.
         12.       This Memorandum of Understanding may be executed in 
counterparts.

Dated:   October 26, 1998

                                   /s/ Brian P. Murray
                                   RABIN & PECKEL LLP
                                   Attorneys for Plaintiffs


                                   /s/ Russell E. Brooks
                                   MILBANK, TWEED, HADLEY & McCLOY
                                   Attorneys for Westbridge Capital Corp.,
                                   Martin E. Kantor and Patrick J. Mitchell


                                   /s/ Michael E. Adler
                                   A.I. MANAGEMENT AND PROFESSIONAL
                                   LIABILITY CLAIM ADJUSTERS


                                   /s/ Noel M. Hensley
                                   HAYNES AND BOONE, LLP
                                   Attorneys for Forum Capital Markets L.P. and
                                   Raymond James & Associates, Inc.


<PAGE>