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                                                                   Exhibit 10.7

            FIRST AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER


     THIS FIRST AMENDMENT TO CREDIT AGREEMENT, CONSENT AND WAIVER  (this "First
Amendment, Consent and Waiver") is entered into as of May 17, 2001, among MUTUAL
RISK MANAGEMENT LTD., a company incorporated under the laws of Bermuda ("Mutual
Risk"), MUTUAL GROUP, LTD., a Delaware corporation ("Mutual Group"), the Lenders
(hereinafter defined) party hereto, and BANK OF AMERICA, N.A., a national
banking association, as the Administrative Agent for the Lenders (the
"Administrative Agent").

                                   RECITALS

     A.   Mutual Risk, Mutual Group, the Lenders (herein so called) party
thereto and the Administrative Agent are party to that certain Credit Agreement
dated as of September 21, 2000 (the "Credit Agreement").  Unless otherwise
defined herein, defined terms used herein shall have the meanings given such
terms in the Credit Agreement.

     B.   Mutual Risk proposes to issue up to $142,500,000 of Senior Convertible
Exchangeable Debentures due 2006 (the "Debentures") pursuant to that certain
Securities Purchase Agreement (herein so called) dated as of May 8, 2001, among
Mutual Risk, an affiliate of XL Capital Ltd., First Union Merchant Banking 2001,
LLC, High Ridge Capital Partners II, L.P., Century Capital Partners II and
certain other investors and to enter into and perform the other Transactions (as
defined in the Securities Purchase Agreement) contemplated by the Transaction
Documents (as defined in the Securities Purchase Agreement), and has requested
that the Lenders and the Administrative Agent (i) consent to the issuance of the
Debentures and the entering into and performance of the other Transactions
contemplated by the Transaction Documents, (ii) agree that such issuance,
entering into and performance will not constitute a Default or Event of Default,
(iii) waive certain provisions of the Credit Agreement, and (iv) agree to amend
the Credit Agreement in certain respects in connection therewith.

     C.   The Lenders and  the Administrative Agent have agreed to give such
consent and agreement and waiver and to amend the Credit Agreement in certain
respects in connection therewith.

     NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrowers, the Lenders and the Administrative Agent agree as
follows:

     1.   Amendments.  The Credit Agreement is amended as follows:
          ----------

          (a)  A new definition of "Debentures," reading in its entirety as
     follows, is added to Section 1.1 of the Credit Agreement:

               ""Debentures" has the meaning given such term in the Securities
                 ----------
          Purchase Agreement."

          (b)  A new definition of "First Amendment, Consent and Waiver,"
     reading in its entirety as follows, is added to Section 1.1 of the Credit
     Agreement:
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               ""First Amendment, Consent and Waiver" means that certain First
                 -----------------------------------
          Amendment to Credit Agreement, Consent and Waiver dated May 17, 2001,
          among the Borrowers and the Guarantors, the Lenders and the
          Administrative Agent."

          (c)  A new definition of "Securities Purchase Agreement," reading in
     its entirety as follows, is added to Section 1.1 of the Credit Agreement:

               ""Securities Purchase Agreement" means that certain Securities
                 -----------------------------
          Purchase Agreement dated as of May 8, 2001, among an affiliate of XL
          Capital Ltd., First Union Merchant Banking 2001, LLC, High Ridge
          Capital Partners II, L.P., Century Capital Partners II, and certain
          other investors, in the form executed and delivered to the Lenders and
          the Administrative Agent, and as in effect, on the date of the First
          Amendment, Consent and Waiver and without giving effect to any
          amendment, supplement or other modification thereto that has not been
          consented to by the Lenders and the Administrative Agent."

          (d)  The "$10,000,000" number appearing in the definition of "Asset
     Sale" in Section 1.1 of the Credit Agreement is amended to read
     "$1,000,000."

          (e)  The definition of "Change of Control" in Section 1.1 of the
     Credit Agreement is amended to read in its entirety as follows:

               ""Change of Control" means the occurrence of any of the following
                 -----------------
          events:

               (i)    Mutual Risk shall cease to own, directly or indirectly,
          100% of the economic and voting interest in the Capital Stock of each
          Insurance Company Subsidiary (other than (v) Trement International
          Insurance LTD., (w) as a result of the conversion of any Debentures,
          (x) as a result of the exercise of any Newco Common Stock Exchange
          Right (as defined in the Debentures), (y) the Policy Holder Preferred
          Shares (as defined in the Debentures), or (z) as a result of the
          exercise by Newco (as defined in the Securities Purchase Agreement) of
          the option to purchase Villanova Insurance Company for book value);

               (ii)   Any Person or Group (as defined below) becomes the
          beneficial owner (as defined below), directly or indirectly, in the
          aggregate of more than 33% of the total voting power of the Voting
          Stock of Mutual Risk;

               (iii)  During any period of two consecutive years, individuals
          who at the beginning of such period constituted the Board of Directors
          of Mutual Risk, together with any new directors whose election by such
          Board of Directors or whose nomination for election by the
          shareholders of Mutual Risk was approved by a vote of a majority of
          the directors of Mutual Risk then still in office who were either
          directors at the beginning of such period or whose election or
          nomination for election was previously so approved, cease for any
          reason to constitute a majority of the Board of Directors of Mutual
          Risk then in office; or

               (iv)   Any event or condition that constitutes a change of
control under the Debentures or the documents governing the RHINOS.

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<PAGE>

               For purposes of this definition only:

               (a)  "beneficial owner" and "beneficially own" shall have the
          meaning specified in Rules 13d-3  and 13d-5 under the Exchange Act,
          except that any Person or Group shall be deemed to have "beneficial
          ownership" of all securities that such Person or Group has the right
          to acquire, whether such right is exercisable immediately, only after
          the passage of time or upon the occurrence of a subsequent condition;

               (b)  "Person" and "Group" shall have the meanings for "person"
          and "group" as used in Sections 13(d) and 14(d) of the Exchange Act;
          and

               (c)  any Person or Group shall be deemed to beneficially own any
          Voting Stock of a corporation held by any other corporation (the
          "parent corporation") so long as such other Person or Group, as the
          case may be, beneficially owns, directly or indirectly, in the
          aggregate more than 33% of the voting power of the Voting Stock of the
          parent corporation and no other Person or Group beneficially owns an
          equal or greater amount of the Voting Stock of the parent
          corporation."

          (f)  The definition of "Guarantee" in Section 1.1 of the Credit
     Agreement is amended to read in its entirety as follows:

               ""Guarantee" has the meaning assigned to it in Section 9.1 and
                 ---------
          also includes any other guarantee of the Obligations."

          (g)  The definition of "Guarantor" and "Guarantors" in Section 1.1 of
     the Credit Agreement is amended to read in its entirety as follows:

               ""Guarantor" and "Guarantors" have the meanings assigned to them
                 ---------       ----------
          in the preamble of this Agreement and also include any other guarantor
          or guarantors of the Obligations."

          (h)  The definition of "Loan Documents" in Section 1.1 of the Credit
     Agreement is amended to read in its entirety as follows:

               ""Loan Documents" means this Agreement (which includes the
                 --------------
          Guarantee), the Notes, and any other documents or instruments now or
          hereafter executed as security for or otherwise in connection with
          this Agreement (which includes the Guarantee) and the Notes, and any
          and all renewals, extensions, restatements, reaffirmations, or
          amendments of, or supplements to, all or any part of the foregoing."

          (i)  The definition of "Loan Party" in Section 1.1 of the Credit
     Agreement is amended to read in its entirety as follows:

               "Loan Party" means each Borrower and Guarantor, and "Loan
                ----------                                          ----
          Parties" means, collectively, the Borrower and the Guarantors."

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          (j)  Sections 5 and 6 of the Credit Agreement are amended to read in
     their entirety as set forth in Exhibit C attached hereto.

          (k)  Section 7.1(c) of the Credit Agreement is amended to read in its
     entirety as follows:

               "(c)  Any Loan Party fails to observe or perform any covenant,
          condition or agreement on the part of such Loan Party to be observed
          and performed pursuant to Section 5.5, Section 5.7, Section 6, or the
          First Amendment, Consent and Waiver."

          (l)  A new Section 7.1(p), reading in its entirety as follows, is
     added to the Credit Agreement:

               "(p)  The holder of any Debenture shall exercise its right to
          have any Debenture mandatorily redeemed prior to the stated maturity
          thereof or the obligation to pay any Debenture shall be accelerated."

          (m)  A new Section 7.1(q), reading in its entirety as follows, is
     added to the Credit Agreement:

               "(q)  Mutual Risk ceases for any reason to have the right and
          power to elect a majority of the Persons comprising the Board of
          Directors of Newco (as defined in the Securities Purchase Agreement)."

          (n)  A new Section 7.1(r), reading in its entirety as follows, is
     added to the Credit Agreement:

               "(r)  any material attachment, sequestration or similar
          proceeding shall be filed against any assets or properties of Mutual
          Risk or any of its Subsidiaries, and such attachment, sequestration or
          similar proceeding remains undischarged, unbonded by Mutual Risk or
          undismissed for a period of 30 days after the commencement thereof."

          (o)  The Pricing Schedule attached to the Credit Agreement is amended
     to read in its entirety as set forth in the Pricing Schedule attached
     hereto.

     2.   Consent.  Subject to the satisfaction of the conditions precedent set
          -------
forth in Paragraph 4, hereof, the Lenders and the Administrative Agent hereby
consent and agree as follows:

          (a)  The Lenders and the Administrative Agent consent to (i) the
     issuance of the Debentures pursuant to the Securities Purchase Agreement
     (provided that such issuance occurs on or before May 18, 2001), including
     $30,000,000 of RHINOS Debentures (as defined in the Securities Purchase
     Agreement) to the holders of the RHINOS in exchange for all of the RHINOS,
     (ii) the exchange of the Debentures and the RHINOS Debentures for Newco
     Debentures (as defined in the Securities Purchase Agreement) and (iii) to
     the guaranties of the Debentures and the Newco Debentures, each as
     contemplated by the Securities Purchase Agreement, and, subject to
     compliance by the Borrowers with Paragraphs 5(a), 5(b), 5(c), 5(d), 5(e)
     and 5(f) hereof, agree that such issuance, exchange and guaranties will not
     constitute a Default or Event of Default under Sections 6.1,

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     6.4 or 6.10 of the Credit Agreement, both as in effect immediately prior to
     the execution of this First Amendment, Consent and Waiver and after giving
     effect to the amendments thereof contained herein.

          (b)  The Lenders and the Administrative Agent consent to the
     Restructuring (as defined in the Securities Purchase Agreement), including
     a change in the organizational structure of Mutual Risk and certain of its
     Subsidiaries from that set forth in Exhibit A attached hereto to that set
     forth in Exhibit B attached hereto and, subject to compliance by the
     Borrowers with Paragraph 5(f) hereof, agree that the Restructuring will not
     constitute a Default or Event of Default under Sections 5.1, 6.5, 6.6,
     6.10, 6.12 or 6.20 of the Credit Agreement, both as in effect immediately
     prior to the execution of this First Amendment, Consent and Waiver and
     after giving effect to the amendments thereof contained herein.

          (c)  The Lenders and the Administrative Agent consent to Newco (as
     defined in the Securities Purchase Agreement) being granted an option to
     purchase Villanova Insurance Company for book value, and agree that such
     option and purchase will not constitute a Default or Event of Default under
     Sections 6.3, 6.5, 6.6 or 6.10 of the Credit Agreement, both as in effect
     immediately prior to the execution of this First Amendment, Consent and
     Waiver and after giving effect to the amendments thereof contained herein.

          (d)  The Lenders and the Administrative Agent consent to the deposit
     of a portion of the proceeds of the issuance of the Debentures, and to the
     grant of security interests therein, pursuant to the Collateral Agreement
     (as defined in the Securities Purchase Agreement), and, subject to
     compliance by the Borrowers with Paragraph 5(d) hereof, agree that such
     deposit and security interests will not constitute a Default or Event of
     Default under Section 6.3 or 6.20 of the Credit Agreement, both as in
     effect immediately prior to the execution of this First Amendment, Consent
     and Waiver and after giving effect to the amendments thereof contained
     herein.

          (e)  The Lenders and the Administrative Agent consent to the
     transactions contemplated by Paragraph 5(e) hereof, and subject to
     compliance by the Borrowers with such paragraph, agree that such
     transactions will not constitute a Default or Event of Default under
     Sections 6.3 or 6.20 of the Credit Agreement, both as in effect immediately
     prior to the execution of this First Amendment, Consent and Waiver and
     after giving effect to the amendments thereof contained herein.

          (f)  The Lenders and the Administrative Agent consent to the
     employment and non-competition agreement with Robert A. Mulderig that is
     required by the Securities Purchase Agreement, and agree that such
     agreement will not constitute a Default or Event of Default under Section
     6.10 of the Credit Agreement, both as in effect immediately prior to the
     execution of this First Amendment, Consent and Waiver and after giving
     effect to the amendments thereof contained herein.

          (g)  The Lenders and the Administrative Agent consent to the
     affirmative and negative covenants and the defaults set forth in the
     Debentures and agree that such covenants and defaults will not constitute a
     Default or Event of Default under Section 6.3 or 6.8 of the Credit
     Agreement.

          (h)  The Lenders and the Administrative Agent consent to the terms and
     conditions of the Securities Purchase Agreement, the Debentures, and the
     other Transaction Documents and the Transactions contemplated by the
     Securities Purchase Agreement, the Debentures, and the other

                                       5
<PAGE>

     Transaction Documents, as executed, delivered to the Lenders and the
     Administrative Agent and in effect on the date hereof, provided that upon
     the termination of the Subordination Period (as contemplated by the
     Transaction Documents), the Obligations shall be pari passu in right of
     payment with the Debentures.

          (i)  In furtherance of the authorizations set forth in Section 8 of
     the Credit Agreement, each Lender hereby irrevocably appoints
     Administrative Agent its attorney-in-fact, with full power of substitution,
     for and on behalf of and in the name of each such Lender, (i) to enter into
     the Collateral Agreement, the pledge or charge agreements contemplated by
     Paragraph 5(f), the Assignment of Account dated the date hereof among
     Mutual Risk, XL Insurance Ltd., Administrative Agent, and the holders of
     the RHINOS Debentures ("Assignment of Account", and collectively, with any
     related documents, the "Collateral Documents") (including, without
     limitation, any appointments of substitute trustees under any Collateral
     Document), (ii) to take action with respect to any collateral now or
     hereafter described in any Collateral Document ("Collateral") to perfect,
     maintain, and preserve Lenders' Liens, and (iii) to execute instruments of
     release or to take other action necessary to release Liens upon any
     Collateral to the extent authorized by Lenders. This power of attorney
     shall be liberally, not restrictively, construed so as to give the greatest
     latitude to Administrative Agent's power, as attorney, relative to the
     Collateral matters described in this Paragraph 2(i). The powers and
     authorities herein conferred on Administrative Agent may be exercised by
     Administrative Agent through any Person who, at the time of the execution
     of a particular instrument, is an officer of Administrative Agent. The
     power of attorney conferred by this Paragraph 2(i) is granted for valuable
     consideration and is coupled with an interest and is irrevocable so long as
     the Obligations, or any part thereof, shall remain unpaid or Lenders are
     obligated to make any Loans under the Loan Documents.

     3.   Waiver.  The Required Lenders and the Administrative Agent hereby
          ------
waive any prepayment of the Loans pursuant to Section 2.12(c), and any reduction
of the Commitments pursuant to Section 2.5, in each case in  connection with the
issuance of the Debentures.

     4.   Conditions Precedent.  This First Amendment, Consent and Waiver shall
          --------------------
not become effective until the Administrative Agent receives (a) counterparts of
this First Amendment, Consent and Waiver executed by the Borrowers and the
Guarantors, the Lenders and the Administrative Agent, (b) resolutions adopted by
the Borrowers' and the Guarantors' Boards of Directors authorizing the
execution, delivery and performance of this First Amendment, Consent and Waiver
by the Borrowers and the Guarantors, and authorizing the issuance of the
Debentures and the entering into and performance of the other Transactions
contemplated by the Transaction Documents, (c) true and correct copies of the
Transaction Documents as in effect on the date hereof, (d) counterparts of each
Collateral Document executed by each of the parties thereto, (e) legal opinions
of each of Mayer, Brown & Platt, special counsel to the Loan Parties, Conyers
Dill & Pearman, Bermuda counsel to the Loan Parties, and Richard O'Brien,
General Counsel of Mutual Risk, in each case covering such matters as are
requested by the Lenders and in form and substance satisfactory to the Lenders,
(f) such other agreements, documents, instruments, and items as the
Administrative Agent or any Lender may reasonably request, (f) an amendment fee
in the amount of $450,000 to be shared pro rata by the Lenders in accordance
with respective Commitments, (h) a written summary of the fees and expenses
incurred in connection with the Transactions and this First Amendment, Consent
and Waiver, which fees and expenses shall not exceed $10,000,000, and (i)
payment of all expenses, including legal fees and expenses of counsel to the
Administrative Agent and each Lender, incurred by the Administrative Agent or
any Lender in connection with this First Amendment, Consent and Waiver.

                                       6
<PAGE>

     5.   Covenants.  The Borrowers jointly and severally covenant and agree
          ---------
with the Administrative Agent and the Lenders as follows:

          (a)  In the event Newco (as defined in the Securities Purchase
     Agreement) becomes the issuer of the Newco Debentures upon the exchange of
     the Debentures, concurrently with such exchange, Newco shall, at the
     election of the Required Lenders, become a Co-Borrower with Mutual Risk
     under the Credit Agreement and assume and become jointly and severally
     liable with Mutual Risk for the obligations and liabilities of Mutual Risk
     as a Borrower under the Loan Documents, and Mutual Risk shall deliver a
     legal opinion of counsel to Newco reasonably acceptable to the Lenders as
     to such assumption by Newco being a legal, valid and binding obligation of
     Newco, enforceable in accordance with its terms and as to such other
     matters as the Lenders may request; provided that Newco shall not agree
     upon the final terms of the covenants and events of default in the Newco
     Debentures without the prior written consent of the Required Lenders.

          (b)  In the event Newco has not then or theretofore become a Co-
     Borrower with Mutual Risk under the Credit Agreement pursuant to Paragraph
     5(a), concurrently with the formation of Newco, Newco shall execute and
     deliver a guarantee of payment of the Obligations substantially in the form
     of Exhibit D attached hereto, together with a legal opinion of counsel to
     Newco reasonably acceptable to the Lenders as to such guarantee being a
     legal, valid, and binding obligation of Newco, enforceable in accordance
     with its terms and as to such other matters as the Lenders may reasonably
     request.

          (c)  Concurrently with the execution and delivery thereof, each
     guarantor that executes and delivers a guarantee of the Debentures shall
     execute and deliver a guarantee of payment of the Obligations substantially
     in the form of Exhibit D attached hereto, together with a legal opinion of
     counsel to each such guarantor reasonably acceptable to the Lenders as to
     such guarantee being a legal, valid and binding obligation of such
     guarantor, enforceable in accordance with its terms and as to such other
     matters as the Lenders may reasonably request.

          (d)  (i) Concurrently with the issuance of the Debentures, not less
     than $22,500,000 of the proceeds of the issuance of the Debentures shall be
     deposited pursuant to the Collateral Agreement as in effect on the date
     hereof, (ii) the Administrative Agent (on behalf of the Lenders) and the
     holders of the RHINOS Debentures shall be granted a second priority
     security interest, pledge and assignment (subordinate to that in favor of
     the holders of the Debentures (other than the RHINOS Debentures)) in the
     moneys held pursuant to the Collateral Agreement to secure the Obligations
     and the indebtedness and liabilities owing under the RHINOS Debentures, and
     (iii) the Collateral Agreement shall not be terminated prior to the
     disposition of the amounts held pursuant thereto in accordance with its
     terms.

          (e)  (i) Concurrently with the issuance of the Debentures, not less
     than $80,000,000 of the proceeds of the issuance of the Debentures shall be
     deposited in an account with Bank of America, N.A. or another Lender
     located in the United States, (ii) the holders of the Debentures (other
     than the RHINOS Debentures) shall be granted a first priority security
     interest, pledge and assignment of such account and all moneys deposited
     thereto to secure the indebtedness evidenced by the Debentures (other than
     the RHINOS Debentures) and the Administrative Agent (on behalf of the
     Lenders) and the holders of the RHINOS Debentures shall be granted a second
     priority security interest, pledge and assignment of such account and all
     moneys deposited thereto to secure the Obligations and the

                                       7
<PAGE>

     indebtedness and liabilities owing under the RHINOS Debentures (provided
     that such security interests, pledges and assignments shall automatically
     terminate upon the expiration of the Subordination Period (as defined in
     the Subordination Agreement) if upon the expiration of the Subordination
     Period, (A) there are no Debentures that have become due and payable
     pursuant to Section 3(b) of the Debentures and that have not been
     indefeasibly paid in full in cash, and (B) there are not then outstanding
     any Credit Agreement Obligations or RHINOS Obligations consisting of
     subrogation rights under the Subordination Agreement), (iii) the moneys
     deposited into such account shall be used by Mutual Risk to make a capital
     contribution in the amount of $80,000,000 to Legion Insurance Company and
     Legion Indemnity Company concurrently with the completion of the
     Restructuring, and shall not be withdrawn from such account or used for any
     other purpose (except in accordance with the terms of the Assignment of
     Account), and Bank of America, N.A. or such other Lender is hereby
     irrevocably authorized and directed, and hereby agrees, to restrict
     withdrawals from such account except for such purposes, and (iv) such
     account shall not be terminated prior to the disposition of the amounts
     deposited in such account pursuant to this paragraph. Any investment
     earnings on the moneys deposited in such account shall remain in such
     account until Mutual Risk has made a capital contribution in the amount of
     $80,000,000 to Legion Insurance Company and Legion Indemnity Company
     concurrently with the completion of the Restructuring, at which time such
     investment earnings may be released to Mutual Risk.

          (f)  Concurrently with the issuance of the Debentures (in the case of
     the pledge of or charge on the shares of the capital stock of Mutual Risk
     Management (Holdings) Ltd.) and concurrently with its formation (in the
     case of the pledge of or charge on the shares of the capital stock of
     Newco), Bank of America, N.A., in its capacity as collateral agent for the
     holders of the Debentures (other than the RHINOS Debentures) (to secure the
     payment or redemption of the Debentures (other than the RHINOS Debentures)
     during the Subordination Period on a first priority basis) and for the
     Lenders and the holders of the RHINOS Debentures (to secure the Obligations
     and the indebtedness and liabilities owing under the RHINOS Debentures on a
     second priority basis prior to the termination of the Subordination Period)
     shall be granted a pledge of and charge on the capital stock of Mutual Risk
     Management (Holdings) Ltd. and Newco owned directly or indirectly by Mutual
     Risk pursuant to a pledge or charge agreement substantially in the form of
     Exhibit E attached hereto, and Mutual Risk shall deliver or cause to be
     delivered such resolutions, stock powers, legal opinions and other
     documents and instruments as may be required pursuant to the terms thereof
     or as the Lenders may otherwise reasonably request in connection therewith.
     Following the termination of the Subordination Period, the holders of the
     Debentures, the holders of the Obligations, and the holders of the RHINOS
     Debentures shall be secured pari passu by such stock.  Upon the request of
     Mutual Risk (which request may be made on or after the first anniversary of
     the date of this First Amendment, Consent and Waiver) and provided that (i)
     at the time of such request and after giving effect thereto, no Event of
     Default has occurred and is continuing or would result therefrom, (ii) the
     ratio of Consolidated Indebtedness to Consolidated Total Capital is less
     than 0.425 to 1, and (iii) the holders of the Debentures and holders of the
     RHINOS Debentures have consented thereto, the Lenders agree to release, and
     hereby instruct Bank of America, N.A. in its capacity as collateral agent,
     to release, the pledge of and charge on the capital stock of Mutual Risk
     Management (Holdings) Ltd. and Newco given pursuant to this Paragraph 5(f).

                                       8
<PAGE>

          (g)  Mutual Risk shall use its best efforts to cause the Restructuring
     to occur by the fourth month anniversary of the date hereof and to obtain
     all approvals of Governmental Authorities, shareholders and other Persons
     required in connection therewith.

          (h)  Mutual Risk shall, concurrently with their delivery to the
     Purchasers (as defined in the Securities Purchase Agreement), deliver to
     the Administrative Agent and each Lender the officer's certificate and
     legal opinion referenced in Section 6.1 of the Securities Purchase
     Agreement, together with writings authorizing the Administrative Agent and
     each Lender to rely on such certificate and legal opinion.

          (i)  Mutual Risk will not, and will not permit any of its Subsidiaries
     to,  amend, modify or supplement any of the Transaction Documents, as they
     are in effect on the date hereof, without the prior written consent of the
     Required Lenders, which consent will not be unreasonably withheld or
     delayed.

          (j)  Mutual Risk will not sell, transfer, assign, dividend or
     otherwise dispose of, or permit to be sold, transferred, assigned,
     dividended or otherwise disposed of, any of the Capital Stock of Newco
     (other than by the holders of the Debentures after the conversion thereof
     to common stock of Newco in accordance with the Debentures) or any of its
     Subsidiaries without the prior written consent of the Required Lenders.

          (k)  The Borrowers shall execute and deliver, or cause to be executed
     and delivered, to the Administrative Agent and the Lenders such amendments
     to the Loan Documents and such other documents, instruments, certificates
     and legal opinions, including a control agreement in order to give effect
     to the provisions of Paragraph 5(e), as the Administrative Agent or the
     Lenders may reasonably request in order to give effect to the satisfaction
     of the foregoing covenants.  The breach by the Borrowers of any of the
     covenants set forth in this Paragraph 5 shall constitute an Event of
     Default.

     6.   Representations and Warranties.  The Borrowers hereby jointly and
          ------------------------------
severally represent and warrant to the Lenders and the Administrative Agent that
(a) immediately after the execution and delivery of this First Amendment,
Consent and Waiver and after giving effect hereto, no Default or Event of
Default exists under the Credit Agreement or any of the other Loan Documents,
(b) all of the provisions of the Loan Documents, except as modified and amended
hereby, are in full force and effect and are hereby ratified and confirmed, (c)
the Borrowers have delivered to the Administrative Agent and the Lenders true
and correct copies of the Securities Purchase Agreement, the Debentures and the
other Transaction Documents, as executed and in effect on the date hereof, and
(d) the Borrowers have no reason to believe that the Restructuring will not
occur, and that all approvals of Governmental Authorities, shareholders and
other Persons required in connection with the Restructuring will not be obtained
by the fourth month anniversary of the date hereof.

     7.   Effect of First Amendment, Consent and Waiver.  This First Amendment,
          ---------------------------------------------
Consent and Waiver is a Loan Document.  Except as expressly modified and amended
by this First Amendment, Consent and Waiver, all of the terms, provisions and
conditions of the Loan Documents shall remain unchanged and in full force and
effect.  The Loan Documents and any and all other documents heretofore, now or
hereafter executed and delivered pursuant to the terms of the Credit Agreement
are hereby amended so that any reference to the Credit Agreement shall mean a
reference to the Credit Agreement as amended hereby.  The consent and waiver of
the Lenders and the Administrative Agent hereunder is expressly limited to the
matters set forth in

                                       9
<PAGE>

Paragraphs 2 and 3 and shall not constitute the consent or waiver by any Lender
or the Administrative Agent of or with respect to any other matter now or
hereafter requiring its consent or waiver under the Loan Documents.

     8.   Counterparts.  This First Amendment, Consent and Waiver may be
          ------------
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.

     9.   Governing Law.  This First Amendment, Consent and Waiver shall be
          -------------
governed by and construed in accordance with the laws of the State of New York.

     10.  ENTIRETY.  THIS FIRST AMENDMENT, CONSENT AND WAIVER, THE CREDIT
          --------
AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE
PARTIES AND SUPERCEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING
TO THE SUBJECT MATTER HEREOF.  THESE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                 [Remainder of Page Intentionally Left Blank]

                                       10
<PAGE>

                                   MUTUAL RISK MANAGEMENT LTD., as a
                                   Borrower and as a Guarantor


                                   By:  ________________________________________
                                        Name: __________________________________
                                        Title:__________________________________
<PAGE>

                              MUTUAL GROUP, LTD., as a Borrower and as a
                              Guarantor


                              By:  _____________________________________________
                                   Name:  ______________________________________
                                   Title: ______________________________________
<PAGE>

                              BANK OF AMERICA, N.A., as Administrative Agent and
                              a Lender


                              By:  _____________________________________________
                                   Name:  ______________________________________
                                   Title: ______________________________________
<PAGE>

                              FLEET NATIONAL BANK, as a Lender


                              By:  _____________________________________________
                                   Name:  ______________________________________
                                   Title: ______________________________________
<PAGE>

                              FIRST UNION NATIONAL BANK, as a Lender


                              By:  _____________________________________________
                                   Name:  ______________________________________
                                   Title: ______________________________________
<PAGE>

                              NATIONAL WESTMINSTER BANK PLC
                              NEW YORK AND/OR NASSAU BRANCH, as a Lender


                              By:  _____________________________________________
                                   Name:  ______________________________________
                                   Title: ______________________________________
<PAGE>

                                   EXHIBIT A
                                   ---------

                        Corporate Re-Organization Plan
                           Old Organizational Chart

----------------------------------------------------------
Mutual Risk Management Ltd - SUMMARY OF CURRENT STRUCTURE
----------------------------------------------------------

-------------------------
     Revised 3/28/2001
-------------------------

<TABLE>
<S>                      <C>                        <C>                   <C>                  <C>                    <C>
                                                            -----------
                                                                MRM
                                                            -----------

                                                       --------------------
                                                           MRM HOLDINGS
                                                       --------------------

     -------------------------------------------------------------------------------------------------------------------------
--------------           ------------------           ----------          -----------           ------------        ---------------
 MUTUAL GROUP             MUTUAL INDEMNITY             IPC COS.            BROKERAGE              CAPTIVE            FINANCIAL SVC
                               DUBLIN                                                            MANAGEMENT
--------------           ------------------           ----------          -----------           ------------        ---------------

     ------------------------------------------------------
-------------               -----------           ------------------
 LEGION INS.                 VILLANOVA             LEGION INDEMNITY
-------------               -----------           ------------------


  -----------------------------------
-----    -----     -----     -----------
 CRS      CRI       SBU       COMPFIRST
-----    -----     -----     -----------
</TABLE>

                                                                             MRM
--------------------------------------------------------------------------------
<PAGE>

                                   EXHIBIT B
                                   ---------

                        Corporate Re-Organization Plan

                           New Organizational Chart


----------------------------------------------------------
Mutual Risk Management Ltd - SUMMARY OF CURRENT STRUCTURE
----------------------------------------------------------

-------------------------
     Revised 3/28/2001
-------------------------

<TABLE>
<S>                 <C>            <C>               <C>              <C>        <C>           <C>       <C>
                                                            -----------
                                                                MRM
                                                            -----------
                                                       --------------------
                                                 --------------          ------------
                                                  MRM HOLDINGS               NEWCO
                                                   (Bermuda)               (Bermuda)
                                                 --------------          ------------
                                        ----------------
                                  --------------   ------------------    ------------
                                   MUTUAL GROUP     MUTUAL INDEMNITY      NEWCO (US)
                                                         DUBLIN
                                  --------------   ------------------    ------------
                              ---------------------------------------                                    ---------------------------
                                                                         ------------
                                                                      -----        -----      -----------    ----------  -----------
                                                                       CRS          CRI        BROKERAGE      IPC COS.    FINANCIAL
                                                                                                                             SVC
                                                                      -----        -----      -----------    ----------  -----------
                   -------------  ------------------  -----------
                    LEGION INS.    LEGION INDEMNITY    VILLANOVA
                   -------------  ------------------  -----------
                    -----------

                ----- -----------
                 SBU   COMPFIRST
                ----- -----------
</TABLE>

                                                                             MRM
--------------------------------------------------------------------------------
<PAGE>

                                   EXHIBIT C
                                   ---------

     If a defined term is used in this Exhibit C and such defined term is not
defined in the Credit Agreement, such defined term shall have the meaning given
to it in the Securities Purchase Agreement or the Debentures, as in effect on
the date of the First Amendment, Consent and Waiver and without giving effect to
any amendment, supplement or modification thereof that is not consented to by
the Lenders.  From and after the date that any of the Newco Debentures are
outstanding, references to Mutual Risk shall be construed as references to
Mutual Risk and Newco.

                                   SECTION 5
                             AFFIRMATIVE COVENANTS
                             ---------------------

     Until all Obligations shall have been paid in full and no Lender shall have
any Commitment hereunder, the Loan Parties, jointly and severally, covenant and
agree with the Lenders and the Administrative Agent that:

     SECTION 5.1    Corporate Existence and Conduct of Business.  Mutual Risk
                    -------------------------------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence of Mutual Risk and each of its
Subsidiaries (except as otherwise permitted herein) and the rights, privileges,
licenses and franchises necessary or desirable in the normal conduct of business
of Mutual Risk and each of its Subsidiaries, except in each case as required or
contemplated by the Restructuring, and Mutual Risk will continue, and will cause
each of its Subsidiaries to continue, to engage in business of the same general
type as now conducted by Mutual Risk and its Subsidiaries.

     SECTION 5.2    Compliance With Laws and Contractual Obligations.  Mutual
                    ------------------------------------------------
Risk will, and will cause each of its Subsidiaries to, comply in all material
respects with all applicable Laws and with all contractual obligations, except
where compliance in all material respects therewith is contested in good faith
by appropriate proceedings.

     SECTION 5.3    Maintenance of Property; Insurance. Mutual Risk shall cause
                    ----------------------------------
all Property used or useful in the conduct of its business or the business of
any of its Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
that nothing in this Section 5.3 shall prevent Mutual Risk from discontinuing
the operation or maintenance of any of such Property if such discontinuance is,
in the judgment of Mutual Risk, desirable in the conduct of its business or the
business of any of its Subsidiaries and not disadvantageous in any material
respect to the Lenders. Mutual Risk will maintain or cause to be maintained (a)
with financially sound and reputable insurers or with self insurance programs,
in each case to the extent consistent with prudent business practices and
customary in its industry, insurance with respect to its Properties and business
and the Properties and businesses of its Subsidiaries against loss or damage of
the kinds (including, in any event, business interruption insurance) and in the
amounts customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses and owning
similar Properties in the same general respective areas in which Mutual Risk and
its Subsidiaries operate, and (b) such other insurance coverage in such amounts
and with respect to such risks as the Required Lenders may reasonably request.
Mutual Risk will deliver to the Administrative Agent (x) upon request from time
to time, full information as to the insurance carried, (y) within five days of
receipt of notice from any insurer a copy of any notice of cancellation or
material change in coverage from that existing on the date of the First
Amendment, Consent and
<PAGE>

Waiver and (z) within five days of receipt, any notice of any cancellation or
nonrenewal of coverage for Mutual Risk or any of its Subsidiaries.

     SECTION 5.4    Payment of Taxes and Other Claims.  Mutual Risk shall pay or
                    ---------------------------------
discharge and will cause each of its Subsidiaries to pay or discharge, before
the same shall become delinquent, (a) all Taxes, assessments and other
governmental charges levied or imposed upon Mutual Risk or any of its
Subsidiaries or upon the income, profits or Property of Mutual Risk or any of
its Subsidiaries and (b) all lawful claims including, without limitation, for
labor, services, materials and supplies which have become due and payable and,
if unpaid, might by law become a Lien upon the Property of Mutual Risk or any of
its Subsidiaries; provided, that Mutual Risk shall not be required to pay or
discharge, or cause to be paid or discharged, any such Tax, assessment, charge
or claim whose amount, applicability or validity is being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP or other appropriate provision has been made.  Mutual Risk
and each of its Subsidiaries, as the case may be, will, promptly upon any of its
officers obtaining knowledge that a charge or claim described in the previous
sentence has not been paid, other than as permitted by the proviso in the
previous sentence, deliver notice to the Administrative Agent (which will
provide a copy of such notice to each Lender) of such failure to pay.

     SECTION 5.5    Investment Company Act.  No Loan Party shall become an
                    ----------------------
investment company subject to registration under the Investment Company Act of
1940, as amended (without giving effect to any exemption based upon the number
or status of the holders of its securities).

     SECTION 5.6    Payments in U.S. Dollars.  All payments of principal,
                    ------------------------
interest and other amounts to be made hereunder or under the Notes shall be made
solely in U.S. Dollars or such other currency as is then legal tender for public
and private debts in the United States of America.

     SECTION 5.7    Use of Proceeds.  The Borrowers shall use the proceeds of
                    ---------------
the Loans solely to repay amounts owing under the Existing Credit Agreement and
then as follows:

     (a)  Mutual Risk may use such proceeds to repurchase Convertible Securities
in open market or privately negotiated transactions; provided, that any
Convertible Securities so repurchased shall be immediately canceled;

     (b)  The Borrowers may use such proceeds for lawful general corporate
purposes; provided that none of such proceeds shall be used by the Borrowers or
any of their Subsidiaries, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or "carrying" (within the
meaning of Regulation U) any Margin Stock; and provided further that none of
such proceeds shall be used in connection with the acquisition of ten percent
(10%) or more of the Voting Stock of any Person if such acquisition is opposed
by the board of directors or other management of such Person.

     SECTION 5.8    Financial Statements.  Mutual Risk will furnish or cause to
                    --------------------
be furnished to the Administrative Agent and to each of the Lenders:

     (a)  as soon as available, but in no event more than forty-five (45) days
after the last day of each of the first three (3) fiscal quarters in each fiscal
year of Mutual Risk, a copy of the consolidated balance sheet and statements of
earnings, changes in stockholders' equity and cash flows of Mutual Risk and its
Subsidiaries and of the consolidating balance sheet and statement of earnings of
Mutual Risk and its Subsidiaries, prepared in accordance with GAAP (except for
the absence of footnotes), as of, and for the fiscal quarter and portion

                                       2
<PAGE>

of the fiscal year ending on, such last day, together with the quarterly report
of Mutual Risk on Form 10-Q (or other applicable form) for such fiscal quarter
filed with the SEC, a certificate of the Chief Financial Officer of Mutual Risk
stating whether, to his best knowledge and belief, any Default or Event of
Default has occurred or exists hereunder, and, if any such Default or Event of
Default has occurred and is continuing or otherwise exists, stating the facts
with respect thereto, and a copy of any presentation made by Mutual Risk or any
of its Subsidiaries to S&P, Moody's, A.M. Best Company or any other rating
agency during such fiscal quarter;

     (b)  as soon as available, but in no event more than ninety (90) days after
the last day of each fiscal year of Mutual Risk, a copy of the consolidated
balance sheet and statements of earnings, changes in stockholders' equity and
cash flows of Mutual Risk and its Subsidiaries and the consolidating balance
sheet and statement of earnings of Mutual Risk and its Subsidiaries, prepared in
accordance with GAAP, as of, and for the fiscal year ending on, such last day,
together with (i) the audit report on the consolidated portions thereof of Ernst
& Young or other independent certified public accountants selected by Mutual
Risk and reasonably satisfactory to the Administrative Agent, which audit report
shall be without material qualification, (ii) a copy of the annual report of
Mutual Risk on Form 10-K (or other applicable form) for such fiscal year filed
with the SEC, and (iii) a certificate of the Chief Financial Officer of Mutual
Risk stating whether, to his best knowledge and belief, any Default or Event of
Default has occurred or exists hereunder, and, if any such Default or Event of
Default has occurred and is continuing or otherwise exists, stating the facts
with respect thereto;

     (c)  as soon as available, but in no event more than one hundred and twenty
(120) days after the last day of each fiscal year of each unconsolidated
Subsidiary or Affiliate of Mutual Risk (whose operations are accounted for in
the consolidated financial statements of Mutual Risk on the equity method), if
any, a copy of the consolidated balance sheet and statements of earnings,
changes in stockholders' equity and cash flows of such unconsolidated Subsidiary
or Affiliate and its Subsidiaries and of the consolidating balance sheet and
statement of earnings of such unconsolidated Subsidiary or Affiliate and its
Subsidiaries, prepared in accordance with GAAP (or SAP in the case of a
regulated insurance company) as of, and for the fiscal year ending on, such last
day, together with the audit report on the consolidated portions thereof of a
firm of independent certified public accountants of recognized standing, which
audit report shall be without material qualification.

     (d)  promptly upon their becoming available but in no event (i) more than
ninety (90) days after the end of each calendar year in the case of the Annual
Statements or (ii) more than forty-five (45) days after the end of each calendar
quarter in the case of the Quarterly Statements, a copy of each Annual Statement
and Quarterly Statement of each Insurance Company Subsidiary prepared in
accordance with SAP, a copy of each externally-prepared actuarial analysis of
each Insurance Company Subsidiary obtained by Mutual Risk  or any of its
Subsidiaries and, in the case of the Annual Statements, a copy of the management
discussion and analysis submitted with such Annual Statements;

     (e)  promptly upon their becoming available, copies of all financial
statements, reports, notices as to material matters, and proxy statements sent
by Mutual Risk or any of its Subsidiaries (which is not a Wholly Owned
Subsidiary) to public stockholders, of all regular, periodic and special reports
filed by Mutual Risk or any of its Subsidiaries with any securities exchange or
with the SEC and of all regular, periodic and special reports filed by any
Insurance Company Subsidiary with Governmental Authorities having jurisdiction
over it;

                                       3
<PAGE>

     (f)  together with the items described in clauses (a) and (b) above,
written calculations in form reasonably satisfactory to the Administrative Agent
demonstrating compliance by Mutual Risk with the covenants contained in Sections
6.1, 6.2, 6.17, 6.18, 6.19 and 6.20; and

     (g)  such additional information, reports, or statements (financial or
otherwise) as is required to be delivered to any Holder of the Debentures or the
Newco Debentures and is not otherwise required to be delivered to the
Administrative Agent and/or the Lenders hereunder; and

     (h)  such additional information, reports or statements (financial or
otherwise) as the Administrative Agent or any Lender through the Administrative
Agent may from time to time reasonably request.

     SECTION 5.9    Notice of Litigation and Other Matters.  Mutual Risk will
                    --------------------------------------
furnish or cause to be furnished to the Administrative Agent and to each of the
Lenders promptly (but in no event later than ten (10) days after an Officer of
Mutual Risk obtains knowledge thereof) telephonic and written notice of:

     (a)  the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving Mutual Risk or any of its
Subsidiaries or any of their respective Properties, assets or businesses which
in any given case or in the aggregate would have a Material Adverse Effect;

     (b)  any notice of any violation received by Mutual Risk or any of its
Subsidiaries, from any Governmental Authority, including, without limitation,
any notice of violation of EHS Laws, which in any such case would have a
Material Adverse Effect;

     (c)  any attachment, judgment, lien, levy or order exceeding $5,000,000
that may be assessed against or threatened against Mutual Risk or any of its
Subsidiaries, other than normal insurance claims adjustment matters involving
Insurance Company Subsidiaries;

     (d)  any Default or Event of Default, or any other event which constitutes
or which with the passage of time or giving of notice or both would constitute a
default or event of default under any Contract to which Mutual Risk or any of
its Subsidiaries is a party or by which Mutual Risk or any of its Subsidiaries
or any of their respective Properties may be bound, which default or event of
default would have a Material Adverse Effect;

     (e)  any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section 401(a) of
the Code (along with a copy thereof), (ii) any fact or circumstance that has
resulted, or could reasonably be expected to result in an ERISA Event, (iii) the
Amount of Unfunded Benefit Liabilities exceeds $1,000,000, and (iv) any event or
events in respect of any Foreign Plan or Foreign Plans occur that, or are
reasonably expected to occur which, individually or together with all other
similar events, result or would reasonably be expected to result in an aggregate
liability to Mutual Risk or any of its Subsidiaries in excess of $1,000,000; and

     (f)  any event which makes any of the representations set forth in Section
3 inaccurate in any material respect.

                                       4
<PAGE>

     SECTION 5.10   Payment of Obligations.  Mutual Risk will pay and discharge,
                    ----------------------
and will cause each of its Subsidiaries to pay and discharge, at or before
maturity, all their respective obligations, except where the same may be
contested in good faith by appropriate proceedings, and will maintain, in
accordance with GAAP, appropriate reserves for the accrual of any of the same.

     SECTION 5.11   Executive Risk Insurance.  Mutual Risk will maintain, in
                    ------------------------
full force and effect, executive risk insurance in an amount which Mutual Risk
reasonably believes to be sufficient for the conduct of its business.

     SECTION 5.13   Inspection of Property, Books and Records.  Mutual Risk will
                    -----------------------------------------
keep, and will cause each of its Subsidiaries to keep, proper books of record
and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to their respective businesses and
activities; and will permit, and will cause each of its Subsidiaries to permit
(during normal business hours and, unless a Default shall have occurred and be
continuing, upon reasonable advance notice) officers, attorneys, agents and
other representatives of the Administrative Agent or any Lender to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective directors, officers, senior
employees, independent public accountants and actuaries as often as may
reasonably be requested.


                                  SECTION 6.
                              NEGATIVE COVENANTS
                              ------------------

     Until all Obligations shall have been paid in full and no Lender shall have
any Commitment hereunder, the Loan Parties, jointly and severally, covenant and
agree with the Lenders and the Administrative Agent that:

     SECTION 6.1    Consolidated Indebtedness to Consolidated Total Capital
                    -------------------------------------------------------
Ratio.  Mutual Risk shall not permit the ratio of Consolidated Indebtedness to
-----
Consolidated Total Capital to exceed (a) 0.50 to 1 at any time from the date of
this Agreement to March 21, 2002, or (b) 0.45 to 1 at any time thereafter.

     SECTION 6.2    Shareholders' Equity.  Mutual Risk shall maintain a
                    --------------------
Stockholders' Equity which is not at any time less than the sum of (a)
$350,000,000 (without giving effect to no more than $15.0 million of adjustments
required by FASB 115) plus (b) 50% of cumulative positive consolidated net
income (without deduction for any net loss for any period) of Mutual Risk and
its Subsidiaries after March 31, 2001.

     SECTION 6.3    Negative Pledge.  Mutual Risk will not, and will not cause
                    ---------------
or permit any of its Subsidiaries to, directly or indirectly, create, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except for (a) Liens which may be created in the ordinary course of business (it
being understood that no Lien securing Debt shall be deemed to have been created
in the ordinary course of business), (b) Liens securing payment of the
Debentures, the Newco Debentures, the Obligations, and the RHINOS Debentures, as
contemplated by the First Amendment, Consent and Waiver, and (c) Liens securing
reimbursement obligations in respect of letters of credit issued under a letter
of credit facility entered into solely in connection with the issuance of Policy
Holder Preferred Shares, consistent with past practices.

     SECTION 6.4    Limitation on Incurrence and Repayment of Debt.
                    ----------------------------------------------

     (a) So long as any of the Debentures are outstanding:

                                       5
<PAGE>

          (i)  Mutual Risk will not, and will not cause or permit any of its
     Subsidiaries to, directly or indirectly, create, incur, issue, assume or
     suffer to exist any Debt; provided, however, that the foregoing shall not
     prohibit the issuance or existence of (A) the Debentures or the Newco
     Debentures (including any guarantees thereof), (B) the Obligations, (C) no
     more than $15.0 million of principal amount of accreted value of other Debt
     of Mutual Risk outstanding on the date of the First Amendment, Consent and
     Waiver, (D) additional Debt of Mutual Risk in an aggregate principal amount
     not to exceed $22.0 million at any one time outstanding; provided, however,
     that any Debt incurred pursuant to this clause (D) shall be subordinated to
     the Obligations pursuant to subordination provisions in form and substance
     satisfactory to the Required Lenders and (E) Debt consisting of
     reimbursement obligations (or guarantees thereof) in respect of letters of
     credit issued under a letter of credit facility entered into solely in
     connection with the issuance of Policy Holder Preferred Shares, consistent
     with past practices; and

          (ii) Mutual Risk will not, and will not cause or permit any of its
     Subsidiaries to, directly or indirectly, make any principal prepayments in
     respect of any Debt, whether at or prior to its stated maturity, other than
     (A) the Debentures or the Newco Debentures in accordance with their terms
     as in effect on the date of issuance thereof, (B) the Obligations and (C)
     Debt consisting of reimbursement obligations (or guarantees thereof) in
     respect of letters of credit issued under a letter of credit facility
     entered into solely in connection with the issuance of Policy Holder
     Preferred Shares, consistent with past practices.

     (b)  If none of the Debentures are outstanding, Mutual Risk shall not
create, incur, assume or suffer to exist in any manner any Indebtedness other
than, without duplication, (i) that outstanding on the date of this Agreement
and described on Schedule 6.4 (provided, that the Indebtedness owing under the
                               --------
Existing Credit Agreement may not remain outstanding after the initial borrowing
of Loans hereunder), (ii) Indebtedness under the Loan Documents, (iii)
Indebtedness in an amount not in excess of $13,000,000 incurred in connection
with the purchase by Mutual Risk or its nominee of its home office building,
(iv) unsecured Indebtedness in an amount not in excess of $5,000,000 incurred in
connection with the acquisition of Valmet Group Ltd., (v) Indebtedness secured
by the Liens described in clauses (i) and (ii) of the definition of Permitted
Liens, and (vi) Permitted Debt Issuances.  Mutual Risk shall not permit any of
its Subsidiaries to create, incur, assume or suffer to exist in any manner any
Indebtedness other than that outstanding on the date of this Agreement and
described on Schedule 6.4; provided, that nothing contained in this Section 6.4
                           --------
shall prohibit (A) any Indebtedness of any Subsidiary of Mutual Risk outstanding
at the time such Subsidiary becomes a Subsidiary of Mutual Risk and not incurred
in contemplation thereof, as long as the outstanding amount of the Indebtedness
remains the sole obligation of such Subsidiary and as long as the outstanding
amount of such Indebtedness is not voluntarily increased by such Subsidiary
after the date such Subsidiary becomes a Subsidiary of Mutual Risk, (B) any
Indebtedness of any Subsidiary secured by a Permitted Lien, provided that such
                                                            --------
Indebtedness does not exceed the value of the assets or property subject to such
Permitted Lien, (C) any Indebtedness owing directly or indirectly to Mutual Risk
by a Subsidiary of Mutual Risk, (D) any Indebtedness of Mutual Group under the
Loan Documents, and (E) any Indebtedness not otherwise permitted by the
foregoing clauses; provided, that the aggregate amount at any time outstanding
for all Subsidiaries of Mutual Risk of (y) the Indebtedness incurred under the
preceding clause (B) and (z) the Indebtedness incurred under the preceding
clause (E) shall not exceed $10,000,000 in the aggregate at any time
outstanding.

     SECTION 6.5    Limitation on Asset Sales.  Mutual Risk, will not, and will
                    -------------------------
not permit any of its Subsidiaries to, consummate an Asset Sale unless (a)
Mutual Risk or the applicable Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the

                                       6
<PAGE>

assets sold or otherwise disposed of, and (b) the consideration received for the
assets sold by Mutual Risk or such Subsidiary, as the case may be, in such Asset
Sale are in the form of cash or Cash Equivalents, in each case received at the
time of such Asset Sale. Mutual Risk will not, and will not cause or permit any
of its Subsidiaries to, in a single transaction or a series of related
transactions, directly or indirectly, sell, lease or otherwise transfer,
directly or indirectly, all or substantially all of the assets of Mutual Risk
and its Subsidiaries to any Person other than Mutual Risk or any of its wholly
owned Subsidiaries.

     SECTION 6.6    Merger, Consolidation, Sale of Assets and Liquidation.
                    -----------------------------------------------------
Mutual Risk shall not enter into any merger or consolidation with any Person, or
sell, lease, assign, distribute or otherwise dispose of all or substantially all
of its assets, or liquidate in whole or in part, or permit any Subsidiary to
enter into any merger or consolidation with any Person, or sell, lease, assign,
distribute or otherwise dispose of all or substantially all of its assets, or
liquidate in whole or in part, except that (a) Mutual Risk may merge or
consolidate with any Subsidiary or other Person incorporated under the laws of
Bermuda or a state of the United States, if Mutual Risk is the surviving
corporation and continues to be a Bermuda company and immediately after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing, (b) any Subsidiary may be merged or consolidated into, or may be
liquidated into, or may sell, lease or transfer all or substantially all of its
assets to, Mutual Risk or a Wholly Owned Subsidiary (provided that Mutual Group
may merge or consolidate into, or liquidate into, or sell, lease or transfer all
or substantially all of its assets to Mutual Risk only), if, in the case of a
merger or consolidation, (y) Mutual Risk or such Wholly Owned Subsidiary is the
surviving corporation (and, if Mutual Risk is the surviving corporation, it
continues to be a Bermuda company), and (z) immediately after giving effect
thereto no Default or Event of Default shall have occurred and be continuing,
and (c) the Restructuring may occur.

     SECTION 6.7    Sale and Leaseback.  Mutual Risk shall not enter into, or
                    ------------------
permit any of its Subsidiaries to enter into, directly or indirectly, any
arrangement under which Mutual Risk or such Subsidiary, as the case may be,
sells or transfers any of the fixed assets then owed by it and thereupon or
within one year thereafter rents or leases the assets so sold or transferred.

     SECTION 6.8    Limitations on Dividend and Other Payment Restrictions
                    ------------------------------------------------------
Affecting Subsidiaries. Mutual Risk will not, and will not cause or permit any
----------------------
of its Subsidiaries to, directly or indirectly, enter into, or suffer to exist,
any consensual agreement with any Person which prohibits or limits the ability
of any Subsidiary to (a) pay dividends or make other distributions or pay any
Debt owed to Mutual Risk or any of its Subsidiaries, (b) make loan or advances
to Mutual Risk or any of its Subsidiaries or (c) transfer any of its properties
or assets to Mutual Risk or any of its Subsidiaries, except for such agreement
or restrictions existing under or by reason of any of the following:

     (i)    The Loan Documents and any other agreement in effect on the date of
this Agreement;

     (ii)   The Debentures or the Newco Debentures;

     (iii)  Customary non-assignment provisions of any lease governing a
leasehold interest of Mutual Risk or any of its Subsidiaries;

     (iv)   Any agreement or other instrument of a Person acquired by Mutual
Risk or any of its Subsidiaries in existence at the time of such acquisition
(but not created in contemplation thereof), which encumbrance or restriction is
not applicable to any Person, or properties or assets of any Person, other than
the Person, or the Property or assets of the Person, so acquired; and

                                       7
<PAGE>

     (v)  Any limitations under applicable laws as to dividends payable by
Insurance Company Subsidiaries.

     SECTION 6.9    Restricted Payments.
                    -------------------

     (a)  So long as any of the Debentures are outstanding, Mutual Risk will
not, and will not cause or permit any of its Subsidiaries to, directly or
indirectly, declare or make any Restricted Payment other than, so long as no
Default or Event of Default has occurred and is continuing or would result
therefrom, (i) quarterly dividends to all shareholders of Mutual Risk, pro rata,
in an amount no greater than $0.07 per share per quarter, (ii) the dividend or
distribution by Mutual Risk of shares of Newco in order to comply with Section
2.1(b)(ii) of the Registration Rights Agreement entered into in connection with
the issuance of the Debentures, (iii) Restricted Payments made to Mutual Risk or
any Guarantor of the Obligations, (iv) Restricted Payments made to the Holders
of the Debentures or the Newco Debentures in accordance with their terms as in
effect on the date of issuance thereof, on a pro rata basis, (v) dividends on
Policy Holder Preferred Shares made solely in connection with the CRM business
and determined in a manner consistent with past practices and (vi) dividends
made in respect of shares issued pursuant to the Hemisphere Restricted Stock
Plan and the repurchase of such shares, in each case in accordance with such
plan and consistent with past practices.

     (b)  If none of the Debentures are outstanding, Mutual Risk shall not, and
shall not permit any of its Subsidiaries to, declare or pay any dividend or
distribution, either in cash or property, on any shares of its Capital Stock
(except dividends or distributions payable solely in shares of Capital Stock) or
purchase, redeem or retire any of its Capital Stock or any warrants, rights or
options to purchase or acquire any shares of its Capital Stock (i) in the case
of Mutual Risk, if a Default or Event of Default exists at any time thereof or
would be caused thereby, (ii) in violation of any applicable Laws, (iii) in the
case of Subsidiaries of Mutual Risk, except for dividends or distributions
declared or paid by a Subsidiary of Mutual Risk to Mutual Risk or a Subsidiary
of Mutual Risk (provided that if the Subsidiary declaring or paying such
                --------
dividend or distribution is not a Wholly-Owned Subsidiary, such dividend or
distribution is paid pro rata to the stockholders of such Subsidiary), (iv) in
the case of dividends or distributions by Mutual Risk, in an amount
substantially greater than the amount of dividends and distributions
historically declared, paid or made by Mutual Risk, and (v) in the case of stock
purchases, redemptions, retirements or other acquisitions by Mutual Risk,
including in completion of its previously announced and currently pending stock
repurchase program, in an aggregate amount in excess of  10% of Stockholders'
Equity on the date of this Agreement.

     SECTION 6.10   Transactions with Affiliates.  Mutual Risk shall not enter
                    ----------------------------
into or be a party to, or permit any Subsidiary to enter into or be a party to,
any transaction with any Affiliate, except (a) pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are no less
favorable to it than it would obtain in a comparable arm's length transaction
with an unrelated Person, and (b) in accordance with the terms and conditions of
the Securities Purchase Agreement, including the Restructuring.

     SECTION 6.11   Lines of Business.  Mutual Risk will not, nor will it permit
                    -----------------
any Subsidiary to, engage in any business other than a Permitted Business.

     SECTION 6.12   Amendment to Charter Documents.  Mutual Risk shall not,
                    ------------------------------
directly or indirectly, and shall not cause or permit any of its Subsidiaries
to, amend its memorandum of association, certificate of incorporation, by-laws
or other organizational documents or any partnership or shareholder agreement to
which Mutual Risk or any of its Subsidiaries is a party.

                                       8
<PAGE>

     SECTION 6.13   No Change in Accounting.  Mutual Risk will not, and will not
                    -----------------------
cause or permit any of its Subsidiaries to, make any material change in any
accounting policy or practice including, without limitation, with respect to
accounting for loss reserves and/or reinsurance recoverables other than any such
changes that are required by law or any order of any Governmental Authority
having jurisdiction over Mutual Risk or any such Subsidiary.

     SECTION 6.14   Restrictions on Amendment of Certain CRM Documents.  Mutual
                    --------------------------------------------------
Risk will not, and will not cause or permit any of its Subsidiaries to, amend or
modify any of the agreements or arrangements between Newco or any of its
Subsidiaries and Mutual Risk or any of its Subsidiaries relating to the
retention of a portion of any premium by, or the payment of any fees to, Mutual
Risk or any of its Subsidiaries in connection with the writing of the underlying
insurance policies related to the CRM business.

     SECTION 6.15   Restrictions on Amendments of Documents.  Mutual Risk will
                    ---------------------------------------
not, and will not cause or permit any of its Subsidiaries to, amend, supplement
or otherwise modify any of the Transaction Documents or any of the documents
related to the RHINOS (or permit any of the foregoing) without the prior written
consent of the Required Lenders, which consent shall not be unreasonably
withheld or delayed, other than as may be necessary in order to complete the
Restructuring.

     SECTION 6.16   Restrictions on Certain Equity Issuances.  Mutual Risk will
                    ----------------------------------------
not issue any Capital Stock or any Common Stock Equivalents (other than pursuant
to employee stock option plans in effect on the date of the First Amendment,
Consent and Waiver and other than upon conversion of the Debentures) until at
least 30 days following the date on which the Required Approvals have been
obtained and the Restructuring has been consummated; provided, however, that
Mutual Risk may comply with its obligations under the RHINOS Debentures and the
documents executed in connection therewith.

     SECTION 6.17   Minimum Capital and Surplus.  So long as any of the
                    ---------------------------
Debentures are outstanding, Mutual Risk will not permit its U.S. Insurance
Subsidiaries' capital and surplus, as defined in the Pennsylvania or Illinois
Insurance Code, as applicable, to be less than the greater of (a) the minimum
amount required under any applicable insurance law to which it is subject and
(b) $350,000,000 in any quarterly period beginning May 1, 2001.

     SECTION 6.18   Maximum Combined Ratio.  So long as any of the Debentures
                    ----------------------
are outstanding, Mutual Risk will not permit the statutory "combined ratio" for
Mutual Risk's U.S. Insurance Subsidiaries, measured with respect to all business
written by the U.S. Insurance Subsidiaries as the sum for such U.S. Insurance
Subsidiaries of (a) the Loss Ratio and (b) the Expense Ratio, to exceed 125%.
Mutual Risk will measure the statutory combined ratio for the previous 12 months
as of the end of each fiscal quarter.  In the event such statutory combined
ratio exceeds 120%, Mutual Risk and the U.S. Insurance Subsidiaries will
establish and implement a plan in order to lower the statutory combined ratio
below 115%.

     SECTION 6.19   Minimum Risk-Based Capital.  On any date of determination
                    --------------------------
prior to (a) the completion of the Restructuring and (b) the capital
contribution by Mutual Risk in the amount of $80,000,000 to Legion Insurance
Company and Legion Indemnity Company, Mutual Risk will not permit the Risk-Based
Capital for any U.S. Insurance Subsidiary to be less than 175% of the Authorized
Control Level and for all such U.S. Insurance Subsidiaries (collectively, on a
combined basis) to be less than 175% of the Authorized Control Level.  On any
date of determination on and after (a) the completion of the Restructuring and
(b) the capital contribution by Mutual Risk in the amount of $80,000,000 to
Legion Insurance Company and Legion Indemnity, Mutual Risk will not permit the
Risk-Based Capital for any U.S. Insurance Subsidiary to be less

                                       9
<PAGE>

than 205% of the Authorized Control Level and for all such U.S. Insurance
Subsidiaries (collectively, on a combined basis) to be less than 225% of the
Authorized Control Level. Mutual Risk will measure Risk-Based Capital as of each
December 31, commencing December 31, 2001, and will run the "early warning"
tests established by the NAIC as of each March 31, June 30, September 30 and
December 31, commencing June 30, 2001. If Mutual Risk and the U.S. Insurance
Subsidiaries fail to comply with any such "early warning" tests, Mutual Risk and
the U.S. Insurance Subsidiaries will establish and implement a plan in order to
improve such test results. In no event will Mutual Risk and the U.S. Insurance
Subsidiaries fail to comply with more than three such "early warning" tests.

     SECTION 6.20   Investments.  So long as any of the Debentures are
                    -----------
outstanding, Mutual Risk will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, make or acquire any Investment, other
than (a) Investments pursuant to Mutual Risk's investment policy as adopted by
Mutual Risk's board of directors and in accordance with Mutual Risk's annual
plan and budget, (b) after the completion of the Restructuring, the Investment
of up to $80.0 million of the net proceeds from the original issuance of the
Debentures into Legion Insurance Company and Legion Indemnity Company, as
contemplated by the Securities Purchase Agreement and First Amendment, Consent
and Waiver, (c) Investments in Subsidiaries of Mutual Risk made in connection
with the Restructuring, (d) Investments in the Collateral Account (as defined in
the Securities Purchase Agreement) and in Cash Equivalents and U.S. Government
Obligations (as defined in the Collateral Agreement), (e) Investments by
Subsidiaries of Mutual Risk in Mutual Risk or any Guarantor of the Obligations
and (f) other Investments not exceeding $10,000,000 in the aggregate outstanding
at any one time.

     SECTION 6.21   Fundamental Changes.  So long as any of the Debentures are
                    -------------------
outstanding, Mutual Risk will not, and will not cause or permit any of its
Subsidiaries to, wind-up, liquidate or dissolve their respective affairs, except
any such action taken with the unanimous consent of Mutual Risk's board of
directors.  Mutual Risk will not, and will not cause or permit any of its
Subsidiaries to, commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to themselves or their
respective debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seek the appointment of a trustee, receiver, liquidation,
custodian or other similar official of them or any substantial part of their
property, or consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against them, or make a general assignment for the benefit or
creditors, or fail generally to pay their respective debts as they become due or
on demand, or take any corporate action to authorize any of the foregoing,
except any such action taken with the unanimous consent of Mutual Risk's board
of directors.

                                      10
<PAGE>

                                   EXHIBIT D

                               FORM OF GUARANTEE
                               -----------------

     THIS GUARANTEE is executed as of ____________, 200_, by the undersigned
("Guarantor"), for the benefit of BANK OF AMERICA, N.A., a national banking
association (in its capacity as Administrative Agent for the benefit of
Lenders).

                                   RECITALS
                                   --------

     A.   Mutual Risk Management Ltd. ("Mutual Risk"), Mutual Group, Ltd.
("Mutual Group"), as borrowers (in such capacity, collectively, the "Borrowers"
and individually, a "Borrower"), Bank of America, N.A., as administrative agent
(including its permitted successors and assigns in such capacity,
"Administrative Agent"), and certain banks and financial institutions from time
to time party thereto (collectively, "Lenders" and individually, a "Lender")
have entered into a Credit Agreement dated as of September 21, 2000 (as amended,
modified, supplemented, or restated from time to time, the "Credit Agreement").

     B.   This Guarantee is integral to the transactions contemplated by the
Credit Agreement and the execution and delivery hereof is a condition to Lenders
obligations to extend credit to Borrower under the Credit Agreement.

     ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, Guarantor (jointly and severally with
any other guarantor of the obligation, whether pursuant to this Guarantee or
otherwise) guarantees to Administrative Agent and Lenders the prompt payment of
the Guaranteed Debt (defined below) as follows:

     1.   DEFINITIONS.  Terms defined in the Credit Agreement have the same
meanings when used, unless otherwise defined, in this Guarantee.  As used in
this Guarantee: "Guaranteed Debt" means, collectively, (a) the Obligations
(provided that, if Guarantor is not organized under the laws of a state in the
United States, Obligations shall be limited to Obligations owing by Mutual Risk
under the Loan Documents) and (b) all present and future costs, attorneys' fees,
and expenses reasonably incurred by Administrative Agent or any Lender to
enforce Borrower's, Guarantor's, or any other obligor's payment of any of the
Guaranteed Debt, including, without limitation (to the extent lawful), all
present and future amounts that would become due but for the operation of (S)(S)
502 or 506 or any other provision of Title 11 of the United States Code and all
present and future accrued and unpaid interest (including, without limitation,
all post-maturity interest and any post-petition interest in any proceeding
under Debtor Relief Laws to which Borrower or Guarantor becomes subject).

     2.   GUARANTEE.  This is an absolute, irrevocable, and continuing guarantee
of payment, not collection, and the circumstance that at any time or from time
to time the Guaranteed Debt may be paid in full does not affect the obligation
of Guarantor with respect to the Guaranteed Debt incurred after such time. This
Guarantee remains in effect until the Guaranteed Debt is fully paid and
performed and all Commitments to extend any credit under the Loan Documents have
terminated.  Guarantor may not rescind or revoke its obligations with respect to
the Guaranteed Debt.  Notwithstanding any contrary provision, it is the
intention of Guarantor, Lenders, and Administrative Agent that the amount of the
Guaranteed Debt guaranteed by Guarantor by this Guarantee shall be in, but not
in excess of, the maximum amount permitted by fraudulent
<PAGE>

conveyance, fraudulent transfer, or similar laws applicable to Guarantor.
Accordingly, notwithstanding anything to the contrary contained in this
Guarantee or any other agreement or instrument executed in connection with the
payment of any of the Guaranteed Debt, the amount of the Guaranteed Debt
guaranteed by Guarantor under this Guarantee shall be limited to an aggregate
amount equal to the largest amount that would not render Guarantor's obligations
hereunder subject to avoidance under Section 548 of the United States Bankruptcy
Code or any comparable provision of any applicable state or foreign law. This
Guarantee is subject to the terms and conditions of the Subordination Agreement
(as defined in the Securities Purchase Agreement dated as of May 8, 2001, among
Mutual Risk, an affiliate of XL Capital Ltd., First Union Merchant Banking 2001,
LLC, High Ridge Capital Partners II, L.P., Century Capital Partners II and
certain other investors).

     3.   CONSIDERATION.  Guarantor represents and warrants that its liability
under this Guarantee may reasonably be expected to directly or indirectly
benefit it.

     4.   CUMULATIVE RIGHTS.  If Guarantor becomes liable for any indebtedness
owing by Borrower to Administrative Agent or any Lender, other than under this
Guarantee, that liability may not be in any manner impaired or affected by this
Guarantee.  The rights of Administrative Agent or Lenders under this Guarantee
are cumulative of any and all other rights that Administrative Agent or Lenders
may ever have against Guarantor.  The exercise by Administrative Agent or
Lenders of any right under this Guarantee or otherwise does not preclude the
concurrent or subsequent exercise of any other right.

     5.   PAYMENT UPON DEMAND.  If an Event of Default exists, Guarantor shall,
on demand and without further notice of dishonor and without any notice having
been given to Guarantor previous to that demand of either the acceptance by
Administrative Agent or Lenders of this Guarantee or the creation or incurrence
of any Guaranteed Debt, pay the amount of the Guaranteed Debt then due and
payable to Administrative Agent and Lenders; provided that, if an Event of
Default exists and Administrative Agent or Lenders cannot, for any reason,
accelerate the Obligations, then the Guaranteed Debt shall be, as among
Guarantor, Administrative Agent, and Lenders, a fully matured, due, and payable
obligation of Guarantor to Administrative Agent and Lenders.  It is not
necessary for Administrative Agent or Lenders, in order to enforce that payment
by Guarantor, first or contemporaneously to institute suit or exhaust remedies
against Borrower or others liable on any Guaranteed Debt or to enforce rights
against any collateral securing any Guaranteed Debt.

     6.   SUBROGATION AND CONTRIBUTION.  Until payment in full of the Guaranteed
Debt and the termination of the Commitment of each Lender to extend credit under
the Loan Documents, (a) Guarantor may not assert, enforce, or otherwise exercise
any right of subrogation to any of the rights or Liens of Administrative Agent
or Lenders or any other beneficiary against Borrower or any other obligor on the
Guaranteed Debt or any collateral or other security or any right of recourse,
reimbursement, subrogation, contribution, indemnification, or similar right
against Borrower or any other obligor on any Guaranteed Debt or Guarantor of it,
(b) Guarantor defers all of the foregoing rights (whether they arise in equity,
under contract, by statute, under common law, or otherwise), and (c) Guarantor
defers the benefit of, and subordinates any right to participate in, any
collateral or other security given to Administrative Agent or Lenders or any
other beneficiary to secure payment of any Guaranteed Debt.

     7.   NO RELEASE.  Guarantor's obligations under this Guarantee may not be
released, diminished, or affected by the occurrence of any one or more of the
following events:  (a) any taking or accepting of any other security or
assurance for any Guaranteed Debt; (b) any release, surrender, exchange,
<PAGE>

subordination, impairment, or loss of any collateral securing any Guaranteed
Debt; (c) any full or partial release of the liability of any other obligor on
any Guaranteed Debt, except for any final release resulting from payment in full
of such Guaranteed Debt; (d) the modification of, or waiver of compliance with,
any terms of any other Loan Document; (e) the insolvency, bankruptcy, or lack of
corporate or partnership power of any other obligor at any time liable for any
Guaranteed Debt, whether now existing or occurring in the future; (f) any
renewal, extension, or rearrangement of any Guaranteed Debt or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by
Administrative Agent or any Lender to any other obligor on any Guaranteed Debt;
(g) any neglect, delay, omission, failure, or refusal of Administrative Agent or
any Lender to take or prosecute any action in connection with the Guaranteed
Debt or to foreclose, take, or prosecute any action in connection with any Loan
Document; (h) any failure of Administrative Agent or any Lender to notify
Guarantor of any renewal, extension, or assignment of any Guaranteed Debt, or
the release of any security or of any other action taken or refrained from being
taken by Administrative Agent or any Lender against Borrower or any new
agreement between Administrative Agent, any Lender, and Borrower; it being
understood that neither Administrative Agent nor any Lender is required to give
Guarantor any notice of any kind under any circumstances whatsoever with respect
to or in connection with any Guaranteed Debt, other than any notice required to
be given to Guarantor by law or elsewhere in this Guarantee; (i) the
unenforceability of any Guaranteed Debt against any other obligor or any
security securing same because it exceeds the amount permitted by law, the act
of creating it is ultra vires, the officers creating it exceeded their authority
or violated their fiduciary duties in connection with it, or otherwise; or (j)
any payment of any Guaranteed Debt to Administrative Agent or any Lender is held
to constitute a preference under any Debtor Relief Laws or for any other reason
Administrative Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this Guarantee will be
reinstated in an amount equal to that payment).

     8.   RELIANCE AND DUTY TO REMAIN INFORMED.  Guarantor confirms that it has
executed and delivered this Guarantee after reviewing the terms and conditions
of the Loan Documents and such other information as it has deemed appropriate in
order to make its own credit analysis and decision to execute and deliver this
Guarantee.  Guarantor confirms that it has made its own independent
investigation with respect to Borrower's creditworthiness and is not executing
and delivering this Guarantee in reliance on any representation or warranty by
Administrative Agent or any Lender as to that creditworthiness. Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrower and any circumstances affecting Borrower's ability to
perform under the Loan Documents to which it is a party or any collateral
securing any Guaranteed Debt.

     9.   NO REDUCTION.  The Guaranteed Debt may not be reduced, discharged, or
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other obligor against Administrative Agent or any
Lender or against payment of the Guaranteed Debt, whether that offset, claim, or
defense arises in connection with the Guaranteed Debt or otherwise.  Those
claims and defenses include, without limitation, failure of consideration,
breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of
limitations, lender liability, accord and satisfaction, usury, forged
signatures, mistake, impossibility, frustration of purpose, and
unconscionability.

     10.  INSOLVENCY OF GUARANTOR.  Should Guarantor become insolvent, or fail
to pay Guarantor's debts generally as they become due, or voluntarily seek,
consent to, or acquiesce in, the benefit or benefits of any Bankruptcy Law
(other than as a creditor or claimant), or become a party to (or be made the
subject of) any proceeding provided for by any Bankruptcy Law (other than as a
creditor or claimant) that
<PAGE>

could suspend or otherwise adversely affect the rights of Administrative Agent
or any Lender granted hereunder, then, in any such event, the Guaranteed Debt
shall be, as among Guarantor, Administrative Agent, and Lenders, a fully
matured, due, and payable obligation of Guarantor to Administrative Agent and
Lenders (without regard to whether Borrower is then in default under the Loan
Documents or whether the Obligation, or any part thereof, is then due and owing
by Borrower to any Lender), payable in full by Guarantor to Lenders upon demand,
and the amount thereof so payable shall be the estimated amount owing in respect
of the contingent claim created hereunder.

     11.  LOAN DOCUMENT.  This Guarantee is a Loan Document and is subject to
the applicable provisions of Sections 1 and 10 of the Credit Agreement,
including, without limitation, the provisions relating to GOVERNING LAW,
JURISDICTION, VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL, all of which
are incorporated into this Guarantee by reference the same as if set forth in
this Guarantee verbatim.

     12.  NOTICES.  Guarantor's address and telecopy number are as set forth
next to Guarantor's signature on the signature page hereof.

     13.  AMENDMENTS, ETC.  No amendment, waiver, or discharge to or under this
Guarantee is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of Section 10.6 of the Credit Agreement.
                ------------

     14.  ADMINISTRATIVE AGENT AND LENDERS.  Administrative Agent is
Administrative Agent for each Lender under the Credit Agreement.  All rights
granted to Administrative Agent under or in connection with this Guarantee are
for each Lender's ratable benefit.  Administrative Agent may, without the
joinder of any Lender, exercise any rights in Administrative Agent's or Lenders'
favor under or in connection with this Guarantee.  Administrative Agent's and
each Lender's rights and obligations vis-a-vis each other may be subject to one
or more separate agreements between those parties.  However, Guarantor is not
required to inquire about any such agreement or is subject to any of its terms
unless Guarantor specifically joins such agreement.  Therefore, neither
Guarantor nor its successors or assigns is entitled to any benefits or
provisions of any such separate agreement or is entitled to rely upon or raise
as a defense any party's failure or refusal to comply with the provisions of
such agreement.

     15.  PARTIES.  This Guarantee benefits Administrative Agent, Lenders, and
their respective successors and assigns and binds Guarantor and its successors
and assigns.  Upon appointment of any successor Administrative Agent under the
Credit Agreement, all of the rights of Administrative Agent under this Guarantee
automatically vest in that new Administrative Agent as successor Administrative
Agent on behalf of Lenders without any further act, deed, conveyance, or other
formality other than that appointment. The rights of Administrative Agent and
Lenders under this Guarantee may be transferred with any assignment of the
Guaranteed Debt pursuant to and in accordance with the terms of the Credit
Agreement. The Credit Agreement contains provisions governing assignments of the
Guaranteed Debt and of rights and obligations under this Guarantee.

                    Remainder of Page Intentionally Blank.
                         Signature Page(s) to Follow.
<PAGE>

EXECUTED as of the date first stated in this Guarantee.

                                                  GUARANTOR:

Address:   __________________
           __________________
Facsimile: __________________                     By  _______________________
                                                      Name:__________________
                                                      Title:_________________

                          Signature Page to Guarantee
<PAGE>

                                   EXHIBIT E
                                   ---------

                                 SHARE CHARGE
                                 ------------

THIS CHARGE dated  the _____ day  of ____________, 2001 is made

BETWEEN:

     (1)  [                                 ], a local company established under
          the laws of Bermuda of 44 Church Street, Hamilton HM 12 Bermuda (the
          "Chargor") and

     (2)  Bank of America, N.A., a bank established under the laws of the United
          States of America of 231 S. LaSalle Street, Chicago, Illinois 60697,
          acting in its capacity as Collateral Agent (herein so called) for
          Holders (hereinafter defined), Lenders (hereinafter defined), and
          RHINOS Holders (hereinafter defined) (the "Secured Party").

WHEREAS:

     A.   Pursuant to that certain Securities Purchase Agreement (herein so
          called) dated as of May 8, 2001, among Mutual Risk Management Ltd.
          ("MRM"), certain of its subsidiaries, as obligors, and XL Insurance
          Ltd., First Union Merchant Banking 2001, LLC, High Ridge Capital
          Partners II, L.P., Century Capital Partners II, L.P., Robert A.
          Mulderig, and Taracay Investors Company (collectively, "Purchasers"),
          Purchasers have agreed to purchase $112,500,000 aggregate principal
          amount of 9 3/8% Convertible Exchangeable Debentures due 2006 of MRM;

     B.   MRM and  Mutual Group, Ltd. (collectively, "Borrowers"), Bank of
          America, N.A., as Administrative Agent, and certain Lenders (herein so
          called) now or hereafter party thereto have entered into a Credit
          Agreement, dated as of September 21, 2000 (as amended, modified,
          supplemented, or restated from time to time, the "Credit Agreement");

     C.   MRM or one of its Subsidiaries has issued RHINOS (hereinafter defined)
          to the RHINOS Holders (hereinafter defined); and

     D.   It is a condition precedent to the transactions contemplated by the
          Securities Purchase Agreement and the Credit Agreement that the
          Chargor and the Secured Party enter into this Charge.

1.   DEFINITIONS AND INTERPRETATION

     (a)  In this Charge, unless contrary to or inconsistent with the context:

          Administrative Agent means Bank of America, N.A., in its capacity as
     administrative agent for Lenders under the Credit Agreement.

          Collateral Agent is defined in the preamble to this Charge and
     includes any successor acting as "Collateral Agent" for Holders, Lenders,
     and RHINOS Holders.
<PAGE>

          Credit Agreement Obligations means, collectively, (a) all Obligations
     (as defined in the Credit Agreement) now or hereafter owing by MRM under
     the Loan Documents and (b) any subrogation rights that Administrative Agent
     or any Lender may have under the Subordination Agreement.

          Debenture Obligations means all indebtedness, liabilities, and
     obligations arising under or pursuant to the Debentures.

          Debentures has the meaning given such term in the Securities Purchase
     Agreement.

          Dollar and US $  means the lawful currency of the United States of
     America.

          Event of Default means the occurrence of an event of default under or
     in respect of any of the Secured Obligations.

          Holders means the holders from time to time of the Debentures.

          Lien means a charge, mortgage, hypothecation, title retention, pledge,
     lien, security interest or other encumbrance, whether fixed or floating and
     howsoever created or arising.

          Representative means XL Insurance Ltd., acting hereunder as
     representative of Holders.

          RHINOS has the meaning given such term in the Securities Purchase
     Agreement and, for purposes of this Charge, also means and includes the
     RHINOS Debentures (as defined in the Securities Purchase Agreement).

          RHINOS Holders means the holders from time to time of the RHINOS.

          RHINOS Obligations means, collectively, (a) all indebtedness,
     liabilities, and obligations arising under or pursuant to the RHINOS and
     (b) any subrogation rights that any RHINOS Holder may have under the
     Subordination Agreement.

          Security Assets has the meaning given such term in clause 3(a).

          Secured Obligations means, collectively, the Debenture Obligations,
     the Credit Agreement Obligations and the RHINOS Obligations.

          Shares means  the shares listed in Schedule 1 hereto of each Company
     (herein co called) listed on Schedule 1 hereto.

          Subordination Agreement means that certain Subordination Agreement,
     dated as of the date hereof, among Holders, Lenders, RHINOS Holders,
     Administrative Agent, Representative and certain other Persons.
<PAGE>

     (b)  In this Charge unless contrary to or inconsistent with the context:

          (i)    capitalized terms used herein have the meaning ascribed thereto
                 in the Credit Agreement;

          (ii)   words (including, without limitation, defined terms) importing:

                 (1)  the singular include the plural and vice versa; and

                 (2)  any gender includes all genders;

          (iii)  a reference to a party or person includes a reference to that
                 party or person and its successors, substitutes (including, but
                 not limited to, any party or person taking by novation),
                 executors, administrators and assigns;

          (iv)   the word "Person" includes an individual, any entity having
                 separate legal personality under the laws governing its
                 formation, partnerships and trusts (whether or not having
                 separate legal personality), companies, corporations,
                 unincorporated organisations and any government, department or
                 agency thereof;

          (v)    a reference to any thing or any matter (including, but not
                 limited to, the Secured Obligations, any other amount and the
                 Security Assets) is a reference to the whole and any part of
                 it;

          (vi)   a reference to this Charge, or any other document includes any
                 variation, novation or replacement of or supplement to any of
                 them from time to time;

          (vii)  a reference to a clause or Schedule means a reference to a
                 clause or Schedule of this Charge;

          (viii) where any clause contains sub-clauses, paragraphs or sub-
                 paragraphs, each sub-clause, paragraph and sub-paragraph
                 however called may be read and construed separately and
                 independently of each other;

          (ix)   a reference (whether specific or general) to a statute or to
                 any other legislation includes any code, ordinance or other
                 law, and any regulation, rule or bye-law or other instrument
                 made under it, and all official directives (if any) and all
                 amendments, consolidations, re-enactments or substitutions of
                 any of them from time to time;

          (x)    a reference to a document includes any deed, agreement in
                 writing, or any certificate, notice, instrument or other
                 document of any kind;

          (xi)   "writing" and related expressions includes all means of
                 reproducing words in a tangible and permanently visible form;
<PAGE>

          (xii)  any agreement, undertaking, acknowledgment, condition or other
                 term that is made or given by the Chargor is deemed to be a
                 covenant in favour of and for the benefit of the Secured Party;

          (xiii) headings are inserted for guidance only and do not affect the
                 interpretation of this Charge; and

          (xiv)  an Event of Default is "subsisting" until it has been waived in
                 writing by, or remedied to the satisfaction of, the party or
                 parties having the right to give such waiver or to receive such
                 satisfaction.

2.   CONSIDERATION

     The Chargor acknowledges that the giving of this Charge and the granting of
     rights under this Charge are  in order to induce the Purchasers and RHINOS
     Holders to enter into the transactions contemplated by the Securities
     Purchase Agreement and the Lenders to enter into the transactions
     contemplated by the Credit Agreement, and that the Chargor is benefitting,
     directly or indirectly, from the giving of this Charge and the granting of
     rights under this Charge.

3.   CHARGE

     The  Chargor, as legal and beneficial owner hereby:

     (a)  charges and agrees to charge in favour of the Secured Party, all of
          its right, title and interest in and to the following property
          (collectively the "Security Assets") (x) as a first fixed security and
          on a first priority basis prior to the termination of the
          Subordination Period (as defined in the Subordination Agreement), and
          on a pari passu basis with all the other Secured Obligations
          thereafter, for the full and complete payment and performance of the
          Debenture Obligations when due, and (y) as a second fixed security and
          on a second priority basis prior to the termination of the
          Subordination Period, and on a pari passu basis with all the other
          Secured Obligations thereafter, for the full and complete payment and
          performance of the Credit Agreement Obligations and the RHINOS
          Obligations when due:

          (i)    the Shares owned by it and any interest it has in the entries
                 on the books of any financial intermediary pertaining to such
                 Shares, and all cash, warrants, rights, instruments and other
                 property or proceeds from time to time received, receivable or
                 otherwise distributed in respect or in exchange for any or all
                 of such Shares;

          (ii)   all additional shares of, and all securities convertible into
                 and warrants, options and other rights to purchase or otherwise
                 acquire, stock, shares or other securities of each Company from
                 time to time acquired by it in any manner (which shares and
                 securities shall be deemed to be part of the Shares) or any
                 other rights and any interest in the entries on the books of
                 any financial intermediary pertaining to such additional shares
                 (all such shares, securities, warrants, options, rights,
                 certificates, instruments and interests collectively being
                 "Additional Shares") and all cash, warrants, rights,
                 instruments and other property or proceeds from time to time
                 received, receivable or
<PAGE>

                 otherwise distributed in respect of or in exchange for any or
                 all of such Additional Shares;

          (iii)  all dividends or interest paid or payable by any Company after
                 the date of and during the continuance of an Event of Default
                 on all or any of the Shares and the Additional Shares; and

          (iv)   to the extent not covered by clauses (i) through (iii) above,
                 all proceeds of any or all of the foregoing Security Assets.
                 For the purposes of this Charge, the term "proceeds" includes
                 whatever is receivable or received when Security Assets or
                 proceeds are sold, exchanged, collected or otherwise disposed
                 of, whether such disposition is voluntary or involuntary;

     (b)  agrees that this Charge shall be a first priority fixed charge (with
          the priorities as among the Holders, Lenders and RHINOS Holders set
          forth herein) over all of the Security Assets; and

     (c)  undertakes to deposit  forthwith with the Secured Party, and in such
          manner as the Secured Party may direct the following:

          (i)    all share certificates and other documents in respect of the
                 Security Assets and share transfer forms endorsed in blank in
                 respect of the Shares or any stocks, shares or securities
                 forming part of the Security Assets;

          (ii)   an undertaking from each Company to register transfer of the
                 Shares to the Secured Party or its nominees;

          (iii)  a certified copy of the Register of Members of each Company
                 containing a notation that the Shares are subject to a charge
                 in favour of the Secured Party;

          (iv)   an irrevocable proxy from the Chargor to the Secured Party in
                 form and substance satisfactory to the Secured Party, entitling
                 the Secured Party to vote the Shares and exercise all other
                 rights, powers and privileges and remedies to which a holder of
                 shares would be entitled;

          (v)    an irrevocable power of attorney from the Chargor in favour of
                 the Secured Party in form and substance satisfactory to the
                 Secured Party; and

          (vi)   executed but undated letters of resignation and release
                 together with letters of authority to date the same from each
                 of the directors, alternate directors and officers of each
                 Company;

          provided that, upon irrevocable payment in full in Dollars of the
          Secured Obligations, the Secured Party will, at the request and
          expense of the  Chargor, release to the  Chargor all the rights, title
          and interest of the Secured Party in or to the Security Assets.
<PAGE>

4.   PRESERVATION OF SECURITY

     (a)  The security constituted by this Charge shall be continuing and not
          satisfied by an intermediate payment or satisfaction of the whole or
          any part of the Secured Obligations but shall secure the ultimate
          balance of the Secured Obligations.  The security hereby given shall
          be in addition to any other Lien now or hereafter held by the Secured
          Party for all or any of the Secured Obligations, and the Secured
          Party's rights under this Charge shall not be postponed, lessened or
          otherwise prejudicially affected or merged in any other such security.

     (b)  The obligations of the Chargor hereunder and the security constituted
          by this Charge shall not be affected by any act, omission or
          circumstances which but for this provision might operate to release or
          otherwise exonerate the Chargor from its obligations hereunder or
          affect such obligations including without limitation and whether or
          not known to either of the Chargor or the Secured Party:

          (i)    any time or indulgence granted to any person, including any
                 Company, or the Chargor;

          (ii)   the variation, extension, compromise, renewal or release of, or
                 refusal or neglect to perfect or enforce any terms of this
                 Charge; and

          (iii)  any irregularity, invalidity or unenforceability of any of the
                 Secured Obligations or any present or future law or order of
                 any government authority (whether of right or in fact)
                 purporting to reduce or otherwise affect any of the Secured
                 Obligations which shall be construed accordingly as if there
                 were no such irregularity, unenforceability, invalidity, law or
                 order.

     (c)  Where any discharge (whether in respect of this Charge, any other
          security or otherwise) is made in whole or in part or any arrangement
          is made on the faith of any payment, security or other disposition
          which is avoided or must be repaid on bankruptcy, liquidation or
          otherwise without limitation, this security and the liability of the
          Chargor under this Charge shall continue as if there had been no such
          discharge or arrangement.

5.   WARRANTIES AND UNDERTAKINGS

     The Chargor hereby warrants, represents and undertakes to the Secured Party
     that:

     (a)  it is and will remain the legal and registered owner of the Shares and
          that it has not transferred, assigned, charged or in any way
          encumbered, and hereby covenants that it will not transfer, assign,
          charge or otherwise encumber hereafter, the whole or any part of the
          Security Assets to anyone other than the Secured Party, unless with
          the prior written approval of the Secured Party;

     (b)  the Shares have been duly authorised, validly issued and are fully
          paid and non-assessable;
<PAGE>

     (c)  neither the Chargor nor any Company has granted any options or other
          rights of any nature in respect of the Shares, or any other shares in
          the capital of any Company to any third party other than those in
          favour of the Secured Party;

     (d)  it is authorised in every respect to make this Charge and its
          obligations hereunder constitute its legal, valid and binding
          obligations enforceable against it in accordance with its terms;

     (e)  this Charge when duly registered will create a valid  first priority
          security interest in the Security Assets (with the priorities as among
          the Holders, Lenders and RHINOS Holders set forth herein) securing the
          payment of the Secured Obligations, and upon execution all filings and
          other actions necessary or desirable to perfect such security interest
          will be duly made or taken; and

     (f)  it shall exercise its powers as a shareholder of each Company to
          procure that each Company will not issue new shares or classes of
          shares or register the transfer of shares without the prior written
          approval of the Secured Party.

6.   REGISTRATION

     The Chargor hereby authorises the Secured Party at any time after the
     occurrence and during the continuance of an Event of Default to arrange for
     the Security Assets to be registered (if required by the Secured Party to
     perfect or ensure the priority of the Secured Party's security therein) and
     (under the powers of realisation herein conferred) to transfer or cause the
     Security Assets to be transferred to and registered in the name of the
     Secured Party or in the name of any purchasers or transferees from, or
     nominees of, the Secured Party and the Chargor undertakes from time to time
     to execute and sign all transfers, powers of attorney and other documents
     which the Secured Party may require for perfecting its title to any of the
     Security Assets or for vesting the same in it or in its nominees or in any
     purchasers or transferees of or from it.

7.   POWERS

     The Secured Party may on notice to the Chargor at any time after the
     occurrence and during the continuance of an Event of Default exercise at
     its discretion (in the name of the Chargor or otherwise) and without any
     further consent or authority on the part of the Chargor in respect of any
     of the Security Assets, any voting rights and any powers or rights which
     may be exercised by the Secured Party or by the person or persons in whose
     name or names the Security Assets are registered or who is the holder
     thereof under the terms thereof or otherwise including, but without
     limitation, all the powers given to trustees under the laws of Bermuda in
     respect of securities or property subject to a trust; provided that upon
     the taking of any such action the Secured Party will promptly give notice
     to the Chargor and that in the absence of any such notice, the Chargor may
     and shall continue to exercise any and all rights with respect to the
     Security Assets, subject always to the terms hereof.

8.   VOTING OF SHARES

     The Secured Party hereby acknowledges that until an Event of Default shall
     have occurred and be continuing, the Chargor shall be entitled to (i) vote
     or cause to be voted any and all of the Security Assets and (ii) give or
     cause to be given consents, waivers and ratifications in respect thereof,
<PAGE>

     provided, however, that no vote shall be cast or consent, waiver or
     ratification given or taken which would be inconsistent with any of the
     provisions of this Charge.  All such rights of the Chargor to vote or cause
     to be voted and to give or cause to be given consents, waivers and
     ratifications shall cease automatically, where an Event of Default occurs
     and is continuing.

9.   ENFORCEMENT OF SECURITY

     Upon and at any time after the occurrence and during the continuance of  an
     Event of Default, the Secured Party shall be entitled to put into force and
     exercise immediately, without further notice to the Chargor, as and when
     it may see fit, any and every power possessed by it by virtue of this
     Charge and, in particular (without prejudice to the generality of the
     foregoing):

     (a)  may solely and exclusively exercise all voting and/or consensual
          powers pertaining to the Security Assets or any part thereof and may
          exercise such powers in such manner as the Secured Party may think
          fit;

     (b)  may remove the then existing directors and officers (with or without
          cause) by dating and presenting the undated, signed letters of
          resignation delivered pursuant to this Charge;

     (c)  may receive and retain all dividends, interest or other monies or
          assets accruing on or in respect of the Security Assets or any part
          thereof, such dividends, interest or other monies or assets to be held
          by the Secured Party, until applied in the manner described in Clause
          9(g) as additional security charged under and subject to the terms of
          this Charge and any such dividends, interest or other monies or assets
          received by the Chargor after such time shall be held in trust by the
          Chargor for the Secured Party and paid or transferred to the Secured
          Party on demand;

     (d)  may sell, transfer, grant options over or otherwise dispose of the
          Security Assets or any part thereof at such place and in such manner
          and at such price or prices as the  Secured Party may deem fit, and
          thereupon the Secured Party shall have the right to deliver, assign
          and transfer in accordance therewith the Security Assets so sold,
          transferred, granted options over or otherwise disposed of;

     (e)  the Secured Party shall not be obliged to make any enquiry as to the
          nature or sufficiency of any payment received by it under this Charge
          or to make any claim or to take any action to collect any monies
          assigned by this Charge or to enforce any rights or benefits assigned
          to the Secured Party by this Charge or to which the Secured Party may
          at any time be entitled hereunder;

     (f)  upon any sale of the Security Assets or any part thereof by the
          Secured Party the purchaser shall not be bound to see or enquire
          whether the Secured Party's power of sale has become exercisable in
          the manner provided in this Charge and the sale shall be deemed to be
          within the power of the Secured Party, and the receipt of the Secured
          Party for the purchase money shall effectively discharge the purchaser
          who shall not be concerned with the manner of application of the
          proceeds of sale or be in any way answerable therefor provided that
          the purchaser purchases the Security Assets in an arm's-length
          transaction;
<PAGE>

     (g)  all monies received by the Secured Party pursuant to this Charge prior
          to the termination of the Subordination Period shall be held by it
          upon trust in the first place to pay or make good all such expenses,
          liabilities, losses, costs, duties, fees, charges or other monies
          whatsoever as may have been paid or incurred by the Secured Party in
          exercising any of the powers specified or otherwise referred to in
          this Charge and the balance shall be applied in the following manner:

          (i)    FIRSTLY: to Representative for application toward payment of
                 the Debenture Obligations;

          (ii)   SECONDLY: ratably to (A) Administrative Agent for application
                 toward payment of the Credit Agreement Obligations and (B)
                 RHINOS Holders for application toward payment of the RHINOS
                 Obligations (for purposes hereof, "ratably" on any date of
                 determination, shall mean the proportion that the principal
                 amount outstanding at such time under the Credit Agreement or
                 the RHINOS (as the case may be) bears to the sum of the
                 principal amount outstanding at such time under the Credit
                 Agreement and the RHINOS);

          (iii)  THIRDLY: the surplus (if any) shall be paid to the Chargor as
                 its interests may appear or to whomsoever else may be entitled
                 thereto;

     (h)  all monies received by the Secured Party pursuant to this Charge on or
          after the termination of the Subordination Period shall be held by it
          upon trust in the first place to pay or make good all such expenses,
          liabilities, losses, costs, duties, fees, charges or other monies
          whatsoever as may have been paid or incurred by the Secured Party in
          exercising any of the powers specified or otherwise referred to in
          this Charge and the balance shall be applied in the following manner:

          (i)    FIRSTLY: ratably to (1) Representative for application toward
                 payment of the Debenture Obligations, (2) Administrative Agent
                 for application toward payment of the Credit Agreement
                 Obligations, and (3) RHINOS Holders for application toward
                 payment of the RHINOS Obligations (for purposes hereof,
                 "ratably" on any date of determination, shall mean the
                 proportion that the principal amount outstanding at such time
                 under the Debentures, the Credit Agreement, or the RHINOS (as
                 the case may be) bears to the sum of the principal amount
                 outstanding at such time under the Debentures, the Credit
                 Agreement, and the RHINOS); and

          (ii)   SECONDLY: the surplus (if any) shall be paid to the Chargor as
                 its interests may appear or to whomever else may be entitled
                 thereto;

     (i)  neither the Secured Party nor its agents, managers, officers,
          employees, delegates and advisers shall be liable for any claim,
          demand, liability, loss, damage, cost or expense incurred or arising
          in connection with the exercise or purported exercise of any rights,
          powers and discretions hereunder in the absence of gross negligence or
          dishonesty;

     (j)  the Secured Party shall not by reason of the taking of possession of
          the whole or any part of the Security Assets or any part thereof be
          liable to account as mortgagee-in-possession or for
<PAGE>

          anything except actual receipts or be liable for any loss upon
          realisation or for any default of omission for which a mortgagee-in-
          possession might be liable; and

     (k)  the powers provided in this Charge are cumulative with and not
          exclusive of powers provided by law or equity independently of this
          Charge.

10.  RECEIVER

     (a)  In addition to the powers conferred in this Charge, at any time after
          the security hereby created shall become enforceable, the Secured
          Party may appoint in writing a receiver or a receiver and manager
          (herein the "Receiver") of all or any part of the Security Assets and
          may remove the Receiver so appointed and appoint another in his stead
          and may from time to time fix the remuneration of the Receiver.  The
          power to appoint a Receiver over all the Security Assets may be
          exercised whether or not a Receiver has already been appointed over
          part of it.

     (b)  Subject to any specific limitations in the terms of appointment, a
          Receiver shall have the powers conferred on receivers by law or equity
          in addition to all the Secured Party's powers including, but not
          limited to, any one or more of the powers in clause 9 each of which is
          to be construed as if a reference to the Secured Party includes a
          reference to the Receiver.

     (c)  The Secured Party shall not be responsible for misconduct or
          negligence on the part of the Receiver.

11.  PROCEDURE FOR PRIVATE SALE

     Without prejudice to the generality of Clause 9, in the event that the
     Secured Party determines in its discretion to sell the Security Assets in
     one or more private sales:

     (a)  the Secured Party may sell the Security Assets or any part thereof in
          one or more parcels;

     (b)  the Secured Party may sell for cash, on credit or for future delivery,
          at such time or times and at such price or prices and upon such other
          terms as the Secured Party may deem commercially reasonable;

     (c)  the Secured Party may in its discretion establish a reserve price for
          the Security Assets or any part thereof;

     (d)  the Secured Party shall not be obligated to make any sale regardless
          of any offer to sell which the Secured Party may have made;

     (e)  the Secured Party may postpone or cancel the sale, modify the terms
          and conditions of the sale, withdraw Security Assets from the sale at
          any time, including by announcement at the time and place fixed for
          the sale, and such sale may, without further notice, be made at the
          time and place to which it was so adjourned;
<PAGE>

     (f)  the Chargor unconditionally waive any claims against the Secured
          Party arising by reason of the fact that the price of which any
          Security Assets may have been sold at such a private sale was less
          than the price which might have been attained at a public sale, even
          if the Secured Party accepts the first offer received and does not
          offer such Security Assets to more than one offeree provided that the
          purchaser purchases the Security Assets for value in an arms-length
          transaction; and

     (g)  the Chargor unconditionally agrees that the Secured Party may acquire
          the Security Assets or sell them to an affiliate.

12.  INDEMNITIES

     (a)  The Chargor will indemnify and save harmless the Secured Party and
          each agent or attorney appointed under or pursuant to this Charge from
          and against any and all expenses, claims, liabilities, losses, taxes,
          costs, duties, fees and charges suffered, incurred or made by the
          Secured Party or such agent or attorney (the "Liabilities"):

          (i)    in the exercise or purported exercise of any rights, powers or
                 discretions vested in them pursuant to this Charge;

          (ii)   in the preservation or enforcement of the Secured Party's
                 rights under this Charge or the priority thereof; or

          (iii)  on the release of any part of the Security Assets from the
                 security created by this Charge;

          except where such Liabilities shall be found by a court of competent
          jurisdiction to have resulted from the gross negligence or willful
          misconduct of the Secured Party or such agent or attorney, and the
          Secured Party or such agent or attorney may retain and pay all sums in
          respect of the same out of money received under the powers conferred
          by this Charge.  All amounts recoverable by the Secured Party or such
          agent or attorney or any of them shall be recoverable on a full
          indemnity basis.

     (b)  If, under any applicable law or regulation, and whether pursuant to a
          judgement being made or registered against the Chargor or the
          bankruptcy or liquidation of the Chargor or for any other reason any
          payment under or in connection with this Charge is made or falls to be
          satisfied in a currency (the "Payment Currency") other than the
          currency in which such payment is due under or in connection with this
          Charge (the "Contractual Currency") then to the extent that the amount
          of such payment actually received by the Secured Party when converted
          into the Contractual Currency at the rate of exchange, falls short of
          the amount due under or in connection with this Charge, the Chargor,
          as a separate and independent obligation, shall indemnify and hold
          harmless the Secured Party against the amount of such shortfall. For
          the purposes of this Clause 12(b) "rate of exchange": means the rate
          at which the Secured Party is able on or about the date of such
          payment to purchase the Contractual Currency with the Payment Currency
          and shall take into account any premium payable to third parties and
          other costs of exchange with respect thereto.
<PAGE>

13.  EXPENSES

     The Chargor shall pay to the Secured Party on demand all costs, fees and
     expenses (including, but not limited to, legal fees and expenses) and taxes
     thereon incurred by the Secured Party or for which the Secured Party may
     become liable in connection with:

     (a)  the negotiation, preparation and execution of this Charge;

     (b)  the preserving or enforcing of, or attempting to preserve or enforce,
          any of the rights under this Charge or the priority hereof;

     (c)  any variation of, or amendment or supplement to, any of the terms of
          this Charge; and/or

     (d)  any consent or waiver required from the Secured Party in relation to
          this Charge;
     and in any case referred to in clauses 13(c) and 13(d) regardless of
     whether the same is actually implemented, completed or granted, as the case
     may be.

14.  FURTHER ASSURANCE

     The Chargor further agrees that at any time and from time to time, upon the
     written request of the Secured Party, it will promptly and duly execute and
     deliver any and all such further instruments and documents as the Secured
     Party may deem necessary, desirable or appropriate for the purpose of
     obtaining the full benefit of this Charge and of the rights and powers
     herein granted.

15.  PROTECTION OF PURCHASER

     No purchaser or other person dealing with the Secured Party or any Receiver
     or with its or his attorneys shall be concerned to enquire (i) whether any
     power exercised or purported to be exercised by it, him or them has become
     exercisable, (ii) whether any money remains due on the security hereby
     created, (iii) as to the propriety and regularity of any of its, his or
     their actions or (iv) as to the application of any money paid to him, it or
     them.  In the absence of mala fides on the part of such purchaser or other
     person, such dealings shall be deemed so far as regards the safety and
     protection of such purchaser or other person to be within the powers hereby
     conferred and to be valid accordingly.

16.  DELEGATION

     The Secured Party may at its expense at any time employ agents, managers,
     employees, advisers, attorneys and others on such terms as it sees fit for
     any of the purposes set out herein.

17.  LIABILITY OF SECURED PARTY

     The Secured Party and any Receiver shall not be liable for any losses
     arising in connection with the exercise or purported exercise of any of
     their rights, powers and discretions in good faith hereunder and, in
     particular, without limitation as mortgagee in possession or for anything
     except actual receipts.
<PAGE>

18.  RELEASE

     Under no circumstances shall the Secured Party be deemed to assume any
     responsibility for or obligation or duty, with respect to any part of all
     of the Security Assets or this Charge of any nature or kind or any matter
     or proceeding arising out of or related thereto; but the same shall be at
     the Chargor's sole risk at all times. The Secured Party shall not be
     required to take any action of any kind to collect, preserve or protect its
     or any Chargor's rights in the Security Assets or against other parties
     thereto.

19.  NOTICE

     Any notice, certificate, consent, determination or other communication
     required or permitted to be given or made under this Charge will be in
     writing and will be effectively given and made if (i) delivered personally,
     (ii) sent by prepaid courier service or mail, or (iii) sent prepaid by fax
     or other similar means of electronic communication, in each case to the
     applicable address set out below:

     (a)  if to the Chargor, to:

          ________________
          44 Church Street
          Hamilton  HM12
          Bermuda

     (b)  if to the Secured Party, to:

          Bank of America, N.A.
          231 S. LaSalle Street
          Chicago, Illinois 60697
          Attention:

     Any such communication so given or made will be deemed to have been given
     or made and to have been received on the day of delivery if delivered, or
     on the day of faxing or sending by other means of recorded electronic
     communication, provided that such day in either event is a business day and
     the communication is so delivered, faxed or sent prior to 4:30 p.m. on such
     day. Otherwise, such communication will be deemed to have been given and
     made and to have been received on the next following business day. Any such
     communication sent by mail will be deemed to have been given and made and
     to have been received on the third business day following the mailing
     thereof; provided however that no such communication will be mailed during
     any actual or apprehended disruption of postal services. Any such
     communication given or made in any other manner will be deemed to have been
     given or made and to have been received only upon actual receipt.

     Any Party may from time to time change its address for notice in the same
     manner as set out above.

20.  ENUREMENT

     This Charge shall be binding upon the Chargor and its successors and
     permitted assigns, and enure to the benefit of the Secured Party and its
     successors and permitted assigns.
<PAGE>

21.  COUNTERPARTS

     This Charge may be executed in several counterparts, each of which shall be
     deemed an original, but all of which together shall constitute one and the
     same Charge.

22.  TIME OF THE ESSENCE

     Time shall be of the essence of this Charge, both as regards the dates and
     periods mentioned and as regards any dates and periods which may be
     substituted for them in accordance with this Charge or by agreement in
     writing between the parties.

23.  GOVERNING LAW

     This Charge shall be governed by and construed in accordance with the laws
     of Bermuda.

24.  JURISDICTION

     (a)  The parties irrevocably agree that the courts of Bermuda are to have
          jurisdiction to settle any disputes which may arise out of or in
          connection with this Charge and that accordingly any suit, action or
          proceeding arising out of or in connection with this Charge (in this
          clause referred to as "Proceedings") may be brought in such courts;

     (b)  Nothing contained in this clause shall limit the right of the Secured
          Party to take Proceedings against  the Chargor in any other court of
          competent jurisdiction, nor shall the taking of Proceedings in one or
          more jurisdictions preclude the taking of Proceedings in any other
          jurisdiction, whether concurrently or not;

     (c)  The Chargor irrevocably waives (and irrevocably agrees not to raise)
          any objection which he or she may have now or subsequently to the
          laying of the venue of any Proceedings in any such court as is
          referred to in this clause any claim that any such Proceedings have
          been brought in an inconvenient forum and further irrevocably agrees
          that a judgment in any Proceedings brought in any such court as is
          referred to in this clause shall be conclusive and binding upon the
          Chargor and may be enforced in the courts of any other jurisdiction;

25.  COLLATERAL AGENT

     (a)  Representative (on behalf of Holders), Administrative Agent (on behalf
          of Lenders), and RHINOS Holders appoint Bank of America, N.A. as
          Collateral Agent to serve as nominee and agent for Holders, Lenders,
          and RHINOS Holders and to act in their names and on their behalf in
          and under this Charge and with respect to the Security Assets in
          accordance with this Clause 25.  Collateral Agent accepts such
          appointment. Collateral Agent is hereby specifically authorized by
          Holders, Lenders, and RHINOS Holders:

          (i)  to enter into this Charge on behalf of Holders, Lenders, and
               RHINOS Holders and to act as Holders', Lenders', and RHINOS
               Holders' nominee and on Holders', Lenders', and RHINOS Holders'
               behalf in and under this Charge;
<PAGE>

          (ii)   to hold the Security Assets and proceeds therefrom ever
                 delivered to, or received by, Collateral Agent to secure the
                 Secured Obligations, as agent and bailee for each Holder, each
                 Lender, and each RHINOS Holder for all purposes;

          (iii)  to take such action with respect this Charge and the Security
                 Assets (including, without limitation, the exercise of any
                 remedies hereunder or the release of all or any part of the
                 Security Assets), as directed by the Administrative Agent
                 without the consent or approval of any Holder or any RHINOS
                 Holder;

          (iv)   to receive all documents and items to be furnished to Holders,
                 Lenders, and RHINOS Holders under this Charge;

          (v)    to be the secured party, mortgagee, beneficiary, recipient,
                 chargee, and similar party in respect of the Security Assets
                 for the benefit of Holders, Lenders, and RHINOS Holders;

          (vi)   to promptly distribute to Representative and Administrative
                 Agent all material information, requests, documents, and items
                 received from Chargor under this Charge;

          (vii)  to promptly distribute (in accordance with the application of
                 payment provided in this Charge) to Representative (for the
                 benefit of Holders), to Administrative Agent (for the benefit
                 of Lenders), or to RHINOS Holders, as the case may be, any
                 proceeds of the Security Assets;

          (viii) to take any action that may be necessary to perfect and
                 maintain the perfection and priority of the Holders', Lenders',
                 and RHINOS Holders' liens in and to the Security Assets; and

          (ix)   to exercise such additional powers as are reasonably incidental
                 to the performance of the foregoing.

     However, Collateral Agent may not be required to take any action that
     exposes it to personal liability or that is contrary to any agreement or
     applicable law.

     (b)  Collateral Agent may perform any of its duties or exercise any of its
          rights hereunder by or through its affiliates and representatives.
          Collateral Agent (and its representatives) (a) is entitled to rely
          upon (and shall be protected in relying upon) any written or oral
          statement believed by it or them to be genuine and correct and to have
          been signed or made by the proper Person and, with respect to legal
          matters, upon opinion of counsel it has selected, (b) is not deemed to
          have notice of the occurrence of an Event of Default unless a
          responsible officer of Collateral Agent who handles matters associated
          with the Loan Documents and transactions thereunder, has actual
          knowledge or has been notified by Representative or Administrative
          Agent, and (d) is entitled to consult with legal counsel (including
          counsel for MRM), independent accountants, and other experts it has
          selected and is not liable for any action taken or not taken in good
          faith by it in accordance with the advice of counsel, accountants, or
          experts.
<PAGE>

     (c)  Neither Collateral Agent nor any of its affiliates or representatives
          will be liable for any action taken or omitted to be taken by it or
          them under this Charge in good faith and believed by it or them to be
          within the discretion or power conferred upon it or them by this
          Charge or be responsible for the consequences of any error of judgment
          (except for fraud, gross negligence, or willful misconduct), and
          neither Collateral Agent nor any of its affiliates or representatives
          has a fiduciary relationship with any Holder, any Lender, or any
          RHINOS Holder by virtue of this Charge.  Except as otherwise expressly
          set forth in this Clause 25, Collateral Agent shall not be responsible
          in any manner to any Holder, any Lender, or any RHINOS Holder for the
          effectiveness, enforceability, genuineness, validity, or the due
          execution of this Charge or for any representation, warranty,
          document, certificate, report, or statement made therein or furnished
          under or in connection therewith, or be under any obligation to any
          Holder, any Lender, or any RHINOS Holder to ascertain or to inquire as
          to the performance or observation of any of the terms, covenants, or
          conditions of this Charge on the part of any party hereto other than
          Collateral Agent.

     (d)  Unless indemnified to its satisfaction against loss, cost, liability,
          and expense, Collateral Agent may not be compelled to do any act under
          this Charge or to take any action toward the execution or enforcement
          of the powers hereby created or to prosecute or defend any suit in
          respect of this Charge.  If Collateral Agent requests instructions
          from Representative or Administrative Agent, as the case may be, with
          respect to any act or action in connection with this Charge,
          Collateral Agent is entitled to refrain (without incurring any
          liability to any Person by so refraining) from that act or action
          unless and until it has received instructions.  In no event, however,
          may Collateral Agent or any of its representatives be required to take
          any action that it or they determine could incur for it or them
          criminal or onerous civil liability.  Without limiting the generality
          of the foregoing, no Holder, Lender, or RHINOS Holder has any right of
          action against Collateral Agent as a result of Collateral Agent's
          acting or refraining from acting under this Clause 25 in accordance
          with instructions of Representative or Administrative Agent, as the
          case may be.

     (e)  Each Holder, each Lender, and each RHINOS Holder agrees to indemnify
          Collateral Agent and its Affiliates and Representatives and hold them
          harmless from and against (but limited to such Holder's, Lender's, and
          RHINOS Holder's Proportionate Part thereof) any and all liabilities,
          obligations, losses, damages, penalties, actions, judgments, suits,
          costs, reasonable expenses, and reasonable disbursements of any kind
          or nature whatsoever that may be imposed on, asserted against, or
          incurred by them in any way relating to or arising out of this Charge,
          or any action taken or omitted by them under this Charge (including
          any of the foregoing arising from the negligence of Collateral Agent,
          its Affiliates or representatives) if Collateral Agent and its
          Representatives are not reimbursed for such amounts by Chargor;
          provided that, Collateral Agent, its Affiliates, and representatives
          shall not have the right to be indemnified for its or their own fraud,
          gross negligence, or willful misconduct.

                    Remainder of Page Intentionally Blank.
                         Signature Page(s) to Follow.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Charge to be duly
executed with the intent that is shall constitute a deed under Bermuda law the
day and year first above written.

[CHARGOR]


By   __________________________________
     Name:_____________________________
     Title:____________________________



BANK OF AMERICA, N.A., as Collateral Agent
for the benefit of Holders, Lenders and RHINOS Holders


By   __________________________________
     Name:_____________________________
     Title:____________________________



BANK OF AMERICA, N.A., as Administrative Agent
for the benefit of Lenders (for purposes of Clause 25)


By   __________________________________
     Name:_____________________________
     Title:____________________________



XL INSURANCE LTD., as Representative for
the benefit of Holders (for purposes of Clause 25)


By   __________________________________
     Name:_____________________________
     Title:____________________________



INTREPID MASTER FUNDING TRUST, as
RHINOS Holders (for purposes of Clause 25)


By   __________________________________
     Name:_____________________________
     Title:____________________________

                        Signature Page to Share Charge
<PAGE>

                                  SCHEDULE I


     Name of Company                               Shares
     ---------------                               ------
<PAGE>

                               PRICING SCHEDULE
                               ----------------

Each of "Eurodollar Margin," "Commitment Fee Rate" and "Utilization Fee Rate"
means, for any date, the rate set forth below in the row opposite such term and
in the column corresponding to the "Pricing Level" (and, in the case of the
Utilization Fee Rate, the utilization of the Commitments) that applies at such
date:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                 Level I   Level II   Level III   Level IV   Level V   Level VI
-----------------------------------------------------------------------------------------------------------------
<S>                                              <C>       <C>        <C>         <C>        <C>       <C>
Eurodollar Margin                                 .50%      .75%        .95%        1.15%     1.50%      2.00%
-----------------------------------------------------------------------------------------------------------------
Commitment Fee Rate                              .125%      .15%       .175%         .25%     .325%       .45%
-----------------------------------------------------------------------------------------------------------------
Utilization Fee Rate when 30% * Utilization **    .05%      .10%       .125%        .125%      .15%       .25%
 60%
-----------------------------------------------------------------------------------------------------------------
Utilization Fee Rate when 60% * Utilization       .10%      .20%        .25%         .25%      .30%       .50%
-----------------------------------------------------------------------------------------------------------------
</TABLE>

*  Less than
** Less than or equal to

For purposes of this Schedule, the following terms have the following meanings,
subject to the last paragraph of this Schedule:

     "Level I Pricing" applies at any date if, at such date, Mutual Risk is
rated A+ or higher by S&P.

     "Level II Pricing" applies at any date if, at such date, Mutual Risk is
rated A by S&P.

     "Level III Pricing" applies at any date if, at such date, Mutual Risk is
rated A- or BBB+ by S&P.

     "Level IV Pricing" applies at any date if, at such date, Mutual Risk is
rated BBB S&P.

     "Level V Pricing" applies at any date if, at such date, Mutual Risk is
rated BBB- by S&P.

     "Level VI Pricing" applies at any date if, at such date, no other Pricing
Level applies.

     "Pricing Level" refers to the determination of which of Level I, Level II,
Level III, Level IV, Level V or Level VI applies at any date.

The credit ratings to be utilized for purposes of this Schedule are those
assigned by S&P to Mutual Risk as an issuer or to the long-term senior
unsecured, non-credit enhanced debt of Mutual Risk.  The rating in effect at any
date is that in effect at the close of business on such date.  If the rating
system of S&P shall change, Mutual Risk and the Administrative Agent shall
negotiate in good faith to amend this Pricing Schedule to reflect such changed
rating system and, pending the effectiveness of such amendment (which shall
require the approval of Required Lenders), the pricing shall be determined by
reference to the rating most recently in effect prior to such change.  If S&P no
longer rates Mutual Risk as an issuer or assigns ratings to the long-term senior
unsecured, non-credit enhanced debt of Mutual Risk, the rating to be used to
determine which Pricing Level applies shall be the "financial strength" rating
assigned by S&P to the Insurance Company Subsidiaries of Mutual Risk, and the
issuer rating of Mutual Risk or the rating assigned to the long-term senior
unsecured, non-credit enhanced debt of Mutual Risk shall be deemed to be three
ratings below such "financial strength" rating (e.g., financial strength rating
of A+ results in Level III Pricing).