MANAGEMENT AGREEMENT
                                       of
                                  RISCORP, INC.

         THIS MANAGEMENT AGREEMENT (the "Agreement") is made and entered into as
of the 18th day of February,  1998, by and among The Phoenix Management Company,
Ltd., a Florida limited partnership (the "Management Company"), RISCORP, Inc., a
Florida  corporation  ("RI"),  RISCORP  Management  Services,  Inc.,  a  Florida
corporation  ("RMS"),  1390 Main Street  Services,  Inc., a Florida  corporation
("1390"),   RISCORP  of  Illinois,   Inc.,  an  Illinois   corporation  ("ROI"),
Independent  Association  Administrators,  Incorporated,  an Alabama corporation
("IAA"),  RISCORP  Insurance  Services,  Inc.,  a Florida  corporation  ("RIS"),
RISCORP Managed Care Services, Inc., a Florida corporation ("RMCS"), CompSource,
Inc., a North Carolina corporation ("CompSource"), RISCORP Real Estate Holdings,
Inc.,  a  Florida  corporation   ("RREH"),   RISCORP  West,  Inc.,  an  Oklahoma
corporation  ("RWl"),  RISCORP of Florida,  Inc., a Florida corporation ("ROF"),
RISCORP Insurance Company,  a Florida  corporation  ("RIC"),  RISCORP Property &
Casualty  Insurance  Company, a Florida  corporation  ("RPC"),  RISCORP National
Insurance Company, a Missouri corporation  ("RNIC"),  RISCORP Services,  Inc., a
Florida corporation ("RSI"), RISCORP Staffing Solutions Holding, Inc., a Florida
corporation ("RSSH"),  RISCORP Staffing Solutions, Inc. I, a Florida corporation
("RSSI"),  and  RISCORP  Staffing  Solutions,  Inc.  II, a  Florida  corporation
("RSSII") (RI, RMS, 1390, ROI, IAA, RIS, RMCS, CompSource,  RREH, RWI, ROF, RIC,
RPC, RNIC,  RSI, RSSH, RSSI and RSSII are  hereinafter  collectively  or, if the
context otherwise requires, individually referred to as "RISCORP"), Frederick M.
Dawson,  an  individual  resident of the State of Florida  ("Mr.  Dawson"),  and
Walter E.  Riehemann,  an  individual  resident  of the State of  Florida  ("Mr.
Riehemann").

                                R E C I T A L S:

         WHEREAS,  RISCORP  has  agreed  to  transfer  substantially  all of its
operating assets and noncontingent  liabilities to Zenith Insurance  Company,  a
California corporation  ("Zenith"),  pursuant to the terms of that certain Asset
Purchase  Agreement  by and among  RISCORP and Zenith  dated June 17,  1997,  as
amended (the "Asset Purchase Agreement"), and following the consummation of such
transaction it is anticipated that RISCORP will not have any employees;

         WHEREAS,  Mr. Dawson, the current President and CEO of RI, was hired by
RI as a  crisis  manager  pursuant  to the  terms  of  that  certain  Employment
Agreement by and between Mr.  Dawson,  RMS and RI,  effective as of May 19, 1997
(the "Employment Agreement") and, in such capacity, has demonstrated exceptional
leadership and has significantly contributed to the value that is expected to be
available  for  distribution  to the  shareholders  of RI following  the sale to
Zenith and the resolution of all claims and  contingencies  related to RISCORP's
former operations;

         WHEREAS,  the  consummation  of the sale to Zenith  will  constitute  a
Change of Control as such term is defined in the  Employment  Agreement  and, as
such,  Mr.  Dawson will have the right to  terminate  the  Employment  Agreement
immediately after the closing date;

         WHEREAS,  Mr. Riehemann,  the current Senior Vice President and General
Counsel of RI, will also have the right to terminate his  employment  with RI in
connection  with the Change of Control  pursuant to the terms of his  Employment
Agreement with RMS dated April 2, 1997 (the "Riehemann Employment Agreement");

         WHEREAS,  Mr.  Dawson  has  formed  the  Management  Company to provide
executive management and consulting services to business organizations following
the sale to Zenith;

         WHEREAS,  Mr. Dawson will serve as the President of the general partner
of the Management  Company and, in such  capacity,  shall control the activities
and operations of the Management Company, and Mr. Walter E. Riehemann will serve
as Vice President and Secretary of the general partner;

         WHEREAS,  given  the  significant  issues  that will  continue  to face
RISCORP  following  the sale to Zenith and the financial  consequences  that the
resolution  of these  issues  will have on any  subsequent  distribution  to the
shareholders of RI, the Board of Directors has determined that it is in the best
interests of RI and its shareholders to retain the Management  Company following
such sale;

         WHEREAS,  pursuant  to the  terms  of this  Agreement,  RISCORP  hereby
retains  the  Management  Company and  through it the  personal  services of Mr.
Dawson and the other  senior  management  personnel of the  Management  Company,
including  Mr.  Riehemann,  to  provide  all  management  services  required  in
connection with the ongoing  operations of RISCORP following the sale to Zenith,
and the Management Company agrees to accept such duties and  responsibilities on
the terms and conditions set forth herein.

         NOW, THEREFORE,  in consideration of the mutual covenants,  conditions,
and  agreements   hereinafter  set  forth,  and  for  other  good  and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
parties hereto do hereby covenant and agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
meanings:

         1.1      "Board of Directors" or "Board" means the Board of Directors
of RI.

         1.2 "Effective  Date" means the date of the consummation of the sale of
substantially  all of the assets  and  noncontingent  liabilities  of RISCORP to
Zenith  pursuant  to  the  terms  of the  Asset  Purchase  Agreement  commencing
immediately  following the  consummation of such transaction and the termination
of the Employment Agreement.

         1.3 "Management Company" means The Phoenix Management Company,  Ltd., a
Florida  limited  partnership,  which will serve as the  management  company for
RISCORP pursuant to this Agreement.

         1.4 "Records of RISCORP" means, whether hard copy or on computer media,
without limitation: any records pertaining to underwriting and claims, both open
and closed; procedure manuals; mailing lists; safety reports and data; marketing
plans, data and records;  statistical  reports;  accounting records;  historical
records;  funds received and in the custody of the Management  Company;  records
relating to the book of business,  contracts and claims; all government filings;
and  any  other  documents,  materials,  data,  computer  disks,  tapes,  source
documents,  or data file  layouts  pertaining  to or bearing  information  about
RISCORP  and  in the  possession  of  the  Management  Company,  its  agents  or
subcontractors.

                                   ARTICLE II
                      TERMINATION OF EMPLOYMENT AGREEMENTS

         2.1 Termination of Dawson Employment  Agreement.  Immediately following
the  consummation  of the sale to  Zenith,  RI shall make cash  payments  to Mr.
Dawson required  pursuant to Sections 3(d) and 7(b) of the Employment  Agreement
and,  upon the  receipt of such  payments,  the  Employment  Agreement  shall be
terminated and shall be of no further force and effect.  In connection  with the
delivery of such payment,  the parties shall enter into a Termination  Agreement
evidencing the termination of each party's rights,  duties and obligations under
the Employment Agreement including,  without limitation,  the termination of the
stock option grant set forth in Section 3(c) thereof and Mr.  Dawson's  right to
receive any of the shares thereunder.

         2.2  Termination  of  Riehemann   Employment   Agreement.   Immediately
following  the  consummation  of the sale to  Zenith,  RMS  shall  make the cash
payment  to  Mr.  Riehemann  required  pursuant  to  Section  7(b)(2)(i)  of the
Riehemann  Employment  Agreement  and,  upon the  receipt of such  payment,  the
Riehemann   Employment  Agreement  (other  than  Section  8  thereof)  shall  be
terminated and shall be of no further force and effect.  In connection  with the
delivery of such payment,  the parties shall enter into a Termination  Agreement
evidencing  the  termination  of each  party's  rights,  duties and  obligations
thereunder,  other  than the  prohibitions  with  respect to the  disclosure  of
confidential information or engaging in competitive activities by Mr. Riehemann.



<PAGE>


                                   ARTICLE III
                DUTIES AND RESPONSIBILITIES OF MANAGEMENT COMPANY

         3.1  Representations   and  Warranties  of  Management   Company.   The
Management  Company represents and warrants that its principals,  employees,  or
subcontractors  have the  experience  and  qualifications  to perform its duties
under the Agreement, including, but not limited to, management of the day-to-day
operations of RISCORP after the  consummation of the  transactions  with Zenith,
managing the preparation,  negotiation and defense of the final business balance
sheet to be provided to Zenith within 70 days of the closing thereof,  providing
assistance in the overall  planning and coordination of the business of RISCORP,
providing  summary  data  relating to  RISCORP's  operations,  and the skill and
experience  to assist  RISCORP in the  collection  and  marshaling  of RISCORP's
assets,  resolving  the  outstanding  liabilities  of  RISCORP  and the  orderly
liquidation of RISCORP.  The Management  Company further represents and warrants
that  throughout  the  term of this  Agreement  Mr.  Dawson  shall  control  the
activities and operations of the Management  Company and shall personally devote
a sufficient  portion of his  business  time,  efforts,  skills,  attention  and
energies to enable the Management Company to perform the Services hereunder. The
Management  Company  agrees  that  neither it nor any of its  senior  management
personnel  shall become  engaged or involved in any  activities or matters which
may  adversely  affect  or  reflect  discredit  on  RISCORP  or  its  respective
businesses,  or conflict with the Services to be provided  hereunder to RISCORP.
Nothing  contained  herein  shall be  construed to limit or restrict the passive
investment  or  other  business  activities  of  any of  the  senior  management
personnel of the Management  Company that do not interfere with the discharge of
the Services hereunder in any material respect.

         3.2  Management  Services.  Subject to the direction and control of the
Board of  Directors,  the  Management  Company  is  hereby  engaged  to  perform
directly,  or,  with the  prior  approval  of the  Board,  to  retain  competent
professionals  to perform,  the  following  services in addition to those duties
otherwise contemplated in this Agreement (collectively, the "Services"), and the
Management  Company hereby  accepts such  engagement on the terms and conditions
set forth herein:

         A.       General  Management  Responsibilities.  The  following  duties
                  will be performed by the  Management  Company at its  expense,
                  unless  otherwise approved by the Board of Directors.

                  1.       Management of the  day-to-day  operations and affairs
                           of RISCORP including, without limitation,  performing
                           all duties normally  performed by the chief executive
                           officer and other  senior  management  personnel of a
                           corporation.

                  2. Management of all outsourcing contracts.

                  3. Management of all litigation.

                  4.       Management  of the  preparation  and  defense  of the
                           Proposed Business Balance Sheet and the determination
                           of the Final  Business  Balance  Sheet (as such terms
                           are  defined  in the  Asset  Purchase  Agreement)  in
                           accordance  with  the  terms  of the  Asset  Purchase
                           Agreement.

                  5.       Management  of  the   indemnification   process  with
                           respect to all  litigation  targets (i.e.  the Board,
                           RISCORP,  as  well  as its  officers,  employees  and
                           agents).

                  6.       Management of claims investigation,  targeting,  data
                           evaluation,  quantification of financial opportunity,
                           and ultimate litigation management.

                  7.       Responsibility for the preparation of all shareholder
                           communications,  press  releases,  responses to media
                           inquiries and similar public communications on behalf
                           of RISCORP  for  approval  by the Board of  Directors
                           prior to issuance.

                  8. Entering into contracts approved by the Board of Directors.

                  9.       Performance  of such other duties as may from time to
                           time be  requested  by the  Board  of  Directors  not
                           inconsistent with the Services set forth herein.

                  10.      Responsibility  for  maintaining,  at the  expense of
                           RISCORP,   all  policies  of  insurance   related  to
                           RISCORP's continuing operations,  including,  without
                           limitation, appropriate D&O insurance coverage.


         B. Monthly Accounting and Consulting  Services.  The Management Company
         shall have oversight  responsibility  for the following  functions with
         the  specific  duties to be  delegated,  at the expense of RISCORP,  to
         competent professionals approved by the Board.

                  1.       Deposit and account for all cash receipts.

                  2.       Monitor cash balances in all bank accounts and
                           prepare cash transfers when necessary.

                  3.       Prepare and maintain cash flow projections for
                           all entities to facilitate proper cash control.

                  4.       Prepare  invoices  for all amounts due RISCORP and
                           monitor collection and aging of receivables.

                  5.       Maintain accounts payable detail.

                  6.       Review and  approve all vendor  invoices  for payment
                           and   prepare   vendor   checks.   Subject   to   the
                           availability  of  sufficient  cash,  net of  adequate
                           reserve  cash  balances,  sign and mail  checks  when
                           required in order to obtain any vendor discounts.

                  7. Prepare payroll for the Company for those former  employees
                     continuing to receive severance benefits.

                  8.  Maintain  all fixed  asset  schedules  and account for all
                      additions and disposals.

                  9.  Maintain   monthly   general   ledgers  for  all  entities
                      including:

                           a.       recording of all cash receipts;
                           b.       recording of all cash disbursements;
                           c.       recording of all investment activity;
                           d.       recording of the fixed asset transactions;
                           e.       reconcile all bank accounts;
                           f.       reconcile investment accounts;
                           g.       verify the accurate and timely payment of
                                    payroll taxes;
                           h.       reconcile all remaining general ledger
                                    balance sheet accounts monthly to verify
                                    account balances; and
                           i.       review all income statement accounts for
                                    reasonableness of balances.

                  10.  Prepare  distribution   payments  to  shareholders  after
                       approval by the Board of Directors.

                  11.  Prepare  monthly  financial  statements  on  a  GAAP  and
                       statutory basis.

                  12.  Prepare GAAP to statutory  conversions  of the accounting
                       data needed for certified audits.

                  13. Prepare budgets for the RISCORP  entities  remaining after
                      the Zenith transaction.

                  14. Prepare  quarterly  reports of actual vs. budgeted results
                      for review by the Board of Directors.

                  15. Prepare explanations of significant budget variances.

                  16. Prepare all premium tax returns for 1998.

                  17. Respond to all regulatory correspondence.

                  18.  Maintain  document  depository of accounting  records for
                       litigation and tax purposes.

                  19. Perform such other duties customarily performed by a chief
                      financial officer and a corporate accounting staff.

         C.  Regulatory  Filings,  Reports  and  Relationships  with  Regulatory
         Authorities. The Management Company shall have oversight responsibility
         for the following  functions with the specific  duties to be delegated,
         at the expense of RISCORP, to competent  professionals  approved by the
         Board.

                  1.       Prepare  and  file all  reports  required  under  the
                           Securities Exchange Act of 1934, as amended, with the
                           Securities Exchange Commission ("SEC").

                  2.       Prepare and file all  reports  required  under
                           applicable insurance laws where any RISCORP entit 
                           is required to file reports.

                  3.       Meet with  representatives of any state department of
                           insurance having  jurisdiction over RISCORP,  the SEC
                           or any other state or federal regulatory authority to
                           which  RISCORP is subject and take such other actions
                           as may be  necessary or  appropriate  to maintain and
                           enhance   RISCORP's   relationship   with  each  such
                           regulatory authority.

         D.  Tax  Services.   The   Management   Company  shall  have  oversight
         responsibility for the following  functions with the specific duties to
         be  delegated,  at the expense of RISCORP,  to competent  professionals
         approved by the Board.

                  1.       Prepare  and file all local,  state and  federal  tax
                           returns  for  RISCORP,  including  but not limited to
                           income,  property,  franchise,  sales and  intangible
                           taxes.

                  2. Defend  RISCORP in any audits  related to its tax  returns,
                    including gathering information and responding to questions.

                  3. Prepare tax information for financial statements.

                  4.  Perform  quarterly  tax  calculations  and  determine  the
                      allocation of the tax liabilities among the entities.

                  5.       To the extent  necessary,  prepare tax provisions and
                           returns   for   Third   Coast   Insurance    Company,
                           Governmental Risk Insurance Trust,  National Alliance
                           for  Risk   Management   Association  and  the  North
                           Carolina Commerce Fund.

                  6.       Prepare and file information returns on Forms 1099
                           and provide backup withholding notices on Forms B.

         E.       General  Administration.  Except as set forth below,  the
                  following  duties will be performed by the Management  Compan
                  at its expense,  unless otherwise approved by the Board of
                  Directors

                  1.       Make such reports pertaining to matters of concern or
                           general interest with respect to RISCORP as the Board
                           of Directors may reasonably  request and provide such
                           administrative  assistance  and staff  support to the
                           Board  and  its   committees  as  may  be  reasonably
                           necessary for the directors to carry out their duties
                           and responsibilities to RISCORP.

                  2.       Purchase or otherwise demonstrate to the satisfaction
                           of the Board of Directors that the Management Company
                           has acquired,  and is  maintaining  in full force and
                           effect   throughout  the  term  of  this   Agreement,
                           fidelity bond coverages in reasonable  amounts and as
                           required by the applicable insurance departments. The
                           allocated  portion of the premiums for such  fidelity
                           bond  coverage   relating  to  that  portion  of  the
                           Management  Company's  operations performed on behalf
                           of  RISCORP  shall be  purchased  and  maintained  at
                           RISCORP expense.

                  3.       Provide to the certified public accountants  selected
                           by the Board  such  reports  and  information  as may
                           reasonably be necessary to enable such accountants to
                           express   their   professional   opinion  as  to  the
                           financial condition of RISCORP.

                  4.       Upon  request  of the Board of  Directors,  represent
                           RISCORP at any examinations,  hearings, meetings, and
                           administrative   inquiries  involving  the  financial
                           interests  of  RISCORP,  and  before  the  SEC or any
                           insurance  department  or any other agency of a state
                           in which RISCORP does  business;  provided,  however,
                           that  the  Management  Company  shall  not  bear  the
                           expense of RISCORP's  separate  representation  by an
                           attorney and any other professional  advisors at such
                           examinations,  hearings,  meetings and administrative
                           inquiries.

                  5.       Upon  reasonable  request,  provide to the  actuaries
                           employed by RISCORP such reports and  information  as
                           may  reasonably  be necessary  for such  actuaries to
                           express   their   professional   opinion  as  to  the
                           financial status of RISCORP.

                  6.       Provide   to  the   Board  of   Directors   financial
                           information and reports regarding RISCORP,  assist in
                           overseeing the fiscal policies and financial  matters
                           of RISCORP,  provide  administrative  support for the
                           fiscal operation and management of RISCORP, including
                           preparation,  accumulation  and  maintenance  of  the
                           Records of RISCORP in  accordance  with  statutes  or
                           regulations  promulgated  by the  SEC,  the  Internal
                           Revenue  Service  or  any  insurance   department  or
                           governing authority.

         F.  Investment  Policy.  The following  duties will be performed by the
         Management  Company at its expense,  unless  otherwise  approved by the
         Board of Directors.

                  1.       Prepare and submit to the Board of  Directors  for
                           approval or modification, as appropriate, an
                           investment policy plan for RISCORP.

                  2.       Coordinate  investment  transactions with one or more
                           investment   advisers   selected  by  the  Management
                           Company with the approval of the Board of Directors.

                  3.       Verify  that the  investment  policy  adopted  by the
                           Board  of  Directors  is  properly   implemented  and
                           followed by the aforesaid investment advisers.

                  4.       Provide  to the  Board of  Directors,  at  reasonable
                           intervals,  reports  regarding  compliance  with  the
                           provisions   of   the   applicable   law   regulating
                           permissible investment policies.

                  5.       Provide  to the  Board of  Directors,  at  reasonable
                           intervals,    reports   regarding   compliance   with
                           investment policies established by RISCORP.

                  6.       Provide   to  the  Board  of   Directors,   at  least
                           quarterly,    a    portfolio    analysis    detailing
                           descriptions    of   securities,    maturity   dates,
                           interest/dividend rates, yield to maturity, after tax
                           yield,  par  value,  book  value,  and  realized  and
                           unrealized gains/losses.

         G. Auditing.  Cooperate with and provide such  information  relating to
RISCORP  as may be  reasonably  necessary  for the  external  auditors  or other
qualified  consultants to evaluate the performance by the Management  Company of
its duties and responsibilities.

         H. Budget.  Prepare a proposed  annual budget to be reviewed,  amended,
modified or revised, if necessary, and approved by the Board.

         I.  Personnel.  In connection  with  discharging  its duties under this
Agreement,  Management Company shall be responsible for employing at its expense
such personnel as may be necessary to perform the Services  contemplated by this
Agreement, subject to the terms hereof.

         J.       Plan of Liquidation.  In a timely manner, prepare and submit
to the Board of Directors for approval or modification,  as appropriate,
a plan of liquidation for RISCORP.

         K. Miscellaneous.  Provide such other reasonably  necessary services as
may be required to fully execute and perform the Management Company's duties and
responsibilities pursuant to this Agreement.

                                   ARTICLE IV
                                  COMPENSATION

         4.1 Management Fee. In consideration  for the services  provided by the
Management Company hereunder,  RISCORP shall pay the Management Company $100,000
per month on the  first  day of each  month  during  the term of this  Agreement
(excluding  the final six months of the initial term as set forth  below),  plus
reasonable  and  necessary  out-of-pocket  expenses of the  Management  Company,
including  but not  limited to,  RISCORP's  allocated  portion of all  insurance
costs, supplies,  facilities,  equipment and transportation expenses incurred in
connection with the services provided by the Management  Company to or on behalf
of RISCORP.  The fees and expenses  payable  hereunder shall be prorated for any
partial month that this Agreement is in effect. Upon the Effective Date, RISCORP
shall pay to the  Management  Company a  retainer  of  $600,000  which  shall be
applied by the Management Company against the fees due to the Management Company
during the final six (6) months of the initial term of this Agreement.

         4.2  Restricted  Stock Grant.  On the  Effective  Date,  RISCORP  shall
deliver  to the  Share  Custodian  (as  such  term  is  defined  in  Exhibit  A)
certificates representing 1,725,000 shares of RISCORP, Inc. Class A Common Stock
(the  "Restricted  Stock").  Such  shares  shall be  subject  to the  terms  and
conditions of a Restricted  Stock Award Agreement in  substantially  the form of
Exhibit A attached hereto.  Ten days prior to the date any tax payment is due by
the partners of the  Management  Company  pursuant to an election  under Section
83(b) of the Internal  Revenue  Code,  as amended,  to include the value of such
shares of Restricted Stock in income on the date of grant, RISCORP shall pay the
Management  Company an amount  which,  on an after-tax  basis,  is sufficient to
reimburse the partners of the Management Company for that portion of all federal
income,  employment and excise taxes  incurred in connection  with such election
under Section  83(b) then being paid.  RISCORP  further  agrees to indemnify and
hold harmless the partners of the  Management  Company,  on an after-tax  basis,
from any additional federal taxes,  interest or penalties incurred in connection
with this Restricted  Stock grant  (exclusive of any assessment for state taxes)
by the  partners  of the  Management  Company in the event any of the  foregoing
taxing  authorities  assess one or more of the partners for any such  additional
taxes,  interest or penalties not initially  reimbursed by RISCORP.  RISCORP and
the  Management  Company agree that the initial  reimbursement  payment shall be
equal to 71.05% of the aggregate value of the shares of Restricted  Stock on the
date of grant as reported in the over-the-counter  market and that the foregoing
amount is not intended to include any reimbursement for any state taxes that may
be payable by any  partner  of the  Management  Company.  For  purposes  of this
Section,  "partners of the Management Company" includes such persons or entities
as are subject to federal tax on income recognized by the Management Company.

         4.3 Expenses.  RISCORP shall  reimburse the Management  Company for the
reasonable  expenses  actually  incurred  by the  Management  Company  for legal
services rendered and the advice of a compensation consultant in connection with
the  negotiation  of this  Agreement  within 10 business  days of the receipt of
acceptable  invoices  for such  services  approved  by the  Board of  Directors.
RISCORP shall also  reimburse the Management  Company for its allocated  portion
(not to exceed the lesser of 25% or  $5,000)  of the  organization  costs of the
Management  Company and for all customary  business and travel expenses approved
by the Board  within 10  business  days of the  receipt  of  acceptable  expense
reports.  In addition,  the Management Company will be provided with such number
of corporate  credit cards in the name of RISCORP as the Board of Directors  may
approve to help defray out-of-pocket expenses.

                                    ARTICLE V
                               EXPENSES OF RISCORP

         It is  understood  and agreed by the parties  that the fees paid to the
Management  Company are in consideration for the Management  Company  performing
the Services  described herein,  but that such fees do not include the following
services and expenses, which shall be borne by RISCORP:

         5.1 The cost of services performed by any actuary retained on behalf of
RISCORP.

         5.2 The  cost of  audits  by  certified  public  accountants  or  other
auditors  retained  on  behalf of  RISCORP  as  required  by  applicable  law or
regulations,  and  preparation  of financial  statements  (whether  "audited" or
periodic  "reviewed") and all returns and reports required by federal,  state or
local taxing authorities.

         5.3 Legal fees for services  performed by attorneys  retained on behalf
of RISCORP.

         5.4      All legal fees, costs and expenses incurred in the prosecution
or defense of lawsuits filed by or against RISCORP.

         5.5 The cost of services performed by any other professionals  retained
with the approval of the Board of Directors on behalf of RISCORP,  including but
not limited to financial  consultants  to operate as the finance  department  of
RISCORP, information systems specialists to help gather and preserve the Records
of  RISCORP  and tax  professionals  to assist in the  preparation,  filing  and
defense of RISCORP tax returns.

         5.6      The costs incurred on behalf of RISCORP related to any
examination or investigation by the SEC, the IRS or any insurance department.

         5.7 Premiums for errors and omissions insurance, directors and officers
insurance, and fidelity coverage (including an allocated portion of the premiums
for such coverage related to that portion of the Management Company's operations
performed  on  behalf of  RISCORP)  and  surety  bonds to  satisfy  the needs of
RISCORP, its officers, directors, employees and agents.

         5.8      Such other reasonable and necessary  expenses incurred by the
Management  Company in the performance of its duties hereunder and approved by
the Board.

         5.9      Cost of investing RISCORP monies.

         5.10     Taxes and assessments charged against RISCORP.

         5.11 The  Management  Company  shall prepare and submit to the Board of
Directors a suggested annual budget for the fees, costs and other expenses to be
incurred by RISCORP  described in this Article V. Subject to the  direction  and
control of the Board,  upon approval of a budget,  the Management  Company shall
proceed with carrying out the programs and projects  contemplated  therein, with
the costs  thereof to be advanced  monthly by RI and at the rate provided in the
budget.

         5.12 All other expenses described under this Article V shall be paid by
either RISCORP or the  Management  Company  according to such  procedures as the
parties  shall  agree  upon from time to time;  provided,  however,  that if the
Management  Company pays for any such items,  it will be  reimbursed  by RISCORP
within ten (10) days after  providing  copies of the  invoice  and its checks to
RISCORP or such other reasonable time as the parties may determine.



<PAGE>


                                   ARTICLE VI
                               RECORDS AND OFFICE

         6.1      Principal Office.  The Management Company shall maintain at
its principal office an original counterpart of this Agreement.

         6.2 Access to Records.  The Board of Directors and its  representatives
shall have  complete and  unfettered  access to the books and records of RISCORP
maintained by the Management  Company and the Management  Company shall make all
such books and records reasonably available at the request of the Board.

         6.3  Location of  Records.  The primary  activities  of the  Management
Company  under  this  Agreement  shall be  handled  from  RISCORP's  offices  in
Sarasota,  Florida and  Orlando,  Florida,  and the Records of RISCORP  shall be
maintained  in the Sarasota  office unless  another  location is approved by the
Board.

         6.4 Confidentiality. The Management Company recognizes and acknowledges
that all  programs  and Records of RISCORP  used by RISCORP are the  property of
RISCORP and shall be deemed confidential and proprietary information of RISCORP.
The Management Company covenants and agrees that it will not, during the term of
this Agreement or after termination thereof,  use,  disseminate,  disclose or in
any manner publish any such  confidential  and proprietary  information  without
RISCORP's  consent;  provided,  however,  that the Management Company may in its
discretion and at its expense make copies of or have access to such  information
to the extent it is needed for defending or prosecuting any legal, tax, or other
administrative  investigation  or proceeding  against the Management  Company or
pertaining to the performance of its duties hereunder.

         6.5 Return of Records and Assets.  Upon  termination of this Agreement,
all  original  Records  of  RISCORP,  hardware  and  software  (except  software
purchased or developed by the  Management  Company)  utilized in generating  and
maintaining  those  records  in the  custody  of the  Management  Company or its
subcontractors  shall be assembled by the  Management  Company and  delivered to
RISCORP all at the expense of RISCORP;  provided,  however,  that the Management
Company may in its  discretion  and at its expense make copies of or have access
to such  information to the extent it is needed for defending or prosecuting any
legal,  tax, or other  administrative  investigation  or proceeding  against the
Management Company or pertaining to the performance of its duties hereunder.

                                   ARTICLE VII
                              TERM AND TERMINATION

         7.1 Term.  The term of this  Agreement  shall commence on the Effective
Date and,  subject to the terms of this Article VII,  shall remain in full force
and effect for a period of three (3) years thereafter. After the initial term of
this Agreement, at the election of RISCORP, this Agreement may be renewed for an
additional one-year term upon providing written notice to the Management Company
of its  election  to  extend  this  Agreement  at least  120  days  prior to the
termination of the initial term. Such extension, if elected by RISCORP, shall be
on the terms and  conditions  set forth  herein,  including  the  payment of the
monthly management fee set forth in Section 4.1 hereof.

         7.2  Disqualification  by  Insurance  Department.  Notwithstanding  the
provisions  of Section 7.1,  this  Agreement may be terminated by RISCORP if the
Management  Company is disqualified  from acting as a management  company by any
insurance department and the Management Company is thereafter unable to cure the
deficiencies cited by such agency within a reasonable period of time.

         7.3 Annual Review. RISCORP's independent auditors shall annually review
the Management Company's performance  hereunder.  If the independent auditors or
the members of the Board of  Directors  (exclusive  of Mr.  Dawson)  unanimously
determine in good faith that the Management Company is not in compliance, in all
material  respects,  with the terms of this  Agreement or  applicable  law, then
written notice of such  noncompliance  shall be given to the Management  Company
and the  Management  Company shall be given a reasonable  time (not less than 60
days) to correct the  noncompliance.  If the Management Company fails to correct
the  noncompliance  in all material  respects within such cure period,  then the
Management  Company  shall pay RISCORP  liquidated  damages in the amount of ten
percent (10%) of the annual management fee then in effect and RISCORP shall have
the right to terminate  this  Agreement at the  expiration  of such cure period.
Unless  the  acts  or  omissions  of the  Management  Company  constitute  gross
negligence or willful  misconduct,  such liquidated damages shall constitute the
satisfaction of all liabilities to RISCORP under this Agreement.

         7.4  Termination by RISCORP.  RISCORP shall have the right to terminate
this Agreement  following the occurrence of any of the following events: (i) Mr.
Dawson ceases to actively  exercise  management  and control over the activities
and operations of the Management Company on behalf of RISCORP,  exclusive of any
period of physical  or mental  disability  not in excess of 12 weeks  during any
period of 12 consecutive months; (ii) Management Company's neglect of or refusal
to perform its duties or the material  breach of any provision of this Agreement
by the  Management  Company if such  breach is not cured  within the time period
reasonably  prescribed  by the Board of  Directors  for such breach or violation
(such  cure  period  to be not  less  than 60  days);  (iii)  any act of  fraud,
misappropriation,  dishonesty or embezzlement by any senior management personnel
of  the  Management  Company;  (iv)  the  indictment  of any  senior  management
personnel of the Management  Company for any felony  criminal  offense;  (v) any
change of control,  dissolution or liquidation of the Management  Company;  (vi)
any merger,  consolidation or other  reorganization  of the Management  Company,
other than a transaction not involving a change of control;  (vii) the filing of
a petition in voluntary bankruptcy or an assignment for the benefit of creditors
by the Management Company,  or upon other action taken or suffered,  voluntarily
or  involuntarily,  under any federal or state law for the benefit of insolvents
by a party,  except  for the  filing of a  petition  of  involuntary  bankruptcy
against a party with the dismissal of such petition within 30 days after filing;
(viii)  the  complete  liquidation,  dissolution  and  winding  up of all of the
business  and  affairs  of  RISCORP  including,  without  limitation,  the final
distribution to all shareholders of RISCORP;  or (ix) the final  distribution to
the holders of the Series A Common Stock of RI.

         7.5      Effect of Termination.

         A. Upon  termination of this Agreement for any reason other than as set
forth in Section  7.4(viii)  or (ix),  RISCORP  shall cease all  payments to the
Management  Company as of the effective date of such  termination and, except as
set forth in subparagraph C below, within 30 days of the effective date thereof,
the Management  Company shall refund to RISCORP the advance payment set forth in
Section  4.1  hereof,  as well as any other  funds  advanced  to the  Management
Company for services to be rendered after the termination date.

         B. Upon the termination of this Agreement pursuant to Section 7.4(viii)
or (ix),  the  Management  Company  shall be  entitled  to retain  the  $600,000
prepayment  described in Section 4.1 hereof and RISCORP shall pay the Management
Company an additional amount equal to the difference  between (1) $3,000,000 and
(2) the aggregate  amount of the monthly  management fees paid to the Management
Company  pursuant  to Section  4.1 hereof  prior to the  effective  date of such
termination.

         C.  Upon  the  termination  of  this  Agreement  due  to the  death  or
disability of Mr. Dawson, the Management Company shall be entitled to retain the
$600,000 prepayment  described in Section 4.1 hereof;  however,  any other funds
advanced  to the  Management  Company  for  services  to be  rendered  after the
termination  date shall be refunded to RISCORP  within 30 days of the  effective
date of termination.

         D. Upon the termination of this Agreement,  at the request of the Board
of Directors,  the  Management  Company  agrees to assist RISCORP in the orderly
transition of the Services being provided hereunder to a new management services
provider or to the  executive  officers  and  employees  then being  employed by
RISCORP,  as the case may be. A prorated portion of the management fee set forth
in Section  4.1  hereof  shall be payable  with  respect to any such  transition
services requested by the Board; provided, however, the Management Company shall
not be required to perform any such  services  for more than 120 days  following
the termination of this Agreement.

                                  ARTICLE VIII
                              DELEGATION OF DUTIES

         Subject  to the  approval  of the Board of  Directors,  the  Management
Company shall have the right to delegate its duties under this Agreement to such
persons or entities as agents,  delegates or  assignees as it may properly  deem
necessary  for the  efficient  performance  of the duties  and  responsibilities
assigned to the Management Company hereunder. Notwithstanding the foregoing, the
parties  hereto  agree that  RISCORP is entering  into this  Agreement  with the
Management  Company to, among other things,  obtain the personal services of Mr.
Dawson  in  connection  with the  performance  of the  Services  hereunder  and,
accordingly,  the  Management  Company shall have no authority to delegate those
duties typically  performed by a chief executive officer of a corporation to any
person  other  than Mr.  Dawson  without  the  prior  approval  of the  Board of
Directors.  Neither the  Management  Company nor any of its  employees  shall be
liable to RISCORP in  connection  with any actions  taken in  reliance  upon the
advice of any professionals  selected or approved by the Board of Directors with
respect to the subject matter of their engagement.

                                   ARTICLE IX
                                 PREVAILING LAW

         This Agreement shall be construed according to the laws of the State of
Florida to the extent that such laws are not preempted by Federal law.

                                    ARTICLE X
                                 INDEMNIFICATION

         RISCORP  agrees  to  indemnify  and hold  the  Management  Company  and
officers,  directors and employees harmless from and against all costs, damages,
judgments, attorneys' fees, expenses, obligations and liabilities of any kind or
nature  that  occur,  arise or  result  from the  Management  Company's  (or its
delegates' or agents')  mismanagement of RISCORP's assets or any other breach of
their duties to RISCORP or its shareholders,  or any other duties imposed by law
(except to the extent that such  mismanagement  or breach of duties results from
the gross  negligence  or willful  misconduct  of the  Management  Company,  its
officers, directors and employees).

                                   ARTICLE XI
                                  MISCELLANEOUS

         11.1 Fidelity Bond.  During the term of this Agreement,  the Management
Company,  at the expense of RISCORP shall  maintain a fidelity bond covering its
employees,  with  RISCORP  as  obligee,  to  protect  all  monies  placed in any
revolving  account made available to the  Management  Company for the payment of
claims,  judgments  and other related  expenses for the benefit of RISCORP.  The
coverage  and  amount  for the  bond  shall  be as  required  by the  applicable
insurance departments or other applicable law.

         11.2 No Violation. This Agreement has been duly adopted by the partners
of the Management Company and the Board of Directors of RISCORP.  This Agreement
does  not  and  will  not  conflict   with  or  violate  the  charter  or  other
organizational documents of any party, or any agreement, instrument, law, order,
rule,  regulation,  or other  obligation or  arrangement by which a party may be
bound.

         11.3 Assignment.  Except as expressly set forth herein,  this Agreement
shall not be assignable without the express written consent of the other parties
hereto.

         11.4  Performance.   Neither  party  nor  any  representative,   agent,
employee,  designee or other firm or  individual  acting on its behalf or at its
direction,  shall in bad  faith  take any  action  for the  primary  purpose  of
circumventing,  diminishing or otherwise avoiding the party's  obligations under
this Agreement,  terminating  this Agreement,  or causing the non-renewal of the
same,  including the (i) imposition of unreasonable or unfair  obligations  upon
the  other  party  for the  purpose  of  causing  the  other  party  to  request
termination  of this  Agreement,  (ii) the  imposition  of arbitrary  standards,
policies or procedures upon the other party, or (iii)  unreasonably  withholding
consent  or  unreasonably  exercising  its  discretion  where  such  consent  or
discretion may be requested by the other party.

         11.5  Corporate  Authority.   Prior  to  the  Effective  Date  of  this
Agreement,  the Board of Directors of RI shall adopt such  resolutions as may be
necessary or  advisable  for the  Management  Company to carryout its duties and
responsibilities hereunder,  including,  without limitation,  resolutions naming
Mr. Dawson as the President and Chief Executive  Officer of RI and Mr. Riehemann
as Chief Investment Officer, Treasurer and Secretary thereof.

         11.6 Entire Agreement.  This Agreement constitutes the entire agreement
between  the  parties,  cannot be  modified  except  in a writing  signed by the
parties,  and  shall be  binding  upon  and for the  benefit  of the  respective
successors and permitted assigns of the parties (including any entities,  funds,
or other organizations  merging into,  consolidated with, formed by, or acquired
by RISCORP).

         11.7 Key Man Life Insurance.  At the request of the Board of Directors,
Mr. Dawson and Mr. Riehemann each agree to undergo annual physical  examinations
and cooperate with RISCORP in seeking to obtain, at the expense of RISCORP, "key
man" insurance against their death or disability in connection with the Services
to be provided hereunder.

         11.8  Arbitration.  RISCORP and the  Management  Company agree that any
dispute or  disagreement  arising  under or related  to this  Agreement  will be
subject  to final  and  binding  arbitration  conducted  under  the rules of the
American Arbitration Association.  The parties agree to request a proposed panel
of seven  (7)  arbitrators  and to engage in  respective  strikes  until one (1)
arbitrator remains. The expenses of the arbitration,  including the arbitrator's
fee, will be shared equally between RISCORP and the Management  Company provided
that  each  party  shall be  responsible  for the fees and  expenses  of its own
counsel, except as the arbitrator, in his or her sole discretion,  may otherwise
determine.



<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                     RISCORP,  Inc.,  individually  and on  behalf  of each of
                     its  subsidiaries  identified  as  parties  to this
                     Agreement

                        /s/ Seddon Goode, Jr.
                     ---------------------------------
                     Seddon Goode, Jr.
                     Director

                       /s/ George E. Greene III
                     ---------------------------------
                     George E. Greene III
                     Director

                       /s/ Walter L. Revell
                     ---------------------------------
                     Walter L. Revell
                     Director


                     THE PHOENIX MANAGEMENT
                     COMPANY, LTD.

                     By:Dawson Managers, Inc., its General Partner

                      /s/ Frederick M. Dawson
                     ---------------------------------
                     Frederick M. Dawson
                     President

                      /s/ Frederick M. Dawson
                     --------------------------------
                     Frederick M. Dawson

                      /s/ Walter E. Riehemann
                     --------------------------------
                     Walter E. Riehemann