MUTUAL RISK MANAGEMENT LTD
CONSENT OF AMENDMENT TO DEBENTURES
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>5
<FILENAME>dex1025.txt
<DESCRIPTION>CONSENT OF AMENDMENT TO DEBENTURES
<TEXT>
<PAGE>

                                                                   Exhibit 10.25

                       CONSENT AND AMENDMENT TO DEBENTURES

          THIS CONSENT AND AMENDMENT TO DEBENTURES (this "Consent and
Amendment") is entered into as of March 7, 2002, among MUTUAL RISK MANAGEMENT
LTD., a company incorporated under the laws of Bermuda ("Mutual Risk" or the
"Issuer"), MUTUAL GROUP, LTD., a Delaware corporation ("Mutual Group"), MGL
INVESTMENTS LLC (successor to MGL Investments Ltd.), a Delaware limited
liability company ("MGL Investments"), LEGION FINANCIAL CORPORATION, a Missouri
corporation ("Legion"), MUTUAL RISK MANAGEMENT (HOLDINGS) LTD., a company
incorporated under the laws of Bermuda ("MRM Holdings"), MRM SECURITIES LTD., a
company incorporated under the laws of Bermuda ("MRM Securities"), MUTUAL
FINANCE LTD., a company incorporated under the laws of Bermuda ("MRM Finance"),
MRM SERVICES LTD., a company incorporated under the laws of Bermuda ("MRM
Services"), MSL (US) LTD., a Delaware corporation ("MSL"), and MRM SERVICES
(BARBADOS) LTD., a company incorporated under the laws of Barbados ("MSBL" and,
together with MGL Investments, Legion, MRM Holdings, MRM Securities, MRM
Finance, MRM Services, MSL, MSBL, Mutual Risk, and Mutual Group, the
"Guarantors") and XL INSURANCE (BERMUDA) LTD ("XL Insurance").

                                    RECITALS

          A. XL Insurance is a holder of over $50.0 million in principal amount
of the Issuer's 9 3/8% Convertible Exchangeable Debentures due 2006 (as
hereafter modified, amended or supplemented, the "Debentures". Unless otherwise
defined herein, defined terms used herein shall have the meanings given such
terms in the Debentures.

          B. Mutual Risk has advised XL Insurance that certain Events of Default
have occurred and are continuing under Sections 7(r) and 7(s) of the Debentures
(the "Existing Events of Default"). Mutual Risk has advised XL Insurance that
one or more of its Wholly Owned Subsidiaries desires to sell all or
substantially all of the capital stock or limited liability company interests
(the "Sale") of Hemisphere Management Limited, a Bermuda company, Hemisphere
Financial Services LLC, a Delaware limited liability company, Hemisphere
Financial Group LLC, a Delaware limited liability company, and Hemisphere
Management (Ireland) Limited, an Ireland company (collectively, "Hemisphere"),
and, as required by Section 7(n) of the Debentures, the Issuer and the
Guarantors have requested that XL Insurance consent to the Sale of Hemisphere.

          C. Notwithstanding the existence of, and without waiving, such
Existing Events of Default, XL Insurance has agreed to consent to the Sale of
Hemisphere upon and subject to the terms and conditions set forth herein. The
Issuer and the Guarantors have also agreed to amend the Debentures in certain
respects.

          NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Issuer and XL Insurance agree as follows:

          1. Consent. XL Insurance hereby irrevocably consents to the Sale of
             -------
Hemisphere upon the following terms and conditions:

          (a) The Sale of Hemisphere shall be consummated on or before June 30,
2002;

          (b) The Sale of Hemisphere shall be consummated pursuant to a Stock
Purchase Agreement (the "Stock Purchase Agreement"), in the form attached hereto
as Exhibit A, without waiver or amendment of any of the terms and conditions
thereof that would reduce the minimum amount paid to the

<PAGE>


                                       -2-

Electing Holders (as defined below) and the Lenders pursuant to clause (c)
following or that would otherwise be materially adverse to XL Insurance or the
other holders of the Debentures, unless such waiver or amendment has been
consented to by XL Insurance in advance in writing;

          (c) The net cash proceeds (the "Hemisphere Net Proceeds") paid by the
Purchaser (as defined in the Stock Purchase Agreement) for the account of the
MRM Sellers (as defined in the Stock Purchase Agreement) at the initial Closing
(as defined in the Stock Purchase Agreement) of the Sale of Hemisphere and paid
to the Lenders (the "Lenders") under that certain Credit Agreement dated as of
September 21, 2000 (as heretofore modified, amended or supplemented, the "Credit
Agreement") and the holders of the Debentures who elect to receive such proceeds
(after receipt of reasonable written notice to the holders of such right from
the Issuer) (the "Electing Holders") pursuant to clause (d) shall not be less
than $88,300,000;

          (d) The Hemisphere Net Proceeds shall be paid directly by the
Purchaser to the Lenders and the Electing Holders to such account(s) as (i) the
Administrative Agent for the Lenders under the Credit Agreement (the
"Administrative Agent") may direct in writing, in the case of amounts to be paid
to the Lenders and (ii) the Electing Holders may direct in writing, in the case
of amounts to be paid to the Electing Holders.

          2. Additional Agreements Relating to the Sale of Hemisphere. The
             --------------------------------------------------------
Issuer and the Guarantors agree with XL Insurance as follows:

          (a) The aggregate expenses associated with and payable in connection
with the Sale of Hemisphere pursuant to the Stock Purchase Agreement shall not
exceed $4,800,000;

          (b) The Issuer and the Guarantors shall cause the MRM Sellers to cause
the Purchaser to pay the Hemisphere Net Proceeds in accordance with Subparagraph
1(d). As a result of the existence of the Existing Events of Default under the
Credit Agreement (and the Guarantees thereof) and under the Debentures, the
Issuer and the Guarantors consent and agree that an amount of principal owing
under the Credit Agreement and under the Debentures (and the Guarantees thereof)
equal to such Hemisphere Net Proceeds shall become due and payable concurrently
with the occurrence of the initial Closing (and concurrently with each payment
of Hemisphere Net Proceeds pursuant to clause (c) following) without further
action by the Administrative Agent, any Lender or any holder of the Debentures.
The portion of such Hemisphere Net Proceeds paid for the account of MGL
Investments LLC shall be a payment by MGL Investments LLC on account of its
Guarantee of the Obligations and of the Debt evidenced by the Debentures. The
portion of such Hemisphere Net Proceeds paid for the account of MRM Financial
Services Ltd. shall be declared as a dividend by MRM Financial Services Ltd. to
MRM Services Ltd. in accordance with applicable law and shall be a payment by
MRM Services Ltd. on account of its Guarantee of the Obligations and of the Debt
evidenced by the Debentures;

          (c) The Hemisphere Net Proceeds shall be shared pro rata (based, at
the time in question, upon the aggregate principal Debt or Indebtedness owing to
the Lenders, on the one hand, and to the holders of the Debentures (whether or
not Electing Holders) on the other hand) among the Lenders (for application to
the principal of the Obligations, with an automatic reduction in the aggregate
amount of the Commitments under the Credit Agreement in a like amount), and the
Electing Holders; provided, however, that in the event any holder of Debentures
elects to not receive its share of such Hemisphere Net Proceeds, such holder's
portion of the Hemisphere Net Proceeds shall be payable to the Electing Holders
on a pro rata basis;

          (d) Any moneys (net of any reasonable, substantiated costs and
expenses incurred in the collection or realization of such moneys) paid for the
account of the MRM Sellers after the initial Closing pursuant to the Stock
Purchase Agreement, whether pursuant to the MRM Escrow Agreement (as defined in
the Stock Purchase Agreement), the Management Escrow Agreement (as defined in
the

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                                      -3-

Stock Purchase Agreement) or otherwise, including, without limitation, any
indemnity payment or expense reimbursement, shall also be Hemisphere Net
Proceeds and shall be paid for the account of the MRM Sellers and otherwise
treated or transferred as provided in clause (b) preceding and applied as
provided in clause (c) preceding; and

          (e) Neither this Consent and Amendment, nor the payment of the
Hemisphere Net Proceeds pursuant hereto, shall constitute the waiver by XL
Insurance or the other holders of Debentures of the Existing Events of Default
that have occurred and are continuing on the date hereof.

          3. Amendment. The Debentures shall be amended to the following effect.
             ---------

          (a) Section 4 of the Debentures and Section 4 of the Newco Debenture
are hereby amended to provide that the repayment of Debentures with a portion of
the Hemisphere Net Proceeds will not have the effect of reducing the number of
shares of Newco Common Stock that are issuable upon exchange or conversion of
the Debentures or the Newco Debentures, respectively. The number of shares of
Newco Common Stock issuable upon exchange of the Debentures or conversion of the
Newco Debentures shall be calculated without giving effect to any reduction in
the outstanding amount of Debentures resulting from the application of the
Hemisphere Net Proceeds.

          4. Conditions Precedent. This Consent and Amendment shall become
             --------------------
effective when (a) counterparts of this Consent and Amendment are executed by
the Issuer and the Guarantors, (b) a written consent is executed by the
Administrative Agent and the Requisite Lenders (as defined in the Credit
Agreement) and the other parties shown on the signature pages thereof the form
attached hereto as Exhibit B and (c) a written consent is executed by the
Required Lenders (as defined in the Letter of Credit and Reimbursement Agreement
dated as of July 11, 2001, as amended, among Mutual Risk, certain Subsidiaries
of Mutual Risk, such lenders, and Bank of America, N.A., as administrative agent
for such lenders), and the other parties shown on the signature pages thereof in
the form attached hereto as Exhibit C.

          5. Representations and Warranties. The Issuer and the Guarantors
             ------------------------------
hereby jointly and severally represent, warrant and acknowledge to XL Insurance
that (a) immediately after the execution and delivery of this Consent and
Amendment and after giving effect hereto, the Existing Events of Default exist
under the Debentures, the Issuer and the Guarantors have no defense thereto, and
neither XL Insurance nor any of the other holders of Debentures has waived or
agreed to forbear from the exercise of any of their rights and remedies that are
presently existing as a result of such Existing Events of Default or any other
Event of Default that may now exist or hereafter occur under the Debentures, all
of which rights and remedies are hereby reserved by XL Insurance and the other
holders of Debentures, and may be exercised the holders of the Debentures at any
time in their sole discretion (b) all of the provisions of the Transaction
Documents, including the Guarantee of the Guarantors, are in full force and
effect and are hereby ratified and confirmed, (c) this Consent and Amendment and
the transactions contemplated hereby have been duly authorized and approved by
all necessary corporate action and require the consent of no Governmental
Authority or other Person that has not been delivered and is not in full force
and effect, (d) the execution, delivery and performance by the Issuer and the
Guarantors of this Consent and Amendment is of corporate benefit to them,
including as a result of the reduction of the principal amount of Debentures and
the Guarantees thereof contemplated hereby, (e) the copy of the Stock Purchase
Agreement attached hereto is a true, correct and complete copy of the execution
form thereof and includes all exhibits and schedules thereto, (f) the dividends
contemplated by Subparagraphs 2(b) and 2(d) of this Consent and Amendment are
within the corporate power and authority of MRM Financial Services Ltd., have
been duly authorized by all necessary corporate action of MRM Financial Services
Ltd., will be lawful and not violate or breach any contract, agreement or law to
which MRM Financial Services Ltd. is a party or which is binding on MRM
Financial Services Ltd., and will not cause MRM Financial Services Ltd. to be
insolvent or to be unable to pay its debts and


<PAGE>


                                       -4-

obligations when due, (g) it is believed that United States income taxes in an
estimated amount of $3,500,000 will be payable in connection with the Sale of
Hemisphere and (h) attached hereto as Exhibit D is a calculation of the gross
cash proceeds payable by the Purchaser for the account of the MRM Sellers at the
initial Closing of the Sale of Hemisphere and of the deductions from such gross
cash proceeds that will be made in determining the Hemisphere Net Proceeds to be
received by the Lenders and the holders of the Debentures at the initial
Closing. The breach by the Issuer and the Guarantors of any of their
representations and warranties set forth in this Paragraph 5 shall constitute an
Event of Default but shall not negate the consent given in Paragraph 1..

          6. Covenants. The Issuer and the Guarantors jointly and severally
             ---------
covenant and agree with XL Insurance as follows:

          (a) As soon as practicable, but in any event on or before March 13,
2002, Mutual Risk shall execute and deliver, or cause to be executed and
delivered, a share charge and related documentation and opinions, in form and
substance satisfactory to XL Insurance on the shares of MRM Services Ltd. owned
by Mutual Risk.

          (b) As soon as practicable, but in any event on or before the date of
the initial Closing under the Stock Purchase Agreement, Mutual Risk shall cause
the MRM Sellers to grant a security interest in all of their respective rights
to receive moneys under the MRM Escrow Agreement, the Management Escrow
Agreement or otherwise pursuant to the Stock Purchase Agreement, and shall cause
to be delivered such agreements, documents, instruments, consents and legal
opinions as may be requested by XL Insurance in order to create, evidence,
perfect or otherwise give effect to and protect such security interest. Such
security interest shall be granted in consideration of the consents and
agreements of XL Insurance given herein and for other good and valuable
consideration, and such security interest shall be granted to Bank of America,
N.A., as collateral agent for the Lenders and the holders of the Debentures, and
shall secure the repayment of the Obligations and the Debt or Indebtedness
evidenced by the Debentures and the other obligations owing to the holders of
the Debentures under the Transaction Documents on a pari passu, pro rata basis
based on the principal amount of Debt or Indebtedness owing to each of the
Lenders and the holders of the Debentures.

          (c) Mutual Risk shall cause the MRM Sellers to deliver to XL Insurance
a copy of any proposed amendment or waiver to the Stock Purchase Agreement
promptly after such amendment or waiver is proposed and to deliver to XL
Insurance true and correct copies of any supplements to or amendments of any of
the Schedules to the Stock Purchase Agreement that are delivered pursuant to
Section 11.15 of the Stock Purchase Agreement.

          (d) The Issuer and the Guarantors shall pay all expenses, including
legal fees and expenses of counsel to XL Insurance and each other Electing
Holder, incurred by XL Insurance or any other such Electing Holder in connection
with this Consent and Amendment.

          (e) On the date of the initial Closing of the Sale of Hemisphere,
Mutual Risk shall deliver or cause to be delivered to XL Insurance (i) a
certified copy of a resolution of the board of directors of MRM Financial
Services Ltd. authorizing the payment of the dividends contemplated by
Subparagraphs 2(b) and 2(d), and (ii) a certificate of solvency executed by two
directors of MRM Financial Services Ltd. in form and substance satisfactory to
XL Insurance.

          (f) On the date of the initial Closing of the Sale of Hemisphere,
Mutual Risk shall cause $3,500,000 of the cash proceeds received by the MRM
Sellers to be deposited in a restricted account at a bank acceptable to the
Administrative Agent and XL Insurance and such amount, together with the
investment earn-

<PAGE>

                                       -5-

ings thereon, shall be withdrawn from such account and used only to pay United
States income taxes due and owing in connection with the Sale of Hemisphere.

          (g) The Issuer and the Guarantors shall execute and deliver such other
agreements, documents instruments and items as XL Insurance may reasonably
request in order to give effect to the terms and conditions of this Consent and
Amendment.

The breach by the Issuer and the Guarantors of any of its covenants set forth in
Paragraph 2 or this Paragraph 6 shall constitute an Event of Default but shall
not negate the consent given in Paragraph 1.

          7. Effect of Consent and Amendment. This Consent and Amendment is a
             -------------------------------
Transaction Document. The consent of XL Insurance hereunder is expressly limited
to the Sale of Hemisphere and shall not constitute the consent or waiver by XL
Insurance or any other holder of Debentures to, of or with respect to any other
matter now or hereafter requiring its consent or waiver under the Transaction
Documents. Except as amended hereby, the Debentures and the other Transaction
Documents are unchanged and are hereby ratified and confirmed.

          8. Engagement of Advisor. Mutual Risk has advised XL Insurance that
             ---------------------
Mutual Risk has engaged Greenhill Partners (the "Advisor") to advise Mutual Risk
and its Subsidiaries with respect to their financial condition, business
operations, and properties, and with respect to the restructuring thereof. On or
before the date hereof, Mutual Risk has delivered to XL Insurance a copy of the
engagement letter evidencing such engagement. The Issuer and the Guarantors
shall cause the Advisor to be available at such times and places as XL Insurance
may reasonably request to discuss with XL Insurance the financial condition,
business operations, and prospects, and the restructuring thereof, of Mutual
Risk and its Subsidiaries and shall otherwise cause the Advisor to cooperate
with XL Insurance in its review, analysis, and administration of the Debentures
and the other Transaction Documents and the transactions contemplated thereby.
Mutual Risk shall not terminate the engagement of the Advisor unless Mutual Risk
concurrently engages another financial and business advisor reasonably
acceptable to XL Insurance.

          9. Release of Claims. In consideration of the execution by XL
             -----------------
Insurance of this Consent and Amendment, the Issuer and the Guarantors hereby
RELEASE, ACQUIT AND FOREVER DISCHARGE XL Insurance and each of the other holders
of Debentures, together with their respective officers, directors, employees,
agents, attorneys, representatives, and affiliates (collectively, the "Debenture
Parties"), from any and all losses, costs, expenses, claims, damages, actions,
causes of action, liability, or suits in law or equity, of whatever kind or
nature (including those that may arise out of the negligence, gross negligence,
or willful misconduct of holder of Debentures) that the Issuer or any Guarantor
have ever had or may now have against any holder of Debentures and that have
accrued or arisen on or prior to the date of this Consent and Amendment and that
arise from or are related in any manner to or concern the Loan Documents, the
transactions contemplated thereby, or the acts or omissions of any Debenture
Party in connection therewith.

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

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

          12. Companies Not Guarantors. XL Insurance acknowledges that none of
             -------------------------
the Companies (as such term is defined in the Stock Purchase Agreement) is a
Guarantor of the Debentures.

<PAGE>


                                       -6-

          13. No Third Party Beneficiary. The Purchaser shall have no rights or
              --------------------------
obligations under this Consent and Amendment, except that the Purchaser may rely
on the consent given in Paragraph 1 and on the acknowledgment contained in
paragraph 12.

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

                  [Remainder of Page Intentionally Left Blank]

<PAGE>


MUTUAL RISK MANAGEMENT LTD., as Issuer


By:        /s/ Robert A. Mulderig
      --------------------------------------------
      Name:    Robert A. Mulderig
               -----------------------------------
      Title:
               -----------------------------------


MUTUAL GROUP, LTD., as a Guarantor


By:       /s/  Richard E. O'Brien
        --------------------------------------------
      Name:    Richard E. O'Brien
               -----------------------------------
      Title:
               -----------------------------------


MGL INVESTMENTS LLC (successor to MGL Investments Ltd.),
as a Guarantor


By:       /s/  Richard E. O'Brien
      --------------------------------------------
      Name:    Richard E. O'Brien
               -----------------------------------
      Title:
               -----------------------------------


LEGION FINANCIAL CORPORATION, as a Guarantor


By:        /s/ Richard E. O'Brien
      --------------------------------------------
      Name:    Richard E. O'Brien
               -----------------------------------
      Title:
               -----------------------------------


MUTUAL RISK MANAGEMENT (HOLDINGS)
LTD., as a Guarantor


By:        /s/ Robert A. Mulderig
      --------------------------------------------
      Name:    Robert A. Mulderig
               -----------------------------------
      Title:
               -----------------------------------


   MRM SECURITIES LTD., as a Guarantor


   By:     /s/ Robert A. Mulderig
        ---------------------------------------------
         Name: Robert A. Mulderig
               --------------------------------------
         Title:
               --------------------------------------


   MUTUAL FINANCE LTD., as a Guarantor


   By:     /s/ Robert A. Mulderig
        ---------------------------------------------
         Name: Robert A. Mulderig
               --------------------------------------
         Title:
               --------------------------------------


   MRM SERVICES LTD., as a Guarantor


   By:     /s/ Robert A. Mulderig
        ---------------------------------------------
         Name: Robert A. Mulderig
               --------------------------------------
         Title:
               --------------------------------------


   MSL (US) LTD., as a Guarantor


   By:     /s/ Richard E. O'Brien
         --------------------------------------------
         Name: Richard E. O'Brien
               --------------------------------------
         Title:
               --------------------------------------


   MRM SERVICES (BARBADOS) LTD., as a Guarantor


   By:     /s/ Robert A. Mulderig
         --------------------------------------------
         Name: Robert A. Mulderig
               --------------------------------------
         Title:
               --------------------------------------

<PAGE>


XL INSURANCE (BERMUDA) LTD


By:      /s/    Paul S. Giordano
      --------------------------------------------
      Name:     Paul S. Giordano
               -----------------------------------
      Title:    Director
               -----------------------------------


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</DOCUMENT>
