Document:

<PAGE>

                                                                     EXHIBIT 4.2

     THE PREFERRED SHARES EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS
PART OF AN ISSUANCE OF UNITS, CONSISTING OF CONVERTIBLE EXCHANGEABLE DEBENTURES
DUE 2006 (THE "DEBENTURES") OF MUTUAL RISK MANAGEMENT LTD. ("MRM") AND SERIES A
PREFERRED SHARES OF MRM. THE SERIES A PREFERRED SHARES OF MRM EVIDENCED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, AND MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, DEBENTURES REPRESENTING THE SAME
PERCENTAGE OF THE TOTAL PRINCIPAL AMOUNT OF OUTSTANDING DEBENTURES THAT THE
NUMBER OF SERIES A PREFERRED SHARES PROPOSED TO BE TRANSFERRED OR ASSIGNED
REPRESENTS OF THE TOTAL NUMBER OF OUTSTANDING SERIES A PREFERRED SHARES.

     THE PREFERRED SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT UNDER ANY
CIRCUMSTANCES BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
<PAGE>

     Certificate Number: [001]                                Number of Series A
                                                           Preferred Shares: [_]

             Series A Preferred Shares (par value $.01 per share)
                    (Liquidation Preference $.01 per share)

                                      of

                          MUTUAL RISK MANAGEMENT LTD.

          MUTUAL RISK MANAGEMENT LTD., a company organized under the laws of
Bermuda (the "Company"), hereby certifies that [_] (the "Holder") is the
registered owner of fully paid and non-assessable preferred securities of the
Company designated the Series A Preferred Shares (par value $.01) (liquidation
preference $.01 per share) (the "Series A Preferred Shares"). The Series A
Preferred Shares are transferable on the books and records of the Registrar, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer, together with the related Debenture to
which this preferred share certificate is attached. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Series A Preferred Shares represented hereby are issued and shall in all
respects be subject to the provisions of the Certificate of Designations of
Series A Preferred Shares due 2006 adopted on April 26, 2001, as the same may be
amended from time to time (the "Certificate of Designations"). Capitalized terms
used but not defined herein shall have the meanings given them in the
Certificate of Designations. The Company will provide a copy of the Certificate
of Designations to a Holder without charge upon written request to the Company
at its principal place of business.

          Reference is hereby made to select provisions of the Series A
Preferred Shares set forth on the reverse hereof, and to the Certificate of
Designations, which select provisions and the Certificate of Designations shall
for all purposes have the same effect as if set forth at this place.

          Upon receipt of this certificate, the Holder is bound by the
Certificate of Designations and is entitled to the benefits thereunder.
<PAGE>

          IN WITNESS WHEREOF, the Company has executed this certificate this [_]
day of May 2001.

                                            MUTUAL RISK MANAGEMENT LTD.

                                            By:_________________________________
                                                Name:
                                                Title:

                                            By:_________________________________
                                                Name:
                                                Title:
<PAGE>

                              REVERSE OF SECURITY

          The Company is not required to pay any dividends on the Series A
Preferred Shares.

          The Series A Preferred Shares are entitled to the voting rights set
forth in the Certificate of Designations.

          The Series A Preferred Shares shall be automatically redeemed, for no
consideration, upon the conversion, exchange or redemption of the Debenture to
which this preferred share certificate is attached.  The Series A Preferred
Shares shall not be redeemable at the option of Company at any time.
<PAGE>

                                  ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned assigns and transfers the Series A
Preferred Shares evidenced hereby to:

________________________________________________________________________________
       (Insert assignee's social security or tax identification number)

________________________________________________________________________________
                   (Insert address and zip code of assignee)

Date: _________________

Signature: ____________________________________________
              (Sign exactly as your name appears on the
              other side of this Series A Preferred
              Share Certificate)

Signature Guarantee:/1/ ________________________________________________________

_________________________________

/1/  (Signature must be guaranteed by an "eligible guarantor institution," that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended.)<PAGE>

                                                                     EXHIBIT 4.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT UNDER ANY
CIRCUMSTANCES BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

                             WARRANT ENTITLING THE
                    HOLDER TO PURCHASE [ ] SHARES OF COMMON
                     STOCK OF MUTUAL RISK MANAGEMENT LTD.

No. [001]                                                           May 17, 2001

                          MUTUAL RISK MANAGEMENT LTD.

          MUTUAL RISK MANAGEMENT LTD., a company organized under the laws of
Bermuda (the "Company"), hereby certifies that, for value received, [        ],
              -------
or its assigns, (the "Holder") is entitled, subject to the terms set forth
                      ------
below, to purchase from the Company, at any time and from time to time (subject
only to Section 5(b)), in whole or in part, an aggregate of [     ] fully paid
and nonassessable shares of Common Stock, par value $0.01 per share ("Common
                                                                      ------
Stock"), of the Company from and after the date hereof (the "Closing Date")
-----                                                        ------------
until the date which is the fifth anniversary of the Closing Date (the "Exercise
                                                                        --------
Period").
------

          SECTION 1.  PURCHASE PRICE.  Such shares of Common Stock shall be
purchased at a purchase price per share, subject to the provisions of Section 3
hereof, equal to U.S. $7.00 (as adjusted in accordance with the terms hereof,
the "Purchase Price").  The number of shares and the character of such Common
     --------------
Stock are subject to adjustment as provided below, and the term "Common Stock"
                                                                 ------------
shall mean, unless the context otherwise requires, the Common Stock and/or other
securities or property at the time deliverable upon the exercise of this
Warrant.

          SECTION 2.  EXERCISE OF WARRANT.  The purchase rights evidenced by
this Warrant shall be exercised by the Holder surrendering this Warrant, with
the form of subscription attached hereto as Annex I at the end hereof duly
executed by such Holder (the "Exercise Notice"), to the Company at its offices,
                              ---------------
44 Church Street, Hamilton HM12, Bermuda, accompanied by payment (as specified
below) of the aggregate Purchase Price determined as of the Determination Date
(as defined below) of the shares of Common Stock being
<PAGE>

                                      -2-

purchased pursuant to such exercise. Payment of the aggregate Purchase Price may
be made, at the option of the Holder, (i) in cash, (ii) by certified check or
bank cashier's check payable to the order of the Company in the amount of such
Purchase Price, (iii) by delivering shares of Common Stock with an aggregate
market price (determined in accordance with Section 3.1(f)) as of the day prior
to the Company's receipt of the Exercise Notice (the "Determination Date") equal
                                                      ------------------
to the product of the Purchase Price and the number of shares of Common Stock
being purchased, (iv) by the Company reducing, at the request of the Holder, the
number of shares of Common Stock for which this Warrant is exercisable by a
number of shares of Common Stock (the "Surrendered Stock") equal to (a) the
                                       -----------------
product of (x) the Purchase Price in effect on the Determination Date and (y)
the number of shares of Common Stock being purchased, divided by (b) the
difference (if positive) between the market price per share of Common Stock
(determined in accordance with Section 3.1(f)) as of the Determination Date and
the Purchase Price in effect on the Determination Date or (v) any combination of
the methods of payment described in clauses (i) through (iv) above.

          2.1.  Partial Exercise.  This Warrant may be exercised for less than
                ----------------
the full number of shares of Common Stock, in which case the number of shares of
Common Stock receivable upon the exercise of this Warrant as a whole, and the
sum payable upon the exercise of this Warrant as a whole, shall be
proportionately reduced.  Upon any such partial exercise, the Company, at its
expense, will forthwith issue to the Holder hereof a new Warrant or Warrants of
like tenor for the number of shares of Common Stock as to which rights have not
been exercised, such Warrant or Warrants to be issued in the name of the Holder
hereof or his nominee.

          2.2.  Delivery of Certificates for Common Stock on Conversion.  As
                -------------------------------------------------------
soon as practicable after the exercise of this Warrant and payment of the
Purchase Price, and in any event within ten (10) days thereafter, the Company,
at its expense, will cause to be issued in the name of, and delivered to, the
Holder hereof a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock or other securities or property to which
such Holder shall be entitled upon such exercise, plus, in lieu of any
fractional share to which such Holder would otherwise be entitled, cash in an
amount determined in accordance Section 4 hereof.  The Company agrees that the
shares of Common Stock so received shall be deemed to be issued to the Holder as
the record owner of such shares of Common Stock as of the close of business on
the date on which this Warrant shall have been surrendered and payment for such
shares of Common Stock made as aforesaid.

          SECTION 3.  ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS.  In order
to prevent dilution of the right granted hereunder, the Purchase Price shall be
subject to adjustment from time to time in accordance with this Section 3.  Upon
each adjustment of the Purchase Price pursuant to this Section 3, the registered
holder hereof shall thereafter be entitled to acquire upon exercise of this
Warrant, at the Purchase Price resulting
<PAGE>

                                      -3-

from such adjustment, the number of shares of the Company's Common Stock
obtainable by multiplying the Purchase Price in effect immediately prior to such
adjustment by the number of shares of the Company's Common Stock acquirable upon
exercise thereof immediately prior to such adjustment and dividing the product
thereof by the Purchase Price resulting from such adjustment.

          3.1.  Adjustment of Purchase Price.  (a) In the event that the Company
                ----------------------------
shall pay or make a dividend or other distribution on any class of its capital
stock in Common Stock or securities convertible into, or exercisable or
exchangeable for, Common Stock ("Common Stock Equivalents"), the Purchase Price
                                 ------------------------
applicable to exercises of this Warrant in effect at the opening of business on
the day following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such Purchase Price by a fraction of which (i) the numerator shall be the number
of shares of Common Stock of the Company outstanding at the close of business on
the date fixed for such determination and (ii) the denominator shall be the sum
of (x) such number of shares and (y) the total number of shares of Common Stock
constituting such dividend or other distribution and shares of Common Stock of
the Company issuable upon conversion, exercise or exchange of the Common Stock
Equivalents constituting such dividend or other distribution, in each case, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination.  For the purposes of this
paragraph, the number of shares of Common Stock of the Company at any time
outstanding shall not include shares held in the treasury of the Company or held
by subsidiaries of the Company but shall include shares of Common Stock issuable
in respect of scrip certificates issued in lieu of fractions of shares of Common
Stock of the Company.  During the Exercise Period, the Company will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company or held by subsidiaries of the Company.

          (b)  In case the Company shall issue Common Stock of the Company at a
price per share less than the higher of the Purchase Price then in effect or the
current market price per share (determined as provided in Section 3.1(f)) of the
Common Stock of the Company on the date such Common Stock is issued, the
Purchase Price applicable to exercise of this Warrant in effect at the opening
of business on the day following such date shall be reduced by multiplying such
Purchase Price by a fraction of which (i) the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
such date plus the number of shares of Common Stock of the Company which the
aggregate of the offering price of the total number of shares of Common Stock of
the Company so issued or offered for subscription or purchase would purchase at
the higher of such current market price or the Purchase Price and (ii) the
denominator shall be the number of shares of Common Stock of the Company
outstanding at the close of business on such date plus the aggregate number of
shares of Common Stock of the Company so offered for subscription or
<PAGE>

                                      -4-

purchase, such reduction to become effective immediately after the opening of
business on the day following such date fixed for such determination.

          In case the Company shall issue Common Stock Equivalents of the
Company with a conversion, exercise or exchange price per share that, together
with the issuance price per share of such Common Stock Equivalents, is less than
the higher of the Purchase Price then in effect or the current market price per
share (determined as provided in Section 3.1(f)) of the Common Stock of the
Company on the date on which such Common Stock Equivalents are issued, the
Purchase Price applicable to exercise of this Warrant in effect at the opening
of business on the day following such date shall be reduced by multiplying such
Purchase Price by a fraction of which (i) the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
such date plus the aggregate number of shares of Common Stock of the Company
that the sum of (A) the aggregate conversion, exercise or exchange price of all
such Common Stock Equivalents and (B) the aggregate issuance price of all such
Common Stock Equivalents would purchase if the conversion, exercise or exchange
price, as applicable, per share of Common Stock of the Company and the issuance
price of Common Stock Equivalent were equal to the higher of such current market
price or the Purchase Price and (ii) the denominator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
such date plus the aggregate number of shares of Common Stock of the Company
that are issuable upon conversion, exercise or exchange of all such Common Stock
Equivalents at the actual conversion, exercise or exchange prices applicable to
such Common Stock Equivalents, such reduction to become effective immediately
after the opening of business on the day following such date.

     For the purposes of this clause (b), the number of shares of Common Stock
of the Company at any time outstanding shall not include shares held in the
treasury of the Company or held by subsidiaries of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.  During the Exercise Period, the Company will not issue
any rights or warrants in respect of shares of Common Stock held in the treasury
of the Company or held by subsidiaries of the Company.  If any rights or
warrants shall expire without having been exercised, the Purchase Price shall
thereupon be readjusted to eliminate the amount of its adjustment due to their
issuance.

          (c)  In case outstanding shares of Common Stock of the Company shall
be subdivided into a greater number of shares of Common Stock, the Purchase
Price applicable to exercises of this Warrant in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and, conversely, in case outstanding
shares of Common Stock of the Company shall each be combined into a smaller
number of shares of Common Stock, the Purchase Price applicable to exercises of
this Warrant in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or in-
<PAGE>

                                      -5-

crease, as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.

          (d)  In case the Company shall, by dividend or otherwise, distribute
to holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any Common Stock Equivalents referred to in
clause (b) of this Section 3.1, any dividend or distribution paid in cash out of
the retained earnings of the Company at a rate not exceeding $0.07 per share per
quarter and any dividend or distribution referred to in clause (a) of this
Section 3.1), the Purchase Price applicable to exercises of this Warrant shall
be adjusted so that the same shall equal the price determined by multiplying the
applicable Purchase Price in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which (i) the numerator shall be the higher of the
Purchase Price then in effect or the current market price per share (determined
as provided in Section 3.1(f)) of the Common Stock of the Company on the date
fixed for such determination less the then fair market value (as determined in
good faith by the board of directors of the Company, whose determination shall
be described in a board resolution delivered to the Holder) of the portion of
the assets or evidences of indebtedness so distributed applicable to one share
of Common Stock of the Company and (ii) the denominator shall be such current
market price per share of the Common Stock of the Company, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.

          (e)  The reclassification of Common Stock of the Company into
securities including other than Common Stock (other than any reclassification
upon a consolidation or merger to which Section 3.7 applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to all
holders of Common Stock of the Company (and the effective date of such
reclassification shall be deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and "the date fixed for such
determination" within the meaning of clause (d) of this Section 3.1), and (ii) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock of the Company outstanding immediately prior to such
reclassification into the number of shares of Common Stock of the Company
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of clause (c) of this Section 3.1).

          (f)  For the purpose of any computation under Sections 2 or 4 or
clauses (b) and (d) of this Section 3.1, the current market price per share of
Common Stock of the Company on any date shall be deemed to be the average of the
daily closing prices for the 10 consecutive Business Days selected by the
Company commencing not less than 10 nor more than
<PAGE>

                                      -6-

20 Business Days before the day in question; provided, however, that the 10
                                             --------  -------
consecutive Business Days selected for determination shall commence no earlier
than three Business Days following the expiration of the Put Period (as defined
in the Securities Purchase Agreement). The closing price for each day shall be
the closing price for such day reported in The Wall Street Journal or, if not so
reported, the last reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if the
Common Stock of the Company is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which such Common
Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the National Association of Securities
Dealers Automated Quotations National Market System or, if such Common Stock is
not listed or admitted to trading on any national securities exchange or quoted
on such National Market System, the average of the closing bid and asked prices
in the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by such Company for that purpose. In the
absence of one or more such sale prices, quotes or bid and asked prices, the
board of directors of the Company shall determine the current market price based
on (i) the most recently completed arm's-length transaction between the Company
and a Person other than an Affiliate (as defined in Section 11) of the Company
and the closing of which occurs on such date or shall have occurred within the
six months preceding such date, (ii) if no such transaction shall have occurred
on such date or within such six-month period, the value of the security most
recently determined as of a date within the six months preceding such date by a
nationally recognized investment banking firm or appraisal firm which is not an
Affiliate of the Company (an "Independent Financial Advisor") or (iii) if
                              -----------------------------
neither clause (i) nor (ii) is applicable, the value of the security determined
as of such date by an Independent Financial Advisor.

             (g)  In addition to the reductions in the Purchase Price that are
required by clauses (a), (b), (c) and (d) of this Section 3.1, the Company will
make such reductions in the Purchase Price (i) as it considers to be advisable
in order that any event treated for Federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients and (ii) as may be
necessary to account for any adjustments to conversion, exercise or exchange
prices or rates made to any Common Stock Equivalents of the Company after the
Closing Date, the result of which is that the conversion, exercise or exchange
price or rate applicable to such Common Stock Equivalents is below the higher of
the Purchase Price or the current market price per share (determined as provided
in Section 3.1(f)) of the Common Stock of the Company, in each case in effect on
the date of such adjustment.

          3.2.  Notice of Adjustments of Purchase Price.  Whenever the Purchase
                ---------------------------------------
Price is adjusted as herein provided:
<PAGE>

                                      -7-

             (a)  the Company shall compute the adjusted Purchase Price in
     accordance with Section 3.1 and shall prepare a certificate signed by the
     Chief Financial Officer of the Company setting forth the adjusted Purchase
     Price and showing in reasonable detail the facts upon which such adjustment
     is based, and such certificate shall forthwith be delivered to the Holder;
     and

             (b)  a notice stating that the Purchase Price has been adjusted and
     setting forth the adjusted Purchase Price shall be mailed by the Company
     together with a copy of the certificate prepared in accordance with
     subsection (a) above to the Holder as soon as practicable after the
     adjustment.

          3.3.  Notice of Certain Corporate Action.  In case:
                ----------------------------------

             (a)  the Company shall declare a dividend (or any other
     distribution) on its Common Stock payable other than a dividend payable in
     cash out of its retained earnings at a rate not in excess of $0.07 per
     share per quarter; or

             (b)  the Company shall authorize the granting to the holders of its
     Common Stock of rights or warrants to subscribe for or purchase any shares
     of capital stock of any class or of any other rights; or

             (c)  of any reclassification of the Common Stock of the Company, or
     of any consolidation or merger to which the Company is a party and for
     which approval of any of its stockholders is required, or of the sale or
     transfer of all or substantially all of the assets of the Company; or

             (d)  of the voluntary or involuntary dissolution, liquidation or
     winding up of the Company;

then the Company shall cause to be delivered to the Holder at least 20 days (or
10 days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice describing
such event in reasonable detail and stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights or warrants, or,
if a record is not to be taken, the date as of which the holders of record of
such Company's Common Stock to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of record of the Company's Common Stock of
record shall be entitled to exchange their shares of Common Stock of the Company
for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
<PAGE>

                                      -8-

          3.4.  Taxes on Exercise.  The Company will pay any and all transfer or
                -----------------
stamp taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on exercise of this Warrant pursuant hereto.  The Company shall
not, however, be required to pay any income tax payable with respect to exercise
of this Warrant or any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that of the Holder to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.

          3.5.  Covenant as to Common Stock.  The Company covenants that all
                ---------------------------
shares of Common Stock which may be issued upon exercise of this Warrant will,
upon issue, be validly issued, fully paid and nonassessable and, except as
provided in Section 3.4, the Company will pay all taxes, liens and charges with
respect to the issue thereof.

          3.6.  Cancellation of Exercised Warrant.  In the event this Warrant is
                ---------------------------------
surrendered for exercise, in whole or in part, it shall be delivered to and
canceled by the Company.

          3.7.  Provisions in Case of Consolidation, Merger or Sale of Assets.
                -------------------------------------------------------------
In case of any consolidation of the Company with, or merger of the Company into,
any other Person, any merger of another Person into the Company (other than a
merger which does not result in any reclassification, exercise, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any sale
or transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver a supplement to this
Warrant providing that the Holder of this Warrant shall have the right
thereafter to convert this Warrant only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares (including fractional shares) of
Common Stock of the Company into which this Warrant might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming such
holder of Common Stock of the Company (a) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("constituent
                                                                 -----------
Person"), or an Affiliate of a constituent Person and (b) failed to exercise its
------
rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer;

provided, however, that if the kind or amount of securities, cash and other
--------  -------
property receivable upon such consolidation, merger, sale or transfer is not the
same for each share of Common Stock of the Company held immediately prior to
such consolidation, merger, sale or transfer by others than a constituent Person
or an Affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purpose of this
                          ------------------
Section 3.7 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each non-
electing share shall be deemed to be the kind and amount
<PAGE>

                                      -9-

so receivable per share by a plurality of the non-electing shares. Such
supplement to this Warrant shall provide for adjustments which, for events
subsequent to the effective date of the event which triggers the requirement of
such supplement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3.7. The above provisions of this
Section 3.7 shall similarly apply to successive consolidations, mergers, sales
or transfers.

          3.8.  No Impairment.  The Company will not, by amendment of its
                -------------
memorandum of association or bye-laws or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Holder against impairment.

          3.9.  When De Minimis Adjustment May Be Deferred.  No adjustment in
                ------------------------------------------
the number of shares of Common Stock of the Company issuable upon exercise of
this Warrant need be made unless the adjustment would require an increase or
decrease of at least 1% in the number of shares of Common Stock of the Company
issuable upon exercise of this Warrant.  Any adjustments that are not made shall
be carried forward and taken into account in any subsequent adjustment.

          All calculations under this Section 3 shall be made to the nearest
1/100th of a share.

          SECTION 4.  FRACTIONS OF SHARES.  No fractional shares of Common Stock
of the Company shall be issued upon exercise of this Warrant.  Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of the Warrant (or specified portions thereof), the Company shall pay
a cash adjustment in respect of such fraction in an amount equal to the same
fraction of the market price per share of Common Stock (as determined as
provided in Section 3.1(f)) at the close of business on the day of any such
conversion.

          SECTION 5.  CERTAIN LIMITATIONS ON VOTING AND EXERCISE RIGHTS.  (a) In
the event that the date of payment of the Purchase Price in respect of any
exercise by the Holder of this Warrant (any such date, the "Exercise Date")
                                                            -------------
occurs prior to the time that the Form A approvals relating to the Transactions
shall have been received by the Company, then, until such time as such Form A
approvals are received by the Company, the Common Stock issuable upon each
exercise of this Warrant shall be limited in its voting rights to the Maximum
Voting Right Percentage (as defined in Section 11).  The limitations on voting
rights contained in this Section 5(a) shall not in any way restrict the ability
of the Holder to exercise all or any portion of this Warrant or to receive
Common Stock of the Company therefor.  In addition, the provisions of this
Section 5(a) shall not in any manner restrict or other-
<PAGE>

                                     -10-

wise affect the economic ownership percentage represented by the Common Stock of
the Company issued in connection with any exercise of this Warrant.

          (b)  In the event that any Exercise Date occurs prior to the time that
the shareholder approvals relating to the Transactions shall have been received
by the Company, then, until such time as such shareholder approvals are received
by the Company, the number of shares of Common Stock issuable upon each exercise
of this Warrant shall be limited to the Maximum Exercise Right Percentage (as
defined in Section 11).

          SECTION 6.  RESERVATION OF COMMON STOCK, ETC., ISSUABLE UPON EXERCISE
OF WARRANTS.  The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock or out of Common Stock of the
Company held in the treasury of the Company or held by a subsidiary of the
Company, solely for issuance and delivery upon the exercise of this Warrant and
other similar warrants, such number of its duly authorized shares of Common
Stock as from time to time shall be issuable upon the exercise of this Warrant
and all other similar warrants at the time outstanding.

          SECTION 7.  REPLACEMENT OF WARRANT.  Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, upon
delivery of an indemnity agreement (with surety if reasonably required) in an
amount reasonably satisfactory to it, or, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.

          SECTION 8.  REMEDIES.  The Company stipulates that the remedies at law
of the Holder of this Warrant in the event of any default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.

          SECTION 9.  NEGOTIABILITY, ETC.  This Warrant is issued upon the
following terms, to all of which each taker or owner hereof consents and agrees:

             (a)  Neither this Warrant, the shares of Common Stock of the
     Company issuable upon exercise of this Warrant (the "Underlying Stock") nor
                                                          ----------------
     the rights of the Holder hereunder may be transferred except in compliance
     with all applicable Federal and State securities laws.

          The provisions of this Section 9 shall be binding upon any transferee
     of this Warrant and upon each holder of Underlying Stock.
<PAGE>

                                     -11-

             (b)  Subject to the limitations described in this Section 9, title
     to this Warrant may be transferred by endorsement (by the Holder hereof
     executing the form of assignment at the end hereof including guaranty of
     signature) and delivery in the same manner as in the case of a negotiable
     instrument transferable by endorsement and delivery.

             (c)  Any person in possession of this Warrant properly endorsed
     and, if not the original holder hereof, to whom possession was transferred
     in accordance with the provisions of clauses (a) and (b) of this Section 9
     is authorized to represent himself as absolute owner hereof and is granted
     power to transfer absolute title hereto by endorsement and delivery hereof
     to a bona fide purchaser hereof for value; each prior taker or owner waives
     and renounces all of his equities or rights in this Warrant in favor of
     every such bona fide purchaser, and every such bona fide purchaser shall
     acquire title hereto and to all rights represented hereby.

             (d)  Until this Warrant is transferred on the books of the Company,
     the Company may treat the registered Holder of this Warrant as the absolute
     owner hereof for all purposes without being affected by any notice to the
     contrary.

          SECTION 10.  NO RIGHTS TO VOTE OR RECEIVE DIVIDENDS OR OTHER
DISTRIBUTIONS.  Prior to the exercise of this Warrant, the Holder hereof shall
not be entitled to any rights of a stockholder of the Company with respect to
shares of Common Stock for which this Warrant shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

          SECTION 11.  CERTAIN DEFINITIONS.

          "Affiliate" means, with respect to any Person (the "Subject Person"),
           ---------                                          --------------
(i) any other Person (a "Controlling Person") that directly, or indirectly
                         ------------------
through one or more intermediaries, Controls the Subject Person or (ii) any
other Person which is Controlled by or is under common Control with a
Controlling Person; provided, however, that the Holder and its Affiliates shall
                    --------  -------
not be deemed Affiliates of the Company or any of its subsidiaries.

          "Business Day" means any day except a Saturday, Sunday or other day on
           ------------
which (i) commercial banks in the City of New York are authorized or required by
law to close or (ii) the New York Stock Exchange is not open for trading.

          "Maximum Exercise Right Percentage" means a percentage of the total
           ---------------------------------
equity ownership of the Company (calculated in accordance with the rules and
regulations of the New York Stock Exchange) equal to the product of (i) 19.9%
and (ii) a fraction, the numerator
<PAGE>

                                     -12-

of which is the number of shares of Common Stock of the Company issuable upon
exercise of this Warrant giving rise to the need to calculate such Maximum
Exercise Right Percentage and the denominator of which is the sum of (x) the
aggregate number of shares of Common Stock of the Company issued or issuable
upon exercise of this Warrant and all other similar warrants issued to
purchasers of the Company's 9 3/8% Convertible Exchangeable Debentures due 2006
in connection with the purchase thereof and (y) the aggregate number of shares
of Common Stock of the Company issued or issuable upon conversion of the 9
3/8%Convertible Exchangeable Debentures due 2006 of the Company.

          "Maximum Voting Right Percentage" means a percentage of the total
           -------------------------------
voting power of the Company equal to (A) product of (i) 9.9% and (ii) a
fraction, the numerator of which is the number of shares of Common Stock of the
Company issuable upon exercise of this Warrant giving rise to the need to
calculate such Maximum Voting Right Percentage and the denominator of which is
the sum of (x) the aggregate number of issued and outstanding shares of Series A
Preferred Stock held by the Holder, (y) the number of shares of the Company
issued to the Holder as a result of the conversion of 9 3/8% Convertible
Exchangeable Debentures due 2006 of the Company and (z) the number of shares of
Common Stock of the Company issued or issuable to the Holder upon exercise of
this Warrant minus (B) the percentage of the total voting power of the Company
             -----
represented by the securities of the Company (other than the Transaction
Securities) then held by the holder.

          "Person" means an individual or a corporation, company, partnership,
           ------
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, government (or any agency or political
subdivision thereof) or other entity of any kind.

          "Series A Preferred Stock" means the Series A Preferred Stock of the
           ------------------------
Company issued to holders of the Company's 9 3/8% Convertible Exchangeable
Debentures due 2006 in connection with the purchase of such debentures.

          "Transaction Securities" means, collectively, the 9 3/8% Convertible
           ----------------------
Exchangeable Debentures due 2006, the Series A Preferred Stock, the shares of
Common Stock of the Company issued or issuable upon conversion of the 9 3/8%
Convertible Exchangeable Debentures due 2006, this Warrant and the shares of
Common Stock of the Company issued or issuable upon exercise of this Warrant.

          "Transactions" means the transactions contemplated by the Transaction
           ------------
Documents (as defined in the Securities Purchase Agreement), both before and
after giving effect to permitted exchanges and conversions of the Convertible
Exchangeable Debentures due 2006 of the Company, including the Restructuring (as
defined in the Securities Purchase Agreement).
<PAGE>

                                     -13-

          SECTION 12.  MAILING OF NOTICES, ETC.  All notices and other
communications from the Company to the Holder of this Warrant shall be mailed by
first-class certified mail, postage prepaid, to the address furnished to the
Company in writing by the last Holder of this Warrant who shall have furnished
an address to the Company in writing.

          SECTION 13.  CHANGE, WAIVER, ETC.  The terms of this Warrant may not
be changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the Holder of this Warrant against which enforcement of the
change, waiver, discharge or termination is sought.

                           [Signature Page Follows]
<PAGE>

                                     -14-

          IN WITNESS WHEREOF, the Company has executed this Warrant this 17th
day of May, 2001.

                                   MUTUAL RISK MANAGEMENT LTD.

                                   By: ___________________________________
                                       Name:
                                       Title:

                                   By: ___________________________________
                                       Name:
                                       Title:

Attest:

___________________________
<PAGE>

                                                                         Annex I
                                                                         -------

                 [To be signed only upon exercise of Warrant]

To Mutual Risk Management Ltd.

          The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _______________ shares of Common Stock of Mutual Risk
Management Ltd. and herewith makes payment of $_________ therefor and/or
requests that the number of shares of Common Stock for which the within Warrant
is exercisable be reduced by __________ shares of Common Stock (in addition to
the shares of Common Stock being purchased) and/or delivers _______ shares of
Common Stock, the aggregate of such payment being equal to the aggregate
purchase price for the shares of Common Stock being purchased, and requests that
the certificates for the shares of Common Stock being purchased be issued in the
name of, and be delivered to, _____________, whose address is ________________.

Dated:

________________________

                                   _________________________________________
                                   (Signature must conform in
                                   all respects to name of
                                   Holder as specified on the
                                   face of the Warrant)

                                   _________________________________________
                                                   Address

<PAGE>

                                                                        Annex II
                                                                        --------

                 [To be signed only upon transfer of Warrant]

          FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _____________________ the within Warrant and appoints
_________________ attorney to transfer said right on the books of Mutual Risk
Management Ltd. with full power of substitution in the premises.

Dated:

________________________

                                   _________________________________________
                                   (Signature must conform in
                                   all respects to name of
                                   Holder as specified on the
                                   face of the Warrant)

                                   _________________________________________
                                                    Address

Signature Guarantee:/1/_____________________________

_____________________________
/1/  (Signature must be guaranteed by an "eligible guarantor institution" that
     is, a bank, stockbroker, savings and loan association or credit union
     meeting the requirements of the Registrar, which requirements include
     membership or participation in the Securities Transfer Agents Medallion
     Program ("STAMP") or such other "signature guarantee program" as may be
     determined by the Registrar in addition to, or in substitution for, STAMP,
     all in accordance with the Securities Exchange Act of 1934, as amended).

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