SECURITIES AND EXCHANGE COMMISSION
                      Washington D.C. 20549

                          FORM 10-KSB

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

For the fiscal year ended:                 Commission file number: 33-89966
December 31, 1997

                              TREMONT ADVISERS, INC.
                        (Name of small business issuer in its charter)

Delaware                                                      06-1210532
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                           Identification No.)

555 Theodore Fremd Avenue, Rye, New York  10580
(Address of Principal Executive Offices) (Zip Code)

          Issuer's telephone number, including area code: (914) 925-1140

      Securities  registered  pursuant to Section 12(b) of the Act:

                              None

      Securities  registered  pursuant to Section 12(g) of the Act:

                              None

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes x No .

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of Issuer's  knowledge,  in the definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. x

State issuer's revenues for its most recent fiscal year = $7,026,641.00.

The aggregate  market value of the Class A Common Stock held by nonaffiliates of
the Issuer was  approximately  $2,346,847,  based upon the  average  bid and ask
prices of such stock on March 6, 1998, quoted by the National  Quotation Bureau,
LLC in the over-the  counter market.  The aggregate  market value of the Class B
Common Stock held by nonaffiliates of the Issuer was  approximately  $8,379,621,
based upon the average bid and ask prices of such stock on March 6, 1998, quoted
by the National Quotation Bureau, LLC in the over-the-counter market.

The number of outstanding  shares of the Issuer's Class A Common Stock, $.01 par
value was 1,284,718 as of March 6, 1998 and the number of outstanding  shares of
the Issuer's  Class B Common Stock,  $.01 par value was 2,802,104 as of March 6,
1998.

                                        DOCUMENTS INCORPORATED BY REFERENCE
                                                       None



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                                                 Table of Contents



PART I   .................................................................... 1

         Item 1.      Description of Business................................ 1
         Item 2.      Description of Properties.............................. 9
         Item 3.      Legal Proceedings...................................... 9
         Item 4.      Submission of Matters to a Vote of Security Holders.... 9

PART II  ................................................................... 10

         Item 5.      Market For the Registrant's Common Equity and Related
                      Stockholder Matters................................... 10
         Item 6.      Management's Discussion and Analysis.................. 12
         Item 7.      Financial Statements.................................. 21
         Item 8.      Changes in and Disagreements With Accountants on
                      Accounting and Financial Disclosure................... 40

PART III ................................................................... 41

         Item 9.      Directors and Executive Officers of the Registrant.....41
         Item 10.     Executive Compensation................................ 43
         Item 11.     Security Ownership of Certain Beneficial Owners and
                      Management............................................ 47
         Item 12.     Certain Relationships and Related Transactions........ 50
         Item 13.     Exhibits, List and Reports on Form 8-K................ 52

EXHIBIT INDEX............................................................... 57






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                                                      PART I
Item 1.  Description of Business

General

         Tremont Advisers,  Inc. (the "Company"),  which was incorporated in the
State of Delaware on June 18,  1987,  is a holding  company  which,  through its
wholly-owned  subsidiaries,  is primarily  engaged in rendering  consulting  and
specialized  investment  services  to  investment  funds,  investment  managers,
institutional  investors  and high net worth  individuals  with  respect  to the
organization and management of their investment  portfolio or programs,  as well
as managing and sponsoring its own single-manager  and multi-manager  investment
funds.  Further,  the Company,  through its  subsidiaries,  offers marketing and
business development  consulting services to investment  management firms and to
individual investment advisers. The Company derives a significant portion of its
revenues  from   consulting   services   agreements  with   single-manager   and
multi-manager investment funds or their sponsors and advisers. The  Company's
principal domestic subsidiary,  Tremont Partners,  Inc. ("TPI"), is a registered
investment  adviser  under the  Investment  Advisers Act of 1940, as amended
(the  "Advisers  Act"),  and  currently  serves  either as a co-general partner
or  general  partner,  of five  investment  limited  partnerships.  TPI
provides  investment  advisory  services  for the  funds  for which it serves as
general partner.  Tremont  (Bermuda)  Limited ("TBL"),  the Company's  principal
foreign   subsidiary,   provides   investment   advisory   services  to  several
multi-manager  offshore  funds and acts as the fund sponsor,  primary  placement
agent and, in some cases,  administrator,  for a select group of offshore  funds
managed by U.S.-based money managers.  The Company's third  subsidiary,  Tremont
Securities, Inc. ("TSI"), is a registered broker/dealer and was formed to assist
in the  purchase  and  sale of  investment  funds  and  other  entities,  and to
facilitate  soft-dollar  arrangements.  The Company's primary  objectives are to
maintain and expand its services for single-manager and multi-manager investment
programs  or  funds,  and to  develop  or  sponsor  its own  single-manager  and
multi-manager investment funds.

Services and Method of Operation

         The Company conducts its business through the activities and operations
of the three subsidiaries  mentioned above. Although each subsidiary markets its
services to a distinct and separate  group of clients,  certain of the Company's
clients  may utilize the  services  of more than one of such  subsidiaries.  The
Company has derived its principal revenues from TPI and TBL, and continues to do
so.

         1.       TPI:

         TPI was  formed in 1984 as a  consulting  firm  assisting  pension  and
profit sharing plans and other financial entities in the design and structure of
specialized   investment  programs.   TPI  now  specializes  in  non-traditional
approaches to investment  management and has expanded its client base to include
financial  intermediaries,  individuals  and  pension,  retirement,  and  profit
sharing plans. TPI also provides  consulting  services to several  multi-manager
investment funds, as well as to institutional and high net worth investors.  Its
primary  consulting  services  have been and  continue  to be  rendered  to plan
sponsors or managers  of  single-manager  and  multi-manager  investment  funds.
During the years ended  December 31, 1997 and 1996,  approximately  53% and 53%,
respectively,  of the Company's consolidated revenues have been derived from the
operations of TPI. The principal services offered and rendered to clients by TPI
include the following:


                                     1

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                  A. Investment Funds. TPI's consulting  services to these funds
or their sponsors have accounted for  approximately 39% and 38% of the Company's
consolidated  revenues  for each of the years ended  December 31, 1997 and 1996,
respectively. TPI has been instrumental in the organization and structure of its
current major  single-manager or multi-manager  investment fund clients.  In the
organization  of such  funds,  TPI  assists  the  sponsor  in: (i)  establishing
investment  objectives and guidelines  consistent with the client's purposes and
market;  (ii) defining suitable asset classes for investment;  (iii) negotiating
fees and other  arrangements  with investment  advisers and other  professionals
rendering services to the funds; and (iv) providing  consultation regarding fund
structure and  administration.  Upon  organization  of such funds,  TPI renders,
among other things, services for (i) the monitoring of investment performance of
such funds,  including the performance of individual  investment advisers;  (ii)
the recommendation of the retention or replacement of such investment  advisers;
(iii) the  furnishing of specialized  reports  responsive to the requests of the
sponsors or managers of such funds;  and (iv) other  administrative  services as
required from time to time. In several instances,  TPI is the investment adviser
to such funds with respect to the  investment  of their  portfolio  assets.  TPI
currently  serves as either a  co-general  partner  or  general  partner of five
investment  limited   partnerships.   TPI  also  renders  advisory  services  to
investment  partnerships,  bank trust  funds,  and  insurance  companies  in the
selection of their investments in other investment  partnerships,  funds, and/or
separate  accounts.  In addition to receiving  management  fees, TPI may receive
consulting fees based on the value of assets of funds under management for which
it provides its consulting or advisory  services to its investment fund clients.
In several funds, TPI may receive a performance fee at the end of a fund's first
fiscal year and yearly  thereafter  in addition  to the fees  received  based on
assets under management.

                  B. Institutional and High Net Worth Investors. TPI also offers
and renders  consulting  services to  corporate  pension and  profit-sharing  or
similar  plans,  state  and  local  retirement  systems,   and  high  net  worth
individuals  with respect to the investment  and management of their  investment
portfolios  or  programs.   Such   services  may  include:   (i)  designing  and
implementing,  including  objectives and guidelines,  their investment programs;
(ii)  identifying  and  selecting  appropriate   investment  advisers  for  such
programs; (iii) monitoring the performance of such investment programs; and (iv)
administering,  and  reporting  in respect  of,  such  programs.  TPI  generally
receives annual retainer fees or asset-based fees for its consulting services to
these institutional and individual investors.



                  C.  Investment  Adviser  Research  Program.  As  part  of  its
consulting business, TPI maintains a continuing research program with respect to
the evaluation and review of both domestic and foreign  investment  advisers and
advisory  firms.  TPI's  employees  meet with and  interview  over 250  advisory
individuals  or firms each year.  Interviews  are conducted with each adviser or
the senior  investment  personnel of an advisory  firm in order to evaluate such
factors  as  investment  approach,  style,  personnel  turnover,  delegation  of
investment  decision-making  responsibilities  and number  and type of  accounts
under  management.  As a result of TPI's  investment  adviser  research,  it has
developed a  proprietary  computerized  database  of more than 2,000  investment
advisers and investment  advisory firms,  including  domestic and  international
equity and fixed income advisers,  mutual funds,  private limited  partnerships,
and offshore funds. This database allows TPI to monitor and evaluate  investment
management performance and to simulate the match of a fund's objectives with the
investment  characteristics  of different or combined  investment  advisers.  In
addition,  TPI utilizes its database to assist in advising  investor  clients in
the selection of appropriate investment advisers or investment programs.



                                                         2

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                  D. Special Projects.  TPI has offered, and continues to offer,
its investment advisory or investor clients specialized  consulting services for
projects under consideration by such clients. Such projects may include research
or reports on particular aspects of the investment management business,  such as
studies of risk  arbitrage  opportunities,  research for investing in distressed
securities,   recommendations   for  investment   products  utilizing  insurance
programs,  and  market  neutral  investing.  Such  projects  have not,  overall,
produced  significant  revenues to TPI. TPI generally  receives a single project
fee for its consulting services for these types of projects.

         2.       TBL:

         TBL was formed in November  1988 as an exempted  company under the laws
of Bermuda to provide investment management services to offshore investors.  TBL
currently  provides  investment  advisory  services  to  several   multi-manager
offshore funds and acts as the fund sponsor,  primary  placement  agent,  and in
some  cases  administrator,  for a select  group of  offshore  funds  managed by
U.S.-based  money managers.  For the years ended December 31, 1997 and 1996, TBL
accounted  for  approximately  40%  and  43%,  respectively,  of  the  Company's
consolidated  revenues.  The Company  expects  that TBL will  continue to render
consulting or investment advisory services to its clients, as well as to several
new offshore funds to be organized by other sponsors.

         TBL offers  placement  agent  services  to a select  group of  offshore
mutual funds. This activity was a logical  extension of the consulting  services
it offers to financial  intermediaries and investment  managers through TPI. TBL
currently  provides  placement agent services to  approximately  twenty offshore
funds located in offshore  jurisdictions  worldwide.  Services  offered to these
funds include:

                  A. Fund  Development  and  Structuring.  TBL  coordinates  all
aspects of offshore fund development,  including  reviewing offering  materials,
creating marketing programs and sales literature,  identifying service providers
for the funds, and negotiating fees as directed by the fund manager.

                  B.  Placement  Agent  Services.  Upon formation of an offshore
fund,  TBL assists the fund manager in raising  capital for  investment in these
funds from investors located outside the United States. Placement agent services
are conducted by TBL's office in Hamilton,  Bermuda and by TBL's staff traveling
abroad.   During  1997,   substantial   resources  were  devoted  to  developing
relationships with prospective investors located in Europe.

         Given the growth during recent years in the amount of money invested in
offshore funds,  management  believes that TBL will continue to be a significant
contributor to the Company's revenues in the future.

         The  Company's  business  continues  to  focus on the  development  and
management of singlemanager and multi-manager fund products and clients. TPI and
TBL have been actively engaged in seeking new  single-manager  and multi-manager
investment  fund clients.  Additionally,  the growth of the offshore fund market
and placement agent business has diversified the Company's  business  interests.
The  Company  expects  to  concentrate  on  rendering   consulting  services  to
single-manager or multi-manager  investment fund clients, to continue to develop
its own proprietary  investment  funds,  and to develop its own distribution for
select institutional and individual markets worldwide.  In 1994, TBL acquired an
interest  in a  joint  venture  which  has  developed  a full  "turn-key"  asset
allocation  program that is offered on a private label basis to select financial
institutions and offshore clients


                                                         3

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around the world.  In 1996, TBL acquired an interest in Tremont International
Insurance Ltd. ("TIIL").  TIIL is a Cayman Island insurance company offering a
variety of insurance products to customers who are not residents of the Cayman 
Islands.

         In July 1997, Mutual Risk Management,  Ltd.  ("MRM"),  an international
risk management company, invested $5 million in TIIL.  Simultaneously,  TBL, MRM
and The Anglo Dutch Insurance  Company  Limited,  a Cayman Island life insurance
company  ("Anglo-Dutch"),  formed  Tremont MRM Services  Limited  ("TMRM") under
Bermuda law. TMRM provides  product  development,  marketing and  administrative
services to TIIL pursuant to an agreement between the parties.  MRM has invested
$1 million in TMRM and received a 20% interest  therein.  TBL owns 24.5% of TIIL
and 40% of TMRM. As a result of certain  transactions  described below in Item 6
under the heading "Management's  Discussion and Analysis - Liquidity and Capital
Resources,"  MRM  indirectly  owns  Class B  Common  Stock  equal  to 20% of the
aggregate of the Company's  outstanding  Class A Common Stock and Class B Common
Stock.

         3.       TSI:

         TSI, a  wholly-owned  subsidiary  of the  Company,  is a  broker-dealer
registered  under the  Securities  Exchange  Act of 1934,  as  amended.  TSI was
established to act as an introducing broker for security transactions  initiated
by nonaffiliated  companies,  and to facilitate  soft-dollar  arrangements.  TSI
accounted for approximately 7% and 4%,  respectively,  of consolidated  revenues
for the years ended December 31, 1997 and December 31, 1996.

Clients

         The Company's principal clients have been and continue to be investment
funds  formed  by or with the  assistance  of TPI or TBL,  or the  sponsors  and
managers of such investment  funds. The types of investment funds include mutual
funds  registered as investment  companies  under the Investment  Company Act of
1940, as amended (the  "Investment  Company Act"),  limited  partnerships,  bank
trust funds and offshore  mutual funds.  TPI and TBL consulting  agreements with
investment fund clients accounted for  approximately 58% and 64%,  respectively,
of the Company's consolidated revenues for the years ended December 31, 1997 and
1996. Accordingly, the loss of a significant portion of these clients could have
a material adverse effect on the Company.

         The significant client relationships of the Company, by subsidiary, are
as follows:

         1.       TPI:

         The   Domestic   Emerging   Markets  -  Minority   Equity  Trust  is  a
multi-manager commingled equity fund utilizing investment management firms which
are owned and operated by minorities or women whose assets were  transferred  to
it from The Minority  Equity Trust on or about December 1, 1996. TPI advises the
sponsor of this trust on a wide range of investment services, including minority
investment  manager  selection and monitoring and  supervision of its investment
program.  Compensation to TPI is through an annual retainer; however, in October
1996,  TPI  received a one-time  payment of  $320,000  in October  1996 from the
sponsor of the Domestic  Emerging Markets Minority Equity Trust in consideration
for terminating  TPI's contract with The Minority Equity Trust. As of January 1,
1998, the program had a net asset value of approximately $203 million.



                                                         4

<PAGE>



         The Chrysler  Minority  Equity Trust is a  multi-manager  program which
uses minority owned and operated investment  management firms. TPI advises it on
the selection and  monitoring of the managers,  as well as on the  allocation of
funds among them. TPI's compensation is based upon a percentage of the net asset
value at the end of each  month.  As of January 1, 1998,  the  program had a net
asset value of approximately $346 million.

         Preferred   Investors,   L.P.  is  a  multi-manager   Delaware  limited
partnership,  designed  for high net  worth  individuals  who can  accept a high
degree of risk in their investment,  focuses on investment  strategies that tend
to  counterbalance  one  another  during  periods of both  market  strength  and
weakness. TPI serves as consultant to the general partner of the partnership and
assists in the  monitoring and selection of investment  partnerships  considered
for  investment.  TPI receives  on-going  compensation  from the general partner
based on a percentage of assets in the  partnership at the end of each month. As
of January 1, 1997, the  approximate net asset value of the partnership was $181
million.

         Sage Capital,  L.P. is a  multi-manager  Delaware  limited  partnership
composed of a diverse selection of highly skilled investment managers whose risk
profile and levels of expertise meet the standards of the general partners.  TPI
serves as consultant to the general  partners of the  partnership and assists in
the  monitoring  and  selection  of  investment   partnerships   considered  for
investment.  TPI receives on-going  compensation from the general partners based
on a percentage of the assets in the partnership at the end of each month. As of
January 1, 1998, the fund had a net asset value of approximately $57.7 million.

         Meridian  Horizon  Fund,  L.P.,  formerly The Ultima Fund,  L.P.,  is a
multi-manager  Delaware  limited  partnership (the "Meridian Fund") organized in
1991 by Zeron  Capital  Management,  Inc.  ("Zeron")  to engage  principally  in
diversified  investment  strategies  utilizing  a  multi-manager   approach.  In
September  1994,  TPI became a co-general  partner.  Effective  January 1, 1997,
Meridian  Capital  Partners,  Inc.  replaced  Zeron as co-general  partner.  The
general partners receive an  administrative  fee and a quarterly  management fee
based upon the net asset value of the partnership as of the end of each quarter.
At January 1, 1998,  the  approximate  net asset value of the Meridian  Fund was
$160 million.  At December 31, 1997,  TPI's  investment in the Meridian Fund was
$299,483.

         GamTree,   L.P.  is  a  multi-manager   Delaware  limited   partnership
("GamTree") formed for the purpose of achieving long-term capital growth through
diversified asset management.  TPI and an affiliate of a principal  shareholder,
GAMCO Investors, Inc., are its co-general partners. The general partners receive
a quarterly  management fee based upon the net asset value of the partnership as
of the end of each  quarter.  In addition,  the general  partners may receive an
incentive  allocation  based upon the net asset value of the capital accounts of
the limited  partners at the end of each year if there is a gross profit,  after
obtaining certain pre-established  benchmarks, from investment activities of the
partnership  for the relevant  fiscal year. At January 1, 1998, the  approximate
net asset value of the partnership was $1.8 million. At December 31, 1997, TPI's
investment in GamTree was $186,717.

         The  Broad  Market  Fund,  L.P.  is a  multi-manager  Delaware  limited
partnership formed for the purpose of achieving long term capital growth through
hedged  investments  arranged by one or more money  managers  and/or  investment
funds.  TPI is the general  partner and receives a monthly  management fee based
upon the net asset  value of the  partnership  as of the end of each  month.  At
January 1, 1998, the  approximate  net asset value of the  partnership  was $149
million after including


                                                         5

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$14.8 million of January 1, 1998 contributions.  At December 31, 1997, TPI's
investment in the fund was $688,592.

         The Broad Market Prime Fund, L.P. is a Delaware  multi-manager  limited
partnership  ("BMPF")  created  in  July,  1997  for the  purpose  of  achieving
long-term  capital growth through a leveraged  investment  strategy.  TPI is the
general  partner and receives a monthly  management fee based upon the net asset
value of the partnership as of the end of each month. As of January 1, 1998, the
approximate net asset value of the partnership was $68 million. In addition, the
general partner will be reimbursed for certain allocable  expenses.  At December
31, 1997, TPI did not have an investment in BMPF.

         The  F.W.  Thompson  Fund,  L.P.  is  a  Delaware  limited  partnership
organized for the purpose of achieving long-term capital growth while preserving
capital.  TPI is the general partner and receives a monthly management fee based
upon the net asset value of the  partnership  as of the end of each  month.  The
general  partner also  receives a  performance  fee from the  partnership's  net
profit after all other fees,  including the  management  fee, are deducted.  The
performance fee is payable on a cumulative  basis.  The performance fee will not
be payable with regard to any period during which the  partnership  incurs a net
loss and only becomes  payable after such net loss is recouped and net gains are
achieved,  net of performance  fees previously paid. The performance fees earned
by the general  partner at  December  31, 1997 and 1996 for the years then ended
were $246,494 and $195,830,  respectively.  At January 1, 1998, the  approximate
net asset value of the partnership was $5.7 million. At December 31, 1997, TPI's
investment in the fund was $46,695.

         Security Equity Life Insurance Company is a New York company offering a
Group Flexible Premium Variable Life Insurance  contract with separate  accounts
for different  investments.  TPI acts as the investment  manager of one of these
separate  accounts  using  a  multi-manager  approach.  The  primary  investment
objective of this account is to achieve above-average, long-term capital growth.
At  January 1, 1998,  the  account  had an  approximate  net asset  value of $52
million.  TPI receives  compensation from the account based upon a percentage of
net assets in the account.

         2.       TBL:

         Ultima  Investments  Limited  is a Cayman  Islands  fund  organized  to
provide  non-American  investors  access to a fund  managed by a select group of
investment managers not usually available to the public.  Currently, the fund is
being marketed in Japan and Europe.  Investments may include  open-ended  mutual
funds, non-U.S. based investment partnerships, managed funds, securities held in
segregated accounts and other investment vehicles that invest or trade in a wide
range of primarily U.S. equity securities,  as well as stocks,  bonds,  options,
currencies,   futures,   money  market  instruments  and  precious  metals.  TBL
evaluates,  selects and monitors the fund's investment managers and arranges for
all  the  administrative  services  required  for  the  operation  of the  fund.
Compensation to TBL is based upon a percentage of the net asset value at the end
of each month.  At January 1, 1998, the  approximate net asset value of the fund
was $15 million.

         Kingate  Global  Fund,  Ltd. is a British  Virgin  Islands  hedge fund,
marketed to high net worth  individuals  who can accept a high degree of risk in
their investment.  TBL receives compensation from the fund based on a percentage
of the net asset  value of the fund at the end of each  month.  As of January 1,
1998, the approximate net asset value of the fund was $290 million.



                                                         6

<PAGE>



         Starvest  Fund,  Ltd. is a Bermuda  hedge fund that is marketed to high
net worth  individuals who can accept a high degree of risk in their investment.
TBL serves as its investment advisor and receives on-going compensation based on
a percentage of the average net assets in the fund at the end of each month.  In
addition,  TBL is entitled to a performance  fee when and if the fund's  sponsor
receives a performance  fee.  During the years ended December 31, 1997 and 1996,
performance fees of $191,802 and $128,000 respectively, were accrued by TBL. The
performance  fee for the year ended  December 31, 1997 is subject to  adjustment
pending  completion  of final  audit of the fund.  As of January  1,  1998,  the
approximate net asset value of the fund was $116 million.

         Tremont  International  Insurance,  Ltd.  ("TIIL")  is a Cayman  Island
corporation   offering  certain  deferred  variable  annuities,   variable  life
insurance and other insurance contracts to customers who are not resident in the
Cayman Islands. TIIL was originally a joint venture between TBL and Anglo-Dutch.
Effective July 1, 1997, Mutual Risk Management  ("MRM"),  an international  risk
management   company,   purchased   51%  of   TIIL's   issued   share   capital.
Simultaneously,  TBL sold 0.4% of TIIL's issued share capital to Anglo-Dutch. As
a result of these  transactions,  TBL's  interest  has been  reduced to 24.5% of
TIIL's  issued  share  capital.  TBL,  MRM and  Anglo-Dutch  formed  Tremont MRM
Services Limited ("TMRM"),  a Bermuda company,  to provide product  development,
marketing and administrative services to TIIL. TBL owns a 40% interest in TMRM.

         The  percentage  of  revenues  that any client,  including  the clients
described  above,  contributes to the Company can fluctuate  substantially  over
time  due to the  nature  of the  capital  markets  or  the  nature  of the  fee
arrangements  with the client.  As the Company continues to grow, it is expected
that total revenue will be less dependent on any one client.

         The Company,  through its subsidiaries,  enters into written agreements
with its clients.  Under these  agreements,  TPI's and TBL's fees are  typically
based on a  percentage  of assets  under  management  or a  percentage  based on
performance of the fund,  payable  periodically,  usually  monthly or quarterly,
during the term of the agreement.  In certain instances,  TPI and TBL receive an
initial fixed fee from multi-manager  investment fund clients for their services
in organizing the multimanager investment funds. Other arrangements are based on
annual  retainer fees,  payable  periodically  during the term of the consulting
agreement  or as a  single  fee for  individual  consulting  projects.  Fees for
offshore  placement  agent  services are based on assets  placed in the offshore
funds by TBL.  TBL may  receive  from  these  clients a  one-time  fixed fee for
services  rendered in organizing the offshore fund.  Several  contracts  entered
into by TBL  require  the  payment of  asset-based  fees to TBL well  beyond the
termination of a particular  contract,  so long as those investors placed by TBL
remain investors in those funds.

         The  Company's  ability  to  generate  and  sustain  revenues  from its
multi-manager  investment fund clients is primarily dependent on the size of the
assets under  management in each fund and on the  continuation of its agreements
with the funds.  Each of these agreements  generally is terminable upon 30 to 60
days' written  notice or on the  expiration of a stated term of up to two years,
subject to earlier termination in certain  circumstances.  Other annual retainer
or ongoing  agreements are also generally  terminable on short-term  notice from
clients.

         Although the Company expects that its arrangement with its clients with
respect to the  multimanager  investment funds will continue for the duration of
such funds, there can be no assurance that such arrangements will not be earlier
terminated by the clients.  During 1997,  TPI and TBL agreed to terminate  their
consulting  relationships with three clients due to what management believes are
the


                                                         7

<PAGE>



clients'  internal  business  reasons.  During 1996, TBL agreed to terminate its
relationship  with two  clients due to what  management  believes  are  internal
business reasons of their sponsor.  In addition,  two  multi-manager  investment
funds changed the method of payment to TPI from a fee based upon a percentage of
assets under  management  to an annual  retainer.  Neither the 1996 nor the 1997
consulting agreement terminations, nor the changes in the methods of calculating
fees payable to TPI, have resulted in a significant  loss of revenues.  However,
the  Company  will  continue  to  endeavor to expand its client base and further
diversify its  consulting  business in an effort to reduce the adverse impact of
termination in respect to any one or more of its clients.

         The  following  table sets forth the number of clients,  by type of fee
arrangement,   and  the  percentage  of  the  Company's   consolidated  revenues
(exclusive of  commissions  earned by TSI) generated by such clients for each of
the two years ended December 31, 1997 and 1996:


                        Number of Clients           % of Revenue
                      ---------------------     --------------------
                      1997            1996        1997        1996
                      ----            ----        ----        ----

Percentage Fee         29              28          77%         79%
Placement Agent Fee    17              22          10          12
Annual Retainer Fee    26              17          10           8
Single Project Fee      1               4           3           1
                       --              --          --           --
Total                  73              71         100%        100%
                      ======          ====       =====         ====



Competition

         The  Company  encounters  intense  competition  in all  aspects  of the
securities  business  and  competes  directly  with other  securities  firms,  a
significant  number  of which  have  substantially  greater  capital  and  other
resources  and many of which offer a wider range of financial  services than the
Company. In addition to competition for investment consulting clients from firms
currently  in the  securities  business,  there  has  recently  been  increasing
competition from other sources, such as commercial banks and insurance companies
offering financial services, and from other investment alternatives. The Company
believes that the principal  competitive  factors in the securities industry are
the  quality  and  ability of  professional  personnel  and  relative  prices of
services and products  offered.  The Company  believes  that the most  important
factors  affecting   competition  among  investment  consulting  firms  are  the
abilities and reputations of their consulting and professional personnel,  their
ability to develop new  investment  management  products  and  technologies  for
clients and the personal marketing of their services, rather than differences in
their consulting fees. The principal factor in maintaining a firm's  competitive
position is the continued involvement of its professional management.

Regulation

         The  Company  may be  subject  to or  restricted  by  federal  or state
governmental laws or regulations relating to the investment  consulting services
rendered  to  its  clients.  The  Company's  principal  domestic  subsidiary  is
registered as an investment  adviser under the Advisers Act.  Although TPI is so
registered,  such  registration  does not imply in any manner  that TPI has been
approved by the Commission or any state or foreign regulatory  authority or that
the  qualifications  of TPI have been passed upon by the Commission or any state
regulatory authority. To the extent that the


                                                         8

<PAGE>



Company renders such services, it is subject to compliance with the Advisers Act
and state law, including limitations on the amount of fees charged by it and the
transactions  effected by it. Even though management of the Company believes the
Company  is  in  compliance  with  applicable   regulations,   changes  in  such
regulations  may affect the expense of operation and require costly  adjustments
in the Company's business procedures to ensure compliance.

         The Company may, in certain  instances,  be deemed to be a  "fiduciary"
for its  clients  and  their  funds  under  ERISA and U.S.  Department  of Labor
regulations promulgated thereunder.  In such event, the Company could be subject
to  certain  sanctions  and  fines  for  its  noncompliance  with  such  law and
regulations.

         The Company obtains a significant  amount of its revenues from sponsors
or managers of single-manager and multi-manager investment funds. These sponsors
and managers are generally  subject to regulation  under the Investment  Company
Act and the Investment  Advisers Act with respect to the amount of the fees that
they may charge to their funds.  Since the Company is generally  paid out of the
fees received by such sponsors or managers,  any regulatory  limits on such fees
directly  impact  the fees to be  received  by the  Company.  In  addition,  the
aforementioned  acts require that the  agreements  of such  sponsors or managers
with their funds be generally  terminable by the funds on 30 to 60 days' notice.
Accordingly,  the  Company's  agreements  with such  sponsors  or  managers  are
generally subject to such termination provisions.

Employees

         At December 31, 1997,  the Company had 27  full-time  employees  and no
part-time employees.


Item 2.  Description of Properties

         The  Company  owns no real  property.  Effective  September  1997,  the
Company moved to a larger facility for its executive offices. The lease for this
8,222 square foot office  expires August 2002 and requires  monthly  payments of
approximately  $17,100. The Company was completely released from its obligations
under its former lease which required monthly payments of approximately $8,450.

         TBL's lease for corporate  offices  expired in February  1997,  and was
renewed  through  February  2000.  The lease for this 3,250  square  foot office
requires monthly payments of approximately $5,500.


Item 3.  Legal Proceedings.

         None.


Item 4.  Submission of Matters to a Vote of Security Holders.

         No matter was  submitted to a vote of the holders of either the Class A
Common Stock or Class B Common Stock in the fourth quarter of 1997.



                                                         9

<PAGE>





                                                      PART II

Item 5.  Market For the Registrant's Common Equity and Related Stockholder
         Matters

         The Company's  Class A Common Stock has been quoted on the OTC Bulletin
Board under the symbol TMAV since March,  1992,  when the Company  completed its
initial public  offering of Class A Common Stock.  Prior to the initial  private
offering of shares of Class B Common  Stock,  which  closed on January 14, 1994,
and subsequent effective registrations of such shares in July 1994 and May 1995,
respectively,  there had been no public trading market for the Company's Class B
Common Stock. The Class A Common Stock and Class B Common Stock are closely held
and thinly traded.  The Class A Common Stock and Class B Common Stock are quoted
on the OTC Bulletin Board.

         The quotations are dealer prices without retail mark-ups, mark-downs or
commissions and may not represent actual transactions.  The following table sets
forth the range of high and low bid prices of the Class A Common Stock and Class
B Common Stock, respectively, from January 1, 1996 through March 6, 1998.



                                                        10

<PAGE>


<TABLE>
                                        Price Range of Class A Common Stock

        <S>                                                           <C>         <C>                                           
                                                                         Bid Prices
                                                                      High        Low

1996

January 1, 1996 - March 31, 1996                                     $2.00      $1.00
April 1, 1996 - June 30, 1996                                         3.00       1.00
July 1, 1996 - September 30, 1996                                     3.00       2.50
October 1, 1996 - December 31, 1996                                   4.50       3.00

1997

January 1, 1997 - March 31, 1997                                     $3.75      $3.75
April 1, 1997 - June 30, 1997                                         4.25       3.75
July 1, 1997 - September 30, 1997                                     4.25       3.25
October 1, 1997 - December 31, 1997                                   6.25       3.25

1998

January 1, 1998 - March 6, 1998                                      $6.25      $5.00


                                        Price Range of Class B Common Stock

                                                                       Bid Prices
                                                                      High        Low

1996

January 1, 1996 - March 31, 1996                                     $ .50      $ .50
April 1, 1996 - June 30, 1996                                          .75        .50
July 1, 1996 - September 30, 1996                                     1.00        .75
October 1, 1996 - December 31, 1996                                   2.50       1.00


1997

January 1, 1997 - March 31, 1997                                     $2.50      $2.50
April 1, 1997 - June 30, 1997                                         3.50       1.88
July 1, 1997 - September 30, 1997                                     3.50       3.50
October 1, 1997 - December 31, 1997                                   4.75       3.50

1998

January 1, 1998 - March 6, 1998                                      $4.75      $4.75


</TABLE>

                                                        11

<PAGE>




Holders

         As of March 6, 1998  there were  approximately  68 holders of record of
the Company's  Class A Common Stock and  approximately  112 holders of record of
the Company's Class B Common Stock.


Dividends

         Since its  organization,  the Company has not paid any dividends on its
Common Stock nor does it plan to do so in the foreseeable future.


Item 6.  Management's Discussion and Analysis

Financial Condition

         The Company  believes its  relationships  with its present  clients are
stable.  The  agreements  with the Company's  single-manager  and  multi-manager
investment  funds  generally are terminable upon 30 to 60 days' notice or on the
expiration of a stated term of up to two years,  subject to earlier  termination
in certain  circumstances.  At December 31, 1997,  the Company  expects that its
arrangements with its principal single-manager and multi-manager investment fund
clients  will  continue  for the  duration of such funds and the Company has not
received  any  notice  that  any  of  such  clients  intends  to  terminate  its
arrangement  after  December 31, 1997.  There can be no assurance  that any such
arrangement  will not be earlier  terminated  by the client.  The Company is not
currently  aware of any  event or  events  which  would  cause  its  clients  to
terminate their arrangements with the Company. Several contracts entered into by
TBL require the payment of asset-based  fees to TBL well beyond the  termination
of a  particular  contract,  so  long  as the  investors  placed  by TBL  remain
investors in those funds.

         The Company believes that its product  development  efforts of 1997, as
well as the  relationships  formed  abroad,  have  placed the  Company in a good
position  for  1998  and  thereafter.   Management  expects  to  concentrate  on
successfully  developing  new products and taking full  advantage of its growing
relationships  world-wide  to improve its  revenues  and to develop  independent
product distribution channels.  Profitability is dependent on the ability of the
Company to maintain existing client relationships,  several of which account for
a  significant  portion of the  Company's  revenues,  to increase  assets  under
management for its client funds, and to market its services to new accounts.

Results of Operations

         The  Company's  revenues are derived from  consulting  and  specialized
investment  services  provided to  institutional  and other clients,  as well as
management  fees  from  certain  funds  under  management.  Consulting  fees are
generally a function of the amount of assets under management and the percentage
fees charged to clients. Management fees are based on a percentage of the assets
of the managed fund and are usually paid on a monthly or  quarterly  basis.  The
Company also receives  asset-based fees for investments placed by TBL in certain
offshore mutual funds. The Company provides other consulting  services generally
on a fixed fee basis, whether as annual retainer fees or


                                                        12

<PAGE>



single project fees.  The Company's principal operating expenses consist of its 
costs of personnel and independent consultants.

Fiscal year ended  December 31, 1997 compared to Fiscal year ended  December 31,
1996.

         Consulting  fees earned by the Company for the year ended  December 31,
1997 increased by $1,557,174,  or  approximately  36.4%, as compared to the year
ended December 31, 1996. At the principal domestic  subsidiary,  TPI, consulting
fees  increased  from  $2,599,672  for  the  year  ended  December  31,  1996 to
$3,437,455 for the year ended  December 31, 1997,  primarily due to increases in
revenues  from The Broad Market Fund,  L.P.  ($619,138),  The Broad Market Prime
Fund, L.P. ($210,498) and The Security Equity Life program ($187,806). These and
other  increases  were  partially  offset by declines in  revenues,  including a
decline in  revenues  from Pine  Street  Associates,  L.P.  ($100,000)  and from
Minority Equity Trust ($320,000 resulting from a 1996 one-time termination fee),
among others. Consulting fees also increased domestically in 1997 as a result of
a 1996  amendment of TSI's  restriction  agreement with the NASD so that TSI may
sell  limited  partnership  interests.  For the year ended  December  31,  1997,
consulting  fees from this activity  equalled  $173,055.  During the years ended
December  31,  1997  and  1996  certain  clients  accounted  for  a  significant
percentage of the Company's  consolidated  revenues: The Broad Market Fund, L.P.
accounted for approximately 17% and 10%, respectively,  of consolidated revenues
and revenues  from related  entities  accounted for  approximately  28% and 20%,
respectively, of consolidated revenues.

         At  the  foreign  subsidiary,   TBL,  consulting  fees  increased  from
$1,683,424 for the year ended December 31, 1996 to $2,229,760 for the year ended
December 31, 1997.  This increase is primarily due to increases in revenues from
the Class B Shares of the  Kingate  Global  Fund,  Ltd.  ($322,149)  and Winston
Partners II Offshore Ltd.  ($91,074),  as well as the  commencement  of revenues
from Tremont MRM Services,  Ltd. ($154,800).  These and other increases in TBL's
revenues,  were  partially  offset by declines in revenues from Global  Advisors
Portfolio,  N.V. ($230,013),  among others. The increase or decrease in revenues
was  primarily  as a result of increases or decreases in the value of the assets
within the respective investment vehicles.

         Performance fees for the year ended December 31, 1997 were $884,284
compared to $780,678 for the year ended December 31, 1996.  This $103,606 
increase is primarily due to the underlying investment vehicles outperforming
pre-established benchmarks.  The significant performance fees earned by TBL in
1997 were from Starvest Fund Ltd. ($191,802), B.P. Overseas Partners, Ltd. 
($102,281) and Cambridge Energy Fund International Ltd. ($131,258).  The sole
significant performance fee earned by TPI in 1997 was $246,494 from The F.W.
Thompson Fund, L.P.  The performance fees earned for the year ended December
31, 1997 are subject to adjustment pending completion of final audit of the
respective funds.

         Each of Global Advisors  Portfolio,  N.V. and Global Advisors Portfolio
II, N.V.  terminated TBL as their advisor  effective as of the close of business
on  November  15,  1996 and,  as a result,  no further  fees were,  nor will be,
generated from them after that date. Management believes these terminations will
not have a material future impact on the Company.

         Management  expects  performance fee revenue to increase during periods
of positive market  conditions,  but management cannot predict with any accuracy
whether  such income from  performance  fees will  continue in the future due to
changing market conditions and other outside factors.



                                                        13

<PAGE>



         Commissions  increased $72,012 for the year ended December 31, 1997, or
approximately  31%, as compared to the year ended December 31, 1996, as a result
of TSI having additional clients and more trading activity in 1997.

         Operating profits at TBL were $490,203 and $625,762 for the years ended
December 31, 1997 and 1996, respectively.  The decrease in operating profit from
1996 to 1997  ($135,559) was primarily due to an investment  gain of $130,874 in
1996 which did not recur in 1997. Identifiable assets of TBL were $1,531,727 and
$1,563,788 at December 31, 1997 and 1996, respectively.

         Compensation  expense increased for the year ended December 31, 1997 by
$624,163,  or approximately 23%, over the similar period in 1996, as a result of
the  Company's  continued  efforts to attract  and retain  qualified  employees.
Compensation  expense  primarily  increased due to salary  increases for certain
employees that became effective  January 1, 1997 and increased health care costs
due to the  increase  in the number of  employees  during  the year.  As part of
compensation  expense,  $701,000 and  $780,750 for the years ended  December 31,
1997 and 1996, respectively, were attributable to bonuses granted by the Company
to its employees.

         General  and   administrative   expenses  consist  primarily  of  rent,
telecommunications,  travel and  entertainment,  outside  professional  fees and
other related expenses.  General and administrative expenses were $1,506,834 and
$1,306,040  for the  years  ended  December  31,  1997 and  1996,  respectively,
representing 21.4% and 24.7% of revenues, respectively. The increases in general
and administrative expenses were primarily due to costs related to the Company's
continued  expansion to service its business growth. The decrease,  however,  in
general and administrative  expense as a percentage of revenues was attributable
to the increase in revenues from the Company's proprietary  products,  expansion
of its client base, and the positive results from cost containment measures.

         Consulting  expenses  increased  by $476,420  during the year 1997,  as
compared to the similar period of 1996, primarily as a result of the increase in
revenues from the clients that participate in revenue sharing arrangements.  For
example,  TSI  has an  arrangement  for  securities  clearance  services  with a
clearing broker dealer whereby a certain percentage of the commissions earned is
shared;  this  agreement  became  effective  in June  1995  when  TSI  became  a
registered  broker dealer.  Also, TPI and TBL have revenue sharing  arrangements
with respect to certain clients whose products were launched during 1997.

         The  increase in  depreciation  and  amortization  is a result of fixed
asset  purchases  during the year  ended  December  31,  1997.  These  purchases
totalled  $299,692 and  consisted of computer  equipment  for the new  employees
hired during the year, software purchases,  as well as a computer system network
for TBL. At December 31, 1997,  the Company has no significant  commitments  for
additional capital expenditures.

         Other income decreased for the year ended December 31, 1997 by $131,120
over  1996.  Other  income  in 1996  includes  an  investment  gain of  $130,874
resulting  from the  exercise of warrants  to purchase  57,639  shares of common
stock of an  unaffiliated  public  corporation  and the subsequent  sale of such
shares. At December 31, 1997, TBL owned warrants to purchase common stock of the
same unaffiliated  public  corporation at $3.78 per share until October 19, 1998
(87,500  shares),  and 18,750  shares at $3.63 per share until October 30, 1998,
respectively. Such warrants have been valued at zero on December 31, 1997.



                                                        14

<PAGE>



         Profitability  is  dependent  on the ability of the Company to maintain
existing  client  relationships,  several  of  which  currently  account  for  a
significant  portion  of  the  Company's  revenues,  to  increase  assets  under
management for its clients, and to market its services to new accounts.

         Foreign  currency  fluctuation may also have an impact on the Company's
profitability  over time as a result of the Company's  participation  in foreign
securities markets.  Currently,  all of the Company's transactions are conducted
in U.S.  dollars,  so the Company does not have, at this time,  any  significant
foreign currency risk.

Fiscal year ended  December 31, 1996 compared to Fiscal year ended  December 31,
1995.

         Consulting  fees earned by the Company for the year ended  December 31,
1996 increased by $1,211,007,  or  approximately  39.4%, as compared to the year
ended  December  31, 1995.  At the domestic  subsidiary,  TPI,  consulting  fees
increased from $1,735,699 for the year ended December 31, 1995 to $2,599,672 for
the year ended December 31, 1996.  The increase at this  subsidiary is primarily
due to increases in revenues from The Broad Market Fund,  L.P.  ($320,283),  The
Ultima Fund, L.P.  ($119,376),  The F.W.  Thompson Fund, L.P.  ($94,467) and the
Chrysler Minority Equity Trust ($87,141). These increases, as well as a one-time
payment of $320,000 as a result of a termination  agreement  with the sponsor of
the Minority  Equity Trust,  were partially  offset by declines in revenues from
Pine  Street  Associates,   L.P.  ($100,000),   among  others.  At  the  foreign
subsidiary,  TBL,  consulting  fees increased from $1,336,390 for the year ended
December  31, 1995 to  $1,683,424  for the year ended  December  31,  1996.  The
increase at this  subsidiary  is primarily due to increases in revenues from the
Class B Shares of the Kingate Global Fund, Ltd. ($283,442),  Winston Partners II
Offshore  Ltd.  ($117,206)  and  Ultima  Investments  Limited  ($62,480).  These
increases  in  revenues,  as well as other  increases  in revenues at TBL,  were
partially  offset by declines in revenues from Global Advisors  Portfolio,  N.V.
($222,820),  among others. The increase or decrease in revenues was primarily as
a result of  increases  or  decreases  in the  value of the  assets  within  the
respective investment vehicles.

         Performance fees for the year ended December 31, 1996 were $780,678 
compared to $209,196 for the year ended December 31, 1995.  This $571,482
increase is primarily due to the underlying investment vehicles outperforming
pre-established benchmarks.  The significant performance fees earned by TBL in 
1996 were from Starvest Fund Ltd. ($128,000), B.P. Overseas Partners, Ltd.
($125,000) and Needham Emerging Growth International Fund, Ltd ($119,899).  The
performance fee earned by TPI in 1996 was $195,830 for The F.W. Thompson Fund,
L.P.

         Each of Global Advisors  Portfolio,  N.V. and Global Advisors Portfolio
II,  N.V.  terminated  their  relations  with TBL  effective  as of the close of
business on November  15,  1996,  and as a result,  no further fees have been or
will be generated after that date.  Management  believes these terminations will
not have a material future impact on the Company.

         Commissions  increased $96,124 for the year ended December 31, 1996, or
approximately  72%, as compared to the year ended  December 31, 1995 as a result
of TSI having a full year of operation in 1996.

         Management  believes  that the Company will become less  dependent on a
small number of large clients, as the Company is developing relationships with a
variety  of  additional   entities.   The  Company  is  also   utilizing   these
relationships to create diversified ways to package and distribute


                                                        15

<PAGE>



Tremont proprietary  products.  In addition,  management expects performance fee
revenue to increase during periods of positive market conditions, but management
cannot predict with any accuracy  whether such income from performance fees will
continue  in the future due to  changing  market  conditions  and other  outside
factors.

         Operating  profits at TBL were $625,762 and $41,999 for the years ended
December 31, 1996 and 1995, respectively.  The increase in operating profit from
1995 to 1996  ($583,763)  was due to  increases  in revenues of $742,432  and an
investment  gain of  $130,874  partially  offset by an  increase  in expenses of
$270,361.  Identifiable  assets of TBL were  $1,563,788 and $731,997 at December
31,  1996 and 1995,  respectively.  Identifiable  assets at  December  31,  1996
increased  from December 31, 1995  primarily as a result of TBL's net income and
increased accounts  receivable as a result of higher performance fees accrued at
December 31, 1996.

         Compensation  expense increased for the year ended December 31, 1996 by
$572,550,  or approximately 27%, over the similar period in 1995, partially as a
result of the  Company's  continued  efforts  to attract  and  retain  qualified
employees. Such efforts resulted in an increase in the number of employees to 26
at December 31, 1996 from 23 at December  31, 1995.  In addition to the increase
in the number of employees,  compensation  expense also  increased due to salary
increases  for  certain  employees  that  became  effective  January 1, 1996 and
increased  health care costs due to the increase in the number of employees.  As
part of compensation expense, $780,750 and $420,000 for the years ended December
31, 1996 and 1995,  respectively,  were  attributable  to bonuses granted by the
Company to its employees.

         General  and   administrative   expenses  consist  primarily  of  rent,
telecommunications,  travel and  entertainment,  outside  professional  fees and
other related expenses.  General and administrative expenses were $1,306,040 and
$997,231  for  the  year  ended  December  31,  1996  and  1995,   respectively,
representing 24.7% and 29.2% of revenues, respectively. The increases in general
and administrative expenses were primarily due to costs related to the Company's
continued  expansion to service its business growth. The decrease,  however,  in
general and administrative  expense as a percentage of revenues was attributable
to the increase in revenues from the Company's proprietary  products,  expansion
of its client base, and the positive results from cost containment measures.

         Consulting  expenses increased during the year 1996, as compared to the
similar  period of 1995,  primarily as a result of the increase in revenues from
the clients that participate in revenue sharing  arrangements.  For example, TSI
has an arrangement  for  securities  clearance  services with a clearing  broker
dealer whereby a certain  percentage of the commissions  earned is shared;  this
agreement  became  effective  in June 1995 when TSI became a  registered  broker
dealer.  Also,  TPI has revenue  sharing  arrangements  with  respect to certain
clients whose products were launched during 1996.

         The  increase in  depreciation  and  amortization  is a result of fixed
asset  purchases  during the year  ended  December  31,  1996.  These  purchases
totalled $99,013 and consisted of computer equipment for the new employees hired
during the year,  software  purchases,  as well as a computer system network for
TBL. At December  31,  1996,  the Company has made  commitments  for  additional
capital expenditures totaling approximately $27,000.

         Other income increased for the year ended December 31, 1996 by $126,129
over 1995. Other income in 1996 includes an investment gain of $130,874 from the
exercise of warrants to


                                                        16

<PAGE>


purchase 57,639 shares of common stock of an unaffiliated public corporation and
the subsequent  sale of such shares.  At December 31, 1996, TBL owns warrants to
purchase common stock of the same unaffiliated  public  corporation at $3.78 per
share until  October 19, 1998 (87,500  shares),  and 18,750  shares at $3.63 per
share until  October 30, 1998,  respectively.  Such warrants have been valued at
zero on December 31, 1996.

Liquidity and Capital Resources

         At  December  31,  1997,  the  Company  had  $820,801  in cash and cash
equivalents  and  working  capital of  $1,819,482,  as compared to cash and cash
equivalents of $551,710 and working  capital of $605,828 at December 31, 1996. A
portion  of this  increase  was due to the  series of equity  transactions  with
Mutual Risk Management which are described below.

         Cash flows used by operating  activities was $56,267 in 1997,  compared
to cash flows provided by operating  activities of $443,025 in 1996. The primary
operating  use of the 1997  cash  flows was to  decrease  accounts  payable  and
accrued  expenses and also reflects an increase in accounts  receivables.  These
uses were partially  offset by cash generated from profitable  operations.  Cash
flows used in investing  activities were $397,896 and $426,464 in 1997 and 1996,
respectively.  The  principal  use of the 1997 and 1996 cash flows in  investing
activities were investments in limited partnerships and joint ventures,  as well
as the  purchase  of  fixed  assets  offset  partially  by the  sale of  limited
partnership interests.

         Cash  flows  provided  by  financing  activities  of  $723,254  in 1997
resulted  from the issuance of 202,365  shares of the  Company's  Class B Common
Stock.  In July 1997,  Mutual Risk Management  ("MRM"),  an  international  risk
management  company,  indirectly  acquired an equity interest in the Company. In
July 1997, MGL  Investments  Ltd.  ("MGL"),  a  wholly-owned  subsidiary of MRM,
purchased 615,000 shares of outstanding Class B Common Stock at a price of $3.75
per share pursuant to a tender offer.  In addition,  the Company  simultaneously
sold MGL 202,365  shares of Class B Common  Stock at a price of $3.75 per share.
As a result of these transactions, the Company received net proceeds of $723,254
and MRM indirectly  acquired,  through MGL, Class B Common Stock equal to 20% of
the  aggregate  of the  Company's  outstanding  Class A Common Stock and Class B
Common Stock.

         At December  31,  1997,  the Company  owned  options to purchase  8,000
shares of a  nonpublic  registered  investment  adviser  specializing  in 401(k)
investment allocation advice over the Internet.  The options were granted at $10
per share and have  vested or will vest 25% on  January  1,  1996;  25% in equal
installments  at the end of each month between  January 1, 1996 and December 31,
1997; and 50% in equal  installments at the end of each month between January 1,
1998 and  December  31,  1998.  The options  have a five year term and have been
valued at zero by the Company at December 31, 1997.

         At December 31, 1997,  the Company  owned 30,000  shares of a nonpublic
financial services company as a result of an employee's participation as a board
member of such company.  As a result of consulting  services  performed for this
entity,  TPI  received  $56,152 and  $42,235,  respectively  for the years ended
December  31, 1997 and 1996.  At December  31,  1997,  the Company  valued these
shares of common stock at zero.



                                                        17

<PAGE>



         The Company believes that it has adequate capital resources and working
capital to bring to market the  products it  developed in late 1997 and those it
expects  to  develop  in early  1998,  and that the  revenue  stream  from these
products,  as well as from  existing  products,  will be  sufficient  to support
future growth. The Company has no material short or long term debt obligations.

         In August 1993, a law suit was initiated against the Company,  TPI, TBL
and Ms. Manzke,  the Chairman of the Board, in the Supreme Court of the State of
New York, County of New York, by Mr. Sass Khazzam,  Capulet  Management Inc. and
Kazco Mgt.,  Inc.  alleging  that there was an  agreement  pursuant to which the
plaintiffs would receive 20% of the fees paid by Global Advisors Portfolio, N.V.
The Court ordered the dismissal of the complaint against the Company and TPI. In
February  1997,  a jury  returned a verdict  against TBL in favor of Kazco Mgt.,
Inc.  After entry of the verdict,  the Company was informed  that the  plaintiff
would not appeal the verdict and that no judgment would be entered  against TBL,
provided that the amount  awarded by the jury was paid.  On March 31, 1997,  TBL
paid KazCo Mgt.,  Inc. the sum of $151,689,  the full amount awarded by the jury
including  interest and court costs.  General  releases  were  exchanged and the
action was discontinued with prejudice.

         The Company and Sandra L. Manzke,  the Company's  Chairman of the Board
and Chief Executive Officer,  are parties to an employment agreement dated as of
September  25,  1995.  The  agreement  was amended on December 10, 1997 and will
expire on December 31, 1998,  unless  terminated  at an earlier date pursuant to
the terms and  conditions  of such  agreement.  While  employed,  Ms.  Manzke is
entitled to a minimum base salary of $373,000 per annum. She is also entitled to
a bonus as determined by the Board of Directors.  Ms. Manzke's employment may be
terminated due to illness, disability or other incapacity to the extent that she
is unable to perform her duties for a period of ninety (90) consecutive days. If
her employment is so terminated, she will be entitled to receive her base salary
and accrued bonus until December 31, 1998. In the event of her death,  her right
to compensation will cease.

         In the event of the  termination  of Ms.  Manzke's  employment  for any
reason,  including  death,  the  Company  will have the  option,  provided it is
exercised  within ninety (90) days, to reacquire all of Ms.  Manzke's  shares of
capital  stock of the Company for a price per share equal to its market value on
the  date of such  termination.  Ms.  Manzke  agreed  that  she will not sell or
dispose of her stock in the  Company  without  first  offering to sell it to the
Company at a price per share equal to the then market value.

         On December 10, 1997,  the Company  amended its  employment  agreement,
dated April 22, 1994, with Robert I. Schulman, the Company's President and Chief
Operating Officer.  Under the amended  agreement,  which expires on December 31,
1998,  Mr.  Schulman  is  entitled  to receive a minimum  annual  base salary of
$335,700. In addition, he is entitled to receive incentive compensation equal to
90% of the incentive compensation payable to Ms. Manzke in the applicable year.

         Upon Mr. Schulman's  execution of his employment agreement in 1994, the
Board of Directors  granted him an option to purchase  275,000 shares of Class B
Common  Stock at $1.75 per share,  the then  current  fair value of the stock as
determined  by the Board of  Directors.  The options  are fully  vested and will
expire on the anniversary of the grant date in 2001. In the event Mr. Schulman's
employment  is  terminated,  TPI, a  subsidiary  of the  Company,  will have the
option,  exercisable no later than seven days after the date of termination,  to
purchase all of Mr. Schulman's


                                                        18

<PAGE>



stock and vested  options.  The  purchase  price for each share of Common  Stock
shall be equal to the best bid  price on the date of such  termination,  and the
purchase  price for each  option  shall be the  greater of (i) $1.75 or (ii) the
amount of the best bid  price  for a share of  Common  Stock on the date of such
termination less $1.75.

         On May 15, 1997 and June 12, 1997,  options to purchase  20,000  shares
and 125,000  shares,  respectively,  of Class B Common Stock were granted to the
directors  and certain  employees  of the Company at a price of $3.75 per share.
The options  vest 25% on the grant  date,  25% on the first  anniversary  of the
grant date, and 50% on the second  anniversary of the grant date. They expire on
the fifth anniversary of the grant date.

         Effective  September  1997, the Company moved to a larger  facility and
entered  into a lease  agreement  for new  executive  offices.  The  Company was
completely  released from its obligation  under the old lease. The lease for the
new  facility   expires  August  31,  2002  and  requires  monthly  payments  of
approximately $17,100.

         TBL's lease for  corporate  offices  expired in  February  1997 and was
renewed  through  February 2000.  The lease  requires  monthly lease payments of
approximately $5,500.

         Meridian  Horizon  Fund,  L.P.,  formerly The Ultima Fund,  L.P.,  is a
multi-manager  Delaware  limited  partnership (the "Meridian Fund") organized in
1991 by Zeron  Capital  Management,  Inc.  ("Zeron")  to engage  principally  in
diversified  investment strategies utilizing a multi-manager  approach. In 1994,
TPI became a co-general  partner.  Effective  January 1, 1997,  Meridian Capital
Partners,  Inc.  replaced  Zeron as  co-general  partner.  The general  partners
receive an administrative fee and a quarterly  management fee based upon the net
asset  value of the  partnership  as of the end of each  quarter.  At January 1,
1998, the approximate net asset value of the Meridian Fund was $160 million.  At
December 31, 1997, TPI's investment in the Meridian Fund was $299,483.

         GamTree,   L.P.  is  a  multi-manager   Delaware  limited   partnership
("GamTree") formed for the purpose of achieving long-term capital growth through
diversified asset management.  TPI and an affiliate of a principal  shareholder,
GAMCO Investors, Inc., are its co-general partners. The general partners receive
a quarterly  management fee based upon the net asset value of the partnership as
of the end of each  quarter.  In addition,  the general  partners may receive an
incentive  allocation  based upon the net asset value of the capital accounts of
the limited  partners at the end of each year if there is a gross profit,  after
obtaining certain pre-established  benchmarks, from investment activities of the
partnership  for the relevant  fiscal year. At January 1, 1998, the  approximate
net asset value of the partnership was $1.8 million. At December 31, 1997, TPI's
investment in GamTree was $186,717.

         The  Broad  Market  Fund,  L.P.  is a  multi-manager  Delaware  limited
partnership formed for the purpose of achieving long term capital growth through
hedged  investments  arranged by one or more money  managers  and/or  investment
funds.  TPI is the general  partner and receives a monthly  management fee based
upon the net asset  value of the  partnership  as of the end of each  month.  At
January 1, 1998, the  approximate  net asset value of the  partnership  was $149
million  after  including  $14.8  million of January 1, 1998  contributions.  At
December 31, 1997, TPI's investment in the fund was $688,592.

         The Broad Market Prime Fund, L.P., is a Delaware  multi-manager limited
partnership  which had an  approximate  net  asset  value of $68  million  as of
January 1, 1998. It was created in July, 1997


                                                        19

<PAGE>



for the  purpose of  achieving  long-term  capital  growth  through a  leveraged
investment  strategy.  TPI  is  the  general  partner  and  receives  a  monthly
management  fee based upon the net asset value of the  partnership as of the end
of each month.  In addition,  the general partner will be reimbursed for certain
allocable  expenses.  At December 31, 1997,  TPI did not have an  investment  in
BMPF.

         The  F.W.  Thompson  Fund,  L.P.  is  a  Delaware  limited  partnership
organized for the purpose of achieving long-term capital growth while preserving
capital.  TPI is the general partner and receives a monthly management fee based
upon the net asset value of the  partnership  as of the end of each  month.  The
general  partner also  receives a  performance  fee from the  partnership's  net
profit after all other fees,  including the  management  fee, are deducted.  The
performance fee is payable on a cumulative  basis.  The performance fee will not
be payable with regard to any period during which the  partnership  incurs a net
loss and only becomes  payable after such net loss is recouped and net gains are
achieved,  net of performance  fees previously paid. The performance fees earned
by the general  partner at  December  31, 1997 and 1996 for the years then ended
were $246,494 and $195,830,  respectively.  At January 1, 1998, the  approximate
net asset value of the partnership was $5.7 million. At December 31, 1997, TPI's
interest in the fund was $46,695.

         Tremont  International  Insurance,  Ltd.  ("TIIL"),  is a Cayman Island
corporation  that offers  certain  deferred  variable  annuities,  variable life
insurance and other insurance contracts to customers who are not resident in the
Cayman  Islands.  TIIL is a joint  venture  between  TBL  and  The  Anglo  Dutch
Insurance   Company   Limited,   a  Cayman   Island   life   insurance   company
("Anglo-Dutch").  Effective July 1, 1997,  Mutual Risk  Management  ("MRM"),  an
international  risk  management  company,  purchased  51% of TIIL's issued share
capital. Simultaneously,  0.4% of TIIL's issued share capital to Anglo-Dutch. As
a result of these  transactions,  TBL's  interest  has been  reduced to 24.5% of
TIIL's  issued  share  capital.  TBL,  MRM and  Anglo-Dutch  formed  Tremont MRM
Services  Limited  ("TMRM"),  a Bermuda company to provide product  development,
marketing and administrative services to TIIL. TBL owns a 40% interest in TMRM.

Inflation

         The  impact of  inflation  on the  Company's  revenues  and  results of
operations has not been significant.

Impact of Year 2000

         The Year 2000 issue is the result of computer  programs  being  written
using two digits rather than four to determine the applicable year. Any computer
programs  that have time  sensitive  software may recognize a date using "00" as
the year 1900 rather than the year 2000.  This could result in a system  failure
or  miscalculation  causing  significant  disruptions of operations,  including,
among other things, a temporary  inability to process  transactions or engage in
similar normal business  activities.  Based on a recent assessment,  the Company
determined its computer systems are currently enabled for year 2000 entries. The
cost of such  assessment  was  immaterial to the Company.  However,  the Company
could be  adversely  affected  if the  Computer  systems  used by the  Company's
service providers do not properly process and calculate date-related information
and  data  from  and  after  January  1,  2000.  The  Company  is  currently  in
communication  with these other  companies to  determine if there is  reasonable
cause for concern.



                                                        20

<PAGE>




Item 7.  Financial Statements.


Year Ended December 31, 1997

                                                                           Page

Reports of Independent Auditors..............................................22
Consolidated Balance Sheets as of December 31, 1997 and 1996 ................24
Consolidated Statements of Income for the years ended
  December 31, 1997 and 1996 ................................................25
Consolidated Statements of Shareholders' Equity for the years ended
  December 31, 1997 and 1996 ................................................26
Consolidated Statements of Cash Flows for the years ended
  December 31, 1997 and 1996 ................................................27
Notes to Consolidated Financial Statements...................................28




                                                        21
<PAGE>


                         Report of Independent Auditors


Shareholders and Board of Directors
Tremont Advisers, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Tremont
Advisers,  Inc. as of December 31, 1997 and 1996,  and the related  consolidated
statements of income,  shareholders'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  The  financial  statements of The Broad Market
Fund,  L.P.  (a limited  partnership  in which the  Company  had a .51% and .80%
interest at December 31, 1997 and 1996, respectively) have been audited by other
auditors  whose reports have been furnished to us; insofar as our opinion on the
consolidated  financial statements relates to data included for The Broad Market
Fund, L.P., it is based solely on their reports.  In the consolidated  financial
statements, the Company's investment in The Broad Market Fund, L.P. is stated at
$688,592  and  $559,847 at December  31,  1997 and 1996,  respectively,  and the
Company's  equity in the net income of The Broad Market Fund,  L.P. is stated at
$128,745  and  $79,784,  for  the  years  ended  December  31,  1997  and  1996,
respectively.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that our  audits,  and the  reports  of other  auditors,  provide a
reasonable basis for our opinion.

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material respects, the consolidated financial position of Tremont Advisers, Inc.
at December 31, 1997 and 1996, and the consolidated  results of their operations
and their cash flows for the years then  ended,  in  conformity  with  generally
accepted accounting principles.


                                             Ernst & Young, LLP


Stamford, Connecticut
February 13, 1998

                                   22
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT




To the Partners of
The Broad Market Fund, L.P.


We have audited the  statement of financial  condition of The Broad Market Fund,
L.P. (a limited partnership) as of December 31, 1997, and the related statements
of income,  changes  in  Partners'  capital,  and cash flows for each of the two
years  in  the  period  then  ended  (not  presented  herein).  These  financial
statements are the responsibility of the General Partner.  Our responsibility is
to express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of The Broad Market Fund, L.P. as
of December 31, 1997,  the results of its operations and its cash flows for each
of the two years in the period then ended in conformity with generally  accepted
accounting principles.




GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
New York, New York

February 2, 1998
                                   23

<PAGE>                           
                              Tremont Advisers, Inc.

                           Consolidated Balance Sheets
<TABLE>
     <S>                                                              <C>                <C>        

                                                                             December 31
                                                                            1997     1996
Assets
  Current assets:
  Cash and cash equivalents                                           $   820,801      $    551,710
  Accounts receivable, less allowance for bad debts of $25,000          2,011,445         1,419,578
  Receivable from officer                                                 200,000             -
  Prepaid expenses and other                                              123,103            31,616
Total current assets                                                    3,155,349         2,002,904

Investments in limited partnerships (cost -- $803,467 and $668,467)     1,221,487           871,378
Investments in joint ventures (cost -- $371,667 and $317,400)              99,345           169,250
Other investments (cost -- $86,000 and $170,000)                           75,420           170,000

Fixed assets:
  Furniture and equipment                                                 706,640           449,704
  Leasehold improvements                                                   53,662            10,906
  Less accumulated depreciation                                          (359,149)         (226,894)
Fixed assets, net                                                         401,153           233,716

Other assets                                                               28,958            34,495
Total assets                                                          $ 4,981,712       $ 3,481,743

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                                    $    50,490       $    90,606
  Accrued expenses                                                      1,112,734         1,131,970
  Income taxes payable                                                      1,143             3,000
  Deferred income taxes payable                                           171,500           171,500
Total current liabilities                                               1,335,867         1,397,076

Deferred income taxes payable                                             160,600            22,600
Redeemable preferred stock:
  Series A Preferred Stock, $1 par value, 650,000 shares 
    authorized, none issued and outstanding                                 -                 -

Shareholders' equity:
  Preferred Stock, $1 par value, 350,000 shares authorized,
   issued and outstanding - none                                            -                 -
  Class A Common Stock, $0.01 par value, 5,000,000 
   shares authorized, 1,284,718 shares issued and outstanding              12,847            12,847
  Class B Common Stock, $0.01 par value, 5,000,000 shares
   authorized, 2,802,104 and 2,599,739 shares issued and outstanding       28,021            25,997
  Additional paid in capital                                            4,725,293         4,004,063
  Accumulated deficit                                                  (1,280,916)       (1,980,840)
Total shareholders' equity                                              3,485,245         2,062,067
Total liabilities and shareholders' equity                            $ 4,981,712       $ 3,481,743

</TABLE>
See accompanying notes.

                                   24

<PAGE>
                             Tremont Advisers, Inc.

                        Consolidated Statements of Income


<TABLE>
                                                   Year ended December 31    
     <S>                                            <C>               <C>
                                                   1997             1996
Revenues:
Consulting fees                                   $5,840,270      $4,283,096
Performance fees                                     884,284         780,678
Commissions                                          302,087         230,075
Total revenues                                     7,026,641       5,293,849

Expenses:
Compensation                                        3,325,025      2,700,862
General and administrative                          1,506,834      1,306,040
Consulting                                          1,119,030        642,610
Depreciation and amortization                         137,792        100,628
Total expenses                                      6,088,681      4,750,140

Equity in earnings of limited partnerships            215,109        106,574
Loss from operations of joint ventures, net          (117,109)       (73,150)
Other income, net                                      13,834        144,954

Income before income taxes                          1,049,794        722,087
Provision for income taxes                            349,870        196,542
Net income                                        $   699,924      $ 525,545
     

Net income per common share                       $      0.18      $    0.14

Net income per common share - assuming dilution   $      0.17      $    0.13
</TABLE>   
See accompanying notes
                                        25
<PAGE>




                             Tremont Advisers, Inc.

                 Consolidated Statements of Shareholders' Equity

<TABLE>
          <S>                           <C>                      <C>                      <C>                 <C>                 

                                                         Common Stock                         Additional                  Total
                                          Shares Outstanding               Par Value           Paid in     Accumulated Shareholders'
                                     Class A           Class B        Class A       Class B    Capital       Deficit     Equity

Balance at December 31, 1995        1,284,718        2,559,739        $12,847       $25,597  $3,924,463    $(2,506,385)  $1,456,522

  Issuance of Class Common Stock -
     Director Option                     -              40,000            -            400      79,600            -          80,000

  Net Income                           -                -               -             -         -            525,545        525,545

Balance at December 31, 1996        1,284,718        2,599,739          12,847       25,997  4,004,063      (1,980,840)   2,062,067

  Issuance of Class B Common Stock       -             202,365            -          2,024     721,230            -         723,254

  Net income                             -                -               -             -         -            699,924      699,924

Balance at December 31, 1997        1,284,718        2,802,104         $12,847       $28,021  $4,725,293   $(1,280,916)  $3,485,245


</TABLE>
See accompanying notes.


                                       26

<PAGE>
                             Tremont Advisers, Inc.

                      Consolidated Statements of Cash Flows

<TABLE>
       <S>                                           <C>                 <C>
                                                       Year ended December 31
                                                        1997             1996
Operating activities
Net income                                           $ 699,924      $  525,545
Adjustments to reconcile net income to net 
  cash provided (used) by operating activities:
   Depreciation and amortization                       137,792         100,628
   Equity in earnings of limited partnerships         (215,109)       (106,574)
   Loss from operations of joint ventures, net         117,109          73,150
   Loss/(gain) from other investments                   10,580        (130,874)
   Deferred income taxes                               138,000         194,100
   Changes in operating assets and liabilities:
    Accounts receivable                               (591,867)       (701,338)
    Receivable from officer                           (200,000)           -
    Income taxes, net                                   (1,857)            700
    Prepaid expenses and other                         (91,487)          3,044
    Accounts payable                                   (40,116)         17,788
    Accrued expenses                                   (19,236)        461,468
    Other                                                      -         5,388
Net cash provided (used) by operating activiti         (56,267)        443,025

Investing activities
Purchase of fixed assets                              (299,692)        (99,013)
Investments in limited partnerships                   (685,000)       (200,925)
Withdrawals from limited partnerships                  550,000            -
Investments in joint ventures                          (56,842)       (207,400)
Sale of joint venture                                    9,638             -
Sale of other investment                                84,000             -
Investment in mutual fund                                 -            (50,000)
Purchase of marketable securities                         -           (128,516)
Sale of marketable securities                             -            259,390
Net cash used by investing activities                  397,896         426,464

Financing activities
Net proceeds from offering - Class B Common Stock      723,254            -
Exercise of Class B Common Stock Option                    -            80,000
Net cash provided by financing activities              723,254          80,000

Net increase in cash and cash equivalents              269,091          96,561
Cash and cash equivalents at beginning of year         551,710         455,149
Cash and cash equivalents at end of year            $  820,801       $ 551,710


</TABLE>
See accompanying notes.

                                        27
<PAGE>


                             Tremont Advisers, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 1997



1. Basis of Presentation

The consolidated  financial statements include the accounts of Tremont Advisers,
Inc. ("the Company") and its wholly-owned subsidiaries,  Tremont Partners, Inc.,
("TPI"), Tremont (Bermuda) Limited ("TBL") and Tremont Securities, Inc. ("TSI").
TPI is an investment  advisor  registered  under the Investment  Advisers Act of
1940, as amended.  TBL is incorporated  under Bermuda law and provides  advisory
services to clients located offshore. TSI, a registered  broker-dealer,  assists
customers  in the  purchase  and  sale of  investments  in other  entities.  All
significant intercompany transactions have been eliminated in consolidation.

The Company is a holding company which, through its subsidiaries,  is engaged in
one business segment.  The Company is primarily engaged in rendering  consulting
and specialized  investment services to investment funds,  investment  managers,
institutional  investors,  and high net worth  individuals  with  respect to the
organization and management of their investment  portfolio or programs,  as well
as managing and sponsoring its own multi-manager funds. In addition, the Company
offers  marketing  and business  development  consulting  services to investment
management firms and to individual investment advisers.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from such estimates.

The consolidated statements of income include revenues from a foreign subsidiary
located in Bermuda,  of $2,801,875  and  $2,284,686 for the years ended December
31, 1997 and 1996, respectively. Net income included in the statements of income
from this  foreign  subsidiary,  are  $490,203  and $625,762 for the years ended
December  31, 1997 and 1996,  respectively.  Identifiable  assets of the foreign
subsidiary  were  $1,531,727  and  $1,563,788  at  December  31,  1997 and 1996,
respectively.

2. Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The  estimated  fair value of amounts  reported  in the  consolidated  financial
statements  have been  determined  by using  available  market  information  and
appropriate valuation  methodologies.  The carrying value for all current assets
and current  liabilities  approximates  fair value  because of their  short-term
nature. The fair value of long-term  investments also approximate their carrying
value.
                                   28

<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

Revenue Recognition

Consulting  fees are  recorded as earned and are  derived  from  consulting  and
specialized  investment services provided to institutional and other clients, as
well as fees  earned  from  certain  funds  under  management.  These  fees  are
generally a percentage of the amount of assets under  management as well as fees
for  investments  placed by TBL in certain  offshore  mutual funds.  The Company
provides other  consulting  services  generally on a fixed fee basis,  either as
annual retainer fees or single project fees. Performance fees are recorded based
on the achievement of investment performance in excess of established benchmarks
and are recognized  only when they are no longer  subject to market  conditions.
Commissions earned by TSI are recorded on a trade date basis.

During the periods presented in the consolidated  statements of income,  certain
clients  accounted  for a significant  percentage of the Company's  consolidated
revenues.  For the years ended  December  31, 1997,  and December 31, 1996,  the
Broad Market Fund, L.P.  accounted for  approximately 17% and 10 %, respectively
of  consolidated  revenues.  For the years  ended  December  31,  1997 and 1996,
revenues from related entities (see Note 3) accounted for  approximately 28% and
20% of consolidated revenues, respectively.

Cash and Cash Equivalents

The Company  considers  all highly liquid  investments  with a maturity of three
months or less at the time of purchase to be cash  equivalents.  At December 31,
1997 cash and cash  equivalents  includes a U.S Treasury Bill of $250,000  which
matured January 8, 1998.

Investments

The equity method of accounting is used for investments in limited  partnerships
and investments in joint ventures. Other investments are recorded at cost.

Marketable Securities

Management  determines  whether  marketable  securities  are to be classified as
trading or  available-for-sale  at the time of purchase  and  re-evaluates  such
designation as of each balance sheet date.  Securities classified as trading are
securities acquired (and generally held for short periods) to make a profit from
short-term  movements  in market  price.  These  securities  are carried at fair
value,   with  unrealized   holding  gains  and  losses  included  in  earnings.
Available-for-sale  securities  are carried at fair value,  with the  unrealized
gains and losses,  net of tax, reported as a separate component of shareholders'
equity.  Realized gains and losses and declines in value judged to be other than
temporary on  available-for-sale  securities are included in other income,  net.
The cost of securities is based on the specific identification method.

Fixed Assets

Fixed  assets  are  stated  at  cost.   Depreciation   is  provided   using  the
straight-line  method over the estimated useful lives of the related assets (3-5
years).
                                   29

<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

Income Taxes

The  provision  for income  taxes  includes  federal and state  taxes  currently
payable  and  those  deferred  because  of  temporary  differences  between  the
financial  statement  and tax  basis of  assets  and  liabilities.  A  valuation
allowance is recorded  based on available  evidence  when it is more likely than
not that some portion or all of the deferred tax assets will not be realized.

Stock Compensation

The Company accounts for its stock  compensation under the provisions of APB 25,
"Accounting for Stock Issued to Employees".

Net Income Per Share

In 1997,  the Financial  Accounting  Standards  Board issued  Statement No. 128,
"Earnings  Per Share."  Statement  128 replaced the  calculation  of primary and
fully  diluted  earnings  per share with basic and diluted  earnings  per share.
Unlike  primary  earnings  per share,  basic  earnings  per share  excludes  any
dilutive  effects of  options,  warrants  and  convertible  securities.  Diluted
earnings  per share is very similar to the  previously  reported  fully  diluted
earnings per share.  All  earnings  per share  amounts for all periods have been
presented,  and where  appropriate,  restated  to conform to the  Statement  128
requirements.

Concentrations of Credit Risk

The  Company's  accounts   receivable  are  not  concentrated  in  any  specific
geographic region, but are concentrated in the investment industry.  At December
31, 1997,  the Company had  accounts  receivable  of $283,917 and $247,070  from
Starvest Funds Ltd. and The F.W. Thompson Fund. L.P., respectively.  At December
31, 1996, the Company had accounts receivable of $228,230, $166,128 and $153,702
from Ultima Investments Limited, Starvest Funds Ltd. and The F.W. Thompson Fund,
L.P.,  respectively.  Although the Company's  exposure to credit risk associated
with  nonpayment  by customers is affected by conditions  within the  investment
industry,  no  other  customer  exceeded  10% of the  Company's  receivables  at
December 31, 1997 and 1996, respectively.

3. Investments in Limited Partnerships

The Broad Market Fund,  L.P.--The  Broad Market Fund L.P. is a Delaware  limited
partnership  ("Broad  Market  Fund")  that  was  organized  for the  purpose  of
achieving long-term capital growth through hedged investments arranged by one or
more money managers and/or investment funds. At December 31, 1997 and 1996, TPI,
the  General  Partner,  had an  investment  of $688,592  (cost -  $423,620)  and
$559,847  (cost - $423,620),  respectively,  in the Broad  Market Fund.  For the
years ended December 31, 1997 and 1996, TPI's  proportionate  share of the Broad
Market Fund's income ($128,745 and $79,784, respectively) is reflected in equity
in earnings of limited partnerships in the consolidated statements of income. At
December  31,  1997  and  1996,  TPI's  investment  in  the  Broad  Market  Fund
represented .51% and .80%, respectively,  of the Broad Market Fund's net assets.
The summarized  audited  financial  information of the Broad Market Fund,  based
solely on the report of other auditors, is as follows:

                                   30
<PAGE>
                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



3. Investments in Partnerships (continued)

                                                      December 31
                                                    1997           1996

Total assets                                 $162,511,390      $75,908,923
Total liabilities                              28,567,596        6,264,461

                                                 Year ended December 31,
                                                    1997           1996

Net investment income                       $   2,658,019       $  878,640
Net realized gain on investments               15,764,772        7,485,139
Net income                                    $18,422,791      $ 8,363,779

GamTree,  L.P.--GamTree,  L.P., a Delaware limited  partnership  ("GamTree") was
organized  for  the  purpose  of  achieving  long-term  capital  growth  through
diversified asset  management.  At December 31, 1997 and 1996, TPI, a Co-General
Partner  with GAMCO  Investors,  Inc.,  an affiliate  of a  shareholder,  had an
investment  of  $186,717  (cost -  $100,000)  and  $158,429  (cost -  $100,000),
respectively,  in GamTree. For the years ended December 31, 1997 and 1996, TPI's
proportionate  share of GamTree's income ($28,288 and $21,079,  respectively) is
reflected  in equity in earnings  of limited  partnerships  in the  consolidated
statements  of  income.  At  December  31,  1997,  TPI's  investment  in GamTree
represented 10.2% of GamTree's net assets.

Meridian Horizon Fund,  L.P.--Meridian  Horizon Fund, L.P. is a Delaware limited
partnership  ("Meridian"),  formerly  known as The Ultima Fund,  L.P.,  that was
organized for the purpose of achieving a high total return and  preservation  of
capital  utilizing a multi-manager  approach to investing.  At December 31, 1997
and 1996, the Company had an investment of $299,483 (cost $250,000) and $116,549
(cost  $115,000),  respectively,  in Meridian,  which  represents .23% and .20%,
respectively,  of Meridian's  net assets.  For the years ended December 31, 1997
and 1996, the Company's  proportionate  share of Meridian's  income ($47,934 and
$1,549,   respectively),   is   reflected  in  equity  in  earnings  of  limited
partnerships  in the  consolidated  statements of income.  Effective  January 1,
1997,  Meridian's Limited Partnership Agreement was amended and restated whereby
Meridian Capital  Partners,  Inc. replaced Zeron Capital  Management,  Inc. as a
Co-General Partner with the Company.

The F.W.  Thompson Fund,  L.P.--In October 1995, The F.W.  Thompson Fund, L.P. a
Delaware  limited  partnership  (the  "Thompson  Fund"),  was  organized for the
purpose of achieving  long-term  capital  growth while  preserving  capital.  At
December  31, 1997 and 1996,  TPI, the General  Partner,  had an  investment  of
$46,695  (cost - $29,847)  and $36,553  (cost - $29,847),  respectively,  in the
Thompson  Fund,  which  represents  .82% and .60%,  respectively,  of the fund's
equity.  In  addition,  TPI has a  commitment  to  fund up to 1% of the  limited
partnership  losses if and when such losses occur.  For the years ended December
31, 1997 and 1996, TPI's proportionate share of the limited partnership's income
($10,142 and $4,162, respectively) is reflected in equity in earnings of limited
partnerships in the consolidated statements of income.

                                   31
<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



3. Investments in Partnerships (continued)

The Broad Market Prime Fund, L.P.--The Broad Market Prime Fund, L.P., a Delaware
limited  partnership  ("BMPF"),  was  formed on July 1, 1997 for the  purpose of
achieving long-term capital growth through a leveraged investment  strategy.  At
December 31, 1997, the Company,  as General Partner,  did not have an investment
in this fund,  however  the  Company  has a  commitment  to fund up to 1% of the
limited  partnership  losses if and when such losses  occur.  For the year ended
December  31,  1997,  the Company did not have any equity in earnings of limited
partnerships for this limited partnership.

The aggregated summarized unaudited financial information of GamTree,  Meridian,
the Thompson Fund and BMPF is as follows:

         
                                                   December 31
                                            1997             1996

Total assets                             $249,504,158      $70,688,495
Total liabilities                          60,805,159        7,342,820

                                              Year Ended December 31
                                            1997             1996

Net investment loss                       $(2,509,355)     $(1,077,612)
Net realized and unrealized 
   gain on investments                     16,488,421        9,765,451
Net income                                $13,979,066      $ 8,687,839


4. Investments in Joint Ventures

In October  1994,  TBL entered  into an agreement  to form  N-Compass  Financial
Services Limited, a joint venture,  to provide  investment  advisory services to
offshore  clients.  For the  years  ended  December  31,  1997 and  1996,  TBL's
proportionate  share (40%) of operating losses of the joint venture were $83,508
and $95,350,  respectively. The investment in this joint venture at December 31,
1997 and 1996 was $10,400  (cost -  $264,258)  and  $79,650  (cost -  $250,000),
respectively.

At December 31, 1997 and 1996, TBL's investment  representing 24.5% and 24.9% of
Tremont  International  Insurance Ltd. ("TIIL"),  a Cayman Islands  corporation,
formed in July 1996,  was $61,238 (cost - $62,250) and $60,532 (cost - $62,250),
respectively.  TIIL offers certain deferred  variable  annuities,  variable life
insurance and other insurance  contracts to customers not resident in the Cayman
Islands.  For the periods ended December 31, 1997 and 1996, TBL's  proportionate
share of operating income (losses) were $706 and $(1,718), respectively.

In July 1997,  TBL formed with Mutual Risk  Management,  an  international  risk
management  company  ("MRM") and another  party,  and acquired a 40% interest in
Tremont MRM Services Limited ("TMRM"),  a company incorporated under the laws of
Bermuda.  TMRM  provides  product  development,   marketing  and  administrative
services to TIIL.  At December  31,  1997,  TBL's  investment  was $3,663  (cost
$4,800) and for the period ended  December 31, 1997 its  proportionate  share of
operating losses was $1,137.

                                   32
<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



4. Investments in Joint Ventures (continued)

At December  31, 1997 and 1996,  the Company has other joint  venture  interests
aggregating $24,044 (cost - $40,359) and $29,068 (cost - $5,150).

5. Other Investments

At December  31,  1997,  the Company has options to purchase  8,000  shares of a
nonpublic  company.  This registered  investment  adviser  specializes in 401(k)
investment allocation advise over the Internet.  The options were granted at $10
per share and 50% have vested as of December 31, 1997. The remaining 50% vest in
equal installments at the end of each month between January 1, 1998 and December
31,  1998.  The  options  have a five year term and have been  valued at zero at
December 31, 1997.

At December 31, 1997, the Company owns a beneficial interest in 30,000 shares of
a nonpublic financial services company formed in 1996. Such shares were received
by the Company as a result of an  employees  participation  as a board member of
such company.  As a result of consulting  services  performed for this nonpublic
entity,  TPI has received $56,152 and $42,235,  respectively for the years ended
December 31, 1997 and 1996.  At December  31,  1997,  the shares of common stock
have been valued at zero.

At December  31, 1997,  TBL owns  warrants to purchase  87,500  shares of common
stock of an  unaffiliated  public  corporation  at $3.78 per share which  expire
October 19, 1998,  and 18,750  shares of common  stock of the same  unaffiliated
public  corporation  at $3.63 per share  which  expire  October 30,  1998.  Such
warrants have been valued at zero at December 31, 1997.

At December 31, 1997 and 1996, TBL's investment in American Master Fund Limited,
a Cayman  Islands  exempt  Company,  which was  incorporated  in July 1991,  was
$51,420  (cost -  $50,000)  and  $50,000  (cost -  $50,000),  respectively.  The
principal activity of this Company is to operate as an investment fund to invest
primarily in offshore investment vehicles. The Fund's investment objective is to
achieve a high total rate of return by  utilizing  the  expertise of a number of
investment managers, while preserving capital for its investors.

At December  31, 1997 and 1996,  the  Company  had other  nonpublic  investments
aggregating   $24,000   (cost  -  $36,000)  and  $120,000   (cost  -  $120,000),
respectively.
                                       33

<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



6. Accrued Expenses

Accrued expenses consist of the following:


                                                     December 31
                                               1997             1996

Professional and consulting fees          $   741,105      $   930,454
Compensation                                  200,000          150,000
Note payable                                   87,840              -
Employee benefit plan                          46,566              -
Other                                          37,223           51,516
                                           $1,112,734       $1,131,970

7. Shareholders' Equity

The  Company's  Class A Common  Stock and Class B Common  Stock are  entitled to
equal rights and privileges, except that:

a.   with respect to voting  rights,  each Class A Common Stock  shareholder  is
     entitled  to four votes for each  share  held of record,  while the Class B
     Common Stock  shareholders  are entitled to one vote for each share held of
     record; and,

b.   upon  liquidation,  dissolution  or winding up of the  Company,  before any
     distribution  in respect of the Class B Common Stock,  the  shareholders of
     the Class A Common  Stock are  entitled  to receive an amount  equal to the
     aggregate  liquidation  preference of $0.40 per share.  The shareholders of
     the Class B Common  Stock are then  entitled  to $0.40 per  share,  and the
     remaining  assets of the Company are then  distributed in equal amounts per
     share.

The Company also has authorized  350,000 shares of $1 par value voting Preferred
Stock;  no shares of such  Preferred  Stock have been issued.  In addition,  the
Company has authorized  650,000 shares of Series A Preferred  Stock  (Redeemable
Preferred  Stock) $1 par value.  The Redeemable  Preferred has no voting rights,
except to elect one member of the Company's Board of Directors and to vote, as a
separate class, on any merger,  consolidation,  or sale of the Company's assets.
At  December  31,  1997,  there is no  Redeemable  Preferred  Stock  issued  and
outstanding.

No dividends  may be declared or paid on either class of Common Stock as long as
there are  accumulated  and unpaid  dividends on Series A Preferred  Stock.  The
Company  has not  declared or paid  dividends  on either  Class of Common  Stock
during the two year period ended December 31, 1997.

In July 1997,  the Company  entered  into a series of  transactions  whereby MRM
indirectly  acquired  an equity  interest  in the  Company.  In June  1997,  MGL
Investment Ltd. ("MGL"), a wholly-owned  subsidiary of MRM, began a tender offer
to purchase 615,000 shares of outstanding  Class B Common Stock, par value $0.01
at a price of $3.75 per share.  This  transaction  was completed on July 7, 1997
for the entire 615,000 shares. In addition, pursuant to a certain stock purchase
agreement,  the Company sold to MGL 202,365  shares of its Class B Common Stock,
par value $0.01 at a price of $3.75 per share. The transaction was completed for
net proceeds of $723,254, which is net of $35,615 of costs incurred. As a result
of these  transactions,  MRM indirectly owns,  through MGL, Class B Common Stock
equal to 20% of the aggregate of the Company's  outstanding Class A Common Stock
and Class B Common Stock.

                                   34

<PAGE>
                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



8. Stock Options

During  December  1994,  an option to purchase  40,000  shares of Class B Common
Stock at $2.00 per share was  granted  to a director  and an option to  purchase
10,000  shares of Class B Common  Stock at $2.00 per  share  was  granted  to an
employee. The director exercised his option and purchased 40,000 shares of Class
B Common Stock in December  1996. The  employee's  options,  which are now fully
vested,  will expire on the  anniversary of the grant date in 1999. In the event
of the  termination  of the  employee's  employment,  the Company  will have the
option,  exercisable no later than seven days after the date of termination,  to
purchase all of the employee's stock and vested options.  The purchase price for
each  share  of stock  shall be equal to the best bid  price on the date of such
termination,  and the purchase price for each option shall be the greater of (i)
$2.00 or (ii) the  amount of the best bid price for a share of stock on the date
of such termination less $2.00.

In April  1994,  the  Board of  Directors  granted  to the  president  and chief
operating  officer an option to purchase  275,000 shares of Class B Common Stock
at $1.75 per share, the then current fair market value of the stock. The options
are fully vested and will expire on the  anniversary  of the grant date in 2001.
In the event of the termination of the executive's employment, TPI will have the
option,  exercisable no later than seven days after the date of termination,  to
purchase all of the executive's stock and vested options.  The purchase price of
each  share  of stock  shall be equal to the best bid  price on the date of such
termination,  and the purchase price for each option shall be the greater of (i)
$1.75 or (ii) the  amount of the best bid price for a share of stock on the date
of such termination less $1.75.

The Company has elected to follow  Accounting  principles  Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related  Interpretations
in accounting for its employee stock options  because,  as discussed  below, the
alternative  fair value  accounting  provided for under FASB  Statement No. 123,
"Accounting  for  Stock-Based  Compensation,"  requires use of option  valuation
models that were not developed for use in valuing employee stock options.  Under
APB 25,  because the exercise  price of the  Company's  employee  stock  options
equals  the  market  price of the  underlying  stock on the  date of  grant,  no
compensation expense is recognized.

During May and June 1997,  options to purchase  145,000 shares of Class B Common
Stock were granted to the directors and certain executive employees at $3.75 per
share. The options will vest and become  exercisable on the following  schedule:
25 percent on the date of the agreement,  25 percent on the first anniversary of
the execution of the agreement and 50 percent on the second  anniversary  of the
agreement.  In the event of the  termination of the directors or employees,  the
Company  will have the  option,  exercisable  no later than seven days after the
date of  termination,  to purchase all of the directors or employees  shares and
vested options. The purchase price for each share of stock shall be equal to the
best bid price on the date of such termination,  and the purchase price for each
option  shall be the  greater of (i)  $3.75,  or (ii) the amount of the best bid
price for a share of stock on the date of such  termination  less $3.75.  During
1997,  13,334 of such options lapsed due to the  termination of an employee.  No
options were granted during 1996.

Pro forma information regarding net income and earnings per share is required by
Statement  123, and has been  determined as if the Company had accounted for its
employee stock options under the fair value method of that  Statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following  weighted-average  assumptions for 1997;
risk-free interest rate of 6.62%; dividend yield of 0%; volatility factor of the
expected   market  price  of  the  Company's   common  stock  of  .574,   and  a
weighted-average expected life of the options of 5 years.

                                        35
<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



8. Stock Options (continued)

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information for 1997 follows:

          Pro forma net income                          $640,848

          Pro forma earnings per share
            Basic                                       $   0.16
            Diluted                                     $   0.16

A summary of the Company's stock option activity and related information for the
years ended December 31 follows:
<TABLE>
        <S>                                       <C>                 <C>
                                                1997                       1996
                                          Weighted-Average            Weighted-Average
                                      Options    Exercise Price   Options      Exercise Price

Outstanding - beginning of year        285,000        $1.76        325,000         $1.79
Granted                                145,000         3.75          -
Exercised                                 -                        (40,000          2.00
Lapsed                                 (13,334)        3.75          -

Outstanding - end of year              416,666        $2.39        285,000         $1.76

Exercisable at end of year             322,916        $1.99        235,000         $1.76

Weighted-average fair value of
 options granted during the year         $1.71                       -
</TABLE>
Exercise  prices for options  outstanding  as of  December  31, 1997 ranged from
$1.75 to $3.75. The weighted-average remaining contractual life of those options
is 3.6 years.


9. Other Income, Net
                                                       1997         1996

Interest income                                     $ 24,414     $  14,080
Realized gain/(loss) from other investments          (10,580)      130,874
                                                    $ 13,834      $144,954

                                   36

<PAGE>

                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



10. Income Taxes

The provision for income taxes is summarized as follows:

                                              1997          1996
Current:
 Federal                                    $157,975      $   -
 State                                        53,895         2,442
                                             211,870         2,442
Deferred:     
 Federal                                     128,702       194,100
 State                                         9,298          -
Total tax expense                           $349,870      $196,542

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's  deferred tax  liabilities  and deferred tax assets as of December
31, 1997 and 1996 are as follows:

                                               1997          1996
Deferred tax liabilities:
 Tax over book depreciation                $  23,500      $  19,200
 Unrealized appreciation in limited
   partnerships                                9,600          8,500
 Undistributed earnings of foreign
   subsidiary                                306,700        208,000
Total deferred tax liabilities               339,800        235,700

Deferred tax assets:
  Bad debt reserves                            4,000          4,000
  Organization costs                           3,700          5,100
  Net operating loss carryforward                -           32,500
Total deferred tax assets                      7,700         41,600
Net deferred tax liability                  $332,100       $194,100

The income tax provision gives effect to permanent differences between financial
and taxable  income,  resulting in a lower effective tax rate than the statutory
income tax rate. The  reconciliation of income tax attributable to income before
income  taxes  computed at the U.S.  federal  statutory  tax rates to income tax
expense is:

                                                 1997                1996
                                           Amount   Percent    Amount   Percent
                    
Statutory federal income tax rate        $356,930    34.0     $245,510    34.0
State taxes, net of federal benefit        41,707     4.0        1,612      .2
Travel and entertainment - nondeductible    9,556     0.9        7,435     1.0
Permanently reinvested foreign income     (68,000)   (6.6)         -        -
Change in valuation allowance                 -        -       (62,100)   (8.6)
Other                                       9,677     1.0        4,085      .6
                                         $349,870     33.3    $196,542    27.2

                                   37

<PAGE>
                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



10. Income Taxes (continued)

In 1997, the Company made estimated federal income tax payments of $160,000.  In
1997 and 1996 the  Company  paid  $53,727  and  $1,742,  respectively,  in state
income, minimum and capital taxes.

Deferred  income  taxes  were not  provided  on  certain  undistributed  foreign
earnings  ($200,000  at December  31,  1997) of TBL because  such  undistributed
earnings are expected to be reinvested  indefinitely  overseas. If these amounts
were  not  considered  permanently  reinvested,  additional  deferred  taxes  of
approximately $68,000 would have been provided.

The valuation allowance was reduced to zero at December 31, 1996 from $62,100 at
December 31, 1995 primarily as a result of the utilization of net operating loss
carryforwards  in 1996.  At December 31, 1997,  the Company had no net operating
loss   carryforwards  and  at  December  31,  1996  had  a  net  operating  loss
carryforward of approximately $60,000.

11. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

                                                          1997          1996

Numerator:
  Net income - numerator for basic and
    dilutive earnings per share (income 
    available to common stockholders)                 $ 699,924   $   525,545

Denominator:
  Denominator for basic earnings per
    share - weighted average shares                   3,985,640     3,847,575

Effect of dilutive securities:
  Employee stock options                                136,928       116,534

Denominator for diluted earnings
 per share - adjusted weighted
 average shares and assumed conversions               4,122,568     3,964,109

Basic earnings per share                              $    0.18    $     0.14

Diluted earnings per share                            $    0.17    $     0.13

12. Commitments

On December 10,  1997,  the Company  entered into a amendment to the  employment
contract  with the Chairman of the Board of  Directors  that expires on December
31, 1998. Under the terms of this agreement, the Chairman is entitled to receive
a minimum  annual base salary of  $373,000.  In  addition,  the  Chairman  could
receive incentive  compensation,  to be determined by the Board of Directors, at
the end of each fiscal year.
                                        38
<PAGE>
                             Tremont Advisers, Inc.

             Notes to Consolidated Financial Statements (continued)



12. Commitments (continued)

On December 10, 1997,  the Company  entered into an amendment to the  employment
contract  with the  President  and Chief  Operating  Officer of the Company that
expires on December 31, 1998.  Under the terms of such  amended  agreement,  the
executive is entitled to receive a minimum  annual bases salary of $335,700.  In
addition,  the executive will receive incentive  compensation equal to an amount
pursuant to a predetermined percentage of the incentive compensation paid to the
Company's Chairman of the Board of Directors.

Effective  September  1997,  the Company moved to a larger  facility and entered
into a lease  agreement for new executive  offices.  The Company was  completely
released  from its  obligation  under  the old  lease  (which  required  monthly
payments of approximately $8,450). The lease for the new facility expires August
31, 2002 and requires monthly payments of approximately $17,100.

TBL's lease for  corporate  offices  expired in February  1997,  and was renewed
through  February 2000. Such lease requires  monthly  payments of  approximately
$5,500.

Rent  expense for the years ended  December  31, 1997 and 1996 was  $218,096 and
$173,457, respectively. Future minimum obligations under noncancelable operating
leases at  December  31,  1997 were as  follows:  1998-$319,730,  1999-$298,940,
2000-$234,325 and 2001-$222,293.

13. Employee Benefit Plan

The Company has a defined contribution plan, the Tremont Advisers 401(k) Savings
Plan (the "Plan"),  which has been designed to provide  retirement  benefits for
the Company's employees. All employees who have attained the age of eighteen and
who have  completed  one month of  service  with the  Company  are  eligible  to
participate  in the Plan. An employee may elect to defer up to 15% of his or her
compensation  per  year  to  contribute  to  the  Plan  and  may  allocate  such
contributions  among eight  investment  mutual  funds and the Class A or Class B
Common  Stock  of the  Company.  There is no  provision  for  employer  matching
contributions.

The Company may  contribute  a sum to be  determined  each plan year by employer
resolution.  The amount allocated to each  participant is generally  governed by
each employee's compensation. For the years ended December 31, 1997 and December
31, 1996,  the Company  contributed  $46,566 and $31,728,  respectively,  to the
Plan.

14. Impact of Year 2000 (Unaudited)

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four to determine the applicable year. Any computer  programs
that have time  sensitive  software may  recognize a date using "00" as the year
1900  rather  than the year  2000.  This  could  result in a system  failure  or
miscalculation causing significant disruptions of operations,  including,  among
other things, a temporary inability to process transactions or engage in similar
normal business activities. Based on a recent assessment, the Company determined
its internal computer systems are currently  enabled for year 2000 entries.  The
cost of such  assessment  was  immaterial to the Company.  However,  the Company
could be  adversely  affected  if the  computer  systems  used by the  Company's
service providers do not properly process and calculate date-related information
and  data  from  and  after  January  1,  2000.  The  Company  is  currently  in
communications with these service providers to determine if there is significant
cause for concern.

                                   39
<PAGE>
Item 8.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure.


                                                  Not Applicable


                                                        40

<PAGE>




                                                     PART III

Item 9.  Directors and Executive Officers of the Registrant.

The present Directors and Executive Officers of the Company are set forth below:

    Name                Age              Position

Sandra L. Manzke        49       Chairman of the Board of Directors
                                    and Chief Executive Officer
Robert I. Schulman      52       Director, President and Chief Operating Officer
John L. Keeley, Jr.     57       Director
Jimmy L. Thomas         56       Director
Alan A. Rhein           55       Director
Suzanne S. Hammond      51       Secretary and Treasurer
Stephen T. Clayton      37       Chief Financial Officer
Bruce D. Ruehl          37       Senior Vice President-Director of Manager
                                 Research


         All directors of the Company hold office until the next annual  meeting
of stockholders  of the Company and until their  successors are duly elected and
qualified,  or until their  earlier  death,  resignation  or removal.  Executive
officers  are elected by the Board of  Directors on an annual basis and serve at
the  discretion  of the Board of  Directors.  Sandra  L.  Manzke  and  Robert I.
Schulman are the only officers subject to the terms of an employment  agreement.
There  are no  family  relationships  among any of the  directors  or  executive
officers of the Company.

         Sandra L. Manzke is the Company's Chairman of the Board and Chief
Executive Officer.  Prior to May 31, 1994, she had been President and a director
of the Company since September 1987 when the Company acquired TPI.  Ms. Manzke
was one of the principal founders of TPI in 1984 and has been its Chairman and 
President since its inception.  Ms. Manzke also serves as a director of TBL. 
Ms. Manzke has and continues to be principally responsible for the operation
and client relationships of the Company.

         Robert I. Schulman became the Company's President and Chief Operating
Officer as of May 31, 1994.  He has been a Director of the Company since October
1993.  Mr. Schulman also became President, Chief Executive Officer and a
Director of Tremont Securities, Inc. as of June 1994.  Prior to May 31, 1994, he
was Executive Vice President, Director of Products & Services at Smith Barney
Shearson.  He began his career in 1969 as an Account Executive trainee with E.F
Hutton & Co., Inc.  He then became assistant branch manager of the Columbus
Circle branch of E.F. Hutton & Co., Inc. in New York City.  Subsequently, Mr.
Schulman served as Vice President and Regional Options and Futures Director of 
the Atlantic Region, Senior Vice President and National Director of Leveraged 
Products, and as Executive Vice President of all product sales at E.F. Hutton &
Co., Inc.  He has served on the NYSE Derivative Product Committee, CBOE Retail
Advisory Council, NASD Options and Derivative Product Committee, Board of the
New York Futures Exchange, and the NYSE Option Specialist Allocation Committee.
Mr. Schulman is a member of the Company's Audit Committee.  He also serves on 
the boards of directors of two non-public companies which are parties to
agreements with the Company, the Lockwood Financial Group, Ltd., and 401(K) 
Forum, Inc.


                                                        41

<PAGE>




         John L. Keeley, Jr. became a Director of the Company in January 1994.
Mr. Keeley is President, Treasurer and a Director of Keeley Investment 
Corporation, a registered broker-dealer.  He has held these positions since
1977.  He is also President, Treasurer and a Director of Keeley Asset Management
Corporation, a registered investment advisor, Keeley Small Cap Value Fund, Inc.,
an open-end mutual fund, various investment partnerships and the John L. Keeley,
Jr. Foundation.  Mr. Keeley also became a Director of the Marquette National
Corporation in 1994.  Mr. Keeley is a member of the Company's Audit Committee.

         Alan A. Rhein, became a Director of the Company in June 1997.  Mr.
Rhein is a founding principal of Lockwood Financial Group Ltd., an investment
management consulting firm, and is President and Chief Executive Officer of
Lockwood Financial Services, the broker-dealer division of Lockwood Financial
Group Ltd.  He started his financial services career as an account executive in
1965 with E.F. Hutton & Co.  He spent the next 23 years with that firm in a
variety of positions from Account Executive, Branch Manager to Executive Vice 
President in charge of the Atlantic Region.  In 1986, Mr. Rhein was elected to
the Board of Directors of E.F. Hutton & Co.  After the Shearson Lehman takeover
of E.F. Hutton, Mr. Rhein was promoted to Group President.  In 1993, Mr. Rhein
was recruited by Prudential Securities to serve as Executive Vice President in 
charge of their entire Retail Branch system.  Mr. Rhein is a member of the 
Company's Audit Committee.

         Jimmy L. Thomas became a Director of the Company in November 1994.  Mr.
Thomas has been Senior Vice President - Financial Services and Treasurer of 
Gannett Co., Inc. since December 1991.  Prior to 1991, Mr. Thomas was Vice
President - Financial Services and Treasurer of Gannett Co., Inc.  He is also a
Director of Broadway/Brown Development Co.  Mr. Thomas serves on the Investment 
Advisory Board of the Newspaper Association of America and the Regional Advisory
Boards of Marine Midland Bank and Arkwright Boston Manufacturers Mutual
Insurance Company.  Mr. Thomas is a member of the Company's Audit Committee.

         Suzanne S. Hammond has been the  Secretary and Treasurer of the Company
since August 1991.  Ms.  Hammond  became a consultant to TPI in April 1989,  and
prior to that time,  she served for six years as a Senior  Analyst  with Rogers,
Casey & Associates,  Inc., a firm engaged in the business of pension consulting,
where she was responsible for monitoring the New York City Teachers'  Retirement
System  Variable  Annuity  Fund  A and  the  related  South  Africa  divestiture
proceedings.  Ms. Hammond also currently  serves as a Vice President,  Treasurer
and Secretary of TPI, and as a director of TBL.

         Stephen T.  Clayton  joined the  Company  on January  10,  1994 and was
appointed Chief  Financial  Officer on January 19, 1994. Mr. Clayton also became
the Financial and  Operations  Principal and a Director of TSI in June 1994. Mr.
Clayton  was a Senior  Manager  with Ernst & Young LLP,  an  independent  public
accounting  firm,  from  October  1989  until he joined  the  Company.  Prior to
becoming a Senior Manager, he worked for six years at Ernst & Young LLP.

         Bruce D. Ruehl  joined the  Company  in August  1993 and was  appointed
Senior Vice  President-Director  of Manager  Research  of TPI in 1994.  Prior to
joining  TPI,  Mr.  Ruehl  was  a  Vice  President  and  Principal  at  Reliance
Properties,  Inc. where he advised private real estate partnerships investing in
bank and  RTC-owned  properties.  From  1985 to  1989,  Mr.  Ruehl  was at Brown
Brothers Harriman & Co. in the institutional management area. From 1989 to 1990,
he was with Shearson Lehman's  Consulting  Services Department as Vice President
and  National  Product  Manager   overseeing   proprietary   manager  investment
activities and new products.


                                                        42

<PAGE>





Item 10.     Executive Compensation.

         The following  table sets forth the annual and  long-term  compensation
for the Company's  Chief Executive  Officer and other  executive  officers whose
total cash  compensation  exceeded $100,000 for services rendered to the Company
and its  subsidiaries  for the fiscal year ended  December  31, 1997 (the "Named
Officers").


                                                        43

<PAGE>


<TABLE>
     
      <S>                   <C>         <C>       <C>       <C>            <C>       <C>         <C>          <C>            
                                          Summary Compensation Table
                                                Annual Compensation
---------------------------------------------------------------------------------------------------------------------
                                                                            Long Term Compensation

                                         Annual Compensation
                                                                     ------------------------------------------------
                                                                               Awards           Payouts
---------------------------------------------------------------------------------------------------------------------
                                                                      Restricted   Securities     LTIP    All other
   Name and Principal                                        Other       Stock     Underlying    Payout    Compen-
        Position                   Salary        Bonus       Annual    Award(s)     Options/      ($)     sation ($)
                           Year    ($)(a)       ($)(b)      Compen-       ($)       SARs (#)
                                                             sation
                                                              ($)
---------------------------------------------------------------------------------------------------------------------
Sandra L. Manzke,          1997   362,000        135,000       -           -         35,000        -          -
Chief Executive Officer
                         --------------------------------------------------------------------------------------------
                           1996   262,500        325,000       -           -            -          -          -
                         --------------------------------------------------------------------------------------------
                           1995   250,000        196,500       -           -            -          -          -
---------------------------------------------------------------------------------------------------------------------
Robert I. Schulman,        1997   326,250        121,500       -           -         25,000        -          -
Chief Operating
Officer
                         --------------------------------------------------------------------------------------------
                           1996   236,250        292,500       -           -            -          -          -
                         --------------------------------------------------------------------------------------------
                           1995   225,000        147,375       -           -            -          -          -
---------------------------------------------------------------------------------------------------------------------
Bruce D. Ruehl, Senior     1997   140,000        100,000       -           -         10,000        -          -
Vice President and
Director of Manager
Research for TPI
                         --------------------------------------------------------------------------------------------
                           1996    85,000         55,000       -           -            -          -          -
                         --------------------------------------------------------------------------------------------
                           1995    75,538         10,000       -           -            -          -          -
---------------------------------------------------------------------------------------------------------------------
Stephen T. Clayton         1997   120,000         50,000       -           -         10,000        -          -
Chief Financial Officer
                         --------------------------------------------------------------------------------------------
                           1996   110,000         32,500       -           -            -          -          -
                         --------------------------------------------------------------------------------------------
                           1995   105,000         13,850       -           -            -          -          -
---------------------------------------------------------------------------------------------------------------------
Suzanne S. Hammond,        1997   100,417         14,000       -           -            -          -          -
Secretary and
Treasurer
                         --------------------------------------------------------------------------------------------
                           1996    85,000          7,000       -           -            -          -          -
                         --------------------------------------------------------------------------------------------
                           1995    82,500          5,000       -           -            -          -          -
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) On December 10, 1997, the Company  entered into an amendment to Ms. Manzke's
employment  agreement dated  September 15, 1995.  Under the terms of the amended
agreement  which expires on December 31, 1998, Ms. Manzke is entitled to receive
a minimum  annual base salary of $373,000.  In addition,  Ms. Manzke may receive
incentive  compensation to be determined by the Board of Directors.  On December
10, 1997,  the Company  entered into an amendment to Mr.  Schulman's  employment
agreement dated April 22, 1994. Under the terms of this amended  agreement which
expires on December 31, 1998, Mr. Schulman is entitled to receive minimum annual
base compensation of $335,700. In addition,  Mr. Schulman must receive incentive
compensation  equal 90% of the incentive  compensation paid to Ms. Manzke in any
year.

(b) A portion of the bonuses for Ms.  Manzke and Mr.  Schulman  which accrued in
1996 were  actually  paid in 1997.  These  amounts  were  $75,000  and  $67,500,
respectively.


                                                        44

<PAGE>



Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option 
Values

Presented  below is  information  with respect to  unexercised  stock options to
purchase the  Company's  Class B Common  Stock held by each Named  Officer as of
December 31, 1997.
<TABLE>
  <S>                              <C>                 <C>          <C>           <C>
                                                             (Number of
                                                              Securities       Value of
                                                              Underlying       Unexercised In-
                                                              Unexercised      the-Money Options
                                                              Options at       at December 31,
                                                              December 31,     1997($)
                                                              1997 (#)

                           Shares Acquired on      Value      Exercisable/     Exercisable/
Name                       Exercise (#)          Realized     Unexercisable    Unexercisable
------------------------------------------------------------------------------------------------
Sandra L. Manzke                   -                 -          8,750/26,250    $8,750/$26,250

Robert I. Schulman                 -                 -         281,250/18,750  $831,250/$18,750

Bruce D. Ruehl                     -                 -          2,500/7,500     $2,500/$7,500

Stephen T. Clayton                 -                 -          12,500/7,500    $30,000/$7,500

Suzanne S. Hammond                 -                 -               -                -

</TABLE>

Directors' Compensation

         Directors of the Company who are  salaried  employees of the Company do
not receive any additional compensation for serving as a director.  Non-employee
directors  of the Company  receive  $2,500 for each Board of  Directors  meeting
attended and $1,250 for each telephonic Board Meeting attended.

Employment Contracts, Termination of Employment and Change in Control
Arrangements.

         The Company and Sandra L. Manzke,  the Company's  Chairman of the Board
and Chief  Executive  Officer,  entered  into an  amended  employment  agreement
pursuant to which Ms.  Manzke is  entitled to a minimum  base salary of $373,000
per  annum.  She is also  entitled  to a bonus  as  determined  by the  Board of
Directors. Ms. Manzke's employment may be terminated due to illness,  disability
or other  incapacity  such that she is unable to perform her duties for a period
of ninety (90) consecutive days. If her employment is so terminated, she will be
entitled to receive her base salary and accrued  bonus until  December 31, 1998.
In the event of her death, her right to compensation will cease.

         In the event of the  termination  of Ms.  Manzke's  employment  for any
reason,  including  death,  the Company  shall have the  option,  provided it is
exercised  within ninety (90) days, to reacquire all of Ms.  Manzke's  shares of
capital  stock in the Company for a price per share equal to the market value on
the date of such  termination.  Ms.  Manzke has agreed that she will not sell or
dispose of her stock in the Company  without first offering to sell the stock to
the Company at a price per share equal to its then market value.

         Robert I. Schulman, the President and Chief Operating Officer of the
Company, entered into an amendment, as of December 10, 1997, to his employment
agreement.  The amended agreement


                                                        45

<PAGE>



expires on December 31, 1998 and will be automatically renewed from year to year
unless either party  terminates it in a timely manner.  Mr. Schulman is entitled
to a minimum base salary of $335,700  plus a bonus as the Board of Directors may
determine;  provided,  however, that in no event will Mr. Schulman's base salary
in any year be less than 90% of the base salary  payable to Ms.  Manzke for such
year and in no event will Mr. Schulman's bonus be less than 90% of the incentive
compensation  payable to Ms. Manzke in such year. If Mr. Schulman is disabled or
his employment is terminated by the Company  without cause or by him with cause,
then he will be entitled  to receive  his base  salary and  accrued  bonus until
December 31, 1998. In the event his employment is terminated by the Company with
cause or by him  without  cause,  or in the  event of his  death,  his  right to
compensation will cease upon the date of termination or death.

         Upon  executing  his  employment  agreement in 1994,  Mr.  Schulman was
granted options to purchase 275,000 shares of the Company's Class B Common Stock
at an exercise  price of $1.75 per share,  the then current fair market value of
the Class B Common  Stock.  The options are fully  vested and will expire on the
anniversary of the grant date in 2001. In the event Mr. Schulman's employment is
terminated for any reason, including the expiration of the employment agreement,
any unvested  options  will lapse;  vested but  unexercised  options will remain
outstanding and exercisable under the original terms and conditions,  subject to
an option in favor of TPI to purchase all of Mr.  Schulman's stock no later than
seven days after the date of termination for a per share price equal to the best
bid price on the date of  termination  and the  purchase  price for each  option
shall be the greater of (i) $1.75 or (ii) the amount of the best bid price for a
share of Common Stock on the date of termination  less $1.75.  Mr.  Schulman has
agreed that he will not dispose of the Class B Common Stock he acquires pursuant
to the options or the unexercised options without first offering them to TPI for
the per share price applicable in the case of the termination of his employment.

Class B Options

         During May and June 1997, options to purchase 20,000 shares and 125,000
shares,  respectively,  were  granted to the  directors  and  certain  executive
employees at $3.75 per share.  At September 30, 1997,  13,334 options lapsed due
to an employee's termination of employment. The remaining options have vested or
will vest and become  exercisable on the following  schedule:  25 percent on the
date of the  grant,  25  percent  on the first  anniversary  of the grant and 50
percent  on the second  anniversary  of the  grant.  In the event a director  or
employee ceases to serve as such, the Company will have the option,  exercisable
no later than seven days after the date of termination of the  relationship,  to
purchase all of the director's or employee's vested options.  The purchase price
for each share of Class B Common  Stock  shall be equal to the best bid price on
the date of such  termination,  and the purchase  price for each option shall be
the  greater of (i) $3.75,  or (ii) the amount of the best bid price for a share
of Class B Common Stock on the date of such termination less $3.75.

         In December 1994,  options to purchase  10,000 shares of Class B Common
Stock were granted to an officer. These options are fully vested and will expire
on December 15, 1999, the fifth  anniversary of the date of grant.  In the event
the  officer's  employment  is  terminated,  the  Company  will have the option,
exercisable no later than seven days after the date of termination,  to purchase
all of the officer's stock and vested options. The purchase price for each share
of Class B Common Stock shall be equal to the best bid price on the date of such
termination,  and the purchase price for each option shall be the greater of (i)
$2.00 or (ii) the  amount  of the best bid  price  for a share of Class B Common
Stock on the date of such termination less $2.00.



                                                        46

<PAGE>



         As of December 31, 1997,  options to purchase  275,000  shares,  10,000
shares and  37,916  shares of Class B Common  Stock for $1.75,  $2.00 and $3.75,
respectively, were exercisable by the Company's directors and executives.

Indemnification for Certain Liabilities

         The By-Laws of the Company  provide that the Company may  indemnify its
directors  and  officers  to the  fullest  extent  permitted  by the laws of the
Delaware  General  Corporation  Law against  all  expenses,  liability  and loss
(including  attorneys'  fees,  judgment,  fines and amounts paid in  settlement)
incurred by them in any  action,  suit or  proceeding  arising out of certain of
their actions or omissions in their capacities as directors or officers. Article
Seven of the Company's Restated Certificate of Incorporation provides that, with
certain exceptions,  no director of the Company may be liable to the Company for
monetary  damages as a result of a breach of his fiduciary duties as a director.
The Company has acquired  directors' and officers'  liability  insurance for its
directors and officers.

         The Delaware  Supreme Court has held the  directors'  duty of care to a
corporation and its shareholders  requires the exercise of an informed  business
judgment.   Having  become  informed  of  all  material  information  reasonably
available to them,  directors  must act with  requisite care in the discharge of
their duties. The Delaware General Corporation Law permits a corporation through
its  certificate  of  incorporation  to exonerate  its  directors  from personal
liability to the  corporation  or its  shareholders  for monetary  damages for a
breach of their fiduciary duty of care as a director,  with certain  exceptions.
The  exceptions  include a breach of the  director's  duty of  loyalty,  acts or
omissions not in good faith or which involve  intentional  misconduct or knowing
violation of law, improper  declaration of dividends and transactions from which
the director derived an improper personal benefit. As noted above, the Company's
Restated Certificate of Incorporation  exonerates its directors,  acting in such
capacity,  from  monetary  liability to the extent  permitted by this  statutory
provision.   This  limitation  of  liability  provision  does  not  eliminate  a
shareholder's  right  to  seek  non-monetary,  equitable  remedies  such  as  an
injunction  or  rescission  in order to  redress an action  taken by  directors.
However,  as a practical matter,  equitable remedies may not be available in all
situations,  and  there  may be  instances  in  which  no  effective  remedy  is
available.


Item 11.    Security Ownership of Certain Beneficial Owners and Management.

         The following  table  contains  information  relating to the beneficial
ownership  of Common  Stock by  members of the Board of  Directors,  and by such
members  and by the  Company's  officers  as a group,  as well as certain  other
beneficial owners as of March 6, 1998. Information as to the number of shares of
Common  Stock  owned and the  nature of  ownership  has been  provided  by these
individuals  and is not within  the  direct  knowledge  of the  Company.  Unless
otherwise  indicated,  the named individuals  possess sole voting and investment
power with respect to the shares  listed.  The  following  information  has been
furnished  to the  Company  or is  based on  Schedules  13D,  or any  amendments
thereto, received by the Company as filed with the Commission.



                                                        47

<PAGE>
<TABLE>
     <S>                           <C>                 <C>                 <C>                 <C>                 

Name and Address of                        Number of
Beneficial Owner                         Shares Owned                                % of
                                  Class A            Class B             Class A             Class B


Sandra L. Manzke (1)              199,762              392,826                16%                14%
555 Theodore Fremd Avenue
Rye, New York

Robert I. Schulman(2)               1,964              353,501                 *                 11
555 Theodore Fremd Avenue
Rye, New York

John L. Keeley, Jr. (3)            81,590              331,546                 6                 12
401 South LaSalle Street
Chicago, Illinois

Alan Rhein (4)                        -                  6,250                 -                  *
405 Park Avenue
New York, New York

Jimmy L. Thomas (5)                   -                 42,500                 -                  2
1100 Wilson Boulevard
Arlington, VA  22234

Suzanne S. Hammond (6)                -                 23,832                 -                  *
555 Theodore Fremd Avenue
Rye, New York

Stephen T. Clayton (7)                759               28,667                 *                  1
555 Theodore Fremd Avenue
Rye, New York

Bruce D. Ruehl (8)                    201               98,870                 *                  4
555 Theodore Fremd Avenue
Rye, New York

Mario J. Gabelli (9)              569,039              196,695                44                  7
Gabelli Funds, Inc.
555 Theodore Fremd Avenue
Rye, New York

Lynch Corporation (10)                -                116,189                 -                  4
8 Sound Shore Drive
Greenwich, CT

MGL Investments Ltd. (11)             -                817,365                 -                 29
One Logan Square
Suite 1400
Philadelphia, PA

Directors and Officers
as a group:                       284,276            1,277,992                22                 44


</TABLE>
*   Less than one percent.

(1) Includes 10,000 shares of Class A Common Stock held by the Tremont Advisers,
Inc.,  401(k)  Savings Plan for the benefit of Ms.  Manzke and 16,162  shares of
Class A Common Stock which are registered in the names of Ms. Manzke's children,
over which she possesses sole voting power and investment  power with respect to
such shares. The 392,826 shares of Class B Common Stock include 43,425 shares
held by the Tremont  Advisers,  Inc.  401(k)  Savings Plan for the benefit of 
Ms. Manzke and 8,750 shares  represent  certain stock options granted to Ms.
Manzke by the Company that have vested.

                                                        48

<PAGE>
(2) The shares of Class A Common  Stock are held by the Tremont  Advisers,  Inc.
401(k)  Savings Plan for the benefit of Mr.  Schulman.  Of the 353,501 shares of
Class B Common Stock,  281,250 shares represent certain stock options granted to
Mr.  Schulman by the Company  that have vested and 8,454  shares are held by the
Tremont Advisers, inc. 401(k) Savings Plan for the benefit of Mr. Schulman.

(3) The  81,590  shares of Class A Common  Stock are  beneficially  owned by Mr.
Keeley.  Of the 331,546 shares of Class B Common Stock reported,  262,500 shares
reported are beneficially  owned by Mr. Keeley and include 20,000 shares held in
the name of his wife,  35,000 shares held by the KIC Profit Sharing Plan & Trust
for the benefit of Mr. Keeley for which Mr. Keeley is Trustee, and 35,000 shares
held by the KIC Pension Plan & Trust for the benefit of Ms. Keeley and for which
Mr. Keeley is Trustee and 2,500 shares  represent  certain stock options granted
to Mr. Keeley by the Company that have vested. Of the remaining 69,046 shares of
Class B Common Stock, 65,712 shares are owned by Kamco Limited Partnership No. 1
("KLP")  and 3,334  shares  held by JGJ  Partnership  of which  Mr.  Keeley is a
partner.  Mr.  Keeley  is  the  sole  general  partner  of  KLP,  an  investment
partnership organized under the laws of Illinois. Mr. Keeley is deemed to have a
beneficial  ownership of securities owned  beneficially by each of the foregoing
entities.

(4) The 6,250 shares of Class B Common Stock  represent  certain  stock  options
granted to Mr. Rhein by the Company that have vested.

(5) Of the  42,500  shares  of Class B Common  Stock  beneficially  owned by Mr.
Thomas,  2,500 shares  represent  certain stock options granted to Mr. Thomas by
the Company that have vested.

(6) Of the  23,832  shares  of Class B Common  Stock  beneficially  owned by Ms.
Hammond, 1,500 shares are held by the Tremont Advisers, Inc. 401(k) Savings Plan
for the benefit of Ms. Hammond.

(7) The 759  shares of Class A Common  Stock are held by the  Tremont  Advisers,
Inc. 401(k) Savings Plan for the benefit of Mr. Clayton. Of the 28,667 shares of
Class B Common Stock,  12,500 shares represent  certain stock options granted to
Mr.  Clayton  by the  Company  that have  vested,  3,666  shares are held by the
Tremont  Advisers,  Inc.  401(k) Savings Plan for the benefit of Mr. Clayton and
3,500  shares  are  held  in the  name  of  his  wife,  for  which  Mr.  Clayton
specifically disclaims beneficial ownership.

(8) The 201  shares of Class A Common  Stock are held by the  Tremont  Advisers,
Inc.  401(k) Savings Plan for the benefit of Mr. Ruehl.  Of the 98,870 shares of
Class B Common Stock, 1,370 shares are held by the Tremont Advisers, Inc. 401(k)
Savings  Plan for the benefit of Mr. Ruehl and 2,500  shares  represent  certain
stock options granted to Mr. Ruehl by the Company that have vested.

(9) Includes  325,385 shares of Class A Common Stock and 2,267 shares of Class B
Common Stock owned by family trusts or  partnerships  over which Mr. Gabelli has
sole voting power and investment power. Does not include shares listed elsewhere
in this  table  which  are held by Lynch  Corporation  ("Lynch"),  of which  Mr.
Gabelli  specifically  disclaims  beneficial  ownership.   Mr.  Gabelli  is  the
principal shareholder,  as well as the Chairman of the Board and Chief Executive
Officer,  of Gabelli Funds, Inc. ("GFI"), a registered  investment adviser under
the Investment  Advisers Act of 1940, as amended and the ultimate parent company
for a  variety  of  operating  companies  engaged  in  various  aspects  of  the
securities business,  including GAMCO Investors,  Inc. ("GAMCO"), a wholly-owned
subsidiary of GFI and a registered investment adviser; Gabelli Securities,  Inc.
("GSI"),  a  majority-owned  subsidiary  of GFI;  and  Gabelli &  Company,  Inc.
("Gabelli  &  Company"),  a  wholly-owned  subsidiary  of GSI  and a  registered
broker-dealer.  Mr.  Gabelli is also  Chairman of the Board and Chief  Executive
Officer of GAMCO and a  registered  representative  of  Gabelli & Company.  GFI,
GAMCO,  GSI and Gabelli & Company are herein  referred to as "affiliates" of Mr.
Gabelli.  Acting in these  capacities,  Mr. Gabelli has the authority for making
voting and investment decisions on behalf of the affiliates and, therefore,  may
be deemed to be the  beneficial  owner of shares of the Company owned by or held
in accounts  of such  affiliates.  Of the  remaining  243,654  shares of Class A
Common Stock owned by Mr. Gabelli and  affiliates of Gabelli,  42,000 shares are
held by Gabelli  Securities,  Inc. and 105,500  shares are held by GFI,  each of
which has the sole voting power and sole investment power for their clients with
respect to these securities.

(10) Mr. Gabelli is Chairman of the Board and Chief Executive  Officer of Lynch,
and he and his affiliates and their clients are principal shareholders of Lynch.
Mr. Gabelli may be deemed to be a beneficial  owner of the shares of the Company
owned by Lynch by  virtue  of his and  certain  affiliated  parties'  beneficial
ownership  of  336,250  shares,  or 24.4%,  of the  common  stock of Lynch.  Mr.
Gabelli,  however,  specifically  disclaims  beneficial  ownership of all of the
shares of the Company's Common Stock held by Lynch.

(11) In July  1997,  Mutual  Risk  Management  ("MRM"),  an  international  risk
management  company,  indirectly  acquired an equity interest in the Company. In
July 1997, MGL  Investments  Ltd.  ("MGL"),  a  wholly-owned  subsidiary of MRM,
purchased 615,000 shares of outstanding Class B Common Stock at a price of $3.75
per share pursuant to a tender offer.  In addition,  the Company  simultaneously
sold MGL 202,365  shares of Class B Common  Stock at a price of $3.75 per share.
As a result of these  transactions,  MRM indirectly  owns,  through MGL, Class B
Common Stock equal to 20% of the aggregate of the Company's  outstanding Class A
Common Stock and Class B Common Stock.

                                                        49

<PAGE>



Item 12.    Certain Relationships and Related Transactions.

Class B Common Stock Sale

         In July  1997,  MRM  indirectly  acquired  an  equity  interest  in the
Company. In June 1997, MGL Investment Ltd. ("MGL"), a wholly-owned subsidiary of
MRM,  began a tender offer to purchase  615,000  shares of  outstanding  Class B
Common Stock,  par value $0.01 at a price of $3.75 per share.  This  transaction
was completed on July 7, 1997 for the entire 615,000  shares.  In addition,  the
Company  sold to MGL 202,365  shares of Class B Common Stock at a price of $3.75
per share. As a result of these transactions,  MRM indirectly owns, through MGL,
Class B Common Stock equal to 20% of the aggregate of the Company's  outstanding
Class A Common Stock and Class B Common Stock.

Class B Options

         During May and June 1997, options to purchase 20,000 shares and 145,000
shares, respectively,  of Class B Common Stock were granted to the directors and
certain  executive  employees at $3.75 per share. At September 30, 1997,  13,334
options lapsed due to an employee's  termination  of  employment.  The remaining
options  have  vested  or will  vest and  become  exercisable  on the  following
schedule:  25  percent  on the  date  of the  grant,  25  percent  on the  first
anniversary of the grant and 50 percent on the second  anniversary of the grant.
In the event a director or employee  ceases to serve as such,  the Company  will
have the  option,  exercisable  no  later  than  seven  days  after  the date of
termination of the relationship, to purchase all of the director's or employee's
vested options.  The purchase price for each share of Class B Common Stock shall
be equal to the best bid price on the date of such termination, and the purchase
price for each option  shall be the greater of (i) $3.75,  or (ii) the amount of
the best  bid  price  for a share  of  Class B Common  Stock on the date of such
termination less $3.75.

         In December 1994, an option to purchase 40,000 shares of Class B Common
Stock was granted to Jimmy L.  Thomas,  a director of the  Company.  In December
1996,  Mr.  Thomas  exercised  the option  and  purchased  40,000  shares of the
Company's Class B Common Stock at $2.00 per share, the then fair market value.

Joint Venture Investments

         Tremont  International  Insurance,  Ltd.  ("TIIL"),  is a Cayman Island
corporation  that offers  certain  deferred  variable  annuities,  variable life
insurance and other insurance contracts to customers who are not resident in the
Cayman  Islands.  TIIL  had been a joint  venture  between  TBL and  AngloDutch.
Effective July 1, 1997, Mutual Risk Management  ("MRM"),  an international  risk
management   company,   purchased   51%  of   TIIL's   issued   share   capital.
Simultaneously,  TBL sold 0.4% of TIIL's issued share capital to Anglo-Dutch. As
a result of these  transactions,  TBL's  interest  has been  reduced to 24.5% of
TIIL's  issued  share  capital.  TBL,  MRM and  Anglo-Dutch  formed  Tremont MRM
Services  Limited  ("TMRM"),  a Bermuda company to provide product  development,
marketing and administrative services to TIIL. TBL owns a 40% interest in TMRM.


                                                        50

<PAGE>




Partnership Contributions

         TPI, in its  capacity as a co-general  partner of the Meridian  Horizon
Fund,  L.P., made an additional  contribution  of $135,000 to the  partnership's
capital, effective January 1, 1997.

         TPI is a limited, as well as general, partner of The Broad Market Fund,
L.P. Upon becoming a limited partner, TPI made a contribution of $550,000 to the
partnership's  capital effective August 1, 1997. On November 30, 1997, TPI, as a
limited partner, received a distribution of $550,000 from the partnership.

Selection of Investment Advisers

         As part of its services  rendered,  and in its  capacity as  investment
consultant  to  various   clients,   the  Company  monitors  and  evaluates  the
performance  of investment  managers for clients based on a criteria of matching
the  objectives  of  the  clients  with  the  investment  characteristics  of an
investment  manager.  Based on such monitoring and evaluation,  the Company will
either  recommend the  selection,  continuation  or termination of an investment
manager to the Company's  clients.  The final decision is made by the client. In
certain instances,  clients have requested that affiliates of the Company act as
investment manager.  GAMCO, an affiliate of Mario J. Gabelli, was selected to be
one of the  investment  managers,  along with  others,  to one of the  Company's
consulting  clients upon the  recommendation of TPI or TBL. Such  recommendation
was made  based on an  evaluation  of all  relevant  factors  by TPI or TBL.  In
addition,  TBL was  retained as the  investment  advisor of the Global  Advisors
Portfolio,  N.V.  and an  investment  by this  fund  has  been  made in  Gabelli
International II, a fund operated by an affiliate of the Company.  In accordance
with the terms of this fund, no affiliate of TPI or TBL can manage more than 15%
of the  assets  of this  fund.  In  accordance  with the  investment  management
agreement dated February 22, 1993 by and between the Global  Advisors  Portfolio
N.V.  and TBL,  TBL was  terminated  as of the close of business on November 15,
1996. TBL does not anticipate receiving further fees from this fund.

         In the  future,  the  Company  may  enter  into  transactions  with its
directors,  officers,  stockholders  of 5% of its Common Stock or  affiliates of
Lynch or Mr. Gabelli,  but will do so only if the terms of such transactions are
no less  favorable  to the Company  than could be  obtained by the Company  from
unaffiliated third parties.

Payment from Officer

         Ms. Manzke will pay $200,000 to the Company. Ms. Manzke has advised the
Company that she had provided consulting services for a fee to a principal of an
investment  fund  for  which a  subsidiary  of the  Company  currently  performs
services. Ms. Manzke believes that her services were not within the scope either
of her  employment or the  Company's  business  activities,  but has advised the
Company that she will no longer  render  individual or  independent  services to
such principal.


                                                        51

<PAGE>




Item 13.    Exhibits, List and Reports on Form 8-K.


            (a)   Documents filed as part of this report:

         1. The following  consolidated  financial statements of the Company are
included in Item 7:

Year Ended December 31, 1997

         Report of Independent Auditors
         Consolidated   Balance   Sheets  as  of  December  31,  1997  and  1996
         Consolidated Statements of Income for the years ended
          December 31, 1997 and 1996
         Consolidated Statements of Shareholders' Equity for the years ended
          December 31, 1997 and 1996
         Consolidated Statements of Cash Flows for the years ended
          December 31, 1997 and 1996
         Notes to Consolidated Financial Statements

  Exhibit No.

            3.1   Restated   Certificate   of   Incorporation   of  the  Company
                  (incorporated  herein by reference to the  Company's  Form S-1
                  filed with the Commission on December 16, 1991).

            3.2   By-Laws of the Company  (incorporated  herein by  reference to
                  the Company's  Form S-1 filed with the  Commission on December
                  16, 1991).

            3.3   Amendment to the Certificate of  Incorporation of the Company,
                  dated December 23, 1993  (incorporated  herein by reference to
                  the Company's Form 10-K filed with the Commission on March 29,
                  1994).

            4.1   Specimen  representing  the Rights  Certificate of the Company
                  (incorporated  herein by reference to the  Company's  Form S-1
                  filed with the Commission on December 16, 1991).

            4.2   Specimen  representing  the  Class A Common  Stock,  $0.01 par
                  value, of the Company (incorporated herein by reference to the
                  Company's  Form S-1 filed with the  Commission on December 16,
                  1991).

           10.5   Investment  Management  Agreement  dated  September  20, 1990,
                  between American Masters Fund (Cayman) Limited  (referenced in
                  the  Prospectus  as "The Ultima  Funds  Limited")  and Tremont
                  (Bermuda)  Limited  (incorporated  herein by  reference to the
                  Company's  Form S-1 filed with the  Commission on December 16,
                  1991).


                                                        52

<PAGE>



           10.9   Consulting Services Agreement dated as of May 1, 1991, between
                  Harold Cohen and Tremont Partners,  Inc.  (incorporated herein
                  by  reference  to  the  Company's  Form  S-1  filed  with  the
                  Commission on December 16, 1991).

          10.17   Consulting  Agreements between Leon Meyers and each of Tremont
                  Partners,  Inc. and Tremont  (Bermuda)  Limited  (incorporated
                  herein by reference to the  Company's  Form 8-K filed with the
                  Commission on January 12, 1993).

          10.22   Letter  Agreement dated October 25, 1993,  between the Company
                  and Sandra L. Manzke  (incorporated herein by reference to the
                  Company's  Form 10-K  filed with the  Commission  on March 29,
                  1994).

          10.27   Lease  between  First  Properties  of Bermuda  Ltd and Tremont
                  (Bermuda)  Limited,  dated  February  23,  1994  (incorporated
                  herein by reference to the Company's  Form 10-K filed with the
                  Commission on March 29, 1994).

          10.29   Consulting Services Agreement between Omega Overseas Partners,
                  Ltd.  and  Tremont  (Bermuda)  Limited  dated  April  1,  1994
                  (incorporated  herein by reference to the Company's  Form 10-K
                  filed with the Commission on March 29, 1994).

          10.30   Employment  Agreement dated April 22, 1994 between the Company
                  and Robert I.  Schulman  (incorporated  herein by reference to
                  the Company's  Form 10-Q filed with the  Commission on May 12,
                  1994).

          10.31   Stock  Option  Agreement  dated  April 22,  1994  between  the
                  Company  and  Robert  I.  Schulman   (incorporated  herein  by
                  reference to the Company's Form 10-Q filed with the Commission
                  on May 12, 1994).

          10.33   Stock  Option  Agreement  dated  December 15, 1994 between the
                  Company  and  Stephen  T.  Clayton   (incorporated  herein  by
                  reference to the Company's Registration Statement No. 33-89966
                  on Form S-1 and Post-Effective Amendment No. 1 to Registration
                  Statement No.  33-81438 on Form S-1 filed with the  Commission
                  on March 3, 1995).

          10.34   Employment  Agreement  dated  September  25, 1995  between the
                  Company and Sandra L. Manzke (incorporated herein by reference
                  to the  Company's  Form  10-Q  filed  with the  Commission  on
                  November 13, 1995).

          10.35   Amended  Employment  Agreement  dated as of December 15, 1995,
                  between  the  Company  and  Robert I.  Schulman  (incorporated
                  herein by  reference to the  Company's  Form 10-KSB filed with
                  the Commission on March 12, 1997).

          10.36   Amended  Employment  Agreement  dated as of December 13, 1996,
                  between the Company and Sandra L. Manzke  (incorporated herein
                  by  reference  to the  Company's  Form  10-KSB  filed with the
                  Commission on March 12, 1997).

          10.37   Amended  Employment  Agreement  dated as of December 13, 1996,
                  between  the  Company  and  Robert I.  Schulman  (incorporated
                  herein by  reference to the  Company's  Form 10-KSB filed with
                  the Commission on March 12, 1997).


                                                        53

<PAGE>





          10.38   Amendment,  dated  December 13, 1996,  to Lease  between First
                  Properties  of Bermuda  Ltd. and Tremont  ("Bermuda")  Limited
                  dated February 23, 1994.

          10.39   Lease between Gateside - Rye Company and the Company dated
                  April 18, 1997.

          10.40   Stock Option Agreement dated May 15, 1997 between the Company 
                  and Stephen T. Clayton.

          10.41   Stock Option Agreement dated May 15, 1997 between the Company
                  and Bruce D. Ruehl.

          10.42   Master  Agreement  dated as of June 5, 1997 among the Company,
                  Tremont Bermuda Limited, Tremont International Insurance Ltd.,
                  Mutual Risk Management  (Holdings) Ltd., MGL Investments Ltd.,
                  Hemisphere  Management  Limited and The Anglo-Dutch  Insurance
                  Company Limited.

          10.43   Stock Purchase Agreement dated as of June 5, 1997 between the 
                  Company and MGL Investments Ltd.

          10.44   Stock Option Agreement dated June 12, 1997 between the Company
                  and Sandra L. Manzke.

          10.45   Stock Option Agreement dated June 12, 1997 between the Company
                  and Robert I.Schulman.

          10.46   Stock Option Agreement dated June 12, 1997 between the Company
                  and John L.Keeley, Jr.

          10.47   Stock Option Agreement dated June 12, 1997 between the Company
                  and Alan A. Rhein.

          10.48   Stock Option Agreement dated June 12, 1997 between the Company
                  and Jimmy L. Thomas.

          10.49   Stock  Purchase  Agreement  dated as of July 1,  1997  between
                  Tremont  MRM  Services  Limited  and  Mutual  Risk  Management
                  (Holdings) Ltd.

          10.50   Shareholders' Agreement dated as of July 1, 1997 among Tremont
                  MRM  Services   Limited,   Tremont  (Bermuda)   Limited,   The
                  Anglo-Dutch   Insurance   Company   Limited  and  Mutual  Risk
                  Management (Holdings) Ltd.

          10.51   Amendment to Employment Agreement dated as of December 10,
                  1997, between the Company and Sandra L. Manzke.

          10.52   Amendment to Employment Agreement dated as of December 10, 
                  1997, between the Company and Robert I. Schulman.



                                                        54

<PAGE>



           21.1   Subsidiaries of the Company  (incorporated herein by reference
                  to the Company's  Form 10-K filed with the Commission on March
                  28, 1996).

           23.1   Consent of Ernst & Young LLP, independent auditors.

           23.2   Consent of Goldstein Golub Kessler & Company,P.C., independent
                  auditors.

           99.1   Press Release dated  January 5, 1993  (incorporated  herein by
                  reference to the Company's  Form 8-K filed with the Commission
                  on January 12, 1993).

           99.3   Press Release dated January 18, 1994  (incorporated  herein by
                  reference to the Company's  Form 8-K filed with the Commission
                  on January 18, 1994).

           99.4   Press Release dated June 5, 1997.

           99.5   Press Release dated August 11, 1997.

                    (b)       Reports on Form 8-K.

                              None.


                                                        55

<PAGE>



                                                    SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                  TREMONT ADVISERS, INC.
                                                   (Registrant)
                                              By /s/ Stephen T. Clayton
                                                  Stephen T. Clayton
                                                  Chief Financial Officer

Dated: March 18, 1998

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
    <S>                                       <C>                                                   <C>                        

Signature                                Title                                                    Date

/s/ Sandra L. Manzke                     Chairman of the Board and                           March 18, 1998
--------------------
Sandra L. Manzke                         Chief Executive Officer



/s/ Robert I. Schulman                   President; Chief Operating                          March 18, 1998
----------------------
Robert I. Schulman                       Officer and Director



/s/ John L. Keeley, Jr.                  Director                                            March 18, 1998
-----------------------
John L. Keeley, Jr.



/s/ Alan A. Rhein                        Director                                            March 18, 1998
-----------------
Alan A. Rhein



/s/ Jimmy L. Thomas                      Director                                            March 18, 1998
-------------------
Jimmy L. Thomas



/s/ Suzanne S. Hammond                   Secretary & Treasurer                               March 18, 1998
----------------------
Suzanne S. Hammond



/s/ Stephen T. Clayton                   Chief Financial Officer                             March 18, 1998
----------------------
Stephen T. Clayton

</TABLE>

                                                        56

<PAGE>

<TABLE>
     <S>                                               <C>                                     <C>

                                                   EXHIBIT INDEX
=========================================================================================================
                                                                                              Page No.
---------------------------------------------------------------------------------------------------------
   3.1                      Restated Certificate of Incorporation of the Company (incorporated   ___
                                  herein by reference to the Company's Form S-1 filed with the
                                           Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
   3.2                         By-Laws of the Company (incorporated herein by reference to the   ___
                            Company's Form S-1 filed with the Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
   3.3                     Amendment to the Certificate of Incorporation of the Company, dated   ___
                          December 23, 1993 (incorporated herein by reference to the Company's
                                       Form 10-K  filed with the  Commission  on March 29, 1994).
---------------------------------------------------------------------------------------------------------
   4.1                             Specimen representing the Rights Certificate of the Company   ___
                        (incorporated herein by reference to the Company's Form S-1 filed with
                                               the Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
   4.2                     Specimen representing the Class A Common Stock, $0.01 par value, of   ___
                           the Company (incorporated herein by reference to the Company's Form
                               S-1 filed with the Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
   10.5                      Investment Management Agreement dated September 20, 1990, between   ___
                          American Masters Fund (Cayman) Limited (referenced in the Prospectus
                                  as "The Ultima Funds Limited") and Tremont
                        (Bermuda) Limited (incorporated herein by reference to
                        the Company's Form S-1 filed with the Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
   10.9                         Consulting Services Agreement dated as of May 1, 1991, between   ___
                               Harold Cohen and Tremont Partners, Inc. (incorporated herein by
                     reference to the Company's Form S-1 filed with Commission on December 16, 1991).
---------------------------------------------------------------------------------------------------------
  10.17                          Consulting Agreements between Leon Meyers and each of Tremont   ___
                     Partners, Inc. and Tremont (Bermuda) Limited (incorporated herein by the
                          Company's Form 8-K filed with the Commission on January 12, 1993).
---------------------------------------------------------------------------------------------------------
  10.22                       Letter Agreement dated October 25, 1993, between the Company and   ___
                           Sandra L. Manzke (incorporated herein by reference to the Company's
                                       Form 10-K  filed with the  Commission  on March 29, 1994).
---------------------------------------------------------------------------------------------------------
  10.27                    Lease between First Properties of Bermuda Ltd and Tremont (Bermuda)   ___
                         Limited, dated February 23, 1994 (incorporated herein by reference to
                                the Company's Form 10-K filed with the Commission on March 29, 1994).


                                                         57

<PAGE>




---------------------------------------------------------------------------------------------------------
  10.29                    Consulting Services Agreement between Omega Overseas Partners, Ltd.   ___
                               and Tremont (Bermuda) Limited dated April 1, 1994 (incorporated
                                 herein by  reference to the Company's Form 10-K  filed with the
                                 Commission on March 29, 1994).
---------------------------------------------------------------------------------------------------------
  10.30                      Employment Agreement dated April 22, 1994 between the Company and   ___
                         Robert I. Schulman (incorporated herein by reference to the Company's
                                         Form 10-Q filed with the  Commission on May 12, 1994).
---------------------------------------------------------------------------------------------------------
  10.31                    Stock Option Agreement dated April 22, 1994 between the Company and   ___
                         Robert I. Schulman (incorporated herein by reference to the Company's
                                         Form 10-Q filed with the  Commission on May 12, 1994).
---------------------------------------------------------------------------------------------------------
  10.33                             Stock Option Agreement dated December 15, 1994 between the   ___
                           Company and Stephen T. Clayton (incorporated herein by reference to
                             the Company's Registration Statement No. 33-89966 on Form S-1 and
                              Post-Effective Amendment No. 1 to Registration Statement No. 33-
                                81438 on Form S-1 filed with the  Commission  on March 3, 1995).
---------------------------------------------------------------------------------------------------------
  10.34                              Employment Agreement dated September 25, 1995 between the   ___
                         Company and Sandra L. Manzke (incorporated herein by reference to the
                                 Company's Form 10-Q filed with the Commission on November 13, 1995).
                                                                                    
---------------------------------------------------------------------------------------------------------
  10.35                            Amended Employment Agreement dated as of December 15, 1995,   ___
                            between the Company and Robert I. Schulman (incorporated herein by
                           reference to the Company's Form 10-KSB filed with the Commission on March 12,1997).
---------------------------------------------------------------------------------------------------------
  10.36                            Amended Employment Agreement dated as of December 13, 1996,   ___
                              between the Company and Sandra L. Manzke (incorporated herein by
                           reference to the Company's Form 10-KSB filed with the Commission on March 12, 1997). 
---------------------------------------------------------------------------------------------------------
  10.37                            Amended Employment Agreement dated as of December 13, 1996,   ___
                            between the Company and Robert I. Schulman (incorporated herein by
                           reference to the Company's Form 10-KSB filed with the Commission on March 12, 1997).
---------------------------------------------------------------------------------------------------------
  10.38                             Amendment, dated December 13, 1996, to Lease between First    61
                                Properties of Bermuda Ltd. and Tremont (Bermuda) Limited dated 
                                 February 23, 1994.
---------------------------------------------------------------------------------------------------------
  10.39                      Lease between Gateside-Rye Company and the Company dated April 1,    62
                                                                                         1997.
---------------------------------------------------------------------------------------------------------
  10.40                      Stock Option Agreement dated May 15, 1997 between the Company and    63
                                            Stephen T. Clayton.



                                                        58

<PAGE>




---------------------------------------------------------------------------------------------------------
  10.41                      Stock Option Agreement dated May 15, 1997 between the Company and    66
                                                                               Bruce D. Ruehl.
---------------------------------------------------------------------------------------------------------
  10.42                           Master Agreement dated as of June 5, 1997 among the Company,    69
                                Tremont Bermuda Limited, Tremont International Insurance Ltd.,
                                 Mutual Risk Management (Holdings) Ltd., MGL Investments Ltd.,
                                   Hemisphere Management Limited and The Anglo-Dutch Insurance
                                                                              Company Limited.
---------------------------------------------------------------------------------------------------------
  10.43                          Stock Purchase Agreement dated as of June 5, 1997 between the    70
                                                              Company and MGL Investments Ltd.
---------------------------------------------------------------------------------------------------------
  10.44                     Stock Option Agreement dated June 12, 1997 between the Company and   105
                                                                             Sandra L. Manzke.
---------------------------------------------------------------------------------------------------------
  10.45                     Stock Option Agreement dated June 12, 1997 between the Company and   108
                                                                           Robert I. Schulman.
---------------------------------------------------------------------------------------------------------
  10.46                     Stock Option Agreement dated June 12, 1997 between the Company and   111
                                                                           John L. Keeley, Jr.
---------------------------------------------------------------------------------------------------------
  10.47                     Stock Option Agreement dated June 12, 1997 between the Company and   114
                                                                                Alan A. Rhein.
---------------------------------------------------------------------------------------------------------
  10.48                     Stock Option Agreement dated June 12, 1997 between the Company and   117
                                                                              Jimmy L. Thomas.
---------------------------------------------------------------------------------------------------------
  10.49                      Stock Purchase Agreement dated as of July 1, 1997 between Tremont   120
                               MRM Services Limited and Mutual Risk Management (Holdings) Ltd.
---------------------------------------------------------------------------------------------------------
  10.50                     Shareholders' Agreement dated as of July 1, 1997 among Tremont MRM   144
                                  Services Limited, Tremont (Bermuda) Limited, The Anglo-Dutch
                               Insurance Company Limited and Mutual Risk Management (Holdings)
                                                                                          Ltd.
---------------------------------------------------------------------------------------------------------
  10.51                       Amendment to Employment Agreement dated as of December 10, 1997,   167
                                                     between the Company and Sandra L. Manzke.
---------------------------------------------------------------------------------------------------------
  10.52                       Amendment to Employment Agreement dated as of December 10, 1997,   168
                                                   between the Company and Robert I. Schulman.
---------------------------------------------------------------------------------------------------------
   21.1                   Subsidiaries of the Company (incorporated herein by reference to the   ___
                             Company's Form 10-K filed with the Commission on March 28, 1996).
---------------------------------------------------------------------------------------------------------
   23.1                                    Consent of Ernst & Young LLP, independent auditors.   169
---------------------------------------------------------------------------------------------------------
   23.2                        Consent of Goldstein Golub Kessler & Company, P.C., independent   170
                                                                                     auditors.



                                              59

<PAGE>



---------------------------------------------------------------------------------------------------------
   99.1               Press Release dated January 5, 1993 (incorporated herein by reference to   ___
                               the Company's Form 8-K filed with the Commission on January 12,
                                                                                        1993).
---------------------------------------------------------------------------------------------------------
   99.3                 Press Release dated January 18, 1994 (incorporated herein by reference   ___
                            to the Company's Form 8-K filed with the Commission on January 18,
                                                                                        1994).
---------------------------------------------------------------------------------------------------------
   99.4                                                      Press Release dated June 5, 1997.   171
---------------------------------------------------------------------------------------------------------
   99.5                                                   Press Release dated August 11, 1997.   172
=========================================================================================================


</TABLE>
                                                        60

<PAGE>
Exhibit 10.38
                                             13th December, 1996


Mr. Yohann Wong, President
Tremont (Bermuda) Limited
Tremont House, 4 Park Road
Hamilton 11



Dear Johann,

                    Lease of Tremont House


     Thank you for you letter of 26th November, 1996.  As per the original
lease effective 1st March, 1994 under Article 11. of same we are prepared to
renew the lease for a further three years effective 1st March, 1997, at an
annual rent of $66,000.  We will consider further renewal 90 days before expiry,
which will depend on BELCO needs and the market value.  Other terms and 
conditions will remain the same with the exception that effective 1st March,
1997 Castle Realty Ltd. (formerly First Properties of Bermuda) will no longer
be the agent and you will be dealing directly with ourselves.

     Please sign the attached letter signifying your agreement to these terms
and conditions.

     With kind regards,




                                        /s/ Keith B. Spurling
                                        K.B. Spurling
                                        Sr. Manger, Finance & Administration
KBS:mjaf
encl.


Agreed  /s/ Johann Wong
        Johann Wong, President
        TREMONT (BERMUDA) LTD.
                                        
                                        1
<PAGE>
Exhibit 10.39

     Lease, dated as of April 1, 1997, between Gateside-Rye Company, as 
landlord, and Tremont Advisers, Inc., as tenant, is for office space of 8,222
square feet located on the second floor of 555 Theodore Fremd Road, Rye, New 
York, in the building known as Building "C", a part of the International
Corporate Center, as more particularly described on Exhibit A to the Lease. The
Lease has a term of five years commencing on September 1, 1997 and ending on
August 31, 2002, unless sooner terminated in accordance with the provisions
of the Lease, and provides for monthly fixed rental payments of $17,129.17.
<PAGE>
Exhibit 10.40

                             STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (the "Agreement")  dated as of the 15th day of May, 1997,
by and between  STEPHEN T. CLAYTON,  an individual  residing at 65 Raemont Road,
Granite Springs, New York 10527 ( the "Executive");  and TREMONT ADVISERS,  INC.
("Tremont"),  a Delaware  Corporation having its principal  executive offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, the Executive is an officer of Tremont; and

WHEREAS,  Tremont has decided to grant the  Executive  options to purchase up to
10,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Executive an option ("the
Option") to acquire up to 10,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary  of the grant date (being May 15, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  2,500 shares as of the date of
this  agreement,  2,500 shares on the 1st  anniversary  of the execution of this
agreement being May 15, 1998 and 5,000 on the 2nd anniversary of this agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Executive, for any reason, whether by the
Company or by the  Executive,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Executive  shall  desire to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Executive's  offer  notice to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the Executive's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.
                                        1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred to in Section 3,  Tremont  shall  deliver to  Executive  a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Executive shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Executive:

                  Stephen T. Clayton
                  65 Raemont Road
                  Granite Springs, New York  10527

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.
                                       2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be binding  upon  Executive  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Stephen T. Clayton
Stephen T. Clayton



TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President
                                        3
<PAGE>

Exhibit 10.41

                             STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (the "Agreement")  dated as of the 15th day of May, 1997,
by and between BRUCE D. RUEHL,  an  individual  residing at 2 Silver Birch Lane,
Ridgefield,  Connecticut  06877 ( the "Executive");  and TREMONT ADVISERS,  INC.
("Tremont"),  a Delaware  Corporation having its principal  executive offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, the Executive is an officer of Tremont; and

WHEREAS,  Tremont has decided to grant the  Executive  options to purchase up to
10,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Executive an option ("the
Option") to acquire up to 10,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary  of the grant date (being May 15, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  2,500 shares as of the date of
this  agreement,  2,500 shares on the 1st  anniversary  of the execution of this
agreement being May 15, 1998 and 5,000 on the 2nd anniversary of this agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Executive, for any reason, whether by the
Company or by the  Executive,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Executive  shall  desire to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Executive's  offer  notice to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the Executive's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.
                                        1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred to in Section 3,  Tremont  shall  deliver to  Executive  a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Executive shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Executive:

                  Bruce D. Ruehl
                  2 Silver Birch Lane
                  Ridgefield, Connecticut  06877

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.
                                        2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be binding  upon  Executive  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Bruce D. Ruehl
Bruce D. Ruehl


TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President
                                        3
<PAGE>

Exhibit 10.42

         MASTER  AGREEMENT  made  this  5th  day of  June,  1997  among  Tremont
Advisers,  Inc., a Delaware  corporation,  with  offices at 555  Theodore  Fremd
Avenue,  Rye,  NY 10580  ("Tremont"),  Tremont  (Bermuda)  Limited,  an exempted
Bermuda company ("TBL"),  Tremont International Insurance Ltd., a Cayman Islands
exempted  limited  company,  with  offices  at  Genesis  Building,   2nd  Floor,
Georgetown, Grand Cayman, Cayman Islands, B.W.I. ("TIL"), Mutual Risk Management
(Holdings)  Ltd.,  a Bermuda  corporation,  with  offices  at 44 Church  Street,
Hamilton,  HM HX Bermuda ("MRM"),  MGL Investments Ltd., a Delaware  corporation
with offices at One Logan Square, Suite 1400,  Philadelphia,  Pennsylvania 19103
("MGL"),  Hemisphere  Management  Limited,  a Bermuda  company,  with offices at
Hemisphere House, 40 Church Street,  Hamilton,  Bermuda  ("Hemisphere")  and The
Anglo-Dutch  Insurance  Company  Limited,  a Cayman  Islands  corporation,  with
offices at  Genesis  Building,  2nd  Floor,  Georgetown,  Grand  Cayman,  Cayman
Islands, B.W.I. ("AngloDutch").

                                   WITNESSETH:

         WHEREAS,  the parties to this  Agreement  are entering into a series of
transactions  represented by a series of agreements,  documents and instruments,
and MGL intends to make a tender offer for certain shares of the common stock of
Tremont;

         WHEREAS, it is intended that, except as otherwise provided, the various
transactions  are mutually  contingent such that one shall not become  effective
unless all shall become effective;

         WHEREAS, MGL intends to commence the tender offer prior to
the effectiveness of the various transactions;

         WHEREAS,  Tremont  and TBL are  engaged in the  business  of  providing
consulting and specialized  investment services to investment funds,  investment
managers and investors as well as the  management  and  sponsoring of investment
funds, both offshore (in the case of TBL) and onshore (in the case of Tremont);

         WHEREAS,  TIL issues and sells certain  insurance and annuity  products
utilizing offshore investment vehicles;

         WHEREAS, Anglo-Dutch designs and markets insurance and
annuity products utilizing offshore investment vehicles;

         WHEREAS,  MRM is engaged in the business of providing  risk  management
services in the alternative  insurance market as well as other insurance product
and  management  services and MGL is an  affiliate of MRM doing  business in the
United States;

         WHEREAS, Hemisphere is engaged in the business of providing
management and administration services for offshore investment
funds;
                                       1
<PAGE>
         NOW, THEREFORE, it is agreed as follows:

         1.       The Transactions.

                  The  various   transactions  (the   "Transactions")   and  the
principal agreements,  documents and instruments (the "Agreements") entered into
and to be entered into among the parties are as follows:

                  (a)      The Tender Offer

                           MGL intends to immediately make a tender offer for
shares of the Class B Common Stock of Tremont (the "Tender Offer").  MGL intends
to acquire that number of shares which shall equal up to 15% of the total issued
and outstanding shares of the Class A Common Stock and the Class B Common Stock,
taken together,  of Tremont. MGL has prepared,  for dissemination to the Class B
shareholders of Tremont, the following documents:

                           (x)    Letter of Transmittal; and

                           (y)    Offer Letter.

                           The principal terms of the Tender Offer are as
                           follows:

                           (i)  The price per share tendered is $3.75 U.S;

                           (ii) The  aggregate  number of shares to be purchased
                           is not less than 505,000 and not more than 615,000;

                           (iii) The time  period for the Tender  Offer shall be
                           from June 6, 1997 through July 7, 1997; and

                           (iv) The Tender  Offer shall be made  pro-rata to all
                           holders of the Class B Shares;  if more than  615,000
                           shares  shall be  tendered,  then MGL shall  purchase
                           100% of the  shares  tendered  by  holders  of  1,000
                           shares  or  less  and a  proportionate  amount,  on a
                           pro-rata basis, of shares tendered by holders of more
                           than 1,000 shares.

                  (b)      Acquisition of Tremont Shares

                           If the Tender Offer is successful, MGL intends to
purchase  from  Tremont,  and  Tremont  intends to issue and sell to MGL,  up to
340,000 shares of Tremont's Class B Common Stock (the "Tremont Share Purchase").
                                   2
<PAGE>
The  principal  Agreements  to be entered into with respect to the Tremont Share
Purchase shall include the following:

                           (i) Stock Purchase Agreement between Tremont and MGL.

                  (c)      Acquisition of TIL Shares

                  Anglo-Dutch  intends  to  sell  to MRM,  and  MRM  intends  to
purchase from Anglo-Dutch, ordinary shares of TIL representing 51% of the issued
and  outstanding  shares of TIL, for a purchase price equal to the book value of
such shares (the "TIL Share  Purchase").  In  addition,  MRM intends to purchase
from  TIL,  and TIL  intends  to issue  and sell to MRM  1,000  shares  of TIL's
newly-created   preferred  shares  for  U.S.   $5,000,000  (the  "TIL  Preferred
Purchase").  Simultaneously,  MRM shall agree to perform certain  administrative
services for TIL at cost plus 15%. The  principal  Agreements to be entered into
with respect to the TIL Share  Purchase  and the TIL  Preferred  Purchase  shall
include the following:

                           (i)              Stock Purchase Agreement among TIL,
                           Anglo-Dutch and MRM;


                           (ii)             Amendment to TIL Memorandum of
                           Association and Amendment to TIL Articles of
                           Association;

                           (iii) Shareholders  Agreement among TIL,  AngloDutch,
                           MRM and TBL; and

                           (iv) Services Agreement between TIL and MRM.

                  (d)      Formation and Subscription for Shares of Tremont
MRM Services Limited

                  Anglo-Dutch,  TBL and MRM intend to form and own  Tremont  MRM
Services Limited ("TMSL"), a Bermuda exempt company,  which will perform certain
services for TIL (the "TMSL Services Arrangement").  MRM will purchase, and TMSL
will issue and sell to MRM,  twenty percent (20%) of TMSL's ordinary shares (the
"TMSL Share Purchase"). The principal Agreements to be entered into with respect
to the TMSL Services  Arrangement  and the TMSL Share Purchase shall include the
following:

                                        3
<PAGE>
       
                           (ii)  Shareholders  Agreement among TMSL  AngloDutch,
                           MRM and TBL; and

                           (iii) Services Agreement between TMSL and TIL.

                  (e)      Software License

                  In order to assist MRM in its account  management  activities,
TBL, TIL and Anglo-Dutch will license certain computer systems to MRM, including
the account  management and reporting system,  the insurance proposal system and
word  processing  files for the  production of contracts  and private  placement
memoranda.

                           (i)              Software License Agreement between
                           Anglo-Dutch and MRM (the "License Agreement");

                  (f)      Mutual Cooperation and Non-competition

                  The parties have entered into the various  provisions  of this
Agreement relating to cooperation and non-competition.

         2.       Effectiveness of Transactions

                  Each of the parties  shall proceed  expeditiously  and in good
faith to complete all of the Agreements in order to effectuate the Transactions.
The Agreements  may be executed at different  times.  Notwithstanding  the prior
execution of any of the Agreements, and notwithstanding the provisions of any of
the Agreements,  the  effectiveness  of the Transactions and the Agreements with
respect  to  each  of the  Transactions  shall  be  governed  by  the  following
provisions:

                  (a) The Tender Offer shall become effective in accordance with
its terms  and the  Tremont  Share  Purchase  shall  only be  effected  upon the
termination of the Tender Offer.

                  (b)      The following Transactions:

                           (i)              the TIL Share Purchase;

                           (ii)             the TIL Preferred Purchase;

                           (iii)            the TMSL Services Arrangement;

                           (iv)             the TMSL Share Purchase;
     
                                        4
<PAGE>
                           (v)              the Software License Agreement; and

                           (vi)             Cooperation and Non-Competition.

and each and all of the Agreements  relating to each of the  Transactions  shall
become effective  simultaneously and none shall be effective unless all shall be
effective.  The  effectiveness of each shall be a condition to the effectiveness
of each other. In the event that any portion of any of the Transactions shall be
required to be undertaken  prior to such  effectiveness,  the parties shall take
such steps as shall be necessary to revise or undo any such portion in the event
that the effectiveness of all of them shall not occur on or before July 31, 1997
(the  "Outside  Date").  The parties  may extend the Outside  Date if all of the
parties shall agree to such extension. If all of the Transactions shall not have
become  effective on or before the Outside Date, as it may be so extended,  none
of the Transactions shall be consummated.

         3.       Joint Marketing Agreement.

                  (a)  Each of  Tremont,  TBL,  MRM and  Hemisphere,  and  their
respective  affiliates (for this purpose, an "Introducing  Party") has access to
various clients ("Proprietary  Clients") who may be suitable for the proprietary
investment  funds or services  which are sponsored by one of the other  parties.
For  purposes  of this  Agreement,  affiliates  of any of the  parties  shall be
included  within the  definition  of such party  within the meaning set forth in
this Agreement. For purposes of this Agreement,  "Investment Fund" shall mean an
investment fund sponsored by any of the parties,  whether  publicly or privately
offered, and whether offered in the United States or offshore.

                  (b) During the Term (as hereinafter defined), each Introducing
Party shall use reasonable business efforts to market to its Proprietary Clients
the  Investment  Funds and services  sponsored by each of the other parties (for
this purpose, a "Sponsor"),  it being understood that no Introducing Party shall
have any  obligation to market an  Investment  Fund of a Sponsor  which,  in the
opinion of the  Introducing  Party, is directly  competitive  with an Investment
Fund sponsored by the Introducing Party.

                  (c)  The  specific   procedures   applicable  to  the  overall
agreements in this Section 3 are set forth in Sections 4 and 5 below.

                                        5
<PAGE>
         4.       Marketing Procedures.

                  The  following   procedures   shall  apply  to  the  marketing
arrangements referred to in Section 3 above.

                  (a) The  Introducing  Party will  introduce the Sponsor to its
Proprietary  Clients  (who  shall  then  become  "Prospective  Clients"  for the
purposes of this Agreement).

                  (b) At the Sponsor's request, the Introducing Party, solely as
an  independent  contractor  and without any ability to bind the  Sponsor,  will
assist the Sponsor in presentations to Prospective Clients, including attendance
at  meetings  with  clients,   preparation  of  materials  for  presentation  to
Prospective  Clients and follow-up to assist in the  conclusion of  arrangements
with Prospective Clients.

         5.  Standards  of  Conduct.  In  performing  the  services  under  this
Agreement,  the Introducing  Party shall fully comply with each of the following
requirements:

                  (a) The Introducing Party shall at all times comply fully with
all of the provisions of any statute,  rule,  regulation or order  pertaining to
the activities of the Introducing Party.

                  (b) The  Sponsor  shall have the  right,  for any  reason,  to
determine  that the  Introducing  Party shall not pursue  arrangements  with any
Prospective  Client  and,  if the  Sponsor  shall make such  determination,  the
Sponsor shall give notice to the  Introducing  Party of such  determination.  In
such event,  the  Introducing  Party shall  undertake no further  services  with
respect to such  Prospective  Client on the  Sponsor's  behalf.  Notwithstanding
anything to the  contrary in this  Section  6(b),  if the reason for the Sponsor
determining not to pursue  arrangements with any Prospective  Client is that the
Sponsor presently has or has had a prior relationship with such Proposed Client,
the Sponsor's  notice shall so state and, in such event,  the Introducing  Party
shall not receive any  compensation  with  respect to such  Prospective  Client,
whether or not the Sponsor shall receive any  compensation  with respect to such
Prospective Client.

                  (c) The  Introducing  Party shall not,  without the  Sponsor's
prior  direction  or  approval,  make any  representation  with  respect  to the
Sponsor, oral or written, to any Prospective Client.
                         
                                        6
<PAGE>
         6.       Exclusive Fund Administration.

                  (a) TBL presently administers certain Investment Funds for its
own account and for others. With the exception of the Investment Funds presently
administered  by  TBL,  during  the  Term,  Hemisphere  will  be  the  exclusive
administrator for all Investment Funds  "controlled" by TBL or MRM. For purposes
of this Section,  "control" shall mean the absolute power and right to designate
service providers, such as administrators, and the power and right to enter into
an agreement with such providers on behalf of the Investment Fund.

                  (b)  During  the  Term,  each  of TBL  and  MRM  will  use its
reasonable  business  efforts to have Hemisphere  appointed as  administrator on
each Investment Fund with respect to which each of them has a marketing 
agreement or other business arrangement. Notwithstanding the foregoing, all
parties understand that TBL does not "control" such Investment Funds and, 
therefore, TBL shall not be in breach of this agreement if any such Investment
Fund does not so engage Hemisphere for any reason.

                  (c) No  Investment  Fund shall be  required  to enter into any
arrangements with Hemisphere unless (i) the Administration Agreement proposed by
Hemisphere  shall be upon terms and conditions  customary in the industry,  (ii)
the fees and other charges imposed by Hemisphere  shall be competitive and equal
to the lowest fees and  charges  charged by  Hemisphere  to  similarly  situated
investment  funds  and (iii)  Hemisphere  shall be  ready,  willing  and able to
provide commercially competitive service in accordance with the highest industry
standards.

                  (d) Neither TBL nor MRM will engage in the  administration  of
any Investment Fund during the Term (except as provided in the first sentence of
subparagraph  (a)) unless Hemisphere shall fail to comply with the standards set
forth in subparagraph (c) with respect to any Investment Fund.

                  (e) Where  appropriate,  TBL and  Hemisphere  will arrange for
compensation  to be  payable to TBL for its  directing  of  Investment  Funds to
Hemisphere under this Section 6.

         7.       Life and Annuity Products.

                  (a) MRM shall not solicit any hedge fund  manager with respect
to the  marketing  of an offshore  insurance  product  similar to the  insurance
products being marketed by TIL and TMSL except through TMSL.

                                        7
<PAGE>
                  (b) In the event that a manager of a hedge fund shall  contact
MRM concerning the use of MRM Life or another subsidiary of MRM as the issuer of
an offshore  insurance product to be primarily marketed in conjunction with such
hedge fund, MRM shall use its reasonable  best efforts to direct that hedge fund
manager to TMSL. In connection with such efforts,  MRM shall direct such manager
to  representatives  of TBL  and/or  Anglo-Dutch  and shall  assist  the  latter
companies  in  soliciting   such  manager  on  behalf  of  TIL  and  TMSL.   If,
notwithstanding  such  efforts by MRM,  the hedge fund  manager  chooses  not to
utilize  the  services  of TIL and  TMSL,  then MRM may,  thereafter,  offer the
services of MRM Life to such manager.  The products and services  offered by MRM
Life shall be offered at prices  which  shall not be lower than the lower of (i)
 .75% for  variable  annuity  products  and 1%  annually of the cash value of the
policy of the initial premium for variable life insurance products;  or (ii) the
prices at which comparable  services are then being offered by TIL and TMSL, net
of sales allowances and/or commissions, if any.

                  (c)  Clients  seeking   offshore  hedge  fund  type  insurance
products may be  introduced  from time to time to MRM by  independent  financial
planners  and similar  organizations.  MRM shall refer such  clients to TMSL and
TIL.  If,  notwithstanding  such  referral,  any such client shall choose not to
utilize the  services of TMSL and TIL,  then MRM Life may offer to such client a
similar  product.  The  services  offered by MRM Life shall be offered at prices
which are not significantly different than the prices at which such services (or
reasonably similar services) are then being offered by MRM and its Affiliates to
TIL and TMSL.

                  (d)  If  any  client  seeking  an  offshore  hedge  fund  type
insurance  product  from MRM shall  have  previously  been a client or  business
relationship of any affiliate of TBL or TMSL, then the provisions of Section (c)
above shall apply  except that the prices to be offered by MRM shall be governed
by the last sentence of Section (b) in lieu of the last sentence of Section (c).

                  (e) For purposes of this Section 7, a  "Significant  Financial
Institution"  shall  mean a  financial  institution  offering  a wide  range  of
financial  products and  services  (i.e.,  not an  institution  whose  principal
business  is the  management  of hedge  funds) and (i) having a net worth of not
less  than  U.S.$100,000,000,  (ii)  gross  annual  revenues  of not  less  than
U.S.$250,000,000,    or   (iii)   assets   under    management    greater   than
U.S.$2,000,000,000.  If a Significant Financial Institution shall contact MRM or
any of its Affiliates with respect to the use of an offshore  insurance  product
in  connection  with a  hedge  fund,  MRM  shall  have no  duty  to  refer  such

                                   8
<PAGE>
institution to TIL or TMSL, even if the principal  investment  strategy involved
the use of offshore hedge fund managers.

         8.       Development by MRM of Certain Products.

                  During the Term,  TMSL and TIL will supply copies of all their
accounting systems and software utilized to underwrite,  administer and reinsure
the life  insurance  products  presently  offered by TIL. TBL, TIL and TMSL will
make available to MRM copies of all legal  opinions,  reinsurance  contracts and
other contracts used in their  respective life insurance  business.  In addition
TBL, TMSL and TIL will make appropriate personnel available to MRM at cost, plus
15%, to assist MRM in developing a similar  business in a Bermuda life insurance
company, MRM Life.

         9. Finder's Fees. Each Sponsor shall pay to each Introducing  Party the
following compensation:

                  (a) For each Client  introduced to a Sponsor by an Introducing
Party  (including  those  Clients  introduced  pursuant  to  Section 3 and those
clients  introduced by MRM pursuant to Section  7(c)),  the Sponsor shall pay to
the Introducing Party an amount equal to twenty percent (20%) of all
compensation and fees earned by the Sponsor with respect to such Client (the 
"Finder's  Fee").  The Sponsor  shall pay such compensation  within  thirty  
(30) days after the end of the  calendar  month in which the  compensation  and
fees to which such  Finder's Fee shall relate shall have been paid. The
provisions of this paragraph a shall survive the termination of this Agreement.

                  (b) Inasmuch as the Sponsor shall have the absolute discretion
not to enter into an arrangement with any Proposed Client or Prospective Client,
no Finder's Fee shall be payable to the  Introducing  Party unless and until the
Sponsor shall  actually  enter into such  arrangement  and the Sponsor shall not
have any  obligation to the  Introducing  Party for failing or refusing to enter
into any such arrangement.

         10.      Indemnification.

                  (a) Each Party shall  indemnify  and hold  harmless the other,
its partners, employees and agents, from and against any loss, damage, costs and
expenses,  including  reasonable  attorneys'  fees,  to the extent caused by any
breach by such party of any of its  agreements or  representations  contained in
this Agreement.

                  (b) Each Party shall  indemnify  and hold  harmless  the other
from and against any loss,  damage,  costs and  expenses,  including  reasonable

                                        9
<PAGE>
attorneys'  fees,  arising out of or relating to any  violation by such party of
any securities laws.

         11.      Term.

                  The term of this Agreement shall be co-extensive with the term
of Services Agreement referred to in Section 1(d)(iii).


         12.      Miscellaneous Provisions.

                  (a) This agreement may not be amended or modified except by an
instrument in writing signed by the party to be charged.

                  (b) This agreement shall be governed by the laws of Bermuda.

                  (c) No party shall have the right to assign or delegate any of
its  obligations  under  this  agreement  to any  party  and any such  attempted
assignment  or  delegation  shall be void.  This  agreement  shall  otherwise be
binding  upon and inure to the  benefit  of the  parties  and  their  respective
successors and assigns.

                  (d) Any notices which may be given under this agreement  shall
be in writing, shall be sent by recognized overnight courier to any party at its
address set forth above, and shall be deemed given one day after being sent.

                  (e)      This agreement may be executed in counterparts.

                                        10
<PAGE>
         IN WITNESS WHEREOF,  the parties have executed this agreement as of the
date and year first above written.


                                                 TREMONT ADVISERS, INC.


                                              By: /s/ Robert I. Schulman
                                                 Name: Robert I.Schulman
                                                 Its:  President
 


                                                  MUTUAL RISK MANAGEMENT
                                                  (HOLDINGS) LTD.


                                              By:  /s/ David J.Doyle
                                                 Name:  David J. Doyle
                                                 Its:  Director



                                                   MGL INVESTMENTS LTD.


                                               By: /s/ Frederick W. London
                                                  Name:  Frederick W. London
                                                  Its:  _____________________



                                                   TREMONT (BERMUDA) LIMITED



                                                By: /s/ Johann Wong
                                                   Name: Johann Wong
                                                   Its:  Director

                                            11
<PAGE>                    
                                                  TREMONT INTERNATIONAL
                                                  INSURANCE LIMITED


                                               By: /s/ Johann Wong
                                                  Name: Johann Wong
                                                  Its:  Director


                                                   HEMISPHERE MANAGEMENT
                                                   LIMITED


                                                By: /s/ Christopher Wetherhill
                                                   Name: Christopher Wetherhill
                                                   Its:  President


                                                     THE ANGLO-DUTCH INSURANCE
                                                     COMPANY LIMITED


                                                By: /s/ Peter Mackay
                                                   Name: Peter Mackay
                                                   Its: Director


                                        12

<PAGE>

Exhibit 10.43


                            STOCK PURCHASE AGREEMENT

                                 by and between

                             TREMONT ADVISERS, INC.

                                       and

                              MGL INVESTMENTS LTD.


                            Dated as of June 5, 1997







                                        1

<PAGE>



                                TABLE OF CONTENTS

                                                                           Page



Section 1.        Definitions and Principles of Construction.................1
         1.01     Defined Terms............................................. 1
         1.02     Principles of Construction................................ 5

Section 2.        Sale and Purchase of Stock...............................  6
         2.01     Sale and Purchase of Stock...............................  6
         2.02     Purchase Price...........................................  6
         2.03     Closing..................................................  6

Section 3.        Representations and Warranties of the Company............  7
         3.01     Organization and Good Standing...........................  7
         3.02     Authorization............................................  7
         3.03     Enforceability...........................................  8
         3.04     Approvals................................................  8
         3.05     Capitalization...........................................  9
         3.06     Form 10-KSB; Form 10-QSB; Form 10........................ 10
         3.07     Material Adverse Change.................................. 10
         3.08     Litigation............................................... 11
         3.09     Defaults................................................. 11
         3.10     Certificate of Incorporation and By-laws; Minute Books... 12
         3.11     Taxes.................................................... 12
         3.12     Transactions with Affiliates............................. 13
         3.13     Disclosure............................................... 14
         3.14     Governmental Regulations................................. 15
         3.15     Brokers.................................................. 15

Section 4.        Representations, Warranties and Covenants of the 
                    Purchaser.............................................. 15
         4.01     Investment Intent........................................ 15
         4.02     No Registration of Securities............................ 16
         4.03     Investor Status.......................................... 16
         4.04     Organization and Good Standing........................... 16
         4.05     Authorization............................................ 17
         4.06     Enforceability........................................... 17
         4.07     Approvals................................................ 18
         4.08     Brokers.................................................. 18





                                               2

<PAGE>




                                                                           Page


Section 5.        Further Agreements of the Parties........................ 18
         5.01     Protection Against Dilution.............................. 18
         5.02     Right to Elect Director.................................. 19
         5.03     Registration Rights...................................... 20
         5.04     Regulatory Information................................... 23

Section 6.        Covenant with Respect to Conduct of Business............. 24

Section 7.        Conditions to Closing.................................... 24
         (a)      Conditions to Purchase................................... 24
         (b)      Conditions to Sale....................................... 27

Section 8.        Indemnification.......................................... 29

Section 9.        Notices.................................................. 30

Section 10.       Survival of Representations and Warranties............... 31

Section 11.       Amendment or Waiver...................................... 31

Section 12.       Waiver of Jury Trial..................................... 31

Section 13.       Assignment............................................... 31

Section 14.       Miscellaneous............................................ 32


Exhibit A       -                 Form of Tender Offer Documents

Schedule 3.05(b)   -              Options


                                       3
<PAGE>



                  This STOCK  PURCHASE  AGREEMENT,  dated as of June 5, 1997, by
and between Tremont Advisers,  Inc. a Delaware corporation (the "Company"),  and
MGL Investments Ltd., a Delaware corporation (the "Purchaser").

                  In  consideration  of the mutual  covenants and agreements set
forth  herein and for good and valuable  consideration,  the receipt of which is
hereby acknowledged, the parties agree as follows:

                  Section 1.        Definitions and Principles of Construction.

                  1.01 Defined Terms. As used in this Agreement,  and unless the
context  requires a different  meaning,  the  following  terms have the meanings
indicated:

       "Affiliate" shall mean, with respect to a Person, a Person that directly,
or indirectly through one or more intermediaries,  controls, or is controlled by
or is  under  common  control  with,  such  Person.  For  the  purposes  of this
definition, the terms "control," "controlled by" and "under common control with"
shall have such meanings as are used in the Exchange Act.

      "Aggregate Outstanding Common" shall have the meaning set forth in
Section 5.02 hereof.


                                        4
                                   
<PAGE>



          "Agreement" shall mean this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.

          "Class A Common" shall mean the Class A Common Stock of the
Company, $0.01 par value per share.

          "Class B Common" shall mean the Class B Common Stock of the
Company, $0.01 par value per share.

          "Closing" shall have the meaning given to such term in Section 2.03
hereof.

          "Closing Date" shall have the meaning given to such term in Section
2.03 hereof.

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

          "Common Stock" shall mean the common stock of the Company.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.



                                         5

<PAGE>



          "Licenses" shall have the meaning given to such term in Section 3.09
hereof.

          "Lien" shall mean any lien, pledge, hypothecation, mortgage, security
interest,  claim,  lease,  charge,  option,  right  of first  refusal,  easement
encroachment, transfer restriction, or other encumbrance of any kind.

          "Material Adverse Effect" shall mean a material adverse effect upon
the  business,  assets,  condition  (financial  or  otherwise),   operations  or
prospects of the Company and its Subsidiaries, taken as a whole.

          "Persons" shall mean an individual, partnership, corporation,
association,   trust,  joint  venture,   unincorporated  organization,  and  any
government, governmental department or agency or political subdivision thereof.

          "Purchase Price" shall have the meaning given to such term in Section
2.02 hereof.

          "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.


                                             6

<PAGE>


          "Shares" shall have the meaning given to such term in Section 2.01
hereof.

           "Subsidiary" shall mean any corporation or other entity in which the
Company  directly  or  indirectly  owns or has the  power to vote  shares of any
capital stock or other ownership interests having ordinary voting power to elect
a majority of the directors of such  corporation,  or other  persons  performing
similar  functions for such entity, as the case may be, and each partnership and
limited  liability  company  in which  such  corporation  or entity is a general
partner or manager or member, as the case may be.

           "Tax Return" means a report, return or other information required to
be supplied to a  governmental  entity with  respect to Taxes  including,  where
permitted  or  required,  combined  or  consolidated  returns  for any  group of
entities that include the Company or any Subsidiary.

          "Taxes" means any federal, state, county, local or foreign taxes,
charges,  fees,  levies, or other assessments,  including all net income,  gross
income, sales and use, ad valorem,  transfer, gains, profits, excise, franchise,
real and personal property, gross receipt,  capital stock, production,  business
and occupation,  disability,  employment,  payroll, license,  estimated,  stamp,
custom  duties,  severance  or  withholding  taxes  or  charges  imposed  by any
governmental entity, including any interest and penalties (civil or criminal) on
or


                                           7

<PAGE>



additions to any such taxes and any  expenses  incurred in  connection  with the
determination, settlement or litigation of any Tax liability.

         "Tender Offer" shall mean the tender offer to be made by the
Purchaser to the holders of the Class B Common  resulting in the purchase of not
less than 505,000 shares of the Class B Common up to a maximum of 615,000 shares
of the  Class B  Common,  pursuant  to  that  certain  Offer  to  Purchase,  the
accompanying Letter of Transmittal to Tender Shares of Class B Common Stock, and
related documentation, in substantially the form annexed hereto as Exhibit A.

         1.02  Principles  of  Construction.   (a)  All  references  to
sections,  schedules and exhibits are to sections,  schedules and exhibits in or
to this Agreement unless otherwise specified.  The words "hereof," "herein," and
"hereunder"  and words of similar import when used in this Agreement shall refer
to this  Agreement  as a  whole  and not to any  particular  provisions  of this
Agreement.

        (b)      All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the 
United States.





                                        8

<PAGE>



                  Section 2.        Sale and Purchase of Stock.

                 2.01 Sale and Purchase of Stock.  At the Closing,  the Company
agrees  to issue  and sell to the  Purchaser,  and,  subject  to the  terms  and
conditions  hereof  and in  reliance  on  the  representations,  warranties  and
covenants set forth or referred to herein, the Purchaser agrees to purchase from
the  Company,  such  number of shares  of the Class B Common  representing  that
number of shares of Class B Common which,  when issued,  and taken together with
the Class B Common to be acquired by the  Purchaser in the Tender  Offer,  would
cause the  Purchaser to own as of the Closing  Date,  and after giving effect to
the number of shares of Class B Common  acquired by the  Purchaser in the Tender
Offer,  that number of shares which shall equal in number an aggregate amount of
twenty percent (20%) of the issued and outstanding  shares of Class A Common and
Class B Common (the aggregate number of shares of Class B Common being purchased
by the  Purchaser  pursuant  to this  Agreement  at the  Closing is  hereinafter
referred to as the "Shares").  Notwithstanding the foregoing,  the Company shall
not be required to sell to the Purchaser more than 340,000 Shares.

                  2.02 Purchase  Price.  The purchase price for the Shares shall
be Three Dollars and 75/100 ($3.75) per Share (the "Purchase Price").

                  2.03  Closing.  The  closing of the  purchase  and sale of the
Shares  (the  "Closing")  will take place at the  offices  of Newman  Tannenbaum
Helpern Syracuse &


                                                         9

<PAGE>



Hirschtritt  LLP, 900 Third Avenue,  New York,  New York, at 10:00 a.m. New York
time, on the date which is five (5) business  days  following the closing of the
sale and purchase of the shares acquired by the Purchaser pursuant to the Tender
Offer,  or at such other time,  date and place as the  parties  hereto may agree
upon (the  "Closing  Date").  At the  Closing,  the Company  will deliver to the
Purchaser against payment of the Purchase Price, in immediately available funds,
certificates representing the number of Shares.

    ection 3.        Representations and Warranties of the Company.  The Company
represents and warrants to, and for the benefit of, the Purchaser as follows:

                  3.01  Organization and Good Standing.  Each of the Company and
each  Subsidiary  (a) is duly  organized  and  existing in good  standing in its
jurisdiction  of formation,  (b) is duly qualified and authorized to do business
in all other jurisdictions in which the nature of its business or property makes
such  qualification  necessary,  except where such failure to qualify  would not
have a Material Adverse Effect,  and (c) has the power to own its properties and
to carry on its business as now conducted and as proposed to be conducted.

                  3.02 Authorization. The execution, delivery and performance by
the Company of this  Agreement  and the  issuance and sale by the Company of the
Shares (a) are within the Company's corporate power and authority, (b) have been
duly authorized by all necessary corporate proceedings, (c) do not conflict with
or result in any breach or violation  of any  provision  of the  Certificate  of
Incorporation or Bylaws (or similar governing


                                                       10

<PAGE>



documents) of the Company or any Subsidiary,  (d) do not conflict with or result
in any breach or violation of any provision of any law, regulation, or judgment,
writ,  injunction,   license  or  permit,  applicable  to  the  Company  or  any
Subsidiary, and (e) do not conflict with or result in any breach or violation of
any of the terms or  conditions  of, or  constitute  (or with notice or lapse of
time or both  constitute) a default  under,  or give rise to the creation of any
lien upon any of the property or assets of the Company or any Subsidiary,  under
any contract,  agreement,  lease or other instrument to which the Company or any
Subsidiary is a party or by which any of their  respective  assets or properties
are bound,  the  consequences  of which,  with respect to this clause (e), could
reasonably be expected to result in a Material Adverse Effect.

                  3.03 Enforceability. This Agreement has been duly executed and
delivered  by the  Company  and  constitutes,  the  valid  and  legally  binding
obligation of the Company  enforceable  against it in accordance with its terms,
except to the  extent  that its  enforceability  may be  limited  by  applicable
bankruptcy,  insolvency,  reorganization or other laws affecting the enforcement
of  creditors'  rights  generally  and by  principles  of equity  regarding  the
availability of remedies.

                  3.04 Approvals. The execution, delivery and performance by the
Company of this  Agreement,  and the  purchase  and sale of the  Shares,  do not
require  the  approval  or consent  of, or any  filing  with,  any  governmental
authority or agency or any other Person.



                                                   11




<PAGE>



                  3.05  Capitalization.  (a) The authorized capital stock of the
Company consists solely of: (i) 5,000,000 shares of Class A common stock,  $0.01
par value per share;  (ii) 5,000,000  shares of Class B common stock,  $0.01 par
value per share;  (iii) 350,000 shares of preferred  stock,  $1.00 par value per
share; and (iv) 650,000 shares of Series A (redeemable)  preferred stock,  $1.00
par value per share. As of the date hereof, (x) 1,284,718 of the shares of Class
A common stock were issued and outstanding;  (y) 2,599,739 shares of the Class B
common  stock  were  issued  and  outstanding;  and (z)  none of the  shares  of
preferred  stock  or  Series  A  (redeemable)  preferred  stock  was  issued  or
outstanding.  All of the outstanding shares of capital stock of the Company are,
and  upon  the  delivery  to  the  Purchaser  at  the  Closing  of  certificates
representing  the Shares in the manner set forth in  Section  2.03  hereof,  the
Shares, will be, duly authorized,  validly issued,  fully paid and nonassessable
and free and clear of all Liens.

         (b)      Except as otherwise set forth on Schedule 3.05(b), neither the
Company nor any Subsidiary  has  outstanding  any rights (either  pre-emptive or
other)  or  options  to  subscribe  for or  purchase  from the  Company  or such
Subsidiary  or any warrants or other  agreements  providing for or requiring the
issuance or purchase or other acquisition by or on behalf of the Company or such
Subsidiary  of, any capital  stock or other equity  interests or any  securities
convertible into or exchangeable for the Company's or such Subsidiary's  capital
stock or other equity interests.  There are no voting trusts or other agreements
or  understandings  with  respect  to the voting of the  capital  stock or other
equity  interests of the Company or such Subsidiary nor any  restrictions on the
transferability or sale


                                                     12

<PAGE>



of such shares or other  equity  interest  except under the  Securities  Act and
state "blue sky" or securities  laws.  Neither the Company nor any Subsidiary is
subject to any  obligation  (contingent or otherwise) to repurchase or otherwise
acquire,  redeem or retire any shares of capital stock or other equity interests
of the  Company  or  such  Subsidiary  or any  securities  convertible  into  or
exchangeable for any such capital stock or other equity interests.

                  3.06 Form 10-KSB;  Form 10-QSB;  Form 10. The Company's annual
report on Form 10-KSB for the year ended  December  31,  1996 and its  quarterly
report for the quarter  ended March 31,  1997,  as filed with the United  States
Securities and Exchange Commission, fairly and in all material respects presents
the financial  condition of the Company and a description  of its business.  The
Company is not required to have any class of its securities  registered pursuant
to Section 12 of the Exchange Act and does not have any class so registered.

                  3.07 Material  Adverse  Change.  Since  December 31, 1996, (i)
there  has been no  material  adverse  change  in the  business,  properties  or
financial  condition of the Company or its  Subsidiaries,  taken as a whole, and
the Company  does not now know of any such change that is  threatened,  (ii) the
Company and the Subsidiaries  have conducted their business only in the ordinary
course consistent with past practice, (iii) the Company has not declared or paid
any dividends or other  distributions  in respect of its capital stock, and (iv)
the Company and the  Subsidiaries  have not made any change in their  accounting
practices.



                                                13

<PAGE>



                  3.08 Litigation.  There is no litigation,  at law or in equity
or  any  proceeding   before  any  court,   board  or  other   governmental   or
administrative  agency or any  arbitrator  pending or, to the  knowledge  of the
Company, threatened against the Company or any of the Subsidiaries. No judgment,
decree or order of any  court,  board or other  governmental  or  administrative
agency  or  arbitrator  has been  issued  against  or binds the  Company  or any
Subsidiary.

                  3.09 Defaults.  Neither the Company nor any Subsidiary is, nor
upon and immediately after consummation of the transactions contemplated hereby,
will be,  in  default  in any  material  respect  under  any  provisions  of its
respective  Certificate  of  Incorporation  or  By-laws  (or  similar  governing
documents) or under any provisions of any franchise,  contract, agreement, lease
or other  instrument to which either the Company or any Subsidiary is a party or
by which either the Company or any  Subsidiary or its  respective  properties or
assets is bound nor is either the Company or any  Subsidiary in violation of any
law, judgment, decree or governmental order, rule or regulation which default or
violation has or would have a Material  Adverse Effect.  Each of the Company and
each Subsidiary owns or validly holds all licenses, permits, orders or approvals
of any  federal,  state,  local or foreign  governmental  or  regulatory  bodies
(including investment advisor and broker-dealer licenses) that are necessary for
the conduct of the business of the Company or such  Subsidiary,  as the case may
be,  except  for those  which the  failure  to obtain  would not have a Material
Adverse Effect  (collectively,  "Licenses").  All Licenses are in full force and

                                        14
<PAGE>
effect,  and no proceeding is pending or, to the knowledge of either the Company
or any Subsidiary, threatened to revoke or limit any License.

                  3.10 Certificate of Incorporation  and By-laws;  Minute Books.
The copies of the  Certificate of  Incorporation  and By-laws of the Company and
all amendments to each,  which have  heretofore been delivered to the Purchaser,
are true, correct and complete. The minute books of the Company contain true and
complete  records of all  meetings  and  consents  in lieu of  meetings of their
respective Board of Directors (and any committees thereof), or similar governing
bodies, since the time of their respective organizations. The stock books of the
Company are true, correct and complete.

                  3.11 Taxes.  Each of the Company and each Subsidiary has filed
all Tax Returns  required to be filed,  except to the extent that the failure to
file would not have a Material Adverse Effect.  All such Tax Returns were in all
respects true,  complete and correct and have been filed on a timely basis. Each
of the Company and each Subsidiary have paid, in the time and manner  prescribed
by law,  all  Taxes  that are due and  payable,  except to the  extent  that the
failure to pay would not have a Material Adverse Effect.  There are no Tax liens
on any property of the Company or any  Subsidiary.  Each of the Company and each
Subsidiary has established on their books and records  reserves  adequate to pay
all Taxes not yet due and  payable.  There are no  agreements,  waivers or other
arrangements  providing  for an  extension of time with respect to the filing of
any returns or the  assessment of any Tax or  deficiency  against the Company or
any of the Subsidiaries nor are there any


                                                        15

<PAGE>



known actions, suits, proceedings,  investigations or claims pending against the
Company  or any of the  Subsidiaries  in  respect  of  any  Tax,  assessment  or
governmental  charge, or any other matters under discussion  between the Company
or any of the Subsidiaries and any federal, state or local authority relating to
any Tax  assessments,  or  governmental  charges or any known claims against the
Company or any of the Subsidiaries  for additional  Taxes,  assessments,  or any
governmental charges asserted by any such authority.

                  3.12 Transactions with Affiliates. (a) Neither the Company nor
any Subsidiary has any indebtedness  to, nor is there any indebtedness  owing to
the Company or any Subsidiary from, (i) its officers,  directors or any of their
respective spouses or relatives or Affiliates,  and (ii), to its knowledge,  its
stockholders or any of their respective spouses or relatives or Affiliates.

               (b)      None of the officers or directors of the Company or any
Subsidiary or their  respective  spouses or relatives or  Affiliates  or, to the
knowledge  of the  Company or any  Subsidiary,  any of the  stockholders  of the
Company  or  any  Subsidiary  or  their  respective   spouses  or  relatives  or
Affiliates,  has any  contractual  or other claim  against,  any interest in any
property or assets used by, or otherwise  engaged in any transaction with either
the Company or any Subsidiary.

              (c)      None of the officers or directors of the Company or any
Subsidiary or their respective spouses or relatives or Affiliates, or, to the
knowledge of the


                                                        16

<PAGE>



Company  or  any  Subsidiary,  the  stockholders  or  significant  employees  or
consultants  of the Company or any  Subsidiary  or their  respective  spouses or
relatives  or  Affiliates,   owns,  directly  or  indirectly,   individually  or
collectively,  a material  interest in any entity which is a competitor with, or
client of, (or has any  existing  contractual  relationship)  the Company or any
Subsidiary.

                  3.13 Disclosure.  (a) All written  information with respect to
the Company,  any Subsidiary,  and, to the best of the Company's knowledge after
due  inquiry,  the  business  and the assets of the Company and each  Subsidiary
(other  than the  forecasted  balance  sheets  and  other  forecasted  financial
statements)  furnished to the Purchaser by the Company,  any  Subsidiary,  or on
behalf of the  Company  or any  Subsidiary,  were,  at the time the same were so
furnished,  complete  and  correct  in  all  material  respects,  or  have  been
subsequently  supplemented by other written  information to the extent necessary
to give the  Purchaser a true and accurate  knowledge  of the subject  matter of
such written information in all material respects. There is no fact known to the
Company or any Subsidiary, which has a Material Adverse Effect, or so far as the
Company or any Subsidiary can reasonably foresee, is reasonably likely to have a
Material  Adverse  Effect,  which  has  not  been  set  forth  in  such  written
information disclosed to the Purchaser prior to the Closing Date.

          (b)      No representation, warranty or statement made by the Company
or any Subsidiary in this Agreement, or in any agreement, certificate, statement
or document  required  to be  delivered  pursuant  hereto,  contains  any untrue
statement of a material fact or


                                                        17

<PAGE>



omits to  state a  material  fact  necessary  in  order  to make the  statements
contained in this Agreement or in such other agreement,  certificate,  statement
or document  not  misleading  in light of the  circumstances  in which they were
made.

                  3.14    Governmental    Regulations.    Assuming    that   the
representations  and  warranties  of the Purchaser set forth in Section 4.03 are
true and  correct,  the offer,  issuance  and  delivery to the  Purchaser of the
Shares hereunder are exempt from registration under the Securities Act.

                  3.15 Brokers. All negotiations  relative to this Agreement and
the  transactions  contemplated  hereby  have been  carried  out by the  Company
directly with the Purchaser  without the intervention of any Person on behalf of
the  Company  in such  manner as to give rise to any valid  claim by any  Person
against  the  Purchaser  for a finder's  fee,  brokerage  commission  or similar
payment.

   Section 4.        Representations, Warranties and Covenants of the Purchaser.
The Purchaser represents and warrants to, and covenants with, the Company that:

                  4.01 Investment  Intent. The Purchaser is acquiring the Shares
for  investment,  and not with a view to selling or otherwise  distributing  the
Shares.



                                                        18

<PAGE>



                  4.02 No  Registration  of  Securities.  The Purchaser is aware
that the Shares have not been registered under the Securities Act or under state
securities  or blue sky laws in  reliance  upon  certain  exemptions  from  such
registration,  and  may  not be  transferred  except  pursuant  to an  effective
registration  under the  Securities  Act and under state  securities or blue sky
laws or in a transaction exempt from such registration.

                  4.03  Investor  Status.  (a) The Purchaser is able to bear the
economic  risk of the  investment  of the  Purchaser  in the Shares and has such
knowledge and experience in financial and business matters,  so as to be capable
of evaluating the merits and risks of the prospective investment in the Shares.

         (b)      The Purchaser is aware that no Federal or state agency has (i)
made any  finding  or  determination  as to the  fairness  of any  aspect of the
investment  in the  Shares  or (ii)  passed  on or  endorsed  the  merits of the
offering of the Shares.

            (c)      The Purchaser is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

                  4.04  Organization  and Good Standing.  The Purchaser has been
duly  organized and is validly  existing and in good standing  under the laws of
the State of Delaware,  and it has the legal right and all  necessary  corporate
power and authority to execute, deliver and perform all of its obligations under
this Agreement. Prior to the


                                                        19

<PAGE>



Closing  Date  the  Purchaser  shall  deliver  to  the  Company  copies  of  its
Certificate of Incorporation and By-laws,  together with all amendments thereto,
in each case certified as to the truth, accuracy and completeness thereof by the
Purchaser's secretary.

                  4.05 Authorization. The execution, delivery and performance by
the Purchaser of this Agreement, and the purchase by the Purchaser of the Shares
(a) are within the Purchaser's corporate power and authority, (b) have been duly
authorized by all necessary corporate  proceedings of the Purchaser,  (c) do not
conflict  with or result in any  breach or  violation  of any  provision  of the
Certificate of  Incorporation  or Bylaws of the  Purchaser,  (d) do not conflict
with  or  result  in any  breach  or  violation  of any  provision  of any  law,
regulation, order, judgment, writ, injunction,  license or permit, applicable to
the Purchaser,  or (e) conflict with or result in any breach or violation of any
of the terms or conditions of, or constitute (or with notice or lapse of time or
both  constitute) a default under, or give rise to the creation of any lien upon
any of the property or assets of the Purchaser,  under any contract,  agreement,
lease or other  instrument  to which the Purchaser is a party or by which any of
its respective  assets or properties is bound, the  consequences of which,  with
respect to this  clause  (e),  could  reasonably  be expected to have a material
adverse  effect on the validity or  enforceability  of this  Agreement or on the
ability of the Purchaser to perform its obligations hereunder.

   4.06     Enforceability.  This Agreement has been duly executed and delivered
and is the valid and legally binding obligation of the Purchaser enforceable in 
accordance


                                                        20



<PAGE>



with its terms,  except to the extent that its  enforceability may be limited by
applicable  bankruptcy,  insolvency,  reorganization or other laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies.

                  4.07 Approvals. The execution, delivery and performance by the
Purchaser of this  Agreement,  and the  purchase and sale of the Shares,  do not
require  the  approval  or consent  of, or any  filing  with,  any  governmental
authority or agency or any other Person.

                  4.08 Brokers. All negotiations  relative to this Agreement and
the  transactions  contemplated  hereby have been  carried out by the  Purchaser
directly with the Company  without the  intervention  of any Person on behalf of
the  Purchaser  in such  manner as to give rise to any valid claim by any Person
against the Company or any Subsidiary for a finder's fee,  brokerage  commission
or similar payment.

                  Section 5.        Further Agreements of the Parties.

                  5.01  Protection  Against  Dilution.  The  Purchaser is hereby
accorded   protection   against   dilution  with  respect  to  the  transactions
contemplated  hereunder. In the event of the proposed issuance by the Company of
any shares of its common stock  (other than  pursuant to the exercise of options
to purchase  common stock  issued to  employees,  directors  and officers of the
Company) (a "Subsequent Stock Issuance"),  the Purchaser shall have the right to
acquire Class B Common Shares in such issuance (the "Additional Class B


                                                       21
<PAGE>



Shares") in an amount (by number)  equal to up to  twenty-five  percent (25%) of
such  proposed  issuance  at the  purchase  price  and  terms  offered  to other
prospective  purchasers  in the issuance.  In the event the Company  proposes to
issue any such additional of shares of its capital stock, then the Company shall
give notice  thereof in writing to the  Purchaser  (the "Option  Notice") in the
manner  provided  herein not less than thirty (30) days prior to the date of the
proposed  issuance,  setting  forth  appropriate  details  with  respect to such
proposed  issuance.  The  Purchaser  may exercise  such right by giving,  within
fifteen (15) days after delivery to the Purchaser of the Option Notice, a notice
setting forth its election to acquire  Additional  Class B Shares.  In the event
the Purchaser elects to acquire  Additional  Class B Shares,  the closing of the
purchase  and sale of such  Additional  Class B Shares  will  take  place at the
offices  of the  Company on a date not later  than five (5) days  following  the
closing of the sale and  purchase  of the shares in such  issuance  to the other
prospective  purchasers.  At  the  closing  of  the  purchase  and  sale  of the
Additional  Class B Shares,  the Company will deliver to the  Purchaser  against
payment of the purchase price for the Additional Class B Shares,  in immediately
available  funds, or on such other terms as may be afforded other  purchasers in
the  Subsequent  Stock  Issuance,   certificates   representing  the  number  of
Additional Class B Shares.

                  5.02 Right to Elect Director. For so long as the Purchaser, or
its  Affiliates(s),  owns not less than fifteen  percent  (15%) of the aggregate
outstanding  amount of the Class A Common  and  Class B Common  (the  "Aggregate
Outstanding  Common"),  or such  lesser  amount as may be agreed to between  the
Company and the Purchaser, commencing


                                                  22

<PAGE>



with the first annual meeting of the  shareholders of the Company  following the
Closing  Date  and at each  meeting  of  such  shareholders  thereafter  for the
purposes of electing  directors,  the Purchaser shall have the right to nominate
one  director  for  election  to the  Company's  board of  directors;  provided,
however,  that until such first annual  meeting  following the Closing Date, the
Purchaser may require that the board increase its number by one (1) director and
fill such vacancy with an appointee selected by the Purchaser for a term to last
until such first annual  meeting.  In the event the Purchaser shall elect to not
so nominate or appoint such  director,  its shall  nevertheless  be permitted to
have an appointee  attend  every  regular and special  meeting of the  Company's
board of directors.

     5.03     Registration Rights.  The Company covenants and agrees as follows:

         (a)      Piggy-Back Registration.  For so long as the Purchaser, or its
Affiliates(s),  owns not  less  than  fifteen  percent  (15%)  of the  Aggregate
Outstanding  Common,  or such  lesser  amount as may be agreed  to  between  the
Company and the Purchaser, if, at any time following the date of this Agreement,
the Company shall file a  registration  statement  (other than any  registration
statement on Form S-4, Form S-8, or any successor  form) with the Securities and
Exchange  Commission  (the  "Commission")  while  the  Shares  are  owned by the
Purchaser,  the Company shall give the Purchaser at least 45 days' prior written
notice  of the  filing  of such  registration  statement.  If  requested  by the
Purchaser  in writing  within 30 days  after  receipt  of any such  notice,  the
Company  shall,  at  the  Company's  sole  expense  (other  than  the  fees  and
disbursements of counsel for the Purchaser
                                             23

<PAGE>



and the underwriting discounts, if any, payable in respect of the Shares sold by
the  Purchaser),  register or qualify  all or, at the  Purchaser's  option,  any
portion  of  the  Shares  concurrently  with  the  registration  of  such  other
securities,  all to the extent  requisite to permit the public offering and sale
of the  Shares  through  the  facilities  of all  securities  exchanges  and the
over-the-counter   markets  on  which  the  Company's   securities  are  traded.
Notwithstanding the foregoing,  if the managing underwriter of any such offering
shall advise the Company in writing that, in its opinion,  the  distribution  of
all or a portion of the Shares  requested  to be  included  in the  registration
concurrently   with  the  securities  being  registered  by  the  Company  would
materially  adversely  affect the distribution of such securities by the Company
for its own account, then the Purchaser if it has requested  registration of the
Shares  shall not be  entitled  to have the Shares (or the  portions  thereof so
designated by the managing underwriter) included in such registration statement,
provided  that no such  exclusion  or  reduction  shall be made as to any of the
Shares if any  securities  of the  Company  are  included  in such  registration
statement for the account of any Person other than the Company and the Purchaser
unless the  securities  included in such  registration  statement for such other
Person  shall have been  reduced pro rata to the  reduction  of the Shares which
were requested to be included in such registration.

            (b)      Demand Registration.  For so long as the Purchaser, or its
Affiliates(s),  owns not  less  than  fifteen  percent  (15%)  of the  Aggregate
Outstanding  Common,  or such  lesser  amount as may be agreed  to  between  the
Company and the  Purchaser,  if, at any one time after 12 months  following  the
date of this Agreement, the


                                                        24

<PAGE>



Company shall receive a written  request from the Purchaser to register the sale
of the Shares which the Purchaser then owns, provided the Company at the time of
such request is required to file periodic  reports under Section 13 or 15 of the
Exchange Act, the Company shall,  as promptly as  practicable,  at the Company's
sole expense (other than the fees and disbursements of counsel for the Purchaser
and the underwriting discounts, if any, payable in respect of the Shares sold by
the Purchaser)  prepare and file with the  Commission a  registration  statement
sufficient  to permit the public  offering  and sale of the Shares  through  the
facilities of all securities exchanges and the over-the-counter markets on which
the Company's securities are traded, and will use its best efforts to cause such
registration statement to become effective as promptly as practicable; provided,
however,  that the Company may delay the  effectiveness of such request until up
to 120 days after the board of directors of the Company has determined that such
a  registration  would not be in the best interests of the Company at such time.
The Company shall not be obligated to effect any  registration of its securities
pursuant to this Section 5.03(b) within six months after the effective date of a
previous  registration  statement  prepared and filed in accordance with Section
5.03(a) (in which such Shares could have been included).

             (c)      Company's Obligations.  (i) In the event of a registration
pursuant to the  provisions of this Section 5.03, the Company shall use its best
efforts to cause the Shares so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Purchaser may
reasonably request;  provided,  however, that the Company shall not by reason of
this Section 5.03(c) be required to qualify


                                                        25

<PAGE>



to do business in any state in which it is not otherwise required to qualify to
do business or to file a general consent to service of process; and

               (ii)    In the event of a registration pursuant to the provisions
of this Section 5.03, the Company shall furnish to the Purchaser such reasonable
number  of  copies  of the  registration  statement  and of each  amendment  and
supplement  thereto (in each case,  including  all  exhibits),  such  reasonable
number of copies of each prospectus contained in such registration statement and
each supplement or amendment  thereto  (including each preliminary  prospectus),
all of which shall conform to the  requirements  of the  Securities  Act and the
rules and regulations thereunder, and such other documents, as the Purchaser may
reasonably  request to facilitate the disposition of the Shares included in such
registration.

      (d)      Other Conditions.  In the event of a registration pursuant to the
provision of this Section 5.03, the Company and the Purchaser shall enter into a
cross-indemnity  agreement and a contribution agreement, each in customary form,
with each  underwriter,  if any, and, if requested,  enter into an  underwriting
agreement containing  conventional  representations,  warranties,  allocation of
expenses,  and customary  closing  conditions,  including,  without  limitation,
opinions of counsel and accountants' cold comfort letters,  with any underwriter
who acquires any of the Shares.

  5.04     Regulatory Information.  The Purchaser shall furnish the Company with
such information regarding itself and its Affiliates as may be reasonably
requested by the

                                                        26

<PAGE>



Company to the extent the Company  shall be required to amend any License of the
Company or any Subsidiary in connection  with the  transactions  contemplated or
referred to under this Agreement.

                  Section 6. Covenant with Respect to Conduct of Business.  From
the date hereof until the Closing the Company shall conduct its business only in
the ordinary course and in substantially the same manner as heretofore.

                  Section 7.        Conditions to Closing.

                  (a)  Conditions  to Purchase.  The  Purchaser's  obligation to
purchase the Shares at the Closing,  pursuant to this  Agreement,  is subject to
compliance  by the Company  with its  agreements  herein  contained,  and to the
satisfaction,  on or prior to the Closing Date with  respect to the  Purchaser's
obligation to consummate the Closing,  of the following  conditions  (compliance
with  which or the  occurrence  of which  may be  waived  in whole or in part in
writing by the Purchaser):

           (i)      Tender Offer.  The Purchaser shall have acquired the minimum
number of shares of Class B Common  pursuant to the Tender Offer as set forth in
Section 1.01 hereof.



                                                        27

<PAGE>



          (ii)     Charter Documents; Good Standing Certificate.  The Purchaser
shall have received from the Company (1) a  certificate  from a duly  authorized
officer thereof dated as of the Closing Date certifying as to (A) the absence of
any amendment to the Certificate of Incorporation not otherwise furnished to the
Purchaser pursuant to the terms hereof, and (B) the completeness and accuracy of
the  By-laws  of the  Company  as in  effect  on the  Closing  Date,  and  (2) a
certificate,  dated not more than twenty days prior to the Closing  Date, of the
Secretary of State of Delaware  certifying that the Company is duly incorporated
and in good standing under the laws of the State of Delaware.

          (iii)    Proof of Corporate Action.  The Purchaser shall have received
from the Company copies,  certified by a duly  authorized  officer thereof to be
true and complete as of the Closing Date, of the records of all corporate action
taken to authorize the execution, delivery and performance of this Agreement.

             (iv)     Incumbency Certificate.  The Purchaser shall have received
from the Company an incumbency certificate,  dated the Closing Date, signed by a
duly  authorized  officer  thereof,  and giving the name and  bearing a specimen
signature of each individual who shall be authorized to sign, in the name and on
behalf of the  Company,  this  Agreement  and to give  notices and to take other
action on behalf of the Company under this Agreement.



                                                        28

<PAGE>


                 (v)      Legal Opinion.  The Purchaser shall have received from
Newman Tannenbaum Helpern Syracuse & Hirschtritt LLP, counsel to the Company, at
the Closing their favorable  opinion,  dated the Closing Date, and covering such
matters with respect to the  transactions  contemplated by this Agreement as the
Purchaser may reasonably request.

           (vi)     Representations and Warranties; Officers' Certificates.  The
representations  and  warranties  of the Company  contained or  incorporated  by
reference herein shall be true and correct in all material respects on and as of
the Closing  Date;  and the Company  shall have  performed and complied with all
conditions,  covenants and agreements  required to be performed or complied with
by it prior to the Closing Date;  and the  Purchaser  shall have received on the
Closing Date a certificate to these effects  signed by an authorized  officer of
the Company.

         (vii)    Legality; Authorization.  The purchase of the Shares shall not
be  prohibited by any law or  governmental  order or  regulation,  and shall not
subject the Purchaser to any penalty,  special tax or other  onerous  condition.
All necessary consents,  approvals,  licenses, permits, orders and authorization
of, or  registrations,  declarations  and  filings  with,  any  governmental  or
administrative  agency  or with any other  Person,  with  respect  to any of the
transactions  contemplated  by this Agreement  shall have been fully obtained or
made and shall be in full force and effect.



                                                        29

<PAGE>



     (viii)   Litigation, Etc.  No suit, action, investigation, inquiry or other
proceeding  (including,  without limitation,  the enactment or promulgation of a
statute or rule) by or before any arbitrator or any  governmental  injunction or
order by a state or federal  court shall have been entered (1) as of the Closing
Date in connection  with the Agreement or any of the  transactions  contemplated
hereby or (2) at the Closing Date, which would have a Material Adverse Effect or
a material  adverse effect on the  transactions  contemplated by this Agreement,
including,  without  limitation,  the  acquisition  of the  Shares  contemplated
hereby.

                     (ix)     General.  All instruments and legal, governmental,
administrative  and corporate  proceedings in connection  with the  transactions
contemplated  by this  Agreement  shall be reasonably  satisfactory  in form and
substance to the Purchaser,  and the Purchaser shall have received copies of all
documents,   including,  without  limitation,  records  of  corporate  or  other
proceedings,  opinions of counsel, consents,  licenses,  approvals,  permits and
orders  which  the  Purchaser  may  have  reasonably   requested  in  connection
therewith.

                  (b) Conditions to Sale. The Company's  obligation to issue and
sell the  Shares at the  Closing,  pursuant  to this  Agreement,  is  subject to
compliance by the Purchaser with its  agreements  herein  contained,  and to the
satisfaction,  on or prior to the  Closing  Date with  respect to the  Company's
obligation to consummate the Closing,  of the following  conditions  (compliance
with  which or the  occurrence  of which  may be  waived  in whole or in part in
writing by the Company):


                                                        30

<PAGE>




             (i)      Charter Documents; Good Standing Certificate.  The Company
shall have received from the Purchaser (1) a certificate  from a duly authorized
officer thereof dated as of the Closing Date certifying as to (A) the absence of
any amendment to its Certificate of Incorporation not otherwise furnished to the
Company  pursuant to the terms hereof,  and (B) the completeness and accuracy of
the  By-laws  of the  Purchaser  as in effect  on the  Closing  Date,  and (2) a
certificate,  dated not more than twenty days prior to the Closing  Date,  of an
appropriate  government official certifying that the Purchaser is duly organized
and in good standing under the laws of Delaware.

            (ii)     Proof of Corporate Action.  The Company shall have received
from the Purchaser copies,  certified by a duly authorized officer thereof to be
true and complete as of the Closing Date, of the records of all corporate action
taken to authorize the execution, delivery and performance of this Agreement.

          (iii)    Incumbency Certificate.  The Company shall have received from
the Purchaser an  incumbency  certificate,  dated the Closing Date,  signed by a
duly  authorized  officer  thereof,  and giving the name and  bearing a specimen
signature of each individual who shall be authorized to sign, in the name and on
behalf of the  Purchaser,  this  Agreement and to give notices and to take other
action on behalf of the Purchaser under this Agreement.

           (iv)     Representations and Warranties; Officers' Certificates.  The
representations and warranties of the Purchaser contained or incorporated by
reference herein


                                                        31

<PAGE>



shall be true and  correct in all  material  respects  on and as of the  Closing
Date; and the Purchaser  shall have performed and complied with all  conditions,
covenants and  agreements  required to be performed or complied with by it prior
to the Closing  Date;  and the Company shall have received on the Closing Date a
certificate to these effects signed by an authorized officer of the Purchaser.

         (v)      Legality; Authorization.  The purchase of the Shares shall not
be  prohibited by any law or  governmental  order or  regulation,  and shall not
subject the Company to any penalty,  special tax or other onerous condition. All
necessary consents,  approvals,  licenses, permits, orders and authorization of,
or   registrations,   declarations   and  filings  with,  any   governmental  or
administrative  agency  or with any other  Person,  with  respect  to any of the
transactions  contemplated  by this Agreement  shall have been fully obtained or
made and shall be in full force and effect.

                Section 8. Indemnification.  (a) The Company and the Purchaser
each agree to indemnify and hold the other harmless  against any and all claims,
liabilities,  costs, damages or expenses (including  reasonable counsel fees and
disbursements) which at any time may be incurred by the other as a result of any
misrepresentation,  breach of warranty or non-fulfillment of any covenant on the
part of the indemnifying party contained herein.

      (b)      Subject to Section 10, the obligations of the Company and the
Purchaser under this Section 8 shall survive payment or transfer of the Shares.


                                                        32

<PAGE>




                  Section  9.  Notices.  Any  notice or other  communication  in
connection with this Agreement shall be deemed to be delivered if in writing (or
in the form of a  telecopy)  addressed  as  provided  below  and if  either  (a)
actually delivered or telecopied to said address or (b) in the case of a letter,
on the next  business  day  after the same  shall  have  been  deposited  with a
recognized international overnight courier:


                  If to the Company:

                           Tremont Advisers, Inc.
                           555 Theodore Fremd Avenue
                           Rye, New York 10580
                           Attention: Robert Schulman
                           Facsimile No.: 914-921-3499

                  With a copy to:

                           Newman Tannenbaum Helpern
                             Syracuse & Hirschtritt LLP
                           900 Third Avenue
                           New York, New York  10022
                           Attention: Michael G. Tannenbaum, Esq.
                           Facsimile No.: 212-371-1084

                  If to the Purchaser:

                           MGL Investments Ltd.
                           One Logan Square
                           Suite 1400
                           Philadelphia, Pennsylvania  19103
                           Attention: Andrew Walsh
                           Facsimile No.: 215-963-1210

                  With a copy to:

                           Gould & Wilkie
                           One Chase Manhattan Plaza
                           New York, New York  10005
                           Attention: Frederick W. London, Esq.
                           Facsimile No.: 212-809-6890

                                                    33

<PAGE>




                  Section 10. Survival of  Representations  and Warranties.  All
agreements,  representations and warranties made herein or in any certificate or
other document referred to herein or delivered pursuant hereto shall survive (i)
with respect to representations and warranties  contained herein, until eighteen
(18) months after the Closing, (ii) until eighteen (18) months after the Closing
with respect to each  covenant  and  agreement  contained  herein which is to be
performed  on or before  the  Closing,  and (iii)  with  respect  to each  other
covenant  and  agreement  contained  herein  until the last  date on which  such
covenant or agreement  specifies it is to be  performed,  or, if no such date is
specified, indefinitely.

                  Section 11.  Amendment or Waiver.  Neither this  Agreement nor
any terms hereof may be changed,  waived,  discharged or terminated  unless such
change, waiver, discharge or termination is in writing signed by the Company and
the Purchaser.

                  Section 12. Waiver of Jury Trial.  Each of the Company and the
Purchaser  hereby  irrevocably  waives all right to trial by jury in any action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising out of or  relating  to the  actions of the  Company  and the  Purchaser
pursuant to this Agreement in the  negotiation,  administration,  performance or
enforcement thereof.

      Section 13.       Assignment.  This Agreement is not assignable except by
operation of law or as each of the parties hereto may agree in writing and any
attempted assignment in violation of this provision shall be null and void.


                                                        34

<PAGE>




                  Section  14.  Miscellaneous.  This  Agreement  (including  the
Exhibits  and  Schedules)  sets forth the entire  understanding  of the  parties
hereto with respect to the  transactions  contemplated  hereby and supersede any
prior written or oral  understandings  with respect  thereto.  The invalidity or
unenforceability of any terms or provisions hereof shall not affect the validity
or enforceability  of any other term or provision  hereof.  The headings in this
Agreement are for convenience of reference only and shall not alter or otherwise
affect the  meaning  hereof.  This  Agreement  may be  executed in any number of
counterparts  which  together  shall  constitute  one  instrument  and  shall be
governed  by and  construed  in  accordance  with  laws of the State of New York
without  giving regard to the principles of conflicts of law, and shall bind and
inure to the benefit of the parties hereto and their  respective  successors and
permitted assigns.

                  IN WITNESS WHEREOF,  the parties hereto have caused their duly
authorized  officers to execute and deliver this  Agreement as of the date first
above written.


                                                     TREMONT ADVISERS, INC.

ATTEST:                                          By: /s/ Robert I. Schulman
                                                     Name: Robert I. Schulman
/s/ Stephen Clayton                                  Title: President
Name: Stephen Clayton
Title: Chief Financial Officer
                                                      MGL INVESTMENTS LTD.

ATTEST:                                          By:/s/ Richard E. O'Brien
                                                     Name: Richard E. O'Brien 
/s/ Frederick W. London                              Title: Vice President, 
Name:  Frederick W. London                                  Secretary and
Title: Assistant Secretary                                  Treasury


                                                        35

<PAGE>



           EXHIBIT A



         Form of Purchaser's Tender Offer Documents:

         1.       Offer to Purchase
         2.       Letter of Transmittal
         3.       Notice of Guaranteed Delivery
         4.       Letter to Brokers, et al.
         5.       Letter from Brokers, et al. to Clients
         6.       Guidelines for Certification of Taxpayer Identification Number
                  on Substitute IRS Form W-9


                                                      36

<PAGE>


                                                          SCHEDULE 3.05(b)

                             TREMONT ADVISERS, INC.
                            SUMMARY OF STOCK OPTIONS


The Following Class B Stock Options Were Outstanding As of May 30, 1997:

         Robert Schulman                      275,000
         Stephen Clayton                       20,000
         Bruce Ruehl                           10,000           305,000
                                         ------------


The Following Class B Stock Options Are Proposed As of May 30, 1997:

Directors:

         Sandra Manzke                         35,000
         Robert Schulman                       25,000
         Alan Rhein                            25,000
         John Keeley                           10,000
         Jimmy Thomas                          10,000           105,000
                                          -----------

Employees:

         Bill Vasu                             20,000            20,000
                                          -----------        ----------

Total Class B Stock Options Outstanding:      430,000

Terms of the proposed Class B Stock Options are as follows:

Price                                      $3.75

Exercise                                   Period  Options  will expire on fifth
                                           anniversary    Options    will   vest
                                           one-fourth on grant Options will vest
                                           one-fourth   on   first   anniversary
                                           Options will vest  one-half on second
                                           anniversary

                                           In the event of termination,  for any
                                           reason,  any  options  that  have not
                                           vested will lapse.

                                           Tremont  will have the first right to
                                           buy any  vested  options or shares if
                                           the director or employee shall desire
                                           to  sell,  assign  or  transfer  such
                                           shares.


                                                    37

<PAGE>

Exhibit 10.44
                             STOCK OPTION AGREEMENT

STOCK OPTION  AGREEMENT  (the  "Agreement")  dated as of June 12,  1997,  by and
between SANDRA L. MANZKE, an individual  residing at 12 Bishop Park Drive, Pound
Ridge, New York 10576 (the "Executive"); and TREMONT ADVISERS, INC. ("Tremont"),
a Delaware  Corporation  having its  principal  Executive  offices at  Corporate
Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, Ms. Manzke is an Executive of Tremont; and

WHEREAS,  Tremont has decided to grant the  Executive  options to purchase up to
35,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Executive an option ("the
Option") to acquire up to 35,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary of the grant date (being June 12, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  8,750 shares as of the date of
this  agreement,  8,750 shares on the 1st  anniversary  of the execution of this
agreement  being  June  12,  1998  and  17,500  on the 2nd  anniversary  of this
agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Executive, for any reason, whether by the
Company or by the  Executive,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Executive  shall  desire to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Executive's  offer  notice to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the Executive's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.

                                            1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred to in Section 3,  Tremont  shall  deliver to  Executive  a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Executive shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Executive:

                  Sandra L. Manzke
                  12 Bishop Park Drive
                  Pound Ridge, NY 10576

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.
                                   2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be binding  upon  Executive  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Sandra L. Manzke
Sandra L. Manzke


TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President
                                        3
<PAGE>
Exhibit 10.45



                             STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (the  "Agreement")  dated as of the June 12, 1997, by and
between  ROBERT I.  SCHULMAN,  an  individual  residing at 18 Green Valley Road,
Armonk,   New  York  10504  (the  "Executive");   and  TREMONT  ADVISERS,   INC.
("Tremont"),  a Delaware  Corporation having its principal  Executive offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, Mr. Schulman is an Executive of Tremont; and

WHEREAS,  Tremont has decided to grant the  Executive  options to purchase up to
25,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Executive an option ("the
Option") to acquire up to 25,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary of the grant date (being June 12, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  6,250 shares as of the date of
this  agreement,  6,250 shares on the 1st  anniversary  of the execution of this
agreement  being  June  12,  1998  and  12,500  on the 2nd  anniversary  of this
agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Executive, for any reason, whether by the
Company or by the  Executive,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Executive  shall  desire to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Executive's  offer  notice to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the Executive's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.

                                        1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred to in Section 3,  Tremont  shall  deliver to  Executive  a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Executive shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Executive:

                  Robert I. Schulman
                  18 Green Valley Road
                  Armonk, New York  10504

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  Chief Financial Officer

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.
                                        2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be binding  upon  Executive  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Robert I. Schulman
Robert I. Schulman


TREMONT ADVISERS, INC.


By: /s/ Stephen Clayton
Stephen Clayton
Chief Financial Officer

                                        3

<PAGE>
Exhibit 10.46
                             STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (the  "Agreement")  dated as of the June 12, 1997, by and
between  JOHN L. KEELEY,  JR., an  individual  residing at 4138 Central  Avenue,
Western Springs,  Illinois 60558 (the "Director");  and TREMONT  ADVISERS,  INC.
("Tremont"),  a Delaware  Corporation  having its principal  Director offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, Mr. Keeley is a Director of Tremont; and

WHEREAS,  Tremont  has decided to grant the  Director  options to purchase up to
10,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Director an option  ("the
Option") to acquire up to 10,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary of the grant date (being June 12, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  2,500 shares as of the date of
this  agreement,  2,500 shares on the 1st  anniversary  of the execution of this
agreement  being  June  12,  1998  and  5,000  on the  2nd  anniversary  of this
agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Director,  for any reason, whether by the
Company  or by the  Director,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Director  shall  desire  to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Director's  offer  notice  to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the  Director's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.

                                        1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred  to in Section 3,  Tremont  shall  deliver  to  Director a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Director  shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Director:

                  John L. Keeley, Jr.
                  4138 Central Avenue
                  Western Springs, Illinois  60558

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.
                                        2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be  binding  upon  Director  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ John L. Keeley, Jr.
John L. Keeley, Jr.


TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President

                                            3

<PAGE>
Exhibit 10.47

                             STOCK OPTION AGREEMENT

STOCK OPTION  AGREEMENT  (the  "Agreement")  dated as of June 12 , 1997,  by and
between ALAN A. RHEIN, an individual  residing at 16 Belmont Drive South, Roslyn
Heights,   New  York  11577  (the  "Director");   and  TREMONT  ADVISERS,   INC.
("Tremont"),  a Delaware  Corporation  having its principal  Director offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, Mr. Rhein is a Director of Tremont; and

WHEREAS,  Tremont  has decided to grant the  Director  options to purchase up to
25,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Director an option  ("the
Option") to acquire up to 25,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary of the grant date (being June 12, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  6,250 shares as of the date of
this  agreement,  6,250 shares on the 1st  anniversary  of the execution of this
agreement  being  June  12,  1998  and  12,500  on the 2nd  anniversary  of this
agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Director,  for any reason, whether by the
Company  or by the  Director,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Director  shall  desire  to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Director's  offer  notice  to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the  Director's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.

                                        1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred  to in Section 3,  Tremont  shall  deliver  to  Director a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Director  shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Director:

                  Alan A. Rhein
                  16 Belmont Drive South
                  Roslyn Heights, New York  11577

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.

                                        2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be  binding  upon  Director  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Alan A. Rhein
Alan A. Rhein


TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President
                                   3

<PAGE>
Exhibit 10.48
                             STOCK OPTION AGREEMENT

STOCK OPTION  AGREEMENT  (the  "Agreement")  dated as of June 12,  1997,  by and
between  JIMMY  L.  THOMAS,  an  individual   residing  at  100  Gibbon  Street,
Alexandria,  Virginia  22314  ( the  "Director");  and  TREMONT  ADVISERS,  INC.
("Tremont"),  a Delaware  Corporation  having its principal  Director offices at
Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York.

                                   WITNESSETH:

WHEREAS, Mr. Thomas is a Director of Tremont; and

WHEREAS,  Tremont  has decided to grant the  Director  options to purchase up to
10,000  shares of Tremont  Class B common stock  ("Class B Common  Stock"),  par
value $0.01 at an exercise price of $3.75 per share.

NOW,  THEREFORE,  in consideration of the premises and the covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
hereto hereby agree as follows:

         1. OPTION  GRANT.  Tremont  hereby  grants to Director an option  ("the
Option") to acquire up to 10,000  shares of Class B Common Stock  (Collectively,
the "Option Shares") at an exercise price of $3.75 per share ("Exercise Price").

         2.  EXERCISE  PERIOD.  The  Options  will  expire  on the  fifth  (5th)
anniversary of the grant date (being June 12, 2002).  The Options shall vest and
become  exercisable  on the following  schedule:  2,500 shares as of the date of
this  agreement,  2,500 shares on the 1st  anniversary  of the execution of this
agreement  being  June  12,  1998  and  5,000  on the  2nd  anniversary  of this
agreement.
(collectively, the "Exercise Period").

In the event of the termination of the Director,  for any reason, whether by the
Company  or by the  Director,  or upon the  expiration  of this  Agreement,  any
options that have not vested will lapse.

In the event  that at any time the  Director  shall  desire  to sell,  assign or
transfer  all or any part of his  vested  Options  or shares of Stock,  he shall
first  offer  such  Options or shares of Stock (the  "Offered  Options"  and the
"Offered  Stock,"  respectively)  to Tremont by written  notice,  specifying the
number of Offered  Options  and/or the  number of shares of Offered  Stock.  The
purchase  price for each share of Offered  Stock  Shall be equal to the best bid
price  thereof  on the date of the  Director's  offer  notice  to  Tremont.  The
purchase  price for an Offered Option shall be an amount equal to the greater of
(x)  $3.75,  or (y) the amount of the best bid price for a share of Stock on the
date of the  Director's  offer notice to Tremont less $3.75.  Tremont shall have
the  option,  exercisable  no later than 7 days after  receipt of such notice to
purchase the Offered Options and/or the Offered Stock, as the case may be.

         3. METHOD OF EXERCISE.  The Options,  after  vesting,  may be exercised
during  the  Exercise  Period  in whole or in part by giving  written  notice to
Tremont specifying the number of Option Shares to be purchased.  The notice must
be directed to Tremont at Tremont's  Corporate  address,  which currently is the
address set forth in Section 8 below.  The date of exercise is the date on which
such notice is received by Tremont.  Such notice must be  accompanied by payment
to Tremont in full for the Option  Shares to be  purchased  upon such  exercise.
Payment may be made in cash, certified check or bank guaranteed check.

                                            1
<PAGE>
         4.  DELIVERY OF SHARES.  Promptly  after  payment for the Option Shares
referred  to in Section 3,  Tremont  shall  deliver  to  Director a  certificate
representing  the Option Shares so purchased.  In the event that any exercise of
the Options shall be for less than the total amount of the then vested  Options,
the remaining vested Options, shall remain exercisable during the term hereof.

         5.  TRANSFERABILITY.  The Director  shall at no time sell,  assign,  or
transfer  all or any  part  of the  Options  granted  to him  pursuant  to  this
Agreement  except  in  accordance  with  giving  notice  to the  Company  and in
accordance with federal and state securities laws.

         6.  ADJUSTMENTS FOR CHANGES IN  CAPITALIZATION  OF THE COMPANY.  In the
event of any  change in the  outstanding  shares of the Class B Common  Stock of
Tremont  by reason  of  reorganization,  recapitalization,  stock  split,  stock
dividend,  combination  or exchange  of shares,  merger,  consolidation,  or any
change in the  corporate  structure  of  Tremont or in the shares of the Class B
Common Stock, the number of shares covered by the Options and the Exercise Price
shall be appropriately adjusted.

         7. FURTHER ASSURANCES. Each of the parties hereto agrees from and after
the date hereof that each of them shall from time to time, at the request of the
other party and without further consideration, do, execute and deliver, or cause
to  be  done,  executed  and  delivered,  all  such  further  acts,  things  and
instruments as may be reasonably required to more effectively  evidence and give
effect to the provisions and the intent and purposes of this Agreement.

         8. NOTICES.  Any notices or other  communications given hereunder shall
be in writing,  and shall be delivered to the parties at the addresses set forth
below (or to such other  party or entity or address as either  party may specify
by due  notice to the other  party).  Notices or other  communications  given by
certified mail, return receipt requested, postage prepaid, shall be deemed given
three days after the date of mailing. Notice or other communications sent in any
other manner shall be deemed given only when actually received:

         (a)      If to Director:

                  Jimmy L. Thomas
                  100 Gibbon Street
                  Alexandria, Virginia  22314

         (b)      If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580-1430
                  Attention:  President

         9.  SOLE  AGREEMENT  OF  PARTIES.  This  Agreement  sets  forth all the
covenants, promises, agreements, conditions and understandings among the parties
hereto, and there are no other covenants,  promises,  agreements,  conditions or
understandings,  whether oral or written, among the parties hereto in connection
with the transaction contemplated by this Agreement.  This Agreement may only be
amended by a written instrument executed by the parties hereto.

                                        2
<PAGE>
         10. PARTIES IN INTEREST,  ASSIGNMENT. This Agreement shall inure to the
benefit  of and be  binding  upon  Director  and  Tremont  and their  respective
successors and assigns;  and nothing in this Agreement,  express or implied,  is
intended  to confer  upon any other  person any rights or  remedies  under or by
reason of this Agreement.

         11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.

         12. COUNTERPARTS.  This Agreement may be executed simultaneously in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

         13. PUBLIC  DISCLOSURE.  The parties agreed that no publicity  release,
public announcement or governmental filings of this Agreement or the transaction
contemplated  hereby shall be made by any of the parties  without the consent of
the others,  except as may be required by law,  regulation or order to which any
such party may be subject.

         14.  REPRESENTATION.  Each party hereby  represents and warrants to the
other that each has read the above provisions and that each has had a sufficient
opportunity to discuss the term and conditions of this Agreement thoroughly with
each party's  respective  advisors prior to signing below.  Further,  in signing
this  Agreement,  each party has not relied on or been  induced to execute  this
Agreement by any statements,  representations,  agreements, or promises, oral or
written, other than expressly written above in this Agreement.

         in witness  whereof,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.



By: /s/ Jimmy L. Thomas
Jimmy L. Thomas


TREMONT ADVISERS, INC.


By: /s/ Robert Schulman
Robert Schulman
President
                                   3
<PAGE>
Exhibit 10.49

                                                             EXECUTION COPY







                            STOCK PURCHASE AGREEMENT

                                  by and among

                          TREMONT MRM SERVICES LIMITED

                                       and

                     MUTUAL RISK MANAGEMENT (HOLDINGS) LTD.


                            Dated as of July 1, 1997


 







                                        1                                 

<PAGE>



                                TABLE OF CONTENTS

                                                                           Page


Section 1.  Definitions and Principles of
            Construction...................................................  1

     1.01   Defined Terms..................................................  1
     1.02   Principles of Construction.....................................  2

Section 2.  Sale and Purchase of Shares....................................  3
     2.01   Sale and Purchase of Common Shares.............................  3
     2.02   Purchase Price.................................................  3
     2.03   Closing........................................................  3

Section 3.  Representations and Warranties of the Company..................  4
     3.01   Organization and Good Standing.................................  4
     3.02   Authorization..................................................  4
     3.03   Enforceability.................................................  5
     3.04   Approvals......................................................  5
     3.05   Capitalization.................................................  6
     3.06   Litigation.....................................................  7
     3.07   Defaults.......................................................  7
     3.08   Memorandum of Association and Bye-laws.........................  7
     3.09   Disclosure.....................................................  7
     3.10   Brokers........................................................  8

Section 4.  Representations and Warranties of the Purchaser................  9 
     4.01   Investment Intent..............................................  9
     4.02   No Registration of Securities..................................  9
     4.03   Investor Status................................................  9
     4.04   Organization and Good Standing.................................  9
     4.05   Authorization.................................................. 10
     4.06  Enforceability.................................................. 10
     4.07  Approvals....................................................... 11
     4.08  Brokers......................................................... 11

Section 5. Conditions to Closing........................................... 11
           (a)  Purchase................................................... 11
           (b)  Conditions to Sale......................................... 14

Section 6. Indemnification................................................. 16
                                   2
<PAGE>
Section 7. Notices......................................................... 16

Section 8.  Survival of Representations
            and Warranties................................................. 17
Section 9.  Amendment or Waiver............................................ 18

Section 10. Waiver of Jury Trial........................................... 18

Section 11. Assignment..................................................... 18

Section 12. Miscellaneous.................................................. 18

Schedule 3.04                      -                Approvals
Schedule 3.05(a)                   -                Shareholders


                                    3

<PAGE>



                  This STOCK PURCHASE  AGREEMENT,  dated as of July 1, 1997, by
and among  Tremont MRM  Services  Limited,  an  exempted  Bermuda  company  (the
"Company"),  and Mutual Risk Management  (Holdings) Ltd., a Bermuda company (the
"Purchaser").

                  In  consideration  of the mutual  covenants and agreements set
forth  herein and for good and valuable  consideration,  the receipt of which is
hereby acknowledged, the parties agree as follows:

                  Section 1.                Definitions and Principles of
Construction.

                  1.01 Defined Terms. As used in this Agreement,  and unless the
context  requires a different  meaning,  the  following  terms have the meanings
indicated:

                           "Agreement" shall mean this Agreement, as the same
may be amended, supplemented or modified in accordance with the
terms hereof.

                           "Closing" shall have the meaning given to such
term in Section 2.03 hereof.

                           "Closing Date" shall have the meaning given to
such term in Section 2.03 hereof.


                                            4

<PAGE>




                           "Lien" shall mean any lien, pledge, hypothecation,
mortgage,  security  interest,  claim,  lease,  charge,  option,  right of first
refusal,  easement encroachment,  transfer restriction,  or other encumbrance of
any kind.

                           "Material Adverse Effect" shall mean a material
adverse effect upon the business,  assets,  condition  (financial or otherwise),
operations or prospects of the Company, taken as a whole.

                           "Persons" shall mean an individual, partnership,
corporation, association, trust, joint venture, unincorporated organization, and
any  government,  governmental  department  or agency or  political  subdivision
thereof.

                           "Purchase Price" shall have the meaning given to
such term in Section 2.02 hereof.

                           "Shares" shall have the meaning given to such term
in Section 2.01 hereof.

                  1.02  Principles  of  Construction.   (a)  All  references  to
sections,  schedules and exhibits are to sections,  schedules and exhibits in or
to this Agreement unless otherwise specified.  The words "hereof," "herein," and
"hereunder"  and words of similar import when used in this Agreement shall

                                        5
<PAGE>
refer to this Agreement as a whole and not to any particular provisions of this
Agreement.

                           (b)    All accounting terms not specifically defined
herein shall be construed in accordance  with United States  generally  accepted
accounting principles.

                  Section 2.                Sale and Purchase of Shares.

                  2.01 Sale and Purchase of Common Shares.  At the Closing,  the
Company agrees to issue and sell to the Purchaser, and, subject to the terms and
conditions  hereof  and in  reliance  on  the  representations,  warranties  and
covenants set forth or referred to herein, the Purchaser agrees to purchase from
the Company,  2,400 of the Company's  common shares (the number of common shares
of the Company being  purchased by the  Purchaser at the Closing is  hereinafter
referred to as the "Shares").

                  2.02     Purchase Price.  The purchase price for the Shares
shall be Two Thousand Four Hundred U.S. Dollars (U.S.$2,400) (the
"Purchase Price").

                  2.03  Closing.  The  closing of the  purchase  and sale of the
Shares (the "Closing") will take place at the offices of Conyers Dill & Pearman,
Clarendon  House,  Church Street,  Hamilton HM LX, Bermuda,  at 11:00 a.m. local
Bermuda time on July 1, 1997, or at such other time,  date and place as the
parties hereto may agree upon (the "Closing  Date").  At the Closing,  the


                                   6
<PAGE>
Company  will  deliver to the  Purchaser against  payment  of  the  Purchase 
Price,  in  immediately   available  funds, certificates  representing the
Shares.  At the Closing,  the Purchaser will also make an  additional  capital
contribution  to the Company  with  respect to the Shares in the amount of Nine
Hundred  Ninety-Seven  Thousand  Six Hundred  U.S. Dollars (U.S. $997,600).

                  Section 3.             Representations and Warranties of the
Company.  The Company represents and warrants to, and for the
benefit of, the Purchaser as follows:

                  3.01  Organization and Good Standing.  The Company (a) is duly
organized and existing in good standing in its jurisdiction of formation, (b) is
duly qualified and authorized to do business in all other jurisdictions in which
the nature of its  business  or  property  makes such  qualification  necessary,
except where such failure to qualify would not have a Material  Adverse  Effect,
and (c) has the power to own its  properties and to carry on its business as now
conducted and as proposed to be conducted.

                  3.02     Authorization.  The execution, delivery and
performance by the Company of this Agreement and the issuance and
sale by the Company of the Shares (a) are within  the Company's corporate 
power and authority,  (b) have been duly  authorized by all necessary
corporate  proceedings,  (c) do not  conflict  with or result  in any  breach or
violation of any provision of the  Memorandum of  Association or Bye-Laws of the
Company (or similar governing documents),  (d) do not conflict with or result in


                                        7
<PAGE>
any breach or violation of any  provision of any law,  regulation,  or judgment,
writ, injunction,  license or permit,  applicable to the Company, and (e) do not
conflict  with or  result  in any  breach  or  violation  of any of the terms or
conditions  of,  or  constitute  (or  with  notice  or  lapse  of  time  or both
constitute) a default  under,  or give rise to the creation of any Lien upon any
of the property or assets of the Company, under any contract,  agreement,  lease
or other  instrument  to which  the  Company  is a party or by which  any of its
assets or properties are bound, the consequences of which,  with respect to this
clause (e), could reasonably be expected to result in a Material Adverse Effect.

                  3.03 Enforceability. This Agreement has been duly executed and
delivered  by the  Company  and  constitutes,  the  valid  and  legally  binding
obligation of the Company  enforceable  against it in accordance with its terms,
except to the  extent  that its  enforceability  may be  limited  by  applicable
bankruptcy,  insolvency,  reorganization or other laws affecting the enforcement
of  creditors'  rights  generally  and by  principles  of equity  regarding  the
availability of remedies.

                  3.04  Approvals.  Except as set forth on  Schedule  3.04,  the
execution,  delivery and performance by the Company of this  Agreement,  and the
purchase  and sale of the Shares,  do not require the approval or consent of, or
any filing with, any governmental authority or agency or any other Person.

                  3.05  Capitalization.  (a) The authorized share capital of the
Company consists solely of 12,000 shares,  U.S.$1.00 par value per share. Up

                                             8
<PAGE>
to the Closing,  all of the issued and outstanding  share capital of the Company
is owned,  directly  or  indirectly,  beneficially  and of record by the Persons
respectively set forth on Schedule 3.05(a). All of the outstanding share capital
of the Company  is, and upon the  delivery  to the  Purchaser  at the Closing of
certificates  representing  the Shares,  in the manner set forth in Section 2.03
hereof, the Shares, will be, duly authorized,  validly issued, registered in the
name of the  Purchaser,  fully paid and  nonassessable.  The Shares are free and
clear of all Liens.

                           (b)      The Company does not have outstanding any
rights  (either  pre-emptive  or other) or options to subscribe  for or purchase
from the Company or any warrants or other agreements  providing for or requiring
the issuance or purchase or other acquisition by or on behalf of the Company of,
any share capital or other equity  interests or any securities  convertible into
or exchangeable for the Company's share capital or other equity interests.
To the best of the Company's knowledge, there are no voting trusts or
other  agreements  or  understandings  with  respect  to the voting of the share
capital or other  equity  interests of the Company nor any  restrictions  on the
transferability  or sale of such shares or other equity  interest  except as may
exist  under  relevant  securities  laws.  The  Company  is not  subject  to any
obligation (contingent or otherwise) to repurchase or otherwise acquire,  redeem
or retire any shares or other equity  interests of the Company or any securities
convertible  into or  exchangeable  for any such share  capital or other  equity
interests.

                  3.06 Litigation.  There is no litigation,  at law or in equity
or  any  proceeding   before  any  court,   board  or  other   governmental   or


                                        9
<PAGE>
administrative  agency or any  arbitrator  pending or, to the  knowledge  of the
Company,  threatened  against the Company.  No judgment,  decree or order of any
court,  board or other  governmental or administrative  agency or arbitrator has
been issued against or binds the Company.

                  3.07  Defaults.  The Company is not, nor upon and  immediately
after consummation of the transactions  contemplated hereby, will be, in default
in any material respect under any provisions of its Memorandum of Association or
Bye-laws  (or  similar  governing  documents)  or under  any  provisions  of any
franchise,  contract,  agreement, lease or other instrument to which the Company
is a party or by which the Company or its properties  or assets  is bound  nor
is the  Company  in  violation  of any law, judgment,  decree or  governmental 
order,  rule or regulation  which default or violation has or would have a
Material Adverse Effect.

                  3.08 Memorandum of Association and Bye-Laws. The copies of the
Memorandum of Association and Bye-Laws (or similar  governing  documents) of the
Company,  and all  amendments  to each,  which shall have been  delivered by the
Company to the Purchaser on or prior to the Closing Date, are true,  correct and
complete.

                  3.09 Disclosure.  (a) All written  information with respect to
the Company,  and, to the best of the Company's knowledge after due inquiry, the
business  and the  assets  of the  Company  furnished  to the  Purchaser  by the
Company,  or on  behalf  of the  Company,  were,  at the time  the same  were so
furnished,  complete  and  correct  in  all  material  respects,  or  have  been

                                        10
<PAGE>
subsequently  supplemented by other written  information to the extent necessary
to give the  Purchaser a true and accurate  knowledge  of the subject  matter of
such written information in all material respects. There is no fact known to the
Company,  which has a Material  Adverse  Effect,  or so far as the  Company  can
reasonably  foresee,  is reasonably  likely to have a Material  Adverse  Effect,
which  has not  been set  forth in such  written  information  disclosed  to the
Purchaser prior to the Closing Date.

                           (b)    No representation, warranty or statement made
by the Company in this Agreement, or in any agreement, certificate, statement or
document required to be delivered pursuant hereto, contains any untrue statement
of a material fact or omits to state a material fact  necessary in order to make
the  statements  contained  in  this  Agreement  or  in  such  other  agreement,
certificate,  statement or document not misleading in light of the circumstances
in which they were made.

                  3.10 Brokers. All negotiations  relative to this Agreement and
the  transactions  contemplated  hereby  have been  carried  out by the  Company
directly with the Purchaser  without the intervention of any Person on behalf of
the  Company  in such  manner as to give rise to any valid  claim by any  Person
against  the  Purchaser  for a finder's  fee,  brokerage  commission  or similar
payment.

                  Section 4.             Representations and Warranties of the
Purchaser.  The Purchaser represents and warrants to the Company
that:

                                             11
<PAGE>
                  4.01     Investment Intent.  The Purchaser is acquiring the
Shares for investment, and not with a view to selling or
otherwise distributing the Shares.

                  4.02 No  Registration  of  Securities.  The Purchaser is aware
that the Shares have not been registered under any relevant securities laws, and
may therefore be subject to restrictions on transfer under such laws.

                  4.03  Investor  Status.  (a) The Purchaser is able to bear the
economic  risk of the  investment  of the  Purchaser  in the Shares and has such
knowledge and experience in financial and business matters,  so as to be capable
of evaluating the merits and risks of the prospective investment in the Shares.

                           (b)      The Purchaser is aware that no governmental
agency  has (i) made any  finding or  determination  as to the  fairness  of any
aspect of the  investment in the Shares or (ii) passed on or endorsed the merits
of the purchase of the Shares.

                  4.04  Organization  and Good Standing.  The Purchaser has been
duly  organized and is validly  existing and in good standing  under the laws of
Bermuda,  and it has the  legal  right  and all  necessary  corporate  power and
authority  to execute,  deliver and  perform all of its  obligations  under this
Agreement.  Prior to the Closing Date, the Purchaser shall have delivered to the
Company copies of the  Purchaser's  Memorandum of  Association  and Bye-Laws (or
similar governing documents), together with all amendments thereto.



                                        12
<PAGE>

                  4.05 Authorization. The execution, delivery and performance by
the Purchaser of this Agreement, and the purchase by the Purchaser of the Shares
(a) are within the Purchaser's corporate power and authority, (b) have been duly
authorized by all necessary corporate  proceedings of the Purchaser,  (c) do not
conflict  with or result in any  breach or  violation  of any  provision  of the
Memorandum of  Association or Bye-Laws (or similar  governing  documents) of the
Purchaser,  (d) do not conflict with or result in any breach or violation of any
provision of any law, regulation, order, judgment, writ, injunction,  license or
permit,  applicable  to the  Purchaser,  or (e)  conflict  with or result in any
breach or violation of any of the terms or conditions of, or constitute (or with
notice or lapse of time or both constitute) a default under, or give rise to the
creation of any lien upon any of the property or assets of the Purchaser,  under
any contract,  agreement,  lease or other instrument to which the Purchaser is a
party or by which any of its  respective  assets  or  properties  is bound,  the
consequences  of which,  with respect to this clause (e),  could  reasonably  be
expected to have a material adverse effect on the validity or  enforceability of
this  Agreement or on the ability of the  Purchaser  to perform its  obligations
hereunder.

                  4.06 Enforceability. This Agreement has been duly executed and
delivered and is the valid and binding  obligation of the Purchaser  enforceable
in accordance with its terms, except to the extent  that its  enforceability  
may be limited by  applicable  bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights  generally  and by
principles of equity  regarding  the  availability  of remedies.


                                        13
<PAGE>
                  4.07 Approvals. The execution, delivery and performance by the
Purchaser of this  Agreement,  and the  purchase and sale of the Shares,  do not
require  the  approval  or consent  of, or any  filing  with,  any  governmental
authority or agency or other Person.

                  4.08 Brokers. All negotiations  relative to this Agreement and
the  transactions  contemplated  hereby have been  carried out by the  Purchaser
directly with the Company,  without the  intervention of any Person on behalf of
the  Purchaser  in such  manner as to give rise to any valid claim by any Person
against the Company or any Subsidiary for a finder's fee,  brokerage  commission
or similar payment.

                  Section 5.                Conditions to Closing.

                  (a)  Conditions  to Purchase.  The  Purchaser's  obligation to
purchase the Shares at the Closing,  pursuant to this  Agreement,  is subject to
compliance  by the Company  with its  agreements  herein  contained,  and to the
satisfaction,  on or prior to the Closing Date with  respect to the  Purchaser's
obligation to consummate the Closing,  of the following  conditions (compliance
with which or the  occurrence  of which may be waived  in whole or in part in 
writing  by the Purchaser):

                           (i)    Charter Documents; Good Standing Certificate.
The Purchaser  shall have received from the Company  copies of the Memorandum of


                                             14
<PAGE>
Association  and  Bye-Laws  of the  Company  as in effect on the  Closing  Date,
certified as to their  completeness and accuracy by a duly authorized officer of
the Company.

                           (ii)     Proof of Corporate Action.  The Purchaser
shall have  received  from the Company  copies,  certified by a duly  authorized
officer  thereof to be true and complete as of the Closing  Date, of the records
of  all  corporate  action  taken  to  authorize  the  execution,  delivery  and
performance of this Agreement.

                           (iii)         Incumbency Certificate.  The Purchaser
shall have  received  from the  Company  an  incumbency  certificate,  dated the
Closing Date, signed by a duly authorized  officer thereof,  and giving the name
and bearing a specimen  signature of each  individual who shall be authorized to
sign,  in the name and on  behalf of the  Company,  this  Agreement  and to give
notices and to take other action on behalf of the Company under this Agreement.

                           (iv)     Representations and Warranties; Officers'
Certificates.  The  representations  and warranties of the Company  contained or
incorporated  by  reference  herein  shall be true and  correct in all  material
respects on and as of the Closing Date; and the Company shall have performed and
complied with all conditions,  covenants and agreements required to be performed
or complied with by it prior to the Closing Date;  and the Purchaser  shall have
received  on the  Closing  Date a  certificate  to these  effects  signed  by an
authorized officer of the Company.


                                        15
<PAGE>
                           (v)    Legality; Authorization.  The purchase of the
Shares shall not be prohibited by any law or  governmental  order or regulation,
and shall not subject the Purchaser to any penalty, special tax or other onerous
condition.  All necessary consents,  approvals,  licenses,  permits,  orders and
authorization  of,  or   registrations,   declarations  and  filings  with,  any
governmental or administrative  agency or with any other Person, with respect to
any of the  transactions  contemplated  by this Agreement  shall have been fully
obtained or made and shall be in full force and effect.

                           (vi)     Litigation, Etc.  No suit, action,
investigation,  inquiry or other proceeding (including,  without limitation, the
enactment or  promulgation  of a statute or rule) by or before any arbitrator or
any governmental injunction or order by any court having jurisdiction shall have
been entered (1) as of the  Closing  Date in  connection  with  the  Agreement
or any of the transactions  contemplated hereby or (2) at the Closing Date,
which would have a Material  Adverse  Effect  or a  material  adverse  effect
on the  transactions contemplated by this Agreement,  including,  without
limitation, the acquisition of the Shares contemplated hereby.

                           (vii)            General.  All instruments and legal,
governmental,  administrative  and corporate  proceedings in connection with the
transactions  contemplated by this Agreement shall be reasonably satisfactory in
form and  substance to the  Purchaser,  and the  Purchaser  shall have  received
copies of all documents,  including, without limitation, records of corporate or


                                   16
<PAGE>
other proceedings,  opinions of counsel, consents, licenses,  approvals, permits
and orders which the  Purchaser  may have  reasonably  requested  in  connection
therewith.

                  (b) Conditions to Sale. The Company's  obligation to issue and
sell the  Shares at the  Closing,  pursuant  to this  Agreement,  is  subject to
compliance by the Purchaser with its  agreements  herein  contained,  and to the
satisfaction,  on or prior to the  Closing  Date with  respect to the  Company's
obligation to consummate the Closing,  of the following  conditions  (compliance
with  which or the  occurrence  of which  may be  waived  in whole or in part in
writing by the Company):
                           (i)      Charter Documents; Compliance Certificate.
The Company shall have received from the Purchaser (A) copies of the  Memorandum
of  Association  and  Bye-Laws of the Company as in effect on the Closing  Date,
certified as to their  completeness and accuracy by a duly authorized officer of
the Purchaser, and (B) a compliance certificate, dated not more than twenty days
prior to the Closing Date, of an appropriate government official certifying that
the Purchaser is in compliance under the laws of Bermuda as contemplated by such
certificate.

                           (ii)  Proof of Corporate Action.  The Company shall
have received from the Purchaser copies,  certified by a duly authorized officer
thereof to be true and  complete as of the Closing  Date,  of the records of all
corporate  action taken to authorize the execution,  delivery and performance of
this Agreement.


                                        17
<PAGE>

                           (iii)            Incumbency Certificate.  The Company
shall have  received from the  Purchaser an  incumbency  certificate,  dated the
Closing Date, signed by a duly authorized  officer thereof,  and giving the name
and bearing a specimen  signature of each  individual who shall be authorized to
sign,  in the name and on behalf of the  Purchaser,  this  Agreement and to give
notices  and to  take  other  action  on  behalf  of the  Purchaser  under  this
Agreement.

                           (iv)     Representations and Warranties; Officers'
Certificates.  The  representations and warranties of the Purchaser contained or
incorporated  by  reference  herein  shall be true and  correct in all  material
respects on and as of the Closing Date;  and the Purchaser  shall have performed
and  complied  with all  conditions,  covenants  and  agreements  required to be
performed  or  complied  with by it prior to the Closing  Date;  and the Company
shall have received on the Closing Date a certificate to these effects signed by
an authorized officer of the Purchaser.

                           (v)    Legality; Authorization.  The purchase of the
Shares shall not be prohibited by any law or  governmental  order or regulation,
and shall not subject the Company to any penalty,  special tax or other  onerous
condition.  All necessary consents,  approvals,  licenses,  permits,  orders and
authorization  of,  or   registrations,   declarations  and  filings  with,  any
governmental or administrative  agency or with any other Person, with respect to
any of the  transactions  contemplated  by this Agreement  shall have been fully
obtained or made and shall be in full force and effect.


                                             18
<PAGE>
                  Section 6.            Indemnification.  (a) The Company and
the Purchaser each agree to indemnify and hold the other harmless
against any and all claims, liabilities, costs, damages or
expenses (including reasonable counsel fees and disbursements)
which  at  any  time  may  be   incurred  by  the  other  as  a  result  of  any
misrepresentation,  breach of warranty or non-fulfillment of any covenant on the
part of the indemnifying party contained herein.

                           (b)      Subject to Section 8, the obligations of the
Company and the Purchaser under this Section 8 shall survive payment or transfer
of the Shares.

                  Section  7.  Notices.  Any  notice or other  communication  in
connection with this Agreement shall be deemed to be delivered if in writing (or
in the form of a  telecopy)  addressed  as  provided  below  and if  either  (a)
actually delivered or telecopied to said address or (b) in the case of a letter,
the  business  day after the same shall have been  deposited  with a  recognized
international overnight courier:

                  If to the Company:

                           Tremont MRM Services Limited
                           Tremont House, 4 Park Road
                           Hamilton HM11, Bermuda
                           Attention: Secretary
                           Facsimile No.: 441-296-0667

                  With a copy to:

                           Newman Tannenbaum Helpern
                             Syracuse & Hirschtritt LLP
                           900 Third Avenue
                           New York, New York  10022
                           Attention: Michael G. Tannenbaum, Esq.
                           Facsimile No.: 212-371-1084


                                       19
<PAGE>
                  If to the Purchaser:

                           Mutual Risk Management (Holdings) Ltd.
                           44 Church Street
                           P.O. Box HM 2064
                           Hamilton HM HX, Bermuda
                           Attention: Secretary
                           Facsimile No.: 441-292-1867

                  With a copy to:

                           Gould & Wilkie
                           One Chase Manhattan Plaza
                           New York, New York  10005
                           Attention: Frederick W. London, Esq.
                           Facsimile No.: 212-809-6890



                  Section 8. Survival of  Representations  and  Warranties.  All
agreements,  representations and warranties made herein or in any certificate or
other document referred to herein or delivered pursuant hereto shall survive (i)
with respect to representations and warranties  contained herein, until eighteen
(18) months after the Closing, (ii) until eighteen (18) months after the Closing
with respect to each  covenant  and  agreement  contained  herein which is to be
performed  on or before  the  Closing,  and (iii)  with  respect  to each  other
covenant  and  agreement  contained  herein  until the last  date on which  such
covenant or agreement  specifies it is to be  performed,  or, if no such date is
specified, indefinitely.


                                        20
<PAGE>
                  Section 9.                Amendment or Waiver.  Neither this
Agreement nor any terms hereof may be changed, waived, discharged
or terminated unless such change, waiver, discharge or termination is in writing
signed by the Company and the Purchaser.

                  Section 10. Waiver of Jury Trial.  Each of the Company and the
Purchaser  hereby  irrevocably  waives all right to trial by jury in any action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising out of or  relating  to the  actions of the  Company  and the  Purchaser
pursuant to this Agreement in the  negotiation,  administration,  performance or
enforcement thereof.

                  Section 11.               Assignment.  This Agreement is not
assignable except by operation of law or as each of the parties
hereto may agree in writing and any attempted assignment in
violation of this provision shall be null and void.

                  Section  12.  Miscellaneous.  This  Agreement  (including  the
Exhibits  and  Schedules)  sets forth the entire  understanding  of the  parties
hereto with respect to the  transactions  contemplated  hereby and supersede any
prior written or oral  understandings  with respect  thereto.  The invalidity or
unenforceability of any terms or provisions hereof shall not affect the validity
or enforceability  of any other term or provision  hereof.  The headings in this
Agreement are for convenience of reference only and shall not alter or otherwise
affect the  meaning  hereof.  This  Agreement  may be  executed in any number of
counterparts  which  together  shall  constitute  one  instrument  and  shall be


                                        21
<PAGE>
governed by and  construed in  accordance  with laws of Bermuda  without  giving
regard to the principles of conflicts of law, and shall bind and inure to the
benefit of the parties  hereto and their respective successors and permitted
assigns.
                                      
                  IN WITNESS WHEREOF,  the parties hereto have caused their duly
authorized  officers to execute and deliver this  Agreement as of the date first
above written.



                                                 TREMONT MRM SERVICES LIMITED

ATTEST:                                        By:/s/ Spottswood P. Dudley
                                                  Name: Spottswood P. Dudley
/s/ David J. Doyle                                Title: President
Name: David J. Doyle
Title: 



                                                 MUTUAL RISK MANAGEMENT
                                                 (HOLDINGS) LTD.

ATTEST:                                         By: /s/ David J. Doyle
                                                   Name: David J. Doyle
_____________________                              Title:
Name:
Title:

                                   22

<PAGE>


                                   SCHEDULE 3.04

                                   Approvals

                                     None.

                                       








                                        23

<PAGE>

                                 SCHEDULE 3.05(A)

                                  Shareholders

         The existing shareholders of Tremont MRM Services Limited are:



               NAME                                     NUMBER OF SHARES OWNED

Tremont (Bermuda) Limited                                               4,800
The Anglo-Dutch Insurance Company Limited                               4,800



                                             24

<PAGE>



Exhibit 10.50

                             SHAREHOLDERS' AGREEMENT


         SHAREHOLDERS'  AGREEMENT  made as of the 1st day of  July,  1997 by and
among TREMONT MRM SERVICES LIMITED, an exempted Bermuda company,  having a place
of  business  at  Tremont  House,  4 Park Road,  Hamilton,  HM11,  Bermuda  (the
"Company")  Tremont  (Bermuda)  Limited,  an exempted Bermuda company,  having a
place of  business  at Tremont  House,  4 Park  Road,  Hamilton  HM 11,  Bermuda
("TBL"),   The  Anglo-Dutch   Insurance   Company  Limited,   a  Cayman  Islands
corporation,  having  a place  of  business  at  Genesis  Building,  2nd  Floor,
Georgetown, Grand Cayman, Cayman Islands, B.W.I. ("Anglo-Dutch") and Mutual Risk
Management (Holdings) Ltd., a Bermuda corporation, having a place of business at
44 Church Street,  Hamilton HM HX, Bermuda ("MRM").  Each of TBL, AngloDutch and
MRM are referred to as a "Shareholder" and, collectively, as the "Shareholders."

                                    W I T N E S S E T H :

         WHEREAS,  TBL and Anglo-Dutch  have heretofore  operated as an informal
joint  venture to render  services to Tremont  International  Insurance  Ltd., a
Cayman Islands exempted limited company ("TIL");

         WHEREAS,  the parties hereto wish to form an exempted  Bermuda company,
admit MRM to the Company as a  shareholder  and desire to set forth their rights
and obligations vis-a-vis the Company;

         WHEREAS, the Company shall enter into a certain Services Agreement with
TIL for the development, administration, marketing and sale of certain insurance
products  and the  performance  of certain  other  services  as set forth in the
Services Agreement;

         WHEREAS,  the  Memorandum  of  Association  and Bye-Laws of the Company
provide that the Company is authorized to issue 12,000 shares of capital stock
$1.00 par value per share (the "Shares"); and

         WHEREAS, the Shareholders desire to set forth certain
restrictions and obligations on themselves, the Company and the
shares of the Company; and

         WHEREAS,  the  directors  of  the  Company  have  considered  it in the
interests of the Company to enter into this Agreement.

         NOW, THEREFORE, it is agreed as follows:

         1.       Purpose and Mandatory Activities

                  (a) Purpose.  The purpose of the Company (the "Purpose") is to
enter into the Services Agreement, to develop,  administer,  market and sell the

                                        1
<PAGE>
Products,  to perform other services for TIL pursuant to the Services Agreement,
and to engage in such other activities as may be in furtherance of said Purpose.
Other than  unsecured  trade  payables  incurred in the  ordinary  course of the
Company's  business,  the Company  shall incur no  indebtedness  except with the
prior consent of two of the three Shareholders.  The Company shall not engage in
any other business without the prior consent of all of the Shareholders.

                  In  amplification  of the foregoing and as set forth elsewhere
in this Agreement, the Shareholders hereby confirm that the Company is a special
purpose  entity which:  (i) shall not own any asset other than such  personalty,
equipment and/or fixtures as may be reasonably related thereto the Purpose; (ii)
shall not engage in any business  operations  other than those necessary for the
Purpose and any business transactions which are entered into between the Company
and any Shareholder or Affiliate of any  Shareholder  shall be entered into upon
terms and conditions that are intrinsically  fair and  substantially  similar to
those that would be available on an  arm's-length  basis with third parties (the
Shareholders agree that the Services Agreement satisfies such condition);  (iii)
shall be solvent and pay its debts from its assets as the same become due;  (iv)
shall  maintain  books and records and bank accounts  separate from those of its
Affiliates,  including  its  Shareholders;  (v) shall be, and at all times shall
hold itself out to the public as, a legal entity  separate and distinct from any
other entity (including any Affiliate and any Shareholder);  (vi) shall file its
own  tax  returns;   (vii)  shall  maintain  adequate  capital  for  the  normal
obligations  reasonably  foreseeable  in a business of its  respective  size and
character and in light of its respective  contemplated business operations;  and
(viii) shall not commingle its funds or assets with any other person or entity.

                  (b)  Mandatory Activities.  Notwithstanding anything to
the contrary set forth in this Agreement, the Company, at all
times, shall:

                           (i)      hold its assets in its own name;

                           (ii)     conduct its own business in its own name;

                           (iii)    comply in all respects at all times with
                           the provisions of the Services Agreement;

                           (iv)     maintain its books, records, resolutions and
                           agreements as official records;

                                        2
<PAGE>
                           (v)   pay its own liabilities out of its own funds;

                           (vi) observe all corporate formalities,  particularly
                           as required under Bermuda law;

                           (vii)         maintain an arm's-length relationship
                           with its Affiliates;

                           (viii)  pay the  salaries  of its own  employees  and
                           maintain a sufficient number of employees in light of
                           its contemplated business operations;

                           (ix) not guarantee or become  obligated for the debts
                           of any other  entity or hold out its  credit as being
                           available to satisfy the obligations of others;

                           (x)      not acquire obligations of Affiliates;

                           (xi)   not make loans to any other person or entity;

                           (xii)        allocate fairly and reasonably any
                           overhead for shared office space;

                           (xiii)       use separate stationery, invoices, and
                           checks;

                           (xiv)       not pledge its assets for the benefit of
                           any other entity;

                           (xv) hold  itself out as a separate  entity,  and not
                           fail to correct any known misunderstanding  regarding
                           its separate identity;

                           (xvi)            not identify itself or any of its
                           Affiliates as a division or part of the other; and

                           (xvii) not engage in business in the United States.


                  The Board of Directors of the Company shall be responsible for
ensuring  that the  requirements  of Section 1(a) and this Section 1(b) shall be
complied with by the Company.

                                        3
<PAGE>
                  (c)      Meetings, Etc.  All meetings of the Board of
Directors or Shareholders of the Company shall be held in either
Bermuda or the Cayman Islands.

         2.       Management and Control

                  (a)      The Memorandum of Association and Bye-Laws of the
Company, as heretofore adopted by the Company and as amended to date, are, by 
its execution of this Agreement, approved by each of the Shareholders.

                  (b) The Board of  Directors  of the  Company  (the  "Board" or
"Board of  Directors"),  consists  of Robert I.  Schulman  and Sandra L.  Manzke
(appointed  by  TBL);   Spottswood  Dudley  and  James  Salvaggi  (appointed  by
Anglo-Dutch);  and Richard E. O'Brien  (appointed by MRM). Each Shareholder,  by
its execution of this  Agreement,  ratifies and confirms the  appointment of the
foregoing  individuals as Directors of the Company. The Board of Directors shall
consist of at least two  individuals,  one appointed by TBL and one appointed by
Anglo-Dutch.  TBL and  Anglo-Dutch  may increase the number of individuals to be
appointed  by each to any equal  number.  MRM shall have the right to appoint to
the Board of Directors one or more  individuals,  not to exceed one-third of the
total number of individuals on the Board of Directors.

                  (c) The current officers of the Company, as heretofore elected
by the Board, are as follows:  Sandra L. Manzke,  Managing Director;  Spottswood
Dudley, President; Robert I. Schulman, Executive Vice President; James Salvaggi,
Vice  PresidentSecretary/Treasurer.  Each Shareholder,  by its execution of this
Agreement, ratifies and confirms the election of such persons as officers of the
Company and agrees that each such  officer  shall serve in such  capacity  until
removed by a majority of the Board of Directors.

                  (d) The fiscal year of the Company  shall be as  determined by
the Board.

                  (e) The bank  accounts of the Company  shall be  maintained at
such banks as shall be decided by the Board and require such  signatures  as the
Board shall determine.

                  (f) The Board shall be  responsible  for the management of the
Company's  business,  subject to the  provisions  of the other  Sections of this
Agreement  which  shall limit and  restrict  the  authority  of the Board to the
fullest extent permitted by law without  derogating from the fiduciary duties of
the Board (and each of its members) to the Company.

                                        4
<PAGE>
                  (g) Notwithstanding anything to the contrary contained in this
Agreement or applicable  law, the Board of Directors shall not have the power or
authority,  without  the  consent  of all of the  Shareholders  (a) to cause the
Company to take any  Bankruptcy  Action or (b) to cause the  Company to commence
winding up, dissolve, liquidate, consolidate, merge or sell all or substantially
all of its assets.

                  (h) No Director or Shareholder shall be required to devote its
full working time to the Company but shall devote reasonable efforts of the type
a prudent businessman would devote in similar  circumstances  which may be 
necessary in order properly to supervise the affairs and business of the
Company.

                  (i) Unless there shall be prior  approval by MRM,  Anglo-Dutch
will not  originate any new  insurance  applications  for business to be written
after the date of this Agreement during the Term.

                  (j) In  connection  with  the  Company's  services  under  the
Services Agreement:

                           (i)      Anglo-Dutch shall supervise the Company's
                           services as they relate to insurance services;

                           (ii) MRM shall  supervise the  Company's  services as
                           they relate to the actual issuance of policies; and

                           (iii) TBL shall  supervise  all  pricing  issues  and
                           investment management.

                  (k) Each Director and Shareholder  shall devote so much of its
time to the  business  of the  Company  as in its  judgment  the  conduct of the
Company's  business shall  require,  and,  except as otherwise  provided in this
Agreement  or in any  other  agreement  among the  parties,  each  Director  and
Shareholder  may engage in  business  ventures  of any  nature  and  description
independently  or with others and  neither the Company nor any of the  Directors
and Shareholders  shall have any rights in and to such independent  venturers or
the income or profits derived therefrom.

                  (l) Each  Shareholder,  by its  execution  of this  Agreement,
ratifies  and  confirms  that the Board  shall act by majority  vote,  except as
otherwise provided in Section 3 hereof.

                  (m) In the  event  that TBL shall  cause any of its  employees
and/or affiliates to render certain financial and administration services to the


                                        5
<PAGE>
Company,  such  services  shall be provided at such rates as the Company and TBL
shall agree.

                  (n)  Attached  hereto is a schedule  showing  the  anticipated
expenses of the  Company,  aggregating  $1,000,000  for the period June 30, 1997
through June 30, 1998.  These  projections will be updated by the Board at least
annually. It is anticipated that the $1,000,000 capital contribution by MRM
will be utilized for the 1997-1998 expenses.

                  (o) Each  Director and  Shareholder  will have access,  at all
reasonable  times at the  Company's  office,  to the  books and  records  of the
Company.

         3.       Actions Requiring Unanimous Consent

                  Each Shareholder, by its execution of this Agreement, ratifies
and confirms  that the  unanimous  decision of the Board shall be required  with
respect to any of the following matters:

                           (i)      Issuance by the Company of any Shares or
                           other securities to any person;

                           (ii)     Recapitalization of the Company's Shares;

                           (iii)            Liquidation or dissolution of the
                           Company or other cessation of the Company's
                           business;

                           (iv)  Voluntary  winding  up of the  Company or other
                           action  by the  Company  for  relief  under  any laws
                           relating to bankruptcy or insolvency;

                           (v) Reorganization of the Company, including, without
                           limitation,  sale of substantially  all of the assets
                           of  the  Company,  merger  or  consolidation  of  the
                           Company with any other entity or spin-off or split up
                           of the Company;

                           (vi)  Recommendation of the amount of any dividend;

                           (vii) Approval of any transaction  with any Affiliate
                           of  any of the  Shareholders,  or of any  transaction
                           with a partner,  shareholder,  officer or director of
                           any Affiliate of any of the Shareholders; or


                                             6
<PAGE>
                           (viii)  Approval  of the  Corporation's  purchase  of
                           Shares  pursuant to Sections 7 or 9 (except  that the
                           vote  of  any  Director   appointed  by  the  Selling
                           Shareholder shall not be required).

         4.       Share Ownership

                  As of the  date of this  Agreement,  an  aggregate  of  12,000
Shares  are issued and  outstanding.  The number of Shares  owned by each of the
Shareholders,  and the  percentage  of the total  number of  Shares  issued  and
outstanding  owned  by  each  Shareholder,  is  set  forth  below  opposite  the
respective Shareholder's name.

<TABLE>
<S>                                     <C>                 <C>                 <C>                                            
=============================================================================================================================
 Initial                                                                  Number                  Percentage
                                Capital                                    of                       of
  Name                         Contribution                               Shares                   Ownership
-----------------------------------------------------------------------------------------------------------------------------
   TBL                           $4,800                                    4800                       40%





-----------------------------------------------------------------------------------------------------------------------------
Anglo-Dutch                      $4,800                                    4800                       40%
-----------------------------------------------------------------------------------------------------------------------------
    MRM                          $2,400                                    2400                       20%
=============================================================================================================================

</TABLE>
                  In addition,  MRM is making, as of the date of this Agreement,
an additional capital contribution of $997,600 and no additional Shares shall be
issued to MRM as a consequence of that contribution.

         5.       Restrictions on Transfer of Shares

                  (a)  Except  as  otherwise  provided  in  this  Agreement,  no
Shareholder shall at any time during the term of this Agreement,  sell,  assign,
encumber,  transfer,  pledge or hypothecate  or otherwise  dispose of all or any
part of the  Shares  now  owned or  hereafter  acquired  by him or any  interest
therein except by a transfer of the entire legal and beneficial interest therein
and in the manner hereinafter provided. Any such purported encumbrance, transfer
or disposition  in violation of this Agreement  shall be invalid and of no force
and effect in relation to any other  Shareholder  and so far as permitted by law
shall not be recorded on the books of the Company. Any proposed transfer must be
in compliance with all requirements of the law of Bermuda including the securing
of any required approvals.

                  (b) Any additional or substituted person or entity who becomes
a Shareholder in the Company shall be required,  as a condition precedent to the
issuance  or  transfer  of Shares to it, to agree in  writing to be bound by the
terms of this Agreement.


                  (c) Notwithstanding the foregoing, any of the Shareholders may
transfer  to any  employee  of the  Company  Shares  in  the  Company  (up to an


                                        7
<PAGE>
aggregate of 5% of the Company's Shares for all such transfers) free,  except as
provided in this subsection (c), of the restrictions  imposed by this Agreement.
Any such  employee  transferee  shall  agree  that he shall  not  sell,  assign,
encumber,  transfer, pledge, hypothecate or otherwise dispose of all or any part
of his or her Shares and, further,  that upon termination of his employment,  he
shall sell his Shares back to the transferring Shareholder for such price as the
transferring  Shareholder  may designate at the time of transfer.  Any Shares so
repurchased may be transferred to other employees upon the same terms.

         6.       Endorsement of Share Certificates

                  All Share  certificates now or hereafter issued by the Company
shall be subject to this Agreement and shall bear the following legend:

                  "The Shares  evidenced by this  certificate or any certificate
                  issued  in  exchange  or  transfer  therefor  are and  will be
                  subject to, and may be transferred only in accordance with the
                  agreement  dated as of the 1st day of July  1997 by and  among
                  the Company and its shareholders  and any amendments  thereto,
                  which  agreement  provides for  restrictions  on the transfer,
                  encumbrance  and  disposition of the Shares of the Company and
                  which is on file at the registered office of the Company."

         7.       Voluntary Sale of Shares--Bona Fide Offer

                  (a) In the event that any Shareholder shall have received, and
wishes to accept,  a bona fide offer from one or more third  parties to purchase
all but not less than all of its Shares (the "Offered  Shares") the  Shareholder
(the "Selling  Shareholder")  shall offer the Offered  Shares to the Company and
the remaining  Shareholders pursuant to the procedures set forth in this Section
7.

                  (b) In the event that a Selling  Shareholder shall be required
to offer the Offered  Shares to the Company  and/or the  remaining  Shareholders
pursuant to Section 7(a), the Selling Shareholder shall offer such Shares to the



                                        8
<PAGE>
Company and the remaining  Shareholders by written notice (the "Offer  Notice"),
which  Offer  Notice  shall be given  simultaneously  to the  Company and to the
remaining Shareholders, advising them of its intention to make such disposition.
The  Offer  Notice  shall  (i) set  forth the  name(s)  and  address(es)  of the
party(ies)  having made such offer (the  "Offerors") and (ii) specify the number
of Shares  subject to the offer,  the intended  purchase  price  thereof and the
method of payment  therefor  and any other  material  terms of such offer.  Such
options  available to the Company  and/or the  remaining  Shareholders  shall be
exercisable  in accordance  with the provisions of Section 7(c) and Section 7(e)
hereof.

                  (c) The Company  shall have the option,  exercisable  no later
than  forty-five  (45) days after receipt of the Offer Notice and subject to all
applicable laws and regulations  (the "Company  Exercise  Period"),  to agree to
purchase,  at the price  determined  and upon the terms  provided  in  Section 8
hereof,  all or part of the Offered  Shares as indicated  in this Section  7(c);
provided,  however,  that this Section 7(c) shall not apply to any offer made by
an Offeror which the Company has  reasonable  cause to believe may not be a bona
fide  purchase  offer;  and provided,  further,  that the Company shall have the
option to  purchase  less than all of the  Offered  Shares only in the event the
balance of the Offered  Shares are  purchased by the remaining  Shareholders  as
provided in this Section 7.

                  (d) If the Company  shall elect to exercise  this  option,  it
shall give a written  notice of exercise to the  Selling  Shareholder,  no later
than five (5) business days prior to the  expiration  of the  aforesaid  Company
Exercise Period,  which notice (hereinafter the "Company Exercise Notice") shall
specify the number of shares being  purchased  by the Company.  In the event the
Company and/or any remaining Shareholder(s) elect to purchase the Offered Shares
pursuant to this Section 7 (each such purchaser shall  sometimes  hereinafter be
referred  to as a  "Purchaser"),  then  the  closing  shall  take  place  at the
registered  office  of the  Company  or such  other  place  as the  Company  may
reasonably designate (i) in the event the Company shall elect to purchase all of
the  Offered  Shares,  within  sixty (60) days after the giving of such  Company
Exercise  Notice,  or (ii) in the event the Company shall elect to purchase less
than all of the Offered  Shares,  within sixty (60) days after the giving of all
"Shareholder Exercise Notices" (as such term is defined in Section 7(e) hereof).
At the  closing,  the  purchase  price  shall  be paid and the  Shares  shall be
transferred, as set forth in Section 8 hereof.

                  (e) If the Company shall fail to elect to exercise, in part or
in whole,  its  option to  purchase  the  Offered  Shares,  then each  remaining


                                             9
<PAGE>
Shareholder  shall have the option to purchase  its  proportionate  share of the
Offered  Shares,  other than those Shares  purchased by the Company  pursuant to
Section 7(c) hereof,  such proportionate share to be based upon the ratio of the
number of Shares held by each such accepting  Shareholder to the total number of
issued and outstanding shares of Shares held by all accepting Shareholders. This
option to the remaining Shareholders shall be exercisable, if at all, within the
thirty (30) day period  following the expiration of the Company  Exercise Period
as above provided in Section 7(d) (the "Shareholder  Exercise  Period").  If any
Shareholder  shall elect to exercise its option,  such Shareholder  shall give a
written notice of exercise to the Company and the Selling  Shareholder  prior to
the expiration of the aforesaid  Shareholder  Exercise Period (the  "Shareholder
Exercise Notice").

                  (f) In the event that the option is  exercised  by the Company
and the  Company  does not have a  surplus  sufficient  to  enable  the  Company
lawfully  to make such  purchase,  then the Company  and the  Shareholders  will
promptly take all action which may be necessary and permitted by law  (including
reducing  the  capital of the  Company) in order to make funds  available  in an
amount  sufficient  to pay such  sums that may be  required  on  account  of the
purchase price. Each Shareholder,  by its execution of this Agreement, agrees to
vote its Shares in such manner as to accomplish the  availability of such funds,
and the Selling  Shareholder  shall be deemed to have given the President of the
Company its proxy for such  purpose or, if the  President  of the Company is the
Selling Shareholder or there shall be no person  occupying the office of
President,  such proxy shall be deemed given to the Secretary of the Company. 
In addition, the Company shall be able to exercise the option only if it has 
sufficient capital under Bermuda law.

                  (g) In the event that the  options  granted to the Company and
the  remaining  Shareholders  pursuant to this  Section 7 are not  exercised  as
herein provided,  the Selling Shareholder shall have the right to dispose of all
of the shares  owned by the  Selling  Shareholder  at the price and on the terms
specified  in the Offer  Notice  and  subject  to the  terms of this  Agreement;
provided,  however, that the offer and sale of the shares shall, in all respects
comply with the  registration  provisions of (or be exempt from the registration
provisions of) any applicable  securities law and the conclusive written opinion
of the Offeror's  counsel that the offer and sale comply with said  registration
provisions or are exempt  therefrom shall be received by the Company.  Copies of
all  documents  relating to such sale shall be forwarded to the Secretary of the
Company no later than five (5) days after the date of the sale.  If such sale is


                                        10
<PAGE>
not  consummated  within  sixty  (60) days  after the  expiration  of the option
period,  the Selling  Shareholder's  Shares shall again be subject to all of the
terms and provisions of this Agreement.

         8.       Purchase Price for Sale under Section 7

                  (a) In the event that one or more  Purchasers  (as  defined in
Section 7(d)) elect to purchase Shares from the Selling  Shareholder as provided
in Section 7 above,  the purchase  price for the Offered  Shares shall be at the
price and payable on the terms which are designated in the Offer Notice provided
for in Section 7(b) above.

                  (b) In  order  to  provide  security  for the  payment  of the
deferred  portion of the purchase price, if any, the Selling  Shareholder  shall
deliver at  closing  the  certificates  evidencing  the  number of Shares  being
purchased by the Purchaser,  together with duly executed instruments of transfer
of such shares,  to such person as shall be acceptable to both parties as escrow
agent (the "Escrow Agent").  Upon receipt of payment in full of each installment
of  principal  and  interest on such  deferred  portion,  the Escrow Agent shall
release to the maker of the related note or other evidence of indebtedness  note
a duly endorsed share transfer certificate with any required transfer tax stamps
affixed thereto,  representing  that fraction of the Shares which such Purchaser
has purchased which corresponds to a fraction the numerator of which shall equal
the principal payment made and the denominator of which shall equal the original
principal amount of the Purchaser's note or other evidence of indebtedness.

                  (c) In the event of any default in the payment of the deferred
portion of the purchase price, if any, the Selling Shareholder shall give notice
thereof to the Escrow  Agent,  and the Escrow  Agent  shall  thereupon  hold the
certificates  and share  transfer  instruments  in respect of such Shares  until
there  shall  be  delivered  to the  Escrow  Agent a copy  of a  final  judgment
directing  disposition of the Shares or a letter of  instructions  signed by the
Selling  Shareholder and the Purchaser  directing  disposition of the Shares. So
long as a Purchaser's purchased Shares shall be held by the Escrow Agent, he she
or it shall receive any distributions thereon to hold the same upon trust. Until
notice of default,  the Escrow  Agent shall  deliver such  distributions  to the
Purchaser;   after  notice  of  default,   the  Escrow  Agent  shall  hold  such
distributions  pending  instructions  as set forth  above.  Voting  rights  with
respect to such Shares  shall be  exercisable  by the  Purchaser  so long as the
shares  are held by the  Escrow  Agent,  and the  Selling  Shareholder  shall at



                                        11
<PAGE>
closing deliver such  instruments of proxy as may be necessary or appropriate to
give effect to the terms of this Section 8.

         9.       Additional Options to Purchase Shares

                  (a) In the event that any Shareholder shall desire to sell all
or a portion of its  shares of Stock when it has not  received a bona fide offer
as described in Section 7(a), the Shareholder (the "Selling  Shareholder") shall
offer such shares  (the  "Offered  Shares")  to the  Company  and the  remaining
Shareholders  pursuant  to the  procedures  set forth in  Section  7;  provided,
however,  that the notice  hereunder  shall  specify  only the number of Offered
Shares.  The options available to the Company and the remaining  Shareholders to
purchase all of the Offered  Shares shall be exercisable in writing by notice to
the Selling  Shareholder  as specified in Section 7(d) or Section  7(e),  as the
case may be, at the price  determined  and on the terms set forth in  Section 10
hereof,  and the closing of the transaction shall take place no later than sixty
(60) days after the exercise of the option.

                  (b) In the event a Bankruptcy  Action shall occur with respect
to any Shareholder (the "Selling Shareholder"), the Selling Shareholder shall be
deemed,  without further action, to have offered all of the Shares then owned by
such  Shareholder  (the  "Offered  Shares")  to the  Company  and the  remaining
Shareholders  pursuant  to the  procedures  set forth in  Section 7 hereof.  The
options  available  to the  Company  and the  remaining  Shareholders  shall  be
exercisable in writing to the Selling Shareholder no later than thirty (30) days
after the date of occurrence of the  Bankruptcy  Action (or, if such  Bankruptcy
Action was not then  notified or known (or  reasonably  apparent) to the Company
and the remaining Shareholders, after the date of such notification or knowledge
(or becoming  reasonably  apparent) at the price determined and on the terms set
forth in Section 10 hereof,  and the closing of the transaction shall take place
no later than sixty (60) days after the date on which such options are 
exercised.

                  (c) In the event all or any of a Shareholder's  Shares becomes
subject to a proposed or actual  encumbrance,  such  Shareholder  (the  "Selling
Shareholder")  shall be deemed,  without further action,  to have offered all of
the Shares then owned by such Shareholder (the "Offered  Shares") to the Company
and the remaining Shareholders in accordance with the provisions of Section 9(b)
above.  If the aforesaid  offer is accepted by the Company  and/or the remaining
Shareholders,  the closing for such  purchase  shall be held no later than sixty
(60) days after the date of the exercise of the option.


                                        12
<PAGE>
                  (d) In the event that the Company, having exercised its option
to purchase  the Shares  offered or deemed  offered  pursuant to this Section 9,
does not have funds available  sufficient to enable the Company lawfully to make
such  purchase,  then the Company and the  Shareholders  will  promptly take all
action which may be necessary and permitted by law (including without limitation
reducing  the  capital  of the  Company)  to make funds  available  in an amount
sufficient  to pay such sums that may be  required  on account  of the  purchase
price. Each Shareholder,  by its execution of this Agreement, agrees to vote its
Shares in such a manner as to accomplish the  availability of such funds and the
Selling  Shareholder  shall be deemed to have given the President of the Company
his proxy for such  purpose or, if the  President  of the Company is the Selling
Shareholder or there shall be no person occupying the office of President , such
proxy shall be deemed given to the Secretary of the Company.

                  (e) In the event that TIL shall elect to cause the termination
of the Services Agreement pursuant to the provisions of Section 15 thereof, such
election  shall be deemed to be an offer to sell MRM's Shares for the purpose of
Section 9(a) of this  Agreement and the Company and the  remaining  Shareholders
shall have the rights therein specified.

         10.      Method of Valuation for Purposes of Section 9

                  (a)  In  the   event  the   Company   and/or   any   remaining
Shareholder(s)  exercise  its or their  option to  purchase  the shares  offered
pursuant to Section 9, the purchase  price of the sale of Shares under Section 9
shall be an amount  equal to the  Selling  Shareholder's  pro rata  share of the
value of the Company,  determined by an appraiser  appointed in accordance  with
the  provisions of Section 10(c) hereof.  The appraiser  shall act as an expert,
not an  arbitrator  and the  appraiser's  determination  of such value  shall be
final,  conclusive,  and binding on all parties.  The Selling  Shareholder's pro
rata share of the Company's value shall be a fraction thereof, the numerator of
which  is the  number  of  Shares  owned  by the  Selling  Shareholder  and  the
denominator of which is the total number of Shares issued and outstanding on the
date of the  applicable  event  triggering  the  purchase  of the  Shareholder's
Shares.

                  (b) Payment of the purchase price for the Shares shall be made
in cash unless the Selling Shareholder and the Purchaser agree to an alternative
method,  in which event  delivery  of the share  certificates  representing  the
Shares and other documents  evidencing or connected with the sale of such Shares
shall be made in the same manner as is provided for in Section 8(b).

                                        13
<PAGE>
                  (c) An appraiser shall be selected by the Selling  Shareholder
(or its legal  representative) and the Purchasers.  If agreement on an appraiser
cannot be reached  within five days after any election to purchase under Section
9, the Selling  Shareholder (or his legal  representative)  and the Purchaser(s)
shall each promptly select an appraiser,  which  appraisers  shall then promptly
select a third, who shall be deemed the appraiser for the purposes  hereof.  The
determination  of the  appraiser  as to the price of the Stock and the terms and
conditions  of the sale shall be binding  upon the  parties and shall be made as
soon as practicable.

         11.      Come - Along

                  In the event any Shareholder (the "Selling Shareholder") shall
have given an Offer Notice to the  remaining  Shareholders  under  Section 7 and
neither the Company nor the remaining  Shareholders  shall have exercised  their
rights under  Section 7, each  remaining  Shareholder  may join in such sale and
sell its  Shares  on  substantially  the same  basis as set  forth in the  Offer
Notice, pro rata (based upon the respective Shares held by the Shareholders) and
at the same time as the Selling Shareholder.  A remaining Shareholder shall give
notice of its  intention  to so  "come-along"  by giving  notice to the  Selling
Shareholder  within  twenty  (20) days after the Offer  Notice.  Such sale shall
proceed free of any restrictions pursuant to this Agreement.

         12.      Sale of TIL

                  In the event that there shall have been an Offer  Notice given
by any  Shareholder  and,  thereupon,  the  remaining  Shareholders  shall  have
exercised  their  Come-along  rights  pursuant to Section 11 and thus all of the
Shares of the Company  shall be sold to an  unaffiliated  third party,  then the
ordinary shares and preferred shares of TIL shall be sold to such third party in
the same  transaction.  Unless  otherwise agreed to by the third party purchaser
and the owners of TIL, the purchase  price for the ordinary  shares of TIL shall
be their  book value as at the end of the month  preceding  the date of sale and
the purchase price for the preferred  shares of TIL shall be the sum of U.S. 
$5,000,000 plus accrued and unpaid dividends,  together with any interest due
and owing thereon. Notwithstanding the foregoing, if the third party purchaser 
shall not be willing to purchase all of the preferred shares  simultaneously 
with the closing of the sale of the Shares, then MRM, or the Company, as the
case may be, shall agree to a  pro-rata  redemption  of the  preferred  shares 
over a period  not to exceed eighteen (18) months,  with each  installment  of
the redemption price matched against a retirement of a pro-rata  portion of the


                                            14
<PAGE>
preferred  shares.  Dividends shall  continue to accrue and be payable so long
as any  preferred  shares shall remain  outstanding and at each redemption an
dividends owing upon the redeemed shares shall be payable in full.

         13.      Closing

                  Any closing  pursuant to Section 7 and Section 9 shall be held
at the registered office of the Company or such other place as it may reasonably
specify. At such closing the Selling Shareholder shall assign and deliver to the
Purchaser(s) any certificate or certificates  representing the Shares sold by it
hereunder  together with share transfer form(s) duly executed in blank free from
any encumbrances and with any required  transfer tax stamps affixed or paid for.
Payment shall be made for such Shares at the closing at the price determined and
on the terms set forth in Section 10, unless otherwise provided herein.

         14.      Termination and Liquidation

                  (a) The  Term of this  Agreement  shall  commence  on the date
hereof and shall terminate upon the occurrence of any of the following events:

                           (i)      The written agreement of the parties hereto;

                           (ii)     The termination of the Services Agreement;

                           (iii)            The dissolution of the Company; and

                           (iv) The merger or  consolidation of the Company in a
                           transaction in which the Company is not the surviving
                           entity.

                  (b) In the event of a winding-up or liquidation of the Company
during the term of this Agreement,  the assets of the Company shall,  subject to
any applicable law, be disposed of in the following priority:

                           (i)   To the payment in full of all obligations and
                           liabilities of the Company to persons other than
                           the Shareholders;

                           (ii) To the  payment in full of all  obligations  and
                           liabilities of the Company to its Shareholders  (save
                           in their capacity as Shareholders); and


                                        15
<PAGE>
                          (iii) The  balance to the  Shareholders,  pro rata in
                           accordance  with the  number  of  Shares  held,  as a
                           liquidating dividend.

         15.  Specific Performance

                  The  parties  recognize  that the  Shares of the  Company  are
unique  to the  Company  and  not  readily  purchasable  or  saleable  and  that
irreparable  damage  will or may be  suffered  by the  parties  if the terms and
undertakings herein contained are not specifically  enforced.  Therefore,  it is
agreed that this Agreement may be enforced by proceedings for equitable remedies
such as injunction or specific performance;  such right shall be in addition and
not in lieu of any other  rights or remedies any party may have  hereunder,  all
such rights and remedies being cumulative and subject to all applicable law.

         16. Indemnification.  The Company shall indemnify, defend and save each
of the Shareholders  and each of the members of the Board of Directors  harmless
from  all  loss,  cost,  damage  and  expense  (including,  without  limitation,
reasonable counsel fees) and against all claims, actions or proceedings brought,
made or asserted against it, arising out of or resulting from the performance of
its duties in good faith under this Agreement,  absent  misconduct or negligence
with respect to the operations of the Company.

         17.  Notices

                  (a) All notices  provided  for herein  shall be in writing and
they,  as well as any other papers which it is provided  herein shall be sent to
any Shareholder or the Company, shall be either (i) delivered in person, or (ii)
sent via certified mail, return receipt  requested,  or (iii) sent by nationally
recognized  overnight  courier  system,  or (iv)  sent by  facsimile,  telex  or
telegram   addressed  to  a  Shareholder  at  the  address  designated  by  such
Shareholder  and/or  addressed  to the Company at the address of its  registered
office.  The notice shall be deemed to be given in cases (i),  (ii) and (iii) on
the date of its actual receipt by the party entitled thereto, and, in case (iv),
on the date of  transmission.  Any notice by telex or telegram shall be followed
within five (5) days by written notice sent via certified  mail,  return receipt
requested.

                  (b) The parties may  designate by notice to each other any new
address for the purpose of this Agreement as provided in this Section 17.



                                           16

<PAGE>



         18.      Miscellaneous

                  (a) Upon the request of the parties hereto,  the other parties
shall make,  execute and  deliver  any and all  instruments  or papers as may be
reasonably  required for the purpose of giving full effect to this Agreement and
to the terms, provisions and options herein contained.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
binding upon the Company and each of the Shareholders,  its heirs, distributees,
legatees,   executors,   administrators,   legal  representatives  and  assigns,
including any receiver or trustee in bankruptcy or other insolvency proceeding.

                  (c) This  Agreement is a contract  made and to be performed in
Bermuda and shall in all respects be governed by and construed under the laws of
Bermuda.

                  (d) Should any provision, or portion of any provision, of this
Agreement  be  invalid  or  unenforceable  for  any  reason,   the  validity  or
enforceability  of the  remaining  provisions,  or of the other  portions of the
provision  in  question  shall  not be  affected  thereby;  provided,  that such
severance  shall have no material  adverse effect on the terms of this Agreement
and this Agreement shall be carried out as if any such invalid or  unenforceable
provision or portion of any provision were not contained herein.

                  (e)  This   Agreement   merges   and   supersedes   all  prior
negotiations,  agreements and understandings among the Shareholders  relating to
the subject  matter  hereof and  constitutes  the entire  agreement  between the
Shareholders.  No  modification  or amendment of any provision of this Agreement
shall be valid unless in writing signed by all the signatories of this Agreement
who are at the  time of such  modification  or  amendment,  Shareholders  of the
Company and by the Company.

                  (f)  Whenever  required by the context  hereof,  the  singular
shall  include the  plural,  and vice versa,  and the neuter  shall  include the
masculine and feminine genders.

                  (g) No waiver  or any  breach or  default  hereunder  shall be
considered  valid  unless in  writing,  and no such  waiver  shall be deemed the
waiver of any subsequent breach or default of the same or similar nature.

                  (h) The captions and headings  contained in this Agreement are
for convenience only and shall not be construed as part of this Agreement.


                                        17
<PAGE>
                  (i) In the  event of any  conflict  between  the terms of this
Agreement and the Memorandum of Association  and Bye-Laws of the Company then as
between the parties, the provisions of this Agreement  shall prevail and in such
a case the parties  hereto agree to use all their respective powers to remove
such conflict.

                  (j)  This   Agreement   may  be  executed  in  any  number  of
counterparts,  each  of  which  shall  be  deemed  an  original,  and  all  such
counterparts shall together constitute one instrument.

                  (k) The Company's execution,  delivery and performance of this
Agreement have been duly authorized.

         19.      Definitions

                  As used herein,  the following  terms shall have the following
meanings:

                  (a) "Additional Contribution" shall have the meaning set forth
in Section 4(b) hereof.

                  (b)  "Affiliates"  shall  mean  (i)  any  person  directly  or
indirectly  controlling,  controlled  by or under  common  control  with another
person;  (ii) any person owning or controlling  ten percent (10%) or more of the
outstanding voting activities of another person; (iii) any officer,  director or
partner of such person;  and (iv) any company for whom any person is an officer,
director or partner.  An "Affiliated"  entity is an entity which is an Affiliate
of another person.

                  (c) "Agreement" shall mean this Shareholders' Agreement, as it
may be amended, modified, supplemented or restated from time to time.

                  (d) "Bankruptcy  Action" shall be deemed to occur with respect
to the  specified  person or entity  when such  person or entity is  voluntarily
adjudicated a bankrupt or insolvent,  or seeks,  consents to or does not contest
the winding-up or the appointment of a receiver or trustee for itself or for all
or any part of its  property,  or files or  consents to the filing of a petition
seeking relief under the bankruptcy, arrangement, reorganization or other debtor
relief laws of any competent jurisdiction, or makes a general assignment for the
benefit of creditors, or admits in writing an inability to pay its debts as they
may mature,  or a petition is filed against such person or entity seeking relief
under the bankruptcy, arrangement, reorganization or other debtor relief laws of
any  competent  jurisdiction,  or a court of  competent  jurisdiction  enters an
order,  judgment  or decree  appointing,  without  the consent of such person


                                        18
<PAGE>
or entity, a receiver or trustee  for it,  or for all or any part of his or its
property,  and such petition,  order, judgment or decree shall not be and remain
discharged or stayed within a period of sixty (60) days after its entry.

                  (e) "Company"  shall have the meaning set forth in the recital
of the parties hereof.

                  (f) "Company Exercise Notice" shall have the meaning set forth
in Section 7(d) hereof.

                  (g) "Company Exercise Period" shall have the meaning set forth
in Section 7(c) hereof.

                  (h) "Escrow Agent" shall have the meaning set forth in Section
8(b) hereof.

                  (i) "Offer Notice" shall have the meaning set forth in Section
7(b) hereof.

                  (j)  "Offered  Shares"  shall  have the  meaning  set forth in
Section 7(a),  Section 9(a),  Section 9(b), or Section 9(c) hereof,  as the case
may be.

                  (k)  "Offerors"  shall have the  meaning  set forth in Section
7(b) hereof.

                  (l) "Products" shall mean certain deferred  variable  annuity,
variable  life  insurance  and  other  insurance  products  from  time  to  time
developed,  marketed  and sold by the Company for TIL  pursuant to the  Services
Agreement.

                  (m)  "Purchaser"  shall have the  meaning set forth in Section
7(d) hereof.

                  (n) "Selling Shareholders" shall have the meaning set forth in
Section 7(a), Section 9(a) or Section 9(b) hereof, as the case may be.

                  (o)  "Shareholder"  shall  have the  meaning  set forth in the
Preamble hereof.

                  (p)  "Shareholder  Exercise Notice" shall have the meaning set
forth in Section 7(e) hereof.

                  (q)  "Shareholder  Exercise Period" shall have the meaning set
forth in Section 7(e) hereof.


                                        19
<PAGE>
                  (r) "Shares"  shall have the meaning set forth in the Preamble
hereof.

                  (s)  "Services  Agreement"  shall mean that  certain  Services
Agreement dated July 1, 1997 entered into between the Company and TIL.

                  (t) "TIL" shall mean Tremont International Insurance, Ltd.
                                             
                  (u)  "Term"  shall  have the  meaning  set forth in Section 22
hereof.

                    
                                        20

<PAGE>


                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement on the day and year first above written.


                          TREMONT MRM SERVICES LIMITED



                         /s/ Spottswood P. Dudley
                          By: Spottswood P. Dudley
                              President



                            TREMONT (BERMUDA) LIMITED



                          /s/ Johann Wong
                          By: Johann Wong
                              Director


                            THE ANGLO-DUTCH INSURANCE
                             COMPANY LIMITED


                         /s/ Peter Mackay
                         By: Peter Mackay
                             Director



                           MUTUAL RISK MANAGEMENT (HOLDINGS) LTD.



                           /s/ David J. Doyle
                          By:  David J. Doyle
                               Director                                         



                                21

<PAGE>
                        TREMONT MRM SERVICES LIMITED


                   Schedule of Budgeted Operating Expenses


                                        Average             Estimated
                                        Monthly             18 Month
Expense Type                            Expenses            Totals


Rent                                    $ 2,500             $ 45,000
Senior Employee Salary and Benefits      10,000              180,000       
Assistant Employee Salary and Benefits    2,917               52,500
Travel and Entertainment                    200                3,900
Printing, Supplies and Mailings           1,500               27,000
Telephone                                 1,250               22,500
Miscellaneous                               417                7,500
Work Permits                              2,000               36,000
Depreciation - Fixed Assets                 500                9,000
Actuarial & Professional                  4,167               75,000
T&E                                       6,389              115,000
Senior Employee Salary and Benefits      13,333              240,000
Second Employee Salary and Benefits       6,667              120,000
Assistant Salary and Benefits             1,667               30,000
Travel and Entertainment                  3,333               60,000
Rent                                      2,500               45,000
Miscellanelous                              500                9,000


TOTAL EXPENSES                         $ 59,860          $ 1,077,400





                                        22


<PAGE>
Exhibit 10.51
                                   AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT

         AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") dated this 10th of
December,  1997, by and between TREMONT ADVISERS,  INC., a Delaware  corporation
having its principal  executive offices at Corporate Center at Rye, 555 Theodore
Fremd Avenue,  Rye, New York  ("Tremont");  and SANDRA L. MANZKE,  an individual
residing in Pound Ridge, New York ("Executive").
                                   WITNESSETH:

         WHEREAS, Executive is employed by Tremont pursuant to and in accordance
with the  terms  and  conditions  contained  in an  employment  agreement  dated
September  25, 1995 (the  "Employment  Agreement"),  by and between  Tremont and
Executive; and

         WHEREAS,  Executive  and  Tremont are each  desirous  of  amending  the
Employment  Agreement in accordance  with this Amendment,  effective  January 1,
1998.

         NOW, THEREFORE,  in consideration of the promises and mutual covenants,
terms and conditions hereinafter set forth and in the Employment Agreement,  the
parties hereto hereby agree as follows:

1. Section 3(a)(i) of the Employment Agreement is hereby amended by deleting the
following  phrase:  "three hundred  sixty-two  thousand dollars  ($362,000)" and
inserting  in  its  place  "three   hundred   seventy-three   thousand   dollars
($373,000)."

2.  Section 5 shall be amended by deleting all  references  therein to "December
31, 1997" and inserting in its place "December 31, 1998."

3. Except to the extent amended by this  Amendment,  the terms and conditions of
the Employment  Agreement shall remain in full force and effect. In the event of
any conflict  between the terms of the  Employment  Agreement and the Amendment,
the Amendment shall control.

4. Each party hereby represents and warrants to the other that each has read the
foregoing  provisions and that each has had a sufficient  opportunity to discuss
this  Amendment  with  anyone each party might  desire  prior to signing  below.
Further, in signing this Amendment, each party has not relied on or been induced
to execute this  Amendment by any  statements,  representations,  agreements  or
promises,  oral or  written,  made  by the  other  except  for  those  expressly
contained in this Amendment.

         IN WITNESS  WHEREOF,  this Amendment has been executed and delivered by
the parties hereto as of the date first above written.

WITNESS


/s/ Suzanne S. Hammond                             By: /s/ Sandra L. Manzke
Suzanne S. Hammond                                         Sandra L. Manzke
Secretary and Treasurer

ATTEST                                                TREMONT ADVISERS, INC.


/s/ Stephen T. Clayton                                /s/ Robert I. Schulman
Stephen T. Clayton                                        Robert I. Schulman
Chief Financial Officer                                  Chief Operating Officer



                                        1

<PAGE>

Exhibit 10.52
                                   AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT

         AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") dated this 10th of
December,  1997, by and between TREMONT ADVISERS,  INC., a Delaware  corporation
having its principal  executive offices at Corporate Center at Rye, 555 Theodore
Fremd Avenue,  Rye, New York  ("Tremont");  and ROBERT I.SCHULMAN, an individual
residing at 18 Green Valley Road, Armonk, New York ("Executive").

                                   WITNESSETH:

         WHEREAS, Executive is employed by Tremont pursuant to and in accordance
with the  terms  and  conditions  contained  in an  employment  agreement  dated
April 22, 1994 (the  "Employment  Agreement"),  by and between  Tremont and
Executive; and

         WHEREAS,  Executive  and  Tremont are each  desirous  of  amending  the
Employment  Agreement in accordance  with this Amendment,  effective  January 1,
1998.

         NOW, THEREFORE,  in consideration of the promises and mutual covenants,
terms and conditions hereinafter set forth and in the Employment Agreement,  the
parties hereto hereby agree as follows:

1. Section 3(a)(i) of the Employment Agreement is hereby amended by deleting the
following  phrase: "three hundred twenty-six thousand dollars ($26,000)" and
inserting  in  its  place  "three   hundred   thirty-five thousand seven
hundred dollars ($335,700)."

2.  Section 5 shall be amended by deleting all  references  therein to "December
31, 1997" and inserting in its place "December 31, 1998."

3. Except to the extent amended by this  Amendment,  the terms and conditions of
the Employment  Agreement shall remain in full force and effect. In the event of
any conflict  between the terms of the  Employment  Agreement and the Amendment,
the Amendment shall control.

4. Each party hereby represents and warrants to the other that each has read the
foregoing  provisions and that each has had a sufficient  opportunity to discuss
this  Amendment  with  anyone each party might  desire  prior to signing  below.
Further, in signing this Amendment, each party has not relied on or been induced
to execute this  Amendment by any  statements,  representations,  agreements  or
promises,  oral or  written,  made  by the  other  except  for  those  expressly
contained in this Amendment.

         IN WITNESS  WHEREOF,  this Amendment has been executed and delivered by
the parties hereto as of the date first above written.

WITNESS


/s/ Suzanne S. Hammond                             By: /s/ Robert I. Schulman
Suzanne S. Hammond                                     Robert I. Schulman
Secretary and Treasurer

ATTEST                                                  TREMONT ADVISERS, INC.


/s/ Stephen T. Clayton                                   /s/ Sandra L. Manzke  
Stephen T. Clayton                                       Sandra L.Manzke
Chief Financial Officer                                  Chief Executive Officer

                                        1



<PAGE>
Exhibit 23.1
                      CONSENT OF INDEPENDENT AUDITORS




We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-78346)  pertaining to the Tremont Advisers,  Inc. 401(k) Savings Plan
of our  report  dated  February  13,  1998,  with  respect  to the  consolidated
financial  statements of Tremont  Advisers,  Inc.  included in the Annual Report
(Form 10-KSB) for the year ended December 31, 1997.



                                             Ernst & Young, LLP
Stamford, Connecticut
March 18, 1998



                                        1

<PAGE>

Exhibit 23.2

INDEPENDENT AUDITOR'S CONSENT




To the Board of Directors of
Tremont Advisers, Inc.


We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statement on Form S-8 (No.  33-78346)  pertaining to the Tremont Advisers,  Inc.
401(k)  Savings  Plan of our  report  dated  February  2, 1998 on the  financial
statements  of The Broad Market Fund,  L.P. as of December 31, 1997 and for each
of the two years in the period then ended which report is included in the Annual
Report on Form 10-KSB of Tremont Advisers,  Inc. for the year ended December 31,
1997.




GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
New York, New York

March 18, 1998

                                        1

<PAGE>                                 Press Release 97-2
Exhibit 99.4                           For Immediate Release
                                       Contact:  Robert I. Schulman


                        Tremont Advisers, Inc. Announces
                                  Joint Venture

Rye, New York, June 5, 1997 - Tremont Advisers, Inc. ("Tremont")
and Mutual Risk Management Ltd. ("MRM") today announced a series
of transactions pursuant to which MRM will acquire an equity
interest in Tremont and will invest in Tremont's developing
offshore life insurance businesses.

A wholly-owned  Delaware subsidiary of MRM will offer to acquire 20% of Tremont.
A portion of this equity position will be obtained through a tender offer to the
existing  shareholders  of the Company's Class B Common Shares for up to 615,000
shares at $3.75 per  share.  Upon  termination  of the  tender  offer,  MRM will
purchase directly from Tremont between 205,000 and 340,000 Class B Common Shares
depending  upon the  results of the tender  offer.  At the  completion  of these
transactions, MRM will own approximately 20% of the outstanding Common Shares of
Tremont. This offer is expected to commence on or about June 6, 1997.

In a series of related  transactions,  MRM will also acquire,  from an unrelated
party,  51% of Tremont  International  Insurance LTD., a Cayman Island insurance
company recently  established to write offshore life insurance  products such as
variable  annuities and variable life policies.  Tremont  (Bermuda)  Limited,  a
wholly-owned  subsidiary  of  Tremont  Advisers,  Inc.,  will  retain  its 24.5%
interest in Tremont  International  Insurance LTD. MRM will invest $5 million in
Tremont  International  Insurance  LTD., to provide capital and support this new
and exciting business.

In addition,  Tremont (Bermuda) Limited and The Anglo-Dutch Insurance Company, a
Cayman Islands insurance company,  will be joined by MRM in a joint venture that
is designed to develop offshore annuity products utilizing offshore  alternative
managers and the  facilities of Tremont  International  Insurance  LTD. MRM will
invest $1 million in this  venture as initial  capital to  aggressively  develop
this business.

                                              **********************

Tremont Advisers, Inc. is a diversified financial service company
that provides consulting and specialty product advice to a wide
range of financial intermediaries.



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<PAGE>

Exhibit 99.5
                                        Press Release 97-4
                                        For Immediate Release
                                        Contact:  Robert I. Schulman


                     Tremont Advisers, Inc. Announces Second
                     Quarter and Six Month Operating Results


Rye, New York, August 11, 1997 - Tremont Advisers, Inc. ("Tremont") reported net
income of $292,600, or $.07 per share, for the six months ended June 30, 1997 as
compared to $113,100,  or $.03 per share,  for the same period in 1996.  Tremont
also  reported net income of $186,800,  or $.05 per share,  for the three months
ended June 30,  1997 as compared  to  $86,800,  or $.02 per share,  for the same
period in 1996.  Tremont's total revenues for the six months ended June 30, 1997
were  $2,616,500  as compared to $1,971,900  for the same period in 1996.  Total
revenues were $1,367,800 for the three months ended June 30, 1997 as compared to
$1,009,100 for the same period in 1996.  Tremont's  operating  results increased
primarily due to growth in its proprietary  products, an increase in funds under
management,  as well as an expanded  client base. The management team at Tremont
is pleased  with its recent  growth in all of its primary  product  lines and is
optimistic that such growth will continue.

In July,  Tremont  entered  into a series of  transactions  whereby  Mutual Risk
Management, an international risk management company ("MRM"), acquired an equity
interest in Tremont.  In June 1997, MGL Investment Ltd. ("MGL"),  a wholly-owned
subsidiary of MRM, began a tender offer to purchase 615,000 shares of previously
outstanding  Class B Common Stock par value $0.01 at a price of $3.75 per share.
This transaction was completed on July 7, 1997 for the entire 615,000 shares. In
addition,  pursuant to a certain stock purchase  agreement,  Tremont sold to MGL
202,365 shares of its Class B Common Stock,  par value $0.01 at a price of $3.75
per share. As a result of these transactions,  MRM indirectly owns, through MGL,
20% of Tremont's  outstanding  common stock which  includes Class A Common Stock
and Class B Common Stock.

In addition, MRM invested $5 million in Tremont International  Insurance Ltd., a
Cayman Island insurance company ("TIIL") recently established for the purpose of
providing  offshore  life  insurance  products  such as variable  annuities  and
variable life  policies.  Tremont  (Bermuda)  Limited  ("TBL"),  a  wholly-owned
subsidiary of Tremont,  owns a 24.5% interest in TIIL. In July 1997, TBL formed,
with MRM and another party,  and acquired a 40% interest in Tremont MRM Services
Limited ("TMRM"),  a company  incorporated under the laws of Bermuda.  TMRM will
provide product development,  marketing and administrative  services to TIIL, as
more fully set forth in an agreement between the

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<PAGE>


parties.  MRM has invested $1 million in this venture to
initially capitalize and develop this business.

The Broad Market Prime Fund,  L.P., is the newest  addition to Tremont's time of
proprietary  products.  This  domestic  multi-manager  limited  partnership  was
launched  on July 1,  1997 by  means  of a  private  offering  and has  received
subscriptions  for $14.5  million.  It was created for the purpose of  achieving
long term capital growth  through a leveraged  investment  strategy.  This press
release shall not constitute an offer to sell or the solicitation of an offer to
buy the securities  offered by The Broad Market Prime Fund, L.P., which can only
be made by its Private Placement Memorandum.



                                          *******************************

Tremont Advisers, Inc. is a diversified financial services
company that provides consulting and specialty product advice to
a wide range of financial intermediaries.

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