MUTUAL RISK MANAGEMENT LTD
PENNSYLVANIA REHABILITATION ORDER
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>7
<FILENAME>dex1027.txt
<DESCRIPTION>PENNSYLVANIA REHABILITATION ORDER
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.27

                    IN THE COMMONWEALTH COURT OF PENNSYLVANIA

M. Diane Koken,                               :
Insurance Commissioner of the                 :
Commonwealth of Pennsylvania,                 :
                                              :
                                 Plaintiff    :
                                              :
               v.                             :
                                              :
Villanova Insurance Company                   :
One Logan Square, Suite 1400                  :
Philadelphia, PA  19103                       :   Docket No. __________________
                                              :
                                Defendant

                                      ORDER

     AND NOW, this __ day of _______ , 2002, upon consideration of the Petition
for Rehabilitation ("Petition") filed by the Insurance Commissioner of the
Commonwealth of Pennsylvania ("Commissioner"), the Court hereby finds that it is
in the best interest of Villanova Insurance Company ("Villanova"), its
policyholders, creditors, and the public, that Villanova be placed into
Rehabilitation in accordance with provisions of Article V of the Insurance
Department Act of 1921, Act of May 17, 1921, P.L. 789, as amended, 40 P.S.
ss.ss.221.1-221.63, and that sufficient grounds exist for the entry of an Order
of Rehabilitation ("Order"), based on Villanova's consent to rehabilitation
under 40 P.S. ss.221.14(12). NOW, therefore, it is hereby ORDERED, ADJUDGED AND
DECREED that:

     1. The Petition for Rehabilitation filed by the Commissioner is granted.

                                       1

<PAGE>

     2. Effective April 1, 2002, Villanova is hereby placed in rehabilitation
pursuant to the provisions of Article V of the Insurance Department Act, supra.
                                                                         -----

     3. M. Diane Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania, is, and her successors in office are, hereby appointed
Rehabilitator of Villanova, directed to take immediate possession of its
property, business and affairs as Rehabilitator pursuant to the provisions of
Article V of the Insurance Department Act, supra, and to take such action as the
                                           -----
nature of this case and the interests of the policyholders, creditors, or the
public may require.

     4. The Rehabilitator shall have full powers and authority given the
Rehabilitator under Article V of the Insurance Department Act, supra, and under
                                                               -----
provisions of all other applicable laws, as are reasonable and necessary to
fulfill the duties and responsibilities of the Rehabilitator under Article V of
the Insurance Department Act, supra, and under this Order.
                              -----

                              ASSETS OF THE ESTATE
                              --------------------

     5. As provided in Section 515(c) of Article V of the Insurance Department
Act, supra, as Rehabilitator, the Commissioner is hereby directed to take
possession of the assets, contracts and rights of action of Villanova, of
whatever nature and wherever located, whether held directly or indirectly.
According to Section 515(c), supra, "the
                             -----

                                       2

<PAGE>

         filing or recording of this Order with the clerk of the Commonwealth
Court or recorder of deeds of the county in which the principal business of
Villanova is conducted, or the county in which its principal office or place of
business is located, shall impart the same notice as a deed, bill of sale or
other evidence of title duly filed or recorded with that recorder of deeds would
have imparted."

         6. All banks, investment bankers, or other companies, entities, or
persons having in their possession assets which are, or may be, the property of
Villanova are hereby ordered to advise the Rehabilitator, and any agents and
attorneys for the Rehabilitator (collectively, the "Rehabilitator") immediately
of such assets and to identify such assets for the Rehabilitator, and are
further ordered not to disburse, convey, transfer, pledge, assign, hypothecate,
encumber or in any manner dispose of such assets without the prior written
consent of, or unless directed in writing by, the Rehabilitator. Any checks or
other payments which have, as of the date of this Order, been actually mailed or
actually delivered to the payee will, provided same are otherwise proper and in
compliance with relevant law, be honored without prejudice to the rights of the
Rehabilitator regarding recoupment from the recipient. Such persons and
entities, and all other persons and entities, are enjoined from disposing of or
destroying any records pertaining to any business transactions between Villanova
and banks, brokerage houses or other persons or companies having done business
with Villanova or having in their possession assets, which are, or were, the
property of Villanova.

                                       3

<PAGE>

     7. All insurance agents, managing general agents, brokers or other persons
having sold policies of insurance and/or collected premiums on behalf of
Villanova shall account for all earned premiums and commissions and shall
account for and pay all premiums and commissions unearned due to policies
canceled in the normal course of business, directly to the Rehabilitator at the
offices of Villanova within 30 days of the date of this Order, or the date of
receipt, whichever is later, or appear before this Court to show good cause as
to why they should not be required to account to the Rehabilitator. No insurance
agent, broker, or other person shall use premium monies owed to Villanova for
any purpose other than payment to the Rehabilitator.

     8. At the request of the Rehabilitator, all attorneys employed or retained
by Villanova as of the date of this Order shall, within 30 days of such request,
report to the Rehabilitator the name, company claim number, if applicable, and
status of each case or matter they are handling on behalf of Villanova. The
Rehabilitator need not make payment for any unsolicited reports.

     9. At the request of the Rehabilitator, any company providing telephone
service to Villanova shall provide new telephone numbers and refer calls from
the numbers presently assigned to Villanova to any such new numbers and perform
any other changes necessary to the conduct of the Rehabilitation of Villanova.

                                       4

<PAGE>

     10. Any premium finance company which has entered into a contract to
finance a policy which has been issued by Villanova shall pay the premium owed
to Villanova directly to the Rehabilitator at the Offices of Villanova.

     11. The United States Postal Service is requested to provide any
information requested regarding Villanova and to handle future deliveries of
Villanova mail, as directed by the Rehabilitator.

     12. Any entity furnishing water, electric, sewage, garbage or trash removal
services to Villanova shall maintain such services and transfer any such
accounts to the Rehabilitator as of the date of this Order, unless instructed to
the contrary by the Rehabilitator.

     13. Any entity furnishing claims processing or data processing services to
Villanova shall maintain such services and transfer any such accounts to the
Rehabilitator as of the date of this Order, unless instructed to the contrary by
the Rehabilitator.

     14. Any entity which has custody or control of any data processing
information and records including, but not limited to, source documents, all
types of electronically stored information, master tapes or any other recorded
information relating to Villanova, shall transfer, at the request of the
Rehabilitator, custody and control of such records to the Rehabilitator.

                                       5

<PAGE>

     15. At the request of the Rehabilitator, Villanova, its affiliates, and its
officers, directors, trustees, employees, agents and attorneys, are hereby
ordered to deliver to the Rehabilitator keys or access codes to the premises
where Villanova conducts its business and to any safe deposit boxes, and to
advise the Rehabilitator of the combinations or access codes of any safes or
safe keeping devices of Villanova.

     16. Villanova, its affiliates, and its officers, directors, trustees,
employees, agents, accountants, actuaries, auditors and attorneys, are hereby
ordered to identify for the Rehabilitator all of the assets, books, contracts,
causes of actions, funds, documents, records, files, credit cards, work papers
and related documents, investigative materials, or other property of any nature
of or related to Villanova, whether in paper, electronic, magnetic, or other
form, to tender or make readily available to the Rehabilitator, at the
Rehabilitator's request, all of the foregoing, and to advise and cooperate with
the Rehabilitator in identifying and locating any of Villanova's assets.

     17. Except for policies or contracts of insurance, the Rehabilitator, in
her discretion, may affirm or disavow any executory contracts to which Villanova
is a party. The entry of this Order of Rehabilitation shall not constitute an
anticipatory breach of any such contracts.

                                       6

<PAGE>

                 EXPENSES, POLICYHOLDER AND CERTIFICATE CLAIMS,
                 ----------------------------------------------
                           OTHER PAYMENTS AND LAWSUITS
                           ---------------------------

     18. The Rehabilitator may, in her discretion, pay expenses incurred in the
ordinary course of Villanova's business in rehabilitation and may, in her
discretion, pay the actual, reasonable, and necessary costs of preserving or
recovering the assets of Villanova and the costs of goods and services provided
to Villanova's estate. Such costs shall include but not be limited to: (a)
reasonable professional fees for accountants, actuaries, attorneys and
consultants with other expertise retained by the Commonwealth of Pennsylvania
Insurance Department ("Department"), the Commissioner or the Rehabilitator to
perform services relating to the Rehabilitation of Villanova or the feasibility,
preparation, implementation, or operation of a rehabilitation plan; (b)
compensation and other costs related to representatives and employees of
Villanova or its affiliates who perform services for Villanova; and (c) a
reasonable allocation of costs and expenses associated with time spent by
Department personnel in connection with the Rehabilitation of Villanova.

     19. In the event that this Court issues an order appointing the Insurance
Commissioner of the Commonwealth of Pennsylvania as liquidator of Villanova, the
actual, reasonable and necessary costs of preserving or recovering assets of
Villanova and the costs of goods or services provided to and approved by
Villanova (In Rehabilitation), under paragraph 18 of this Order, during the
period of Rehabilitation will be treated as "costs and expenses of
administration," pursuant to 40 P.S. (S)221.44.

                                       7

<PAGE>

     20. The Rehabilitator may, in her discretion, pay claims for losses, in
whole or in part, under policies and contracts of insurance and loss adjustment
expenses as identified in Section 544(b) of the Insurance Department Act, supra,
40 P.S. (S)221.44(b), provided, however, that the Rehabilitator shall not have
the discretion to pay, and may not pay, bad faith claims or claims for
extra-contractual charges or damages.

     21. No payments of any type shall be made to any claimants of Villanova as
identified in Section 544(c) through (i) of the Insurance Department Act of
1921, supra, 40 P.S. (S)221.44(c) through (i), except in the discretion of the
Rehabilitator. -----

     22. All persons, in the Commonwealth or elsewhere, are enjoined and
restrained from: (a) instituting or further prosecuting any court action
(whether at law, in equity, or otherwise) or arbitration or mediation against
Villanova or the Rehabilitator; (b) obtaining preferences, judgments,
attachments, garnishments or liens, including obtaining collateral in any
litigation, mediation, or arbitration involving Villanova, the Rehabilitator, or
Villanova's assets and property; (c) levying any execution process against
Villanova, the Rehabilitator or Villanova's assets and property in the
Commonwealth of Pennsylvania or elsewhere; or (d) making any assessments or
indirectly collecting such assessments by setting them off against amounts
otherwise payable to Villanova.

     23. Pursuant to Section 221.15(c) of the Insurance Department Act of 1921,
supra, the Rehabilitator is specifically authorized, in her sole
-----
discretion, to enter into

                                       8

<PAGE>


agreements to and otherwise take possession of the statutory deposits held by
any state or territory and to do all things necessary to manage and apply the
deposits in accordance with any such agreements. Villanova shall not post
additional statutory security deposits in any state or territory.

     24. a. All court actions, arbitrations and mediations currently or
hereafter pending against Villanova in the Commonwealth of Pennsylvania or
elsewhere are hereby stayed.

         b. All court actions, arbitrations and mediations currently or
hereafter pending against an insured of Villanova in the Commonwealth of
Pennsylvania or elsewhere are stayed for ninety (90) days from the effective
date of this Order or such additional time as the Rehabilitator may request.

     25. No judgment, order or arbitration award against Villanova or an insured
of Villanova entered after the date of filing of the Petition for Rehabilitation
and no judgment, order or arbitration award against Villanova or an insured of
Villanova entered at any time by default or by collusion need be considered as
evidence of liability or quantum of damages by the Rehabilitator.

                                   REINSURANCE
                                   -----------

     26. The amounts recoverable by the Rehabilitator from any reinsurer of
Villanova shall not be reduced as a result of this rehabilitation proceeding or
by reason of

                                       9

<PAGE>

any partial payment or distribution on a reinsured policy, contract or claim,
and each such reinsurer of Villanova is, without first obtaining leave of this
Court, hereby enjoined and restrained from terminating, canceling, failing to
extend or renew, or reducing or changing coverage under any reinsurance policy
or contract with Villanova. The Rehabilitator may, in her discretion, terminate,
rescind, or commute any contract with a reinsurer or reinsurers.


                             NEW OR RENEWAL BUSINESS
                             -----------------------

     27. The Rehabilitator is authorized to accept or reject new, existing, or
renewal business. In implementing this paragraph, the Rehabilitator shall have
the discretion to, inter alia, accept, reject, or cancel new, existing or
                   ----- ----
renewal business, and write renewal business for time periods less than one
year.


               INJUNCTION AGAINST INTERFERING WITH REHABILITATION
               --------------------------------------------------

     28. Until further order of this Court, all affiliates of Villanova,
persons, corporations, partnerships, associations, accountants, actuaries,
auditors, counsel, custodians, and all other entities, wherever located, are
hereby enjoined and restrained from interfering in any manner with the
Rehabilitator's possession and rights to the assets and property of Villanova
and from interfering in any manner with the conduct of the rehabilitation of
Villanova. Those affiliates of Villanova, persons, corporations, partnerships,
associations, accountants, actuaries, auditors, counsel, custodians, and all
other entities are hereby enjoined and restrained from wasting, transferring,
selling,

                                       10

<PAGE>

concealing, terminating, canceling, destroying, shredding, disbursing, disposing
of, or assigning any assets, books, contracts, causes of action, funds, records,
files, credit cards, work papers and related documents, investigative materials,
or other property of any nature of or related to Villanova, whether in paper,
electronic, magnetic, or other form.



                 INJUNCTION AGAINST ACTIONS BY SECURED CREDITORS
                 -----------------------------------------------

     29. All secured creditors or parties, pledgees, lienholders, collateral
holders or other persons claiming secured, priority or preferred interests in
any property or assets of Villanova are hereby enjoined from taking any steps
whatsoever to transfer, sell, assign, encumber, attach, dispose of, or exercise,
purported rights in or against any property or assets of Villanova.



                         NOT A DECLARATION OF INSOLVENCY
                         -------------------------------

     30. This Order shall not be deemed a finding or declaration of insolvency
such as would activate the provisions of the Pennsylvania Property and Casualty
Insurance Guaranty Act, 40 P.S. (S)(S)991.1801-9911.1820, or the provisions of
similar acts of any other state or territory.

                                       11

<PAGE>


                            VIOLATIONS OF THIS ORDER
                            ------------------------


     31. Any person violating any provision of this Order may be held in
contempt of Court.



                                  JURISDICTION
                                  ------------

     32. This Court shall retain jurisdiction for all purposes necessary to
effectuate and enforce this Order.

                                                  BY THE COURT,



                                                  ------------------------------
                                                                              J.

                                       12

<PAGE>

                    IN THE COMMONWEALTH COURT OF PENNSYLVANIA

M. Diane Koken,                         :
Insurance Commissioner of the           :
Commonwealth of Pennsylvania,           :
                                        :
                    Plaintiff           :
                                        :
               v.                       :
                                        :
Legion Insurance Company                :
One Logan Square, Suite 1400            :
Philadelphia, PA  19103                 :   Docket No. __________________
                                        :
                    Defendant

                                      ORDER


     AND NOW, this __ day of ________ , 2002, upon consideration of the Petition
for Rehabilitation ("Petition") filed by the Insurance Commissioner of the
Commonwealth of Pennsylvania ("Commissioner"), the Court hereby finds that it is
in the best interest of Legion Insurance Company ("Legion"), its policyholders,
creditors, and the public, that Legion be placed into Rehabilitation in
accordance with provisions of Article V of the Insurance Department Act of 1921,
Act of May 17, 1921, P.L. 789, as amended, 40 P.S. (S)(S)221.1-221.63, and that
                               -- -------
sufficient grounds exist for the entry of an Order of Rehabilitation ("Order"),
based on Legion's consent to rehabilitation under 40 P.S. (S)221.14(12). NOW,
therefore, it is hereby ORDERED, ADJUDGED AND DECREED that:

     1. The Petition for Rehabilitation filed by the Commissioner is granted.

                                       1

<PAGE>

     2. Effective April 1, 2002, Legion is hereby placed in rehabilitation
pursuant to the provisions of Article V of the Insurance Department Act, supra.
                                                                         -----

     3. M. Diane Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania, is, and her successors in office are, hereby appointed
Rehabilitator of Legion, directed to take immediate possession of its property,
business and affairs as Rehabilitator pursuant to the provisions of Article V of
the Insurance Department Act, supra, and to take such action as the nature of
                              -----
this case and the interests of the policyholders, creditors, or the public may
require.

     4. The Rehabilitator shall have full powers and authority given the
Rehabilitator under Article V of the Insurance Department Act, supra, and under
                                                               -----
provisions of all other applicable laws, as are reasonable and necessary to
fulfill the duties and responsibilities of the Rehabilitator under Article V of
the Insurance Department Act, supra, and under this Order.
                              -----

                              ASSETS OF THE ESTATE
                              --------------------

     5. As provided in Section 515(c) of Article V of the Insurance Department
Act, supra, as Rehabilitator, the Commissioner is hereby directed to take
     -----
possession of the assets, contracts and rights of action of Legion, of whatever
nature and wherever located, whether held directly or indirectly. According to
Section 515(c), supra, "the
                -----

                                       2

<PAGE>

filing or recording of this Order with the clerk of the Commonwealth Court or
recorder of deeds of the county in which the principal business of Legion is
conducted, or the county in which its principal office or place of business is
located, shall impart the same notice as a deed, bill of sale or other evidence
of title duly filed or recorded with that recorder of deeds would have
imparted."

     6. All banks, investment bankers, or other companies, entities, or persons
having in their possession assets which are, or may be, the property of Legion
are hereby ordered to advise the Rehabilitator, and any agents and attorneys for
the Rehabilitator (collectively, the "Rehabilitator") immediately of such assets
and to identify such assets for the Rehabilitator, and are further ordered not
to disburse, convey, transfer, pledge, assign, hypothecate, encumber or in any
manner dispose of such assets without the prior written consent of, or unless
directed in writing by, the Rehabilitator. Any checks or other payments which
have, as of the date of this Order, been actually mailed or actually delivered
to the payee will, provided same are otherwise proper and in compliance with
relevant law, be honored without prejudice to the rights of the Rehabilitator
regarding recoupment from the recipient. Such persons and entities, and all
other persons and entities, are enjoined from disposing of or destroying any
records pertaining to any business transactions between Legion and banks,
brokerage houses or other persons or companies having done business with Legion
or having in their possession assets, which are, or were, the property of
Legion.

                                       15

<PAGE>

     7. All insurance agents, managing general agents, brokers or other persons
having sold policies of insurance and/or collected premiums on behalf of Legion
shall account for all earned premiums and commissions and shall account for and
pay all premiums and commissions unearned due to policies canceled in the normal
course of business, directly to the Rehabilitator at the offices of Legion
within 30 days of the date of this Order, or the date of receipt, whichever is
later, or appear before this Court to show good cause as to why they should not
be required to account to the Rehabilitator. No insurance agent, broker, or
other person shall use premium monies owed to Legion for any purpose other than
payment to the Rehabilitator.

     8. At the request of the Rehabilitator, all attorneys employed or retained
by Legion as of the date of this Order shall, within 30 days of such request,
report to the Rehabilitator the name, company claim number, if applicable, and
status of each case or matter they are handling on behalf of Legion. The
Rehabilitator need not make payment for any unsolicited reports.

     9. At the request of the Rehabilitator, any company providing telephone
service to Legion shall provide new telephone numbers and refer calls from the
numbers presently assigned to Legion to any such new numbers and perform any
other changes necessary to the conduct of the Rehabilitation of Legion.

                                       16

<PAGE>

     10. Any premium finance company which has entered into a contract to
finance a policy which has been issued by Legion shall pay the premium owed to
Legion directly to the Rehabilitator at the Offices of Legion.

     11. The United States Postal Service is requested to provide any
information requested regarding Legion and to handle future deliveries of Legion
mail, as directed by the Rehabilitator.

     12. Any entity furnishing water, electric, sewage, garbage or trash removal
services to Legion shall maintain such services and transfer any such accounts
to the Rehabilitator as of the date of this Order, unless instructed to the
contrary by the Rehabilitator.

     13. Any entity furnishing claims processing or data processing services to
Legion shall maintain such services and transfer any such accounts to the
Rehabilitator as of the date of this Order, unless instructed to the contrary by
the Rehabilitator.

     14. Any entity which has custody or control of any data processing
information and records including, but not limited to, source documents, all
types of electronically stored information, master tapes or any other recorded
information relating to Legion, shall transfer, at the request of the
Rehabilitator, custody and control of such records to the Rehabilitator.

                                       17

<PAGE>


     15. At the request of the Rehabilitator, Legion, its affiliates, and its
officers, directors, trustees, employees, agents and attorneys, are hereby
ordered to deliver to the Rehabilitator keys or access codes to the premises
where Legion conducts its business and to any safe deposit boxes, and to advise
the Rehabilitator of the combinations or access codes of any safes or safe
keeping devices of Legion.

     16. Legion, its affiliates, and its officers, directors, trustees,
employees, agents, accountants, actuaries, auditors and attorneys, are hereby
ordered to identify for the Rehabilitator all of the assets, books, contracts,
causes of actions, funds, documents, records, files, credit cards, work papers
and related documents, investigative materials, or other property of any nature
of or related to Legion, whether in paper, electronic, magnetic, or other form,
to tender or make readily available to the Rehabilitator, at the Rehabilitator's
request, all of the foregoing, and to advise and cooperate with the
Rehabilitator in identifying and locating any of Legion's assets.

     17. Except for policies or contracts of insurance, the Rehabilitator, in
her discretion, may affirm or disavow any executory contracts to which Legion is
a party. The entry of this Order of Rehabilitation shall not constitute an
anticipatory breach of any such contracts.

                                       18

<PAGE>


                 EXPENSES, POLICYHOLDER AND CERTIFICATE CLAIMS,
                 ---------------------------------------------
                           OTHER PAYMENTS AND LAWSUITS
                           ---------------------------

     18. The Rehabilitator may, in her discretion, pay expenses incurred in the
ordinary course of Legion's business in rehabilitation and may, in her
discretion, pay the actual, reasonable, and necessary costs of preserving or
recovering the assets of Legion and the costs of goods and services provided to
Legion's estate. Such costs shall include but not be limited to: (a) reasonable
professional fees for accountants, actuaries, attorneys and consultants with
other expertise retained by the Commonwealth of Pennsylvania Insurance
Department ("Department"), the Commissioner or the Rehabilitator to perform
services relating to the Rehabilitation of Legion or the feasibility,
preparation, implementation, or operation of a rehabilitation plan; (b)
compensation and other costs related to representatives and employees of Legion
or its affiliates who perform services for Legion; and (c) a reasonable
allocation of costs and expenses associated with time spent by Department
personnel in connection with the Rehabilitation of Legion.

     19. In the event that this Court issues an order appointing the Insurance
Commissioner of the Commonwealth of Pennsylvania as liquidator of Legion, the
actual, reasonable and necessary costs of preserving or recovering assets of
Legion and the costs of goods or services provided to and approved by Legion (In
Rehabilitation), under paragraph 18 of this Order, during the period of
Rehabilitation will be treated as "costs and expenses of administration,"
pursuant to 40 P.S. (S)221.44.

                                       19

<PAGE>

     20. The Rehabilitator may, in her discretion, pay claims for losses, in
whole or in part, under policies and contracts of insurance and loss adjustment
expenses as identified in Section 544(b) of the Insurance Department Act, supra,
                                                                          -----
40 P.S. (S)221.44(b), provided, however, that the Rehabilitator shall not have
the discretion to pay, and may not pay, bad faith claims or claims for
extra-contractual charges or damages.

     21. No payments of any type shall be made to any claimants of Legion as
identified in Section 544(c) through (i) of the Insurance Department Act of
1921, supra, 40 P.S.(S)221.44(c) through (i), except in the discretion of the
      -----
Rehabilitator.


     22. All persons, in the Commonwealth or elsewhere, are enjoined and
restrained from: (a) instituting or further prosecuting any court action
(whether at law, in equity, or otherwise) or arbitration or mediation against
Legion or the Rehabilitator; (b) obtaining preferences, judgments, attachments,
garnishments or liens, including obtaining collateral in any litigation,
mediation, or arbitration involving Legion, the Rehabilitator, or Legion's
assets and property; (c) levying any execution process against Legion, the
Rehabilitator or Legion's assets and property in the Commonwealth of
Pennsylvania or elsewhere; or (d) making any assessments or indirectly
collecting such assessments by setting them off against amounts otherwise
payable to Legion.

     23. Pursuant to Section 221.15(c) of the Insurance Department Act of 1921,
supra, the Rehabilitator is specifically authorized, in her sole discretion, to
-----
enter into agreements to and otherwise take possession of the statutory deposits
held by any state or

                                       20

<PAGE>

territory and to do all things necessary to manage and apply the deposits in
accordance with any such agreements. Legion shall not post additional statutory
security deposits in any state or territory.

     24. a. All court actions, arbitrations and mediations currently or
hereafter pending against Legion in the Commonwealth of Pennsylvania or
elsewhere are hereby stayed.

         b. All court actions, arbitrations and mediations currently or
hereafter pending against an insured of Legion in the Commonwealth of
Pennsylvania or elsewhere are stayed for ninety (90) days from the effective
date of this Order or such additional time as the Rehabilitator may request.

     25. No judgment, order or arbitration award against Legion or an insured of
Legion entered after the date of filing of the Petition for Rehabilitation and
no judgment, order or arbitration award against Legion or an insured of Legion
entered at any time by default or by collusion need be considered as evidence of
liability or quantum of damages by the Rehabilitator.

                                   REINSURANCE
                                   -----------

     26. The amounts recoverable by the Rehabilitator from any reinsurer of
Legion shall not be reduced as a result of this rehabilitation proceeding or by
reason of any partial payment or distribution on a reinsured policy, contract or
claim, and each such

                                       21

<PAGE>

reinsurer of Legion is, without first obtaining leave of this Court, hereby
enjoined and restrained from terminating, canceling, failing to extend or renew,
or reducing or changing coverage under any reinsurance policy or contract with
Legion. The Rehabilitator may, in her discretion, terminate, rescind, or commute
any contract with a reinsurer or reinsurers.

                             NEW OR RENEWAL BUSINESS
                             -----------------------

     27. The Rehabilitator is authorized to accept or reject new, existing, or
renewal business. In implementing this paragraph, the Rehabilitator shall have
the discretion to, inter alia, accept, reject, or cancel new, existing or
                   ----- ----
renewal business, and write renewal business for time periods less than one
year.

               INJUNCTION AGAINST INTERFERING WITH REHABILITATION
               --------------------------------------------------

     28. Until further order of this Court, all affiliates of Legion, persons,
corporations, partnerships, associations, accountants, actuaries, auditors,
counsel, custodians, and all other entities, wherever located, are hereby
enjoined and restrained from interfering in any manner with the Rehabilitator's
possession and rights to the assets and property of Legion and from interfering
in any manner with the conduct of the rehabilitation of Legion. Those affiliates
of Legion, persons, corporations, partnerships, associations, accountants,
actuaries, auditors, counsel, custodians, and all other entities are hereby
enjoined and restrained from wasting, transferring, selling, concealing,
terminating, canceling, destroying, shredding, disbursing, disposing of, or
assigning any

                                       22

<PAGE>

assets, books, contracts, causes of action, funds, records, files, credit cards,
work papers and related documents, investigative materials, or other property of
any nature of or related to Legion, whether in paper, electronic, magnetic, or
other form.

                 INJUNCTION AGAINST ACTIONS BY SECURED CREDITORS
                 -----------------------------------------------

     29. All secured creditors or parties, pledgees, lienholders, collateral
holders or other persons claiming secured, priority or preferred interests in
any property or assets of Legion are hereby enjoined from taking any steps
whatsoever to transfer, sell, assign, encumber, attach, dispose of, or exercise,
purported rights in or against any property or assets of Legion.

                         NOT A DECLARATION OF INSOLVENCY
                         -------------------------------

     30. This Order shall not be deemed a finding or declaration of insolvency
such as would activate the provisions of the Pennsylvania Property and Casualty
Insurance Guaranty Act, 40 P.S. ss.ss.991.1801-9911.1820, or the provisions of
similar acts of any other state or territory.

                                       23

<PAGE>

                            VIOLATIONS OF THIS ORDER
                            ------------------------

     31. Any person violating any provision of this Order may be held in
contempt of Court.

                                  JURISDICTION
                                  ------------

     32. This Court shall retain jurisdiction for all purposes necessary to
effectuate and enforce this Order.

                                                              BY THE COURT,



                                                  ------------------------------
                                                                              J.

                                       24

</TEXT>
</DOCUMENT>
