-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UrrXDZIYEx5rgUT9DvBCHMMEgaYn9kF/0RFn5LWELFyWhtn5N8Z3La/puzJ3li2g XD/grwDGWtxBCWXbgIeTFQ== 0000950168-02-000905.txt : 20020416 0000950168-02-000905.hdr.sgml : 20020416 ACCESSION NUMBER: 0000950168-02-000905 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 20020415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARKEL CORP CENTRAL INDEX KEY: 0001096343 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 541959284 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-86242 FILM NUMBER: 02610748 BUSINESS ADDRESS: STREET 1: 4521 HIGHWOODS PARKWAY CITY: GLEN ALLEN STATE: VA ZIP: 23060-3382 BUSINESS PHONE: 8047470136 MAIL ADDRESS: STREET 1: 4551 COX RD CITY: GLEN ALLEN STATE: VA ZIP: 23060 FORMER COMPANY: FORMER CONFORMED NAME: MARKEL HOLDINGS INC DATE OF NAME CHANGE: 19991005 S-4 1 ds4.txt FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL __, 2002 REGISTRATION NO. 333- ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- MARKEL CORPORATION (Exact name of registrant as specified in its charter) VIRGINIA 6331 541359284 (State of other jurisdiction of (Primary Standard Industrial IRS Employer incorporation or organization) Classification Code Number) Identification Number 4521 Highwoods Parkway Glenn Allen, Virginia 23060-6148 (804) 747-0136 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Gregory B. Nevers Senior Vice President and General Counsel 4521 Highwoods Parkway Glenn Allen, Virginia 23060-6148 (804) 747-0136 (Name, address, including zip code, and telephone number, including area code, of agent for service) WITH COPIES TO: Leslie A. Grandis Robert H. Craft, Jr. McGuireWoods LLP Sullivan & Cromwell One James Center 1701 Pennsylvania Ave., NW Richmond, Virginia 23219 Washington, D.C. 20006-5805 (804) 775-1000 (202) 956-7500 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable following the effectiveness of this registration statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement of the earlier effective registration statement for the same offering. [_] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------- PROPOSED TITLE OF EACH CLASS OF PROPOSED MAXIMUM MAXIMUM AMOUNT OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE REGISTRATION REGISTERED REGISTERED UNIT OFFERING PRICE (1) FEE (1) - ------------------------------------------------------------------------------------------------------------------------- 7.2% Notes due 2007 ........... $ 75,000,000 100% $ 70,019,251 $ 6,442 - ------------------------------------------------------------------------------------------------------------------------- 7.0% Notes due 2008 ........... $ 100,000,000 100% $ 91,200,000 $ 8,391 - ------------------------------------------------------------------------------------------------------------------------- Total ......................... $ 175,000,000 $161,219,251 $14,833 - ------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------
/1/ Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) (2), based upon the book value of the outstanding notes to be exchanged hereunder. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE Prospectus and Consent Solicitation Statement U.S. $175,000,000 [MARKEL CORPORATION LOGO] Exchange Offers Existing Notes of Markel International Limited, formerly Terra Nova Insurance (UK) Holdings plc Exchanged for New Notes of Markel Corporation and Solicitation of Consents for Amendment of the Related Indentures - ------------------------------------------------------------------------------------------------------------------------------------ Aggregate Principal Description of CUSIP Description of Consent Payment per $1,000 Amount Existing Notes NUMBER Markel's New Notes Principal Amount ------ -------------- ------ ------------------ ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ $75,000,000 7.2% Terra Nova Notes due August 15, 2007 88100DAC9 7.2% Markel Notes due 2007 $ $100,000,000 7.0% Terra Nova Notes due May 15, 2008 88100DAE5 7.0% Markel Notes due 2008 $ - ------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------ EACH OF THE EXCHANGE OFFERS EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON MAY __, 2002, UNLESS EXTENDED. THE CONSENT PAYMENT DEADLINE IS MAY , 2002. TENDERS MAY ONLY BE WITHDRAWN AT ANY TIME PRIOR TO THE CONSENT PAYMENT DEADLINE. ------------------------------------------------------------------------------ We are offering to exchange your Terra Nova notes of either series listed above for new Markel notes having the same principal amount, interest rate, redemption terms and payment and maturity dates and providing for accrued interest from the last date for which interest has been paid on those Terra Nova notes. If you tender your Terra Nova notes in the exchange offers, you will be deemed to consent to the amendments to the respective indenture under which those Terra Nova notes were issued. We describe those amendments in this prospectus under "The Proposed Amendments." We will not be required to complete either exchange offer or to make the consent payments relating to that exchange offer if we do not receive valid consents sufficient to effect the amendments with respect to both series of notes listed above, although we are free to waive this or any other condition with respect to either of the exchange offers. The time by which you must tender the applicable series of Terra Nova notes in order to be eligible to receive the consent payment, which we refer to as the consent payment deadline, will be 5:00 p.m., New York City time, on May __, 2002, unless extended. Consents may be revoked at any time prior to the consent payment deadline. We will pay an amount in cash equal to the applicable consent payment listed above to each holder of Terra Nova notes accepted for exchange if the holder has tendered those notes before the consent payment deadline. We do not intend to list the Markel notes to be issued in the exchange offers on any national securities exchange or on The Nasdaq Stock Market. For a discussion of the risks that you should consider in evaluating the exchange offers and consent solicitations, see "Risk Factors" beginning on page 8. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities being offered in the exchange offers or passed upon the adequacy or accuracy of this prospectus and consent solicitation statement. Any representation to the contrary is a criminal offense. None of Markel, Terra Nova, the exchange agent, the information agent, the trustee under the Terra Nova indentures, the trustee under the Markel indentures or the dealer manager makes any recommendation as to whether or not holders of Terra Nova notes should exchange their securities in the applicable exchange offer and consent to the proposed amendments to the Terra Nova indentures. The dealer manager for the exchange offers and consent solicitations is: JPMorgan April __, 2002 The exchange offers and consent solicitations are not being made to, nor will Markel accept, exchanges or consents from, holders of either series of Terra Nova notes in any jurisdiction in which the exchange offers, the consent solicitations or the acceptance of outstanding Terra Nova notes of that series in exchange for the Markel notes would violate the securities or blue sky laws of that jurisdiction. You should rely only on the information contained or incorporated by reference in this prospectus and consent solicitation statement. We have not authorized any person (including any dealer, salesman or broker) to provide information or make any representations other than that provided in this prospectus and consent solicitation statement and, if given or made, that information or representation must not be relied upon as having been authorized by Markel, Terra Nova, the dealer manager or any agent or dealer. We are not making an offer of Markel notes in any state where the offer is not permitted. You should not assume that the information in this prospectus and consent solicitation statement is accurate as of any date other than the date on the cover page or that any information contained in any document we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference. TABLE OF CONTENTS Page ---- Summary........................................................... 1 Risk Factors...................................................... 8 Cautionary Statement Regarding Forward-Looking Statements...................................... 11 Where You Can Find More Information............................... 12 The Exchange Offers............................................... 13 Description of Differences between the Terra Nova Notes and the Markel Notes................................... 21 The Proposed Amendments........................................... 30 Certain Related Transactions...................................... 32 Descriptions of Markel Notes...................................... 33 Material U.S. Federal Income Tax Consequences...................................................... 41 Validity of Notes................................................. 45 Experts........................................................... 45 i SUMMARY The following summary highlights some information from this prospectus. It may not contain all of the information that may be important to you. To understand these exchange offers and consent solicitations fully and for a more complete description of the legal terms of these exchange offers and consent solicitations, you should read carefully this entire prospectus and the more detailed financial information and consolidated financial statements, including the notes to the financial statements, included or incorporated by reference in this prospectus and consent solicitation statement. In particular, you should carefully consider the information set forth under "Risk Factors." Unless otherwise indicated, as used in this prospectus, the terms "we," "our" and "us" refer to Markel Corporation and its subsidiaries. Markel Corporation We are a specialty property and casualty insurer. We market and underwrite specialty insurance products and programs to a variety of niche markets. We seek to provide quality products and excellent customer service so that we can be a market leader. We operate in three distinct areas of the specialty insurance market: . the excess and surplus lines market, . the specialty admitted market, and . the London insurance market. Our financial goals are to earn consistent underwriting profits and superior investment returns in order to build shareholder value. We are a Virginia corporation headquartered at 4521 Highwoods Parkway, Glen Allen, Virginia 23060-6148. Our telephone number is (804) 747-0136. Terra Nova Markel International Limited, formerly Terra Nova Insurance (UK) Holdings plc, is a wholly owned subsidiary of Terra Nova (Bermuda) Holdings Ltd. and is the issuer of the Terra Nova notes. We refer to Markel International Limited as Terra Nova. Terra Nova is a company organized under the laws of England and Wales with principal executive offices located at 49 Leadenhall Street, London EC3A 2EA England, telephone number 44-207-953-6000. Bermuda Holdings On March 24, 2000, we acquired Terra Nova. Bermuda Holdings Ltd., which we refer to as Bermuda Holdings. Bermuda Holdings is our direct wholly owned subsidiary and is the holding company for our international operations known as Markel International. At the same time, our existing U.S. operations became Markel North America. All of the financial information in this prospectus includes the results of Bermuda Holdings only since the date of acquisition. Bermuda Holdings, and its direct and indirect subsidiaries, including Terra Nova, write specialty property, casualty, marine and aviation insurance on a direct and reinsurance basis. Business is written worldwide, with the majority coming from the United Kingdom and the United States. Bermuda Holdings is the guarantor of the Terra Nova notes. Bermuda Holdings is a Bermuda company with principal executive offices located at Richmond House, 12 Par-la-ville Road, Hamilton NMO8, Bermuda, telephone number 44-1-292-7731. Markel Corporation Selected Financial Data (dollars in millions, except per share data)/(1)/
Year Ended December 31, ---------------------------------------------------- 2001 2000 1999 1998 1997 ---------------------------------------------------- Results of Operations Earned premiums............................................... $ 1,207 $ 939 $ 437 $ 333 $ 333 Net investment income......................................... 171 154 88 71 69 Total operating revenues...................................... 1,397 1,094 524 426 419 Net income (loss)............................................. (126) (28) 41 57 50 Comprehensive income (loss)................................... (77) 81 (40) 68 92 Financial Position Total investments and cash.................................... $ 3,591 $ 3,136 $ 1,625 $ 1,483 $ 1,410 Total assets.................................................. 6,441 5,473 2,455 1,921 1,870 Unpaid losses and loss adjustment expenses.................... 3,700 3,037 1,344 934 971 Convertible notes payable..................................... 116 -- -- -- -- Long-term debt................................................ 265 573 168 93 93 8.71% Capital Securities...................................... 150 150 150 150 150 Shareholders' Equity.......................................... 1,085 752 383 425 357 Per Share Data Net income (loss) (diluted)................................... $(14.73) $ (3.99) $ 7.20 $ 10.17 $ 8.92 Book value as of year-end..................................... 110.50 102.63 68.59 77.02 65.18
/(1)/ Reflects the acquisitions of Gryphon Holding Inc. (January 15, 1999) and Terra Nova (Bermuda) Holdings Ltd. (March 24, 2000) using the purchase method of accounting. Also reflects the issuance in 2001 of 2.5 million common shares with net proceeds of $408 million. The information as of and for each of the years in the five-year period ended December 31, 2001 has been derived from and should be read in conjunction with our audited consolidated financial statements and footnotes incorporated by reference into this prospectus. See "Where You Can Find More Information." Certain reclassifications of prior years' amounts have been made to conform with 2001 presentations. 2 Terra Nova (Bermuda) Holdings Ltd. Selected Financial Data (dollars in millions, except per share data)
Year Ended December 31, ----------------------------------------------------- 2001/(1)/ 2000/(1)/ 1999 1998/(2)/ 1997 ----------------------------------------------------- Results of Operations Earned premiums............................................... $540 $ 604 $ 585 $ 547 $ 419 Net investment income......................................... 76 85 94 93 85 Total operating revenues...................................... 633 697 706 658 520 Net income (loss)............................................. (121) (132) (35) 72 73 Comprehensive income (loss)................................... (110) (100) (123) 96 93 Financial Position Total investments and cash.................................... $1,424 $ 1,369 $ 1,491 $ 1,575 $ 1,476 Total assets.................................................. 3,076 2,637 2,632 2,479 2,220 Unpaid losses and loss adjustment expenses.................... 2,173 1,672 1,410 1,209 1,158 Long-term debts............................................... 173 175 175 175 175 Shareholder's Equity.......................................... 169 279 444 571 482 Per Share Data Net income (loss) (diluted)................................... -- -- $ (1.38) $ 2.77 $ 2.82 Cash dividends................................................ -- -- 0.24 0.23 0.17 Book value as of year-end..................................... -- -- 17.50 22.51 18.96
/(1)/ On March 24, 2000, Markel acquired Terra Nova (Bermuda) Holdings Ltd. As a wholly-owned subsidiary of Markel, per share data is no longer relevant. /(2)/ Net income, comprehensive income and net income per share are stated after an extraordinary charge of $11.6 million or $0.45 per share associated with debt refinancing in May 1998. The information as of and for each of the years in the five-year period ended December 31, 2001 has been derived from and should be read in conjunction with Bermuda Holdings audited consolidated financial statements and footnotes incorporated by reference into this prospectus. See "Where You Can Find More Information." Certain reclassifications of prior years' amounts have been made to conform with 2001 presentations. ___________________ /(1/ 3 Questions and Answers about the Exchange Offers and Consent Solicitations Q: Why is Markel Making the Exchange Offers and the Consent Solicitations? A: The exchange offers and the proposed amendments are intended to reduce our expenses by eliminating the need to prepare and file separate financial statements and reports for Bermuda Holdings, as well as to allow us to simplify our capital structure. Q: What Will I Receive in the Exchange Offers and Consent Solicitations? A: For each $1,000 principal amount of either series of Terra Nova notes validly tendered and accepted for exchange, Markel is offering $1,000 principal amount of Markel's newly issued notes of a corresponding series. Each series of Markel notes being offered under this prospectus and consent solicitation statement will have the same principal amount, interest rate, redemption terms and payment and maturity dates as those of the corresponding series of Terra Nova notes to be exchanged in the exchange offers, and will be issued under and governed by the terms of an indenture described in this prospectus, each of which we refer to as a Markel indenture. Instead of receiving a payment for accrued interest on Terra Nova notes you exchange, the Markel notes you receive in exchange for those Terra Nova notes will accrue interest from the last date to which interest has been paid on those Terra Nova notes. In addition, Markel will pay an amount in cash equal to the applicable consent payment listed on the cover page of this prospectus and consent solicitation statement to each holder of Terra Nova notes accepted for exchange if the holder has tendered those notes prior to the applicable consent payment deadline. The consent payment deadline for each exchange offer will be 5:00 p.m., New York City time, on May __, 2002, unless extended. As a holder of Terra Nova notes of either series, you may give your consent to the proposed amendments to the Terra Nova indentures only by tendering your Terra Nova notes in the exchange offer for that series. By so tendering, you will be deemed to have given a consent with respect to the notes of that series. Q: What are the Consequences of not Tendering in the Exchange Offers? A: If the exchange offers are consummated and the proposed amendments to the Terra Nova indentures have been adopted, the amendments will apply to all Terra Nova notes not acquired in the exchange offers. All Terra Nova notes that remain outstanding after completion of the exchange offers will be governed by the Terra Nova indentures as amended by the proposed amendments, which will have less restrictive terms and afford reduced protection to the holders of the Terra Nova notes compared to those currently in the Terra Nova indentures. See "Risk Factors -- Risk Factors Relating to the Exchange Offers and Consent Solicitations -- The proposed amendments to the Terra Nova indentures will afford reduced protection to remaining holders of Terra Nova's notes." In addition, holders that do not tender in the exchange offers before the consent payment deadline will not receive the applicable consent payment, even though the proposed amendments will become effective with respect to their Terra Nova notes. If the exchange offers are completed, Terra Nova may apply to delist one or both series of the Terra Nova notes from the exchange on which they are listed. If a series of Terra Nova notes were delisted, then payments of interest on the applicable Terra Nova notes to holders may be subject to U.K. withholding or other deduction unless the holder provides Terra Nova with required information or forms to establish an applicable withholding exemption. Q: How do the Terra Nova Notes Differ from the Markel Notes to be Issued in the Exchange Offers? A: The Terra Nova notes are the obligations solely of Terra Nova guaranteed by Bermuda Holdings and are governed by the Terra Nova indentures, while the Markel notes will be the obligations solely of Markel and will be governed by the Markel indentures. The Terra Nova indentures and the Markel indentures differ in some respects, including as follows: . The provisions of the Terra Nova indentures limiting the ability of Bermuda Holdings and its subsidiaries to incur liens are more restrictive than the corresponding provisions of the Markel indentures. . The provisions of the Terra Nova indentures with respect to mergers, consolidations and sale of assets are more restrictive than the corresponding provisions of the Markel indentures. 4 . The Terra Nova indentures contain provisions requiring the filing of specified reports for Bermuda Holdings and payment of additional amounts in specified circumstances and the Markel indentures will not contain comparable provisions. . The Terra Nova indentures include events of default which are additional to and more broad than the events of default in the Markel indentures. These provisions will be eliminated from the Terra Nova indentures if the proposed amendments are adopted. See "Description of Differences Between the Terra Nova Notes and the Markel Notes" and "Description of the Markel Notes." Because Markel is a holding company that conducts all of its operations through its subsidiaries, its ability to meet its obligations under the Markel notes is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to Markel. Payment of dividends or advances from Markel's insurance subsidiaries may require prior regulatory notice or approval. Holders of Markel notes will generally have a junior position to claims of creditors of Markel's subsidiaries, including any holders of Terra Nova notes not validly tendered and accepted in the exchange offers. As of March 31, 2002, the aggregate principal amount of outstanding long-term debt of Markel's subsidiaries to which holders of the Markel notes would have been structurally subordinated was approximately $170.5 million, all of which consists of the two series of Terra Nova notes for which Markel is making the exchange offers less the amount of Terra Nova notes held by Markel and its subsidiaries. See "Risk Factors -- Risks Relating to the Exchange Offers and Consent Solicitations -- Our holding company structure results in substantial structural subordination and may affect our ability to make payments on the Markel notes" and "Description of the Markel Notes -- Ranking; Additional Debt." Q: What are the U.S. Federal Income Tax Consequences to Holders that Tender Terra Nova Notes in the Exchange Offers? A: The receipt of Markel notes and consent payments in connection with the exchange offers and consent solicitations will be a taxable transaction for U.S. federal income tax purposes, and holders of Terra Nova notes validly tendered in the exchange offers will, accordingly, recognize gain or loss, as described in the section of this prospectus and consent solicitation statement entitled "Material U.S. Federal Income Tax Consequences." Q: What Consents are Required to Effect the Proposed Amendments to the Terra Nova Indentures and Consummate the Exchange Offers? A: Consents from holders of a majority of the total outstanding principal amount, not including notes held by Markel and it subsidiaries, of a particular series of Terra Nova notes as of the close of business on May __, 2002 must be received in order to amend the Terra Nova indenture with respect to that series. As of April 5, 2002, Markel and its subsidiaries held approximately $2.0 million in total principal amount of the 7.2% Terra Nova notes and $2.5 million in total principal amount of the 7.0% Terra Nova notes. The Terra Nova notes held by Markel or its subsidiaries will not be deemed to be outstanding for determining the amount required for consent to the amendments to the Terra Nova indentures. Markel's obligation to complete each exchange offer and to make the consent payments relating to that exchange offer is conditioned upon, among other things, receipt of valid consents sufficient to effect the amendments with respect to both series of Terra Nova notes, although Markel is free to waive this or any other condition with respect to either of the exchange offers. For information about other conditions to Markel's obligation to complete the exchange offers and to make the consent payments, see "Conditions to the Exchange Offers and Consent Solicitations." Q: Will Markel Accept All Tenders of Terra Nova Notes? A: Subject to the satisfaction or waiver of the conditions to each exchange offer, Markel will accept for exchange any and all Terra Nova notes of either series validly tendered in the applicable exchange offer on or before the expiration date of that exchange offer. Q: When Will Markel Issue New Notes and Make Consent Payments in Exchange for Terra Nova Notes? A: Assuming the conditions to the exchange offers are satisfied or waived, Markel will issue new notes in book-entry form and make consent payments in exchange for Terra Nova notes on the third business day following the expiration date of the applicable exchange offer or as soon as practicable after that date. 5 Q: When do I need to Tender My Terra Nova Notes to Receive the Applicable Consent Payment? A: The consent payment deadline for each exchange offer is 5:00 p.m., New York City time on May __, 2002, unless extended. The consent payment deadline is the latest date and time on which you may tender your Terra Nova notes and receive the applicable consent payment if these notes are exchanged. Q: When do the Exchange Offers Expire? A: The exchange offers will expire at 5:00 p.m., New York City time, on May __, 2002, unless Markel, in its sole discretion, extends either or both of the exchange offers in which case the expiration date with respect to an exchange offer will be the latest date and time to which that exchange offer is extended. See "The Exchange Offers -- Consent Payment Deadline; Expiration Date; Extensions; Amendments." Q: What are My Rights if I Change My Mind After I Tender My Terra Nova Notes? A: You may withdraw your tender at any time before the applicable consent payment deadline. A valid withdrawal of tendered Terra Nova notes prior to the applicable consent payment deadline will also constitute the revocation of the related consent to the proposed amendments to the applicable Terra Nova indenture. You may only revoke a consent by validly withdrawing the related Terra Nova notes prior to the consent payment deadline. See "The Exchange Offers -- Withdrawal of Tenders and Revocation of Corresponding Consents." Q: How do I Exchange My Terra Nova Notes if I am a Beneficial Owner of Terra Nova Notes held of Record by a Custodian Bank, Depositary, Broker, Trust Company or other Nominee? Will the Record Holder Exchange My Terra Nova Notes for Me? A: If your Terra Nova notes are held by a custodian bank, depositary, broker, trust company or other nominee and you wish to tender the Terra Nova notes in the exchange offers, you should contact that institution promptly and instruct the institution to tender on your behalf. The record holder will tender your Terra Nova notes on your behalf, but only if you instruct the record holder to do so. See "The Exchange Offers -- Procedures for Tendering -- Tender of Terra Nova Notes Held through a Nominee." Q: Do I have the Right to Dissent from the Exchange Offers or Seek Appraisal of the Terra Nova Notes I hold? A: Holders of Terra Nova notes do not have any appraisal or dissenters' rights under New York law, the law governing the Terra Nova indentures, or under the terms of the Terra Nova indentures in connection with the exchange offers and consent solicitations. Q: To Whom Should I Direct Any Questions? A: Questions concerning the terms of the exchange offers or the consent solicitations should be directed to the dealer manager. Questions concerning tender procedures and requests for additional copies of this prospectus and consent solicitation statement should be directed to the information agent. The addresses and telephone numbers of the dealer manager and the information agent are set forth on the back cover page of this prospectus and consent solicitation statement. 6 Markel Corporation Ratio of Earnings To Fixed Charges The results below include Bermuda Holdings since its acquisition by us on March 24, 2000. Markel's ratio of earnings to fixed charges for each of the periods shown is as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------- Ratio of earnings to fixed charges * * 3.0 4.4 4.1 - -------------------------------------------------------------------------------------------------
The ratio of earnings to fixed charges is computed by dividing pretax income from continuing operations before fixed charges by fixed charges. Fixed charges consist of interest charges and amortization of debt expense and discount or premium related to indebtedness, whether expensed or capitalized, and that portion of rental expense we believe to be representative of interest. Terra Nova (Bermuda) Holdings Ltd. Ratio of Earnings To Fixed Charges Bermuda Holdings' ratio of earnings to fixed charges for each of the periods shown is as follows:
YEARS ENDED DECEMBER 31, ---------------------------------------------------- 2001 2000 1999 1998 1997 - --------------------------------------------------------------------------------------------- Ratio of earnings to fixed charges ** ** ** 7.7 7.5 ---------------------------------- - ---------------------------------------------------------------------------------------------
The ratio of earnings to fixed charges is computed by dividing pretax income from continuing operations before fixed charges by fixed charges. Fixed charges consist of interest charges and amortization of debt expense and discount or premium related to indebtedness, whether expensed or capitalized, and that portion of rental expense we believe to be representative of interest. * For 2001 and 2000, Markel's earnings were insufficient to cover fixed charges by $182.2 million and $51.8 million, respectively. ** For 2001, 2000 and 1999, Bermuda Holdings' earnings were insufficient to cover fixed charges by $180.2 million, $144.7 million and $72.6 million, respectively. 7 RISK FACTORS In addition to the other information contained in this prospectus and consent solicitation statement and the documents incorporated by reference, you should carefully consider the following risk factors. Risk Factors Relating to the Exchange Offers and Consent Solicitations The proposed amendments to the Terra Nova indentures will afford reduced protection to remaining holders of Terra Nova notes. If the proposed amendments to the Terra Nova indentures are adopted, the covenants and some other terms of the Terra Nova notes will be less restrictive and will afford reduced protection to holders of those securities compared to the covenants and other provisions currently contained in the Terra Nova indentures. The proposed amendments to the Terra Nova indentures would, among other things: . eliminate most of the covenants in the Terra Nova indentures, . eliminate restrictions on Bermuda Holdings' ability to consolidate, merge or sell all or substantially all of its assets, and . eliminate some events of default under the Terra Nova Indentures. If the proposed amendments are adopted with respect to the Terra Nova notes, each non-exchanging holder of Terra Nova notes will be bound by the proposed amendments even if that holder did not consent to the proposed amendments. The elimination or modification of the covenants and other provisions in the Terra Nova indentures contemplated by the proposed amendments would, among other things, permit Markel, Bermuda Holdings, Terra Nova and their respective subsidiaries to take actions that could increase the credit risk with respect to Terra Nova or Bermuda Holdings, and might adversely affect the liquidity, market price and price volatility of the Terra Nova notes or otherwise be adverse to the interests of the holders of the Terra Nova notes. See "The Proposed Amendments." The liquidity of the Terra Nova notes that are not exchanged will be reduced. The current trading market for the Terra Nova notes is limited. The trading market for unexchanged Terra Nova notes will become more limited and could cease to exist due to the reduction in the amount of the Terra Nova notes outstanding upon consummation of the exchange offers. In addition, Terra Nova may apply to delist the Terra Nova notes from the exchanges on which they are listed. A more limited trading market might adversely affect the liquidity, market price and price volatility of these securities. If a market for unexchanged Terra Nova notes exists or develops, these securities may trade at a discount to the price at which the securities would trade if the amount outstanding were not reduced, depending on prevailing interest rates, the market for similar securities and other factors. However, there can be no assurance that an active market in the unexchanged Terra Nova notes will exist, develop or be maintained or as to the prices at which the unexchanged Terra Nova notes may be traded. Our holding company structure results in structural subordination and may affect our ability to make payments on the Markel notes. The Markel notes are obligations exclusively of Markel. We are a holding company and, accordingly, substantially all of our operations are conducted through our subsidiaries. As a result, our cash flow and our ability to service our debt, including the notes to be issued in the exchange offers, is dependent upon the earnings of our subsidiaries and on the distribution of earnings, loans or other payments by our subsidiaries to us. In addition, payment of dividends by our insurance subsidiaries may require prior regulatory notice or approval. The Markel notes offered will be structurally subordinated to all obligations of Markel's subsidiaries, including any Terra Nova notes not validly tendered and accepted in the exchange offers. As of March 31, 2002, the aggregate principal amount of outstanding long-term debt of Markel's subsidiaries to which holders of the Markel notes would have been structurally subordinated was approximately $170.5 million, all of which consists of the Terra Nova notes for which Markel is making the exchange offers. Our debt agreements do not limit the amount of debt that we or any of our subsidiaries may incur. See "Description of the Markel Notes -- Ranking; Additional Debt." A public market does not currently exist for the Markel notes offered in the exchange offers, and a market may not develop or be sustained. Markel does not plan to list the Markel notes offered under this prospectus and consent solicitation statement on any national securities exchange or on The Nasdaq Stock Market. Although the Terra Nova 7.0% notes due 2008 are listed on the New York Stock Exchange and the Terra Nova 7.2% notes are listed on the Luxembourg Stock Exchange, a limited trading market for the Terra Nova notes currently exists. The Markel notes will represent new 8 securities for which no such market currently exists. Although a market exists for currently outstanding debt securities of Markel, there can be no assurance that an active trading market for the Markel notes offered under this prospectus and consent solicitation statement will develop or, if a market develops, that it will be liquid or sustainable. A ratings decline could adversely affect the value of the Markel notes. Any of the agencies that rate our debt have the ability to lower the ratings currently assigned to our debt, as a result of their views about our current or future business, financial condition or results of operations. Any ratings decline could adversely affect the value of the Markel notes offered under this prospectus and consent solicitation statement. Risk Factors Relating to the Business of Markel Our results may be affected because actual insured losses differ from our loss reserves. Significant periods of time often elapse between the occurrence of an insured loss, the reporting of the loss to us and our payment of that loss. To recognize liabilities for unpaid losses, we establish reserves as balance sheet liabilities representing estimates of amounts needed to pay reported and unreported losses and the related loss adjustment expense. The process of estimating loss reserves is a difficult and complex exercise involving many variables and subjective judgments. As part of the reserving process, we review historical data and consider the impact of various factors such as: . trends in claim frequency and severity, . changes in operations, . emerging economic and social trends, . inflation, and . changes in the regulatory and litigation environments. This process assumes that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events. There is no precise method, however, for evaluating the impact of any specific factor on the adequacy of reserves, and actual results are likely to differ from original estimates. We may experience losses from catastrophes. Because we are a property and casualty insurance company, we frequently experience losses from man-made or natural catastrophes. Catastrophes may have a material adverse effect on operations. Catastrophes include windstorms, hurricanes, earthquakes, tornadoes, hail, severe winter weather, fires and may include terrorist events such as the attacks on the World Trade Center and Pentagon on September 11, 2001. We cannot predict how severe a particular catastrophe may be until after it occurs. The extent of losses from catastrophes is a function of the total amount of losses incurred, the number of insureds affected, the frequency of the events and the severity of the particular catastrophe. Most catastrophes occur in small geographic areas. However, some catastrophes may produce significant damage in large, heavily populated areas. We are subject to regulation by insurance regulatory authorities that may affect our ability to implement our business objectives. Our insurance subsidiaries are subject to supervision and regulation by the insurance regulatory authorities in the various jurisdictions in which they conduct business. Regulation is intended for the benefit of policyholders rather than shareholders or holders of debt securities. Insurance regulatory authorities have broad regulatory, supervisory and administrative powers relating to solvency standards, licensing, policy rates and forms and the form and content of 9 financial reports. Regulatory actions may affect our ability to implement our business objectives. Also, payment of dividends by our insurance subsidiaries may require prior regulatory notice or approval. Our investment results may be impacted by changes in interest rates, government monetary policies and general economic conditions. We receive premiums from customers for insuring their risks. We invest these funds until they are needed to pay policyholder claims or until they are recognized as profits. Many of the policies we issue are denominated in foreign currencies. Fluctuations in the value of our investment portfolio can occur as a result of changes in interest rates, government monetary policies and general economic conditions. Our investment results may be impacted by these factors. Because the risk profile of the business written and the reinsurance program of recent acquisitions is different from ours, we may incur additional charges. The risk profile of the business written and reinsurance programs of our recent acquisitions was not wholly consistent with those of our other operations. For example, Bermuda Holdings historically wrote policies with large limits and purchased reinsurance to reduce the net retention to a smaller sum. Such reliance on reinsurance may create credit risk as a result of the reinsurer's inability or unwillingness to pay reinsurance claims when due. We have begun to implement policies to reduce this reliance on reinsurance in the future, but must still account for and collect reinsurance for business written prior to our acquisition. Deterioration in the credit quality of existing reinsurers or disputes over the terms of reinsurance could result in additional charges, which may impact our profitability. Because loss reserves are estimates based upon historical experience and statistical data, there can be no assurances that the loss reserves for recent acquisitions are adequate and that there will not be any future impact on our financial performance. It has long been our policy to establish loss reserves at a level that we believe is more likely to prove redundant rather than deficient. Many other companies in the insurance industry establish loss reserves that are "adequate," often defined as the mid-point of an actuarially determined range, i.e., as likely to be too little as too much. When we acquire a company, we seek to apply our policy over time to the reserving practices of the acquired company. However, because loss reserve estimates are based on historical experience and statistical analyses, we often do not have sufficient information for a period of time following the date of an acquisition to implement this policy immediately. As we continue to gather information and obtain additional experience, we can better implement our approach and, depending on the relevant experience, this may result in additional charges to strengthen reserves. 10 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This prospectus and consent solicitation statement and the documents incorporated by reference in this prospectus and consent solicitation statement contain both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements may be identified by the use of terms such as believes, expects, estimate, may, intends, plan, will, should or anticipates or the negative thereof or similar expressions, or by discussions of strategy. We have based the forward-looking statements on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including: . uncertainties and changes in government policy, regulatory policy, statutory law or case law with respect to us brokers or customers which can impede our ability to charge adequate rates and efficiently allocate capital; . the amount and nature of competition in the insurance industry and the amount of capital within the industry and alternative risk transfer markets; . the occurrence of man-made or natural catastrophic events; . assumptions about the impact of events of September 11, 2001, such as the number of insureds and reinsureds affected by the events, the amount and timing of losses incurred and reported and questions of how coverage applies; . the occurrence of additional terrorist activities; . the occurrence of significant changes in products or adverse changes in insurance and financial market conditions; . changing legal and social trends and the inherent uncertainties of the reserving process; . loss of the services of any of our executive officers; . initiatives underway at Markel International to reorganize business units and to evaluate reinsurance programs and exposures that could lead to additional changes and expense; . assumptions about future profitability at Markel International and that Markel International will make steady progress towards underwriting profitability; . changing rates of inflation and other economic conditions; . losses due to foreign currency exchange rate and interest rate fluctuations; . ability to collect reinsurance recoverables; . changes in the availability, cost or quality of reinsurance; . developments in domestic and international financial markets that could affect our investment portfolios; . changes in assigned financial strength or debt ratings; . changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers; and . the effect of mergers, acquisitions and divestitures. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of their dates. 11 WHERE YOU CAN FIND MORE INFORMATION Markel and Bermuda Holdings are subject to the informational reporting requirements of the Securities Exchange Act of 1934. You may read and copy any document that they file at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You may also inspect Markel's and Bermuda Holdings' annual, quarterly, special reports, any proxy statements and other information over the Internet at the SEC's home page at http://www.sec.gov. Markel's common shares are listed on the New York Stock Exchange under the symbol "MKL," and the Terra Nova notes are also listed on the New York Stock Exchange. Markel's and Bermuda Holdings' filings may also be read and copied at the New York Stock Exchange at 20 Broad Street, New York, NY 10005. This prospectus and consent solicitation statement is part of a registration statement Markel has filed with the SEC relating to the Markel notes. As permitted by SEC rules, this prospectus and consent solicitation statement does not contain all of the information Markel has included in the registration statement and the accompanying exhibits and schedules. You may refer to the registration statement, exhibits and schedules for more information about Markel and its securities. The registration statement, exhibits and schedules are available at the SEC's Public Reference Room or through its Web site. The SEC allows Markel to "incorporate by reference" the information filed with them, which means that Markel can disclose important information to you by referring you to those documents. The information Markel incorporates by reference is an important part of this prospectus and consent solicitation statement, and later information filed with the SEC will automatically update and supersede this information. Markel incorporates by reference the documents listed below and any future filings Markel makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all the offered securities are sold. The documents incorporated by reference are: . Markel's Annual Report on Form 10-K for the year ended December 31, 2001. . Terra Nova (Bermuda) Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2001. You may request a copy of these filings (other than an exhibit to that filing, unless we have specifically incorporated that exhibit by reference into this filing), which will be provided at no cost, by writing or telephoning the information agent at the address or telephone number set forth on the back cover of this prospectus and consent solicitation statement. In order to ensure timely delivery of these documents, you should make your request by May __, 2002 or five days before the expiration of any extension of the exchange offers, whichever is later. 12 THE EXCHANGE OFFERS Terms of the Exchange Offers and Consent Solicitations Markel is offering to exchange its notes for each of the two series of issued and outstanding Terra Nova notes in two separate exchange offers. Specifically, Markel is offering: . $1,000 principal amount of Markel Corporation's 7.2% Senior Notes due August 15, 2007, which we refer to as the "Markel 7.2% notes," for each $1,000 principal amount of outstanding Terra Nova 7.2% notes due August 15, 2007, which we refer to as the "Terra Nova 7.2% notes". . $1,000 principal amount of Markel Corporation's 7.0% Senior Notes due May 15, 2008, which we refer to as the "Markel 7.0% notes", for each $1,000 principal amount of outstanding Terra Nova 7.0% notes due May 15, 2008, which we refer to as the "Terra Nova 7.0% notes". The principal amounts, interest rates, redemption terms and payment and maturity dates of a particular series of Markel notes offered in the exchange offers are the same as those of the corresponding series of Terra Nova notes. The Markel notes you receive in exchange for Terra Nova notes will accrue interest from the last date to which interest has been paid on those Terra Nova notes. You will not receive a payment for accrued interest on Terra Nova notes you exchange at the time of that exchange. We refer to the Markel 7.2% notes and Markel 7.0% notes together as the "Markel notes." The Terra Nova 7.2% notes and Terra Nova 7.0% notes are together referred to as the "Terra Nova notes." The indenture for the Terra Nova 7.2% notes is referred to as the "Terra Nova 7.2% notes indenture." The indenture for the Terra Nova 7.0% notes is referred to as the "Terra Nova 7.0% notes indenture." The Terra Nova 7.2% notes indenture and the Terra Nova 7.0% notes indenture are together referred to as the "Terra Nova indentures." Markel is also soliciting consents from the holders of each series of Terra Nova notes to effect amendments to each of the Terra Nova indentures under which those notes were issued. For a description of the proposed amendments, see "The Proposed Amendments." Markel's obligation to complete each exchange offer and to make the consent payments relating to that exchange offer is conditioned on, among other things, receipt of valid and unrevoked consents to the amendments by the consent payment deadline from the holders of a majority in principal amount outstanding of each of the two series of Terra Nova notes, which we refer to as the consent condition, although Markel will be free to waive this or any other condition with respect to either of the exchange offers. A holder validly tendering notes for exchange will, by tendering those notes, be consenting to the proposed amendments to the indenture under which those notes were issued. In addition to the Markel notes that Markel will issue in exchange for Terra Nova notes, Markel will pay an amount in cash equal to the applicable consent payment listed on the cover page of this prospectus and consent solicitation statement to each holder of Terra Nova notes accepted for exchange if the holder has tendered those notes prior to the applicable consent payment deadline. The time by which holders must tender Terra Nova notes in that offer in order to be eligible to receive the consent payment will be 5:00 p.m., New York City time, on May ____, 2002, unless extended. Markel will make a consent payment for Terra Nova notes only if the holder of those notes tenders those notes in the applicable exchange offer prior to the applicable consent payment deadline and Markel in fact exchanges those notes for Markel notes in that exchange offer. If the required consents are received with respect to each series of Terra Nova notes, then Terra Nova, Bermuda Holdings and the trustee with respect to each series of the Terra Nova notes under the Terra Nova indentures will execute supplemental indentures setting forth the proposed amendment in respect of both series. If the required consents are received with respect to one, but not both, series of Terra Nova notes and Markel waives the condition that it receive consents to the proposed amendments to the Terra Nova indenture with respect to each series of Terra Nova notes, then Terra Nova, Bermuda Holdings and the Terra Nova trustee will execute a supplemental indenture setting forth the proposed amendments in respect of the series as to which the required consents are received. Under the terms of the supplemental indentures, the amendment will not become operative with respect to a series of Terra Nova notes until Markel exchanges all Terra Nova notes of that series validly tendered and not withdrawn for Markel notes of the corresponding series pursuant to the applicable exchange offer, even if all notes of that series that were validly tendered are withdrawn. Each non-exchanging holder of that series of Terra Nova notes will be bound by the supplemental indenture. Conditions to the Exchange Offers and Consent Solicitations 13 Markel's obligation to complete each exchange offer and to make the consent payments relating to that exchange offer is subject to the satisfaction or waiver by Markel of the following conditions: . the consent condition described under "Terms of the Exchange Offers and Consent Solicitations" above, . the following statements being true: (1) There does not exist: . in our sole judgment, any actual or threatened legal impediment, including a default under an agreement, indenture or other instrument or obligation to which we are party or by which we are bound, to the consummation of the exchange offers or . any change or development, including a prospective change or development, that, in our sole judgment, has or may have a material adverse effect on us or on the value of the exchange offers to us; and (2) The Terra Nova trustee has executed and delivered a supplemental indenture relating to the proposed amendments and has not objected in any respect to, or taken any action that could in our reasonable judgment adversely affect the consummation of: . either of the exchange offers; . the exchange of Terra Nova notes under the exchange offers; . the consent solicitations; or . our ability to effect the proposed amendments, . the Terra Nova trustee has not taken any action that challenges the validity or effectiveness of the procedures used by Markel in soliciting consents, including the form thereof, or in making the exchange offers, the exchange of the Terra Nova notes under the exchange offers or the consent solicitations. All of these conditions are for the sole benefit of Markel and may be waived by Markel, in whole or in part, and with respect to the exchange offers for either or both series of Terra Nova notes, in its sole discretion. Any determination made by Markel concerning these events, developments or circumstances shall be conclusive and binding. If any of these conditions are not satisfied with respect to a particular series of Terra Nova notes, Markel may, at any time before or concurrently with completing the exchange offer or consent solicitation with respect to that series: (1) terminate the exchange offer and the consent solicitation with respect to that series of Terra Nova notes and return all tendered Terra Nova notes of that series to the holders thereof, whether or not it terminates the exchange offer and consent solicitation with respect to the other series of Terra Nova notes, (2) modify, extend or otherwise amend the exchange offer and consent solicitation with respect to that series of Terra Nova notes whether or not it modifies, extends or otherwise amends the exchange offer and consent solicitation with respect to the other series of Terra Nova notes, and retain all tendered Terra Nova notes of that series and consents until the expiration date, as extended, of that exchange offer and consent solicitation, subject, however, to the withdrawal rights of holders (See "The Exchange Offers -- Withdrawal of Tenders and Revocation of Corresponding Consents" and "-- Consent Payment Deadline; Expiration Date; Extensions; Amendments"), or (3) waive the unsatisfied conditions with respect to that exchange offer and consent solicitation and accept all Terra Nova notes of that series tendered and not previously withdrawn, whether or not it waives these conditions for the exchange offer and consent solicitation with respect to the other series of Terra Nova notes. Consent Payment Deadline, Expiration Date, Extensions, Amendments For purposes of each of the consent solicitations, the term "consent payment deadline" means 5:00 p.m., New York City time, on May ____, 2002, subject to the right of Markel to extend that date and time for either of the consent solicitations in its sole discretion (whether or not it extends that date and time with respect to the other consent solicitation), in which case the consent payment deadline will be, with respect to that extended consent solicitation, the latest date and time to which that consent payment deadline is extended. 14 For purposes of each of the exchange offers, the term "expiration date" means 5:00 p.m., New York City time, on May _____, 2002, subject to the right of Markel to extend that date and time for either of the exchange offers in its sole discretion, in which case the expiration date shall be, with respect to that extended exchange offer, the latest date and time to which that exchange offer is extended. Markel reserves the right, in its sole discretion, to: . delay accepting any validly tendered Terra Nova notes of either series, . extend either or both of the exchange offers, or . terminate or amend either or both of the exchange offers, by giving oral or written notice of such delay, extension, termination or amendment to the exchange agent. Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof which, in the case of an extension, will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Markel also reserves the right, in its sole discretion, to provide a subsequent offering period of between three and 20 business days for either or both of the exchange offers. If a subsequent offering period is provided, all Terra Nova notes validly tendered and not withdrawn prior to the consent payment deadline of the initial offering period will be accepted and exchanged for Markel notes and we will make a public announcement of the subsequent offering period no later than 9:00 a.m., New York City time, on the next business day after the expiration date of the initial offering period. Unless otherwise provided in the announcement of the subsequent offering period, all Terra Nova notes validly tendered during the subsequent offering period will be promptly accepted and exchanged for the applicable series of Markel notes as they are tendered. Unless otherwise provided in the announcement of the subsequent offering period, holders of Terra Nova notes will not have the right to withdraw notes tendered during the subsequent offering period and no consent payment will be made with respect to notes tendered during the subsequent offering period. If the exchange offers are amended in a manner determined by Markel to constitute a material change, Markel will promptly disclose that amendment by means of a prospectus supplement that will be distributed to holders of Terra Nova notes and Markel will extend the exchange offers to a date five to ten business days after disclosing the amendment, depending upon the significance of the amendment and the manner of disclosure to the holders, if the exchange offers would otherwise have expired during that five to ten business day period. Without limiting the manner in which Markel may choose to make a public announcement of any delay, extension, amendment or termination of either of the exchange offers and consent solicitations, Markel will have no obligation to publish, advertise or otherwise communicate that public announcement other than by making a timely release to any appropriate news agency, including the Dow Jones News Service. Effect of Tender Any tender by a holder of either series of Terra Nova notes that is not withdrawn prior to the applicable consent payment deadline of the applicable exchange offer will constitute a binding agreement between that holder and Markel, and a consent to the proposed amendments, upon the terms and subject to the conditions of that exchange offer and the related letter of transmittal and consent. The acceptance of an exchange offer by a tendering holder of either series of Terra Nova notes will constitute the agreement by that holder to deliver good and marketable title to the tendered Terra Nova notes, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind. The successful completion of the exchange offers may adversely affect the liquidity and market prices of any remaining Terra Nova notes. Absence of Dissenters' Rights Holders of the Terra Nova notes do not have any appraisal or dissenters' rights under New York law, the law governing the Terra Nova indentures and the Terra Nova notes, or under the terms of the Terra Nova indentures in connection with the exchange offers and consent solicitations. Accounting Treatment of Exchange Offers We will account for the exchange offers as an exchange of debt under United States generally accepted accounting principles. The Markel notes to be issued in the exchange offers will be recorded at the same carrying value as the Terra Nova notes. Accordingly, we will recognize no gain or loss for accounting purposes upon the consummation of the exchange offers. Markel will amortize a portion of the expenses of the exchange offers over the term of the Markel notes issued in the exchange offers. 15 Acceptance of Terra Nova Notes for Exchange, Delivery of Markel Notes and Consent Payments Assuming the conditions to the exchange offers are satisfied or waived, Markel will issue new notes in book-entry form and will make consent payments in exchange for Terra Nova notes on the third business day following the expiration date of the applicable exchange offer or as soon as practicable after that date. We refer to the date on which we exchange Markel notes for Terra Nova notes pursuant to any exchange offer as the "exchange date" for that exchange offer. Markel will be deemed to have accepted validly tendered Terra Nova notes of either series when, and if, Markel has given oral or written notice thereof to the exchange agent. Subject to the terms and conditions of the exchange offers, the exchange agent will deliver the Markel notes and make the consent payments for Terra Nova notes of either series accepted by Markel on the applicable exchange date upon receipt of that notice. The exchange agent will act as agent for tendering holders of the Terra Nova notes for the purpose of receiving Terra Nova notes from and transmitting Markel notes and consent payments to those holders. If any tendered Terra Nova notes are not accepted for any reason set forth in the terms and conditions of the exchange offers or if Terra Nova notes are withdrawn prior to the applicable consent payment deadline, those unaccepted or withdrawn Terra Nova notes will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the applicable exchange offer. Procedures for Tendering If you hold Terra Nova notes of either series and wish to have those notes exchanged for Markel notes of the corresponding series, you must validly tender (or cause the valid tender of) your Terra Nova notes using the procedures described in this prospectus and consent solicitation statement and in the accompanying letter of transmittal and consent. The proper tender of Terra Nova notes will constitute an automatic consent to the proposed amendments to the Terra Nova indentures. The procedures by which you may tender or cause to be tendered Terra Nova notes will depend upon the manner in which you hold the Terra Nova notes, as described below. Tender of Terra Nova Notes held through a Nominee If you are a beneficial owner of Terra Nova notes that are held of record by a custodian bank, depositary, broker, trust company or other nominee, and you wish to tender Terra Nova notes in either of the exchange offers, you should contact the record holder promptly and instruct the record holder to tender the Terra Nova notes and deliver a consent on your behalf using one of the procedures described below. Tender of Terra Nova Notes with DTC Pursuant to authority granted by The Depository Trust Company, or DTC, if you are a DTC participant that has Terra Nova notes credited to your DTC account and thereby held of record by DTC's nominee, you may directly tender your Terra Nova notes and deliver a consent as if you were the record holder. Accordingly, references herein to record holders include DTC participants with Terra Nova notes credited to their accounts. Within two business days after the date of this prospectus and consent solicitation statement, the exchange agent will establish accounts with respect to the Terra Nova notes at DTC for purposes of the exchange offers. Any participant in DTC, including the respective depositants for Euroclear and Clearstream, Luxembourg, may tender Terra Nova notes and deliver a consent to the proposed amendments to the Terra Nova indentures by effecting a book-entry transfer of the Terra Nova notes to be tendered in the applicable exchange offer(s) into the account of the exchange agent at DTC and either: . electronically transmitting its acceptance of the applicable exchange offer through DTC's Automated Tender Offer Program ("ATOP") procedures for transfer, or . completing and signing the letter of transmittal and consent according to the instructions and delivering it, together with any signature guarantees and other required documents, to the exchange agent at its address on the back cover page of this prospectus and consent solicitation statement, in either case before the applicable exchange offer(s) expire(s). If ATOP procedures are followed, DTC will verify each acceptance transmitted to it, execute a book-entry delivery to the exchange agent's account at DTC and send an agent's message to the exchange agent. An "agent's message" is a message, transmitted by DTC to and received by the exchange agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgement from a DTC participant tendering Terra Nova notes that the participant has received and agrees to be bound by the terms of the letter of transmittal and consent and that Markel and Terra Nova may enforce the agreement against the participant. DTC participants following this procedure 16 should allow sufficient time for completion of the ATOP procedures prior to the expiration date of the applicable exchange offer. The letter of transmittal and consent (or facsimile thereof), with any required signature guarantees, or (in the case of book-entry transfer) an agent's message in lieu of the letter of transmittal and consent, and any other required documents, must be transmitted to and received by the exchange agent prior to the expiration date of the applicable exchange offer at one of its addresses set forth on the back cover page of this prospectus and consent solicitation statement. Delivery of such documents to DTC does not constitute delivery to the exchange agent. If you wish to receive the consent payment, you must deliver a letter of transmittal and consent, or, in the case of book-entry transfer, an agent's message instead of the letter of transmittal and consent, to the exchange agent prior to the consent payment deadline of the applicable exchange offer. Letter of Transmittal and Consent Subject to and effective upon the acceptance for exchange and exchange of Markel notes for Terra Nova notes tendered by a letter of transmittal and consent in accordance with the terms and subject to the conditions set forth in this prospectus and consent solicitation statement, by executing and delivering a letter of transmittal and consent (or agreeing to the terms of a letter of transmittal and consent pursuant to an agent's message) a tendering holder of Terra Nova notes: . irrevocably sells, assigns and transfers to or upon the order of Markel all right, title and interest in and to, and all claims in respect of or arising or having arisen as a result of the holder's status as a holder of the Terra Nova notes tendered thereby, . waives any and all rights with respect to the Terra Nova notes, including any existing or past defaults and their consequences in respect of the Terra Nova notes, . releases and discharges Markel, Terra Nova, Bermuda Holdings and the Terra Nova trustee from any and all claims such holder may have, now or in the future, arising out of or related to the Terra Nova notes and related guarantee, including any claims that such holder is entitled to receive additional principal or interest payments with respect to the Terra Nova notes (other than as expressly provided in this document and in the letter of transmittal and consent) or to participate in any redemption or defeasance of the Terra Nova notes, . represents and warrants that the Terra Nova notes tendered were owned as of the date of tender, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind, . consents to the proposed amendments described under "Proposed Amendments" below, and . irrevocably constitutes and appoints the exchange agent the true and lawful agent and attorney-in-fact of the holder with respect to any tendered Terra Nova notes, with full powers of substitution and revocation (such power of attorney being deemed to be an irrevocable power coupled with an interest) to cause the Terra Nova notes tendered to be assigned, transferred and exchanged in the applicable exchange offer. There is a single form of letter of transmittal and consent that you can fill out for either series of Terra Nova notes. Proper Execution and Delivery of Letter of Transmittal and Consent If you wish to participate in the exchange offers and consent solicitations, delivery of your Terra Nova notes, signature guarantees and other required documents are your responsibility. Delivery is not complete until the required items are actually received by the exchange agent. If you mail these items, Markel recommends that you: . use registered mail properly insured with return receipt requested and . mail the required items sufficiently in advance of the expiration date with respect to the applicable exchange offer to allow sufficient time to ensure timely delivery. Except as otherwise provided below, all signatures on the letter of transmittal and consent or a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program. Signatures on the letter of transmittal and consent need not be guaranteed if: . the letter of transmittal and consent is signed by a participant in DTC whose name appears on a security position listing of DTC as the owner of the Terra Nova notes and that registered holder has not completed 17 the portion entitled "Special Issuance and Payment Instructions" or "Special Delivery Instructions" on the letter of transmittal and consent, or . the Terra Nova notes are tendered for the account of a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc. or is a commercial bank or trust company having an office in the United States, each, an "eligible institution". See Instruction 4 in the letter of transmittal and consent. Withdrawal of Tenders and Revocation of Corresponding Consents Tenders of Terra Nova notes in connection with any of the exchange offers may be withdrawn at any time prior to expiration of the applicable consent payment deadline. Tenders of Terra Nova notes may not be withdrawn at any time after the consent payment deadline. The valid withdrawal of tendered Terra Nova notes prior to the applicable consent payment deadline will be deemed to be a concurrent revocation of the related consent to the proposed amendments to the applicable Terra Nova indenture. You may only revoke a consent by validly withdrawing the related Terra Nova notes prior to the consent payment deadline. Tenders of notes made after the Consent Payment Deadline may not be withdrawn. Beneficial owners desiring to withdraw Terra Nova notes previously tendered should contact the DTC participant through which they hold their Terra Nova notes. In order to withdraw Terra Nova notes previously tendered, a DTC participant may, prior to the applicable consent payment deadline, withdraw its instruction previously transmitted through ATOP by: . withdrawing its acceptance through ATOP, or . delivering to the exchange agent by mail, hand delivery or facsimile transmission, notice of withdrawal of such instruction. The notice of withdrawal must contain the name and number of the DTC participant. Withdrawal of a prior instruction will be effective upon receipt of the notice of withdrawal by the exchange agent. All signatures on a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program, except that signatures on the notice of withdrawal need not be guaranteed if the Terra Nova notes being withdrawn are held for the account of an eligible institution. A withdrawal of an instruction must be executed by a DTC participant in the same manner as the DTC participant's name appears on its transmission through ATOP to which the withdrawal relates. A DTC participant may withdraw a tender only if such withdrawal complies with the provisions described in this paragraph. Withdrawals of tenders of Terra Nova notes may not be rescinded and any Terra Nova notes withdrawn will thereafter be deemed not validly tendered for purposes of either exchange offer. Properly withdrawn Terra Nova notes, however, may be retendered by following the procedures described above at any time prior to the consent payment deadline of the applicable exchange offer. Miscellaneous All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Terra Nova notes in connection with any exchange offer will be determined by Markel, in its sole discretion, whose determination will be final and binding. Markel reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of counsel for Markel, be unlawful. Markel also reserves the absolute right to waive any defect or irregularity in the tender of any Terra Nova notes in either exchange offer, and the interpretation by Markel of the terms and conditions of its exchange offers (including the instructions in the letter of transmittal and consent) will be final and binding on all parties. None of Markel, Terra Nova, the exchange agent, the information agent, the dealer manager or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Tenders of Terra Nova notes involving any irregularities will not be deemed to have been made until those irregularities have been cured or waived. Terra Nova notes received by the exchange agent in connection with any exchange offer that are not validly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the DTC participant who delivered those Terra Nova notes by crediting an account maintained at DTC designated by that DTC participant as promptly as practicable after the expiration date of the applicable exchange offer or the withdrawal or termination of the applicable exchange offer. Transfer Taxes Markel will pay all transfer taxes, if any, applicable to the transfer and sale of Terra Nova notes to Markel in the exchange offers. If transfer taxes are imposed for any other reason, the amount of those transfer taxes, whether 18 imposed on the registered holders or any other persons, will be payable by the tendering holder. Other reasons transfer taxes could be imposed include: . if Markel notes in book-entry form are to be registered in the name of any person other than the person signing the letter of transmittal and consent, or . if tendered Terra Nova notes are registered in the name of any person other than the person signing the letter of transmittal and consent. If satisfactory evidence of payment of or exemption from those transfer taxes is not submitted with the letter of transmittal and consent, the amount of those transfer taxes will be billed directly to the tendering holder and/or withheld from any payments due with respect to the Terra Nova notes tendered by that holder. U.S. Federal Backup Withholding; Withholding on Consent Payments to Non-U.S. Holders U.S. federal income tax law requires that a holder of Terra Nova notes, whose notes are accepted for exchange, provide the exchange agent, as payer, with the holder's correct taxpayer identification number or otherwise establish a basis for an exemption from backup withholding. This information should be provided on Internal Revenue Service Substitute Form W-9 in the case of a U.S. holder described below. In the case of a holder who is an individual, including most resident aliens, this identification number is his or her social security number. For holders other than individuals, the identification number is an employer identification number. Exempt holders, including, among others, all corporations and certain foreign individuals, are not subject to these backup withholding and reporting requirements, but must establish that they are so exempt. If you do not provide the exchange agent with your correct taxpayer identification number or an adequate basis for an exemption or a completed IRS Form W-8BEN ("Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding"), you may be subject to backup withholding on consent payments and a penalty imposed by the IRS. Backup withholding is not an additional federal income tax. Rather, the amount of tax withheld will be credited against the federal income tax liability of the holder subject to backup withholding. If backup withholding results in an overpayment of taxes, you may obtain a refund from the IRS. You should consult with a tax advisor regarding qualifications for exemption from backup withholding and the procedure for obtaining the exemption. Exchange Agent JPMorgan Chase Bank has been appointed the exchange agent for the exchange offers and consent solicitations. Letters of transmittal and consent and all correspondence in connection with the exchange offers should be sent or delivered by each holder of Terra Nova notes, or a beneficial owner's custodian bank, depositary, broker, trust company or other nominee, to the exchange agent at the addresses and telephone numbers set forth on the back cover page of this prospectus and consent solicitation statement. Markel will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable, out-of-pocket expenses in connection therewith. J.P.Morgan Securities Inc., the dealer manager is an affiliate of JPMorgan Chase Bank, the exchange agent. Information Agent Mackenzie Partners, Inc. has been appointed as the information agent for the exchange offers and the consent solicitations, and will receive customary compensation for its services. Questions concerning tender procedures and requests for additional copies of this prospectus and consent solicitation statement or the letter of transmittal and consent should be directed to the information agent at the address and telephone numbers set forth on the back cover page of this prospectus and consent solicitation statement. Holders of Terra Nova notes may also contact their custodian bank, depositary, broker, trust company or other nominee for assistance concerning the exchange offers. Dealer Manager Markel has retained J.P. Morgan Securities Inc. to act as dealer manager in connection with the exchange offers and consent solicitations and will pay to the dealer manager for soliciting tenders in the exchange offers a customary percentage of the total principal amount outstanding of each series of Terra Nova notes if the consent condition is satisfied and the exchange offers are completed. Markel will also reimburse the dealer manager for certain expenses. The obligations of the dealer manager to perform this function are subject to certain conditions. Markel has agreed to indemnify the dealer manager against certain liabilities, including liabilities under the federal securities laws. Questions regarding the terms of the exchange offers or the consent solicitations may be directed to the dealer manager at the address and telephone numbers set forth on the back cover page of this prospectus and consent solicitation statement. From time to time, the dealer manager has provided, and may provide in the future, investment banking, commercial banking and other services for Markel and Terra Nova. 19 Other Fees and Expenses Markel will pay the expenses of soliciting tenders of the Terra Nova notes. The principal solicitation is being made by mail; however, additional solicitations may be made by facsimile transmission, telephone or in person by the dealer manager and the information agent, as well as by officers and other employees of Markel and its affiliates. Tendering holders of Terra Nova notes will not be required to pay any fee or commission to the dealer manager. However, if a tendering holder handles the transaction through its broker, dealer, commercial bank, trust company or other institution, that holder may be required to pay brokerage fees or commissions. 20 DESCRIPTION OF DIFFERENCES BETWEEN THE TERRA NOVA NOTES AND THE MARKEL NOTES The following is a summary comparison of the material terms of the Terra Nova notes and the Markel notes. The Markel 7.2% notes due 2007 and the Markel 7.0% notes due 2008 will each be governed by a separate Markel indenture which will be substantially the same as the indentures governing the Terra Nova notes except for the material terms described below and differences arising from the original issuance of the Terra Nova notes in a transaction exempt from registration under the Securities Act of 1933. The summary does not purport to be complete and is qualified in its entirety by reference to the Terra Nova indentures and the Markel indentures. Copies of those indentures have been filed as exhibits to the registration statement of which this prospectus and consent solicitation statement forms a part and are available from the information agent upon request. See "Where You Can Find More Information" for information as to how you can obtain a copy of these indentures from the SEC. The Terra Nova notes represent, as of the date of this prospectus and consent solicitation statement, the only debt securities issued under the Terra Nova indentures. The description of the Terra Nova notes reflects the Terra Nova notes as currently constituted and does not reflect any changes to the covenants and other terms of the Terra Nova notes or the Terra Nova indentures that may be effected following the consent solicitations as described under "The Proposed Amendments."
- ------------------------------------------------------------------------------------------------------------------------------------ The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ Limitation on Liens Limitation on Liens The Terra Nova indentures provide that Bermuda Holdings will The Markel indentures will provide that Markel may not, and may not, and will not permit, any of its restricted subsidiaries, to not permit, any subsidiary to create, assume, incur or allow to directly or indirectly create, incur, assume or allow to exist exist any lien, other than a purchase money lien, on any capital any lien securing indebtedness, as defined in the Terra Nova stock of any restricted subsidiary of Markel to secure any indentures, other than permitted liens, on any property or asset obligation, as defined in the Markel indentures, without making or on any related income or profits unless all payments under provisions so that all of the then outstanding Markel notes will the applicable Terra Nova indenture and the applicable Terra be directly secured equally and ratably with that obligation. Nova notes are secured on an equal and ratable basis with, or This restriction will not apply to any liens existing on the prior to, the obligations so secured until those obligations are date of the Markel indentures. In addition, this provision will no longer secured by a lien. not restrict any other property or Markel or its subsidiaries. As used in the Terra Nova indentures, "permitted liens" means: As used in the Markel indentures, a "purchase money lien" will mean: . liens securing indebtedness pursuant to any credit agreement that is permitted by the terms of the . any mortgage, pledge, hypothecation, lien, applicable Terra Nova indenture; encumbrance, charge or security interest on any capital stock of any restricted subsidiary acquired . liens in favor of Bermuda Holdings or any restricted after the date of the Markel indentures if the subsidiary; purchase money lien is for the purpose of financing, and does not exceed, the cost to Markel or its . specified liens on property existing at the time an subsidiary of acquiring the capital stock or capital stock or property of that restricted entity property of that restricted subsidiary and the is merged into or consolidated with Bermuda financing is effected concurrently with, or within subsidiary and the financing is effected Holdings or six months after, the date of that acquisition; and any of its restricted subsidiaries; . any extension, renewal or refinancing of any . specified liens on property existing at the time of purchase money lien so long as the principal amount its acquisition; of obligations secured thereby will not exceed the original principal amount of obligations so secured . specified liens to secure the performance of at the time of that extension, renewal or statutory obligations, surety or appeal bonds or refinancing. performance bonds, or landlords', carriers', warehousemen's, mechanics', suppliers', - ------------------------------------------------------------------------------------------------------------------------------------
21
- ------------------------------------------------------------------------------------------------------------------------------------ The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ materialmen's or other like liens, in any case incurred in the ordinary course of business; and for . liens existing on the date of the applicable Terra Nova indenture; . specified liens for taxes or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings; . specified liens with respect to obligations under currency agreements or interest swap obligations and other similar arrangements designed to protect Bermuda Holdings or any of its restricted subsidiaries against fluctuations in the value of investments; . liens incurred in the ordinary course of business of Bermuda Holdings or any of its subsidiaries with respect to obligations permitted under the applicable Terra Nova indenture that do not exceed $10.0 million in principal amount in the aggregate at any one time outstanding; and . specified liens on assets of unrestricted subsidiaries. A "restricted subsidiary" means any subsidiary other than an unrestricted subsidiary. An "unrestricted subsidiary" means any subsidiary that is A "restricted subsidiary" will mean any subsidiary of Markel designated by the board of directors as an unrestricted that is a licensed insurance company. On the date hereof, the subsidiary; but only if the subsidiary: restricted subsidiaries of Markel are: . is designated an unrestricted subsidiary before . Associated International Insurance Company, formation; . Corpagnie de Reassurance d'Die-de-Fran Deerfield Insurance . has total assets at the time of formation with a Company, fair market value, as defined in the Terra Nova indentures, not exceeding $1,000, . Essex Insurance Company, . has no indebtedness other than non-recourse . Evanston Insurance Company, indebtedness, as defined in the Terra Nova indentures; . Markel American Insurance Company, . is not party to any agreement or understanding with . Markel Insurance Company, Bermuda Holdings or any of its restricted subsidiaries unless the terms of the agreement or . Terra Nova (Bermuda) Insurance Company Ltd., understanding are no less favorable to Bermuda Holdings or the restricted subsidiary than those . Terra Nova Insurance Company Limited. that might be obtained at the time from entities who are not The Markel indentures will not prohibit the sale by Markel or any subsidiary of any capital stock, indebtedness or assets of any subsidiary, including any restricted subsidiary. - ------------------------------------------------------------------------------------------------------------------------------------
22
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ affiliates; . is an entity with respect to which neither Bermuda Holdings nor any of its restricted subsidiaries has any direct or indirect obligation to subscribe for additional capital stock or to maintain or preserve the entity's financial condition or to cause the entity to achieve any specified levels of operating results; and . has not guaranteed or otherwise provided credit support for any indebtedness of Bermuda Holdings or any of its restricted subsidiaries. - ------------------------------------------------------------------------------------------------------------------------------------ Reports Reports Whether or not required by the Exchange Act, so long as any Under the Markel indentures, Markel will not covenant to provide Terra Nova notes are outstanding, Bermuda Holdings will furnish reports or financial information. to the holders of Terra Nova notes all financial information that would be required to be contained in a filing with the SEC on Form 10-K, 10-Q or 8-K if Bermuda Holdings were required to file such form, including: . a "Management's Discussion and Analysis of Results of Operations and Financial Condition," and . with respect to the annual financial statements only, a report thereon by Bermuda Holdings' independent public accountants. In addition, whether or not required by the Exchange Act, Bermuda Holdings will file a copy of this information and these reports with the SEC for public availability, unless the SEC will not accept such a filing, and Bermuda Holdings will also make this information available to investors and some others who request it in writing. - ------------------------------------------------------------------------------------------------------------------------------------ Merger, Consolidation or Sale of Assets Merger, Consolidation or Sale of Assets The Terra Nova indentures provide that Bermuda Holdings will not The Markel indentures will provide that Markel will not, in any consolidate with or merge with or into any other entity or, transaction, consolidate with or merge with or into any other directly or indirectly, sell, or otherwise dispose of all or entity or, directly or indirectly, sell, or otherwise dispose of substantially all of its assets in one or more related all or substantially all of its assets in one or more related transactions unless, at the time and after giving effect thereto: transactions unless, at the time and after giving effect thereto: . Bermuda Holdings is the continuing corporation, or the surviving entity, if other than Bermuda . Markel is the continuing corporation, or the Holdings, is a corporation organized and validly surviving entity, if other than Markel, is a existing under the laws of specified jurisdictions corporation organized and validly existing under the or any other jurisdiction that is not materially laws of any domestic or foreign jurisdiction and adverse to the holders of the Terra Nova notes and expressly assumes all the obligations of Markel under the applicable Markel indenture;
23
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ expressly assumes all the obligations of Bermuda Markel indenture; Holdings under the guarantee and the applicable . immediately before and after the transaction, giving Terra Nova indenture; effect to that transaction, no default or event of default under the applicable Markel indenture shall . immediately before and after the transaction, giving have occurred and be continuing; and effect to that transaction, no default or event of default under the applicable Terra Nova indenture . if any of the property or assets of Markel would shall have occurred and be continuing; become subject to any lien, the outstanding Markel notes shall be secured equally and ratably with, or . immediately after giving effect to the transaction prior to, the obligation or liability secured by on a pro forma basis, the consolidated net worth of that lien, unless Markel could create that lien Bermuda Holdings or the surviving entity, if other without equally and ratably securing the Markel than Bermuda Holdings, is at least equal to the notes. consolidated net worth of Bermuda Holdings immediately before the transaction; and . if any of the property or assets of Bermuda Holdings would become subject to any lien, the outstanding Terra Nova notes shall be secured equally and ratably with, or prior to, the obligation or liability secured by that lien, unless Bermuda Holdings could create that lien without equally and ratably securing the Terra Nova notes. . Bermuda Holdings or the surviving entity, if other than Bermuda Holdings, shall be entitled to all the benefits of the tax sharing agreement. - ------------------------------------------------------------------------------------------------------------------------------------ Payment of Additional Amounts Payment of Additional Amounts If any deduction or withholding for taxes or other governmental Under the Markel indentures, Markel will not covenant to pay any charges of the U.K., Bermuda or any relevant jurisdiction or any additional amounts. political subdivision or taxing authority thereof, referred to as a "relevant jurisdiction" is required in respect of any amounts to be paid under the Terra Nova notes or under the guarantee, Terra Nova or Bermuda Holdings, as applicable, will pay such additional amounts as may be necessary so that the net amounts received by a holder of a Terra Nova note after the deduction or withholding will not be less than the amounts specified in the Terra Nova note to which the holder is entitled. However, neither Terra Nova nor Bermuda Holdings is required to make any payment of additional amounts for: . any tax or other governmental charge which would not have been imposed but for: - the existence of any present or former connection between the holder, or between specified other
24
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ parties if the holder is an estate, nominee, trust, partnership or corporation, otherwise than merely by the holding of a Terra Nova note or the receipt of amounts payable in respect of the Terra Nova notes, and any relevant jurisdiction or the holder being subject to the jurisdiction of any relevant jurisdiction; or - the presentation of the Terra Nova note, if required, for payment on a date more than 30 days after the date on which the payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later, except to the extent that the holder would have been entitled to additional amounts had the Terra Nova notes been presented on the last day of the period of 30 days; . any tax or other governmental charge that is imposed or withheld because the holder does not provide information, documents or other evidence requested by Terra Nova concerning the nationality, residence, identity or connection with the taxing jurisdiction of the holder which is required as a precondition to exemption from all or part of that tax or governmental charge; . payments in respect of Terra Nova definitive notes issued at the request of the holder, including on or after the occurrence of an event of default; or . any combination of the foregoing. - ------------------------------------------------------------------------------------------------------------------------------------ Events of Default and Remedies Events of Default and Remedies The Terra Nova indentures provide that each of the following The The following will be events of default under the Markel following will be events of default under the Markel constitutes indentures with respect to the Markel notes: an event of default: indentures with respect to the Markel notes: . failure to pay principal of or any premium on the Markel notes when due; or . default in the payment of interest on any Terra Nova note when the payment becomes due and payable and the continuance of the default for a period of 30 . failure to pay any interest on the Markel notes when days; or due, continued for 30 days; or . default in the payment of the principal of (or . failure to perform any covenant of Markel in the premium, if any, on) any Terra Nova note at its applicable indenture continued for 60 days after maturity; or written notice has been given by the trustee or the holders of at least 25% in . default in the performance of any covenant of
25
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ Terra Nova or Bermuda Holdings in the applicable the trustee or the holders of at least 25% in Terra Nova indenture, other than the payment principal amount of the applicable outstanding obligations specified above or the covenant with Markel notes, as provided in the Indenture; or respect to mergers, and continuance of the default for a period of 60 days after written notice . acceleration of any indebtedness for money borrowed specifying the default and stating that the notice is by Markel having an aggregate principal amount a "notice of default" has been given, by registered outstanding of at least $10 million if that or certified mail, to Terra Nova or Bermuda Holdings, indebtedness has not been discharged or the by the trustee or to Terra Nova or Bermuda Holdings acceleration has not been rescinded or annulled and the trustee by the holders of at least 25% in within 10 days after written notice has been given principal amount of the outstanding applicable Terra by the trustee, or the holders of at least 25% in Nova notes; or outstanding principal amount of the applicable Markel notes, as provided in the indenture; or . an event of default has occurred under the indebtedness of Bermuda Holdings or any restricted . specified events of bankruptcy, insolvency or subsidiary for money borrowed, or the payment of reorganization. which is guaranteed by Bermuda Holdings or any of its restricted subsidiaries, having an aggregate outstanding principal amount of not less than $10.0 million, if the default has resulted in that indebtedness becoming due and payable prior to the date on which it would otherwise become due and payable, and the event has not been cured or rescinded or the indebtedness has not been satisfied within ten business days of the event, or . a default in any payment when due at final stated maturity of any indebtedness outstanding in an aggregate principal amount of not less than $10.0 million and the default has not been cured or the indebtedness has not been satisfied within ten business days; or . final judgments are rendered against Bermuda Holdings, Terra Nova or any restricted subsidiary which require the payment in money, either individually or in an aggregate amount, that is more than $10.0 million, other than any judgment to the extent a reputable non-affiliated insurance company has accepted liability, and the judgment or order is not discharged and either - any creditor has commenced an enforcement proceeding upon the judgment or order, which enforcement proceeding has remained unstayed for a period of 10 days, or - a period of 60 days, during which a
26
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ stay of enforcement has not been in effect, has elapsed following the date on which any period for appeal has expired; or . a decree or order is entered - for relief against Terra Nova, Bermuda Holdings or any principal insurance subsidiary, as defined in the applicable Terra Nova indenture, in an involuntary bankruptcy proceeding, or - adjudging Terra Nova, Bermuda Holdings or any principal insurance subsidiary bankrupt or insolvent, or seeking reorganization or comparable relief in respect of Terra Nova, Bermuda Holdings or any principal insurance subsidiary, or appointing a custodian or other similar official of Terra Nova, Bermuda Holdings or any principal insurance subsidiary or of any substantial part of their properties, or ordering the winding up or liquidation of any of their affairs, and the decree or order remains unstayed and in effect for a period of 60 consecutive days; or . Terra Nova, Bermuda Holdings or any principal insurance subsidiary institutes a voluntary case or proceeding under applicable bankruptcy or similar law, or Terra Nova, Bermuda Holdings or any principal insurance subsidiary files a petition or answer or consent seeking reorganization or relief under applicable bankruptcy or similar law, or Terra Nova, Bermuda Holding or any principal insurance subsidiary consents to the entry of a decree or order for relief in any involuntary case or proceeding under applicable bankruptcy law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian or other similar official of any of Terra Nova, Bermuda Holdings or any principal insurance subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action; or . default in the performance, or breach, of the provisions described under "--Merger, Consolidation or Sale of Assets."
27
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ Terra Nova is required, if a default has occurred and is continuing or under other circumstances, to deliver to the Trustee a statement specifying the default or other circumstance. - ------------------------------------------------------------------------------------------------------------------------------------ Corporate Existence Corporate Existence Subject to the covenants with respect to consolidation, merger Subject to the covenants with respect to consolidation, merger and consolidation discussed above, each of Terra Nova and and conveyance discussed above, Markel will agree in the Markel Bermuda Holdings have agreed in the Terra Nova indentures to indentures to maintain its corporate existence, corporate maintain its corporate existence and that of its subsidiaries, rights, corporate licenses and corporate franchises. However, as well as the corporate rights, corporate licenses and Markel will not be required to maintain its rights, licenses or corporate franchises of Terra Nova, Bermuda Holdings and their franchises if its board of directors determines that the respective subsidiaries, except where failure to do so would not preservation thereof is no longer desirable in the conduct of have a material adverse effect on Bermuda Holdings and its its business and that the loss thereof is not disadvantageous in subsidiaries taken as a whole determined on a consolidated basis any material respect to the holders of the applicable notes. in accordance with generally accepted accounting principles. However, none of Terra Nova, Bermuda Holdings or their respective subsidiaries is required to maintain its existence (other than Bermuda Holdings), rights, licenses or franchises if its respective board of directors determines that the preservation thereof is no longer desirable in the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the holders of the applicable Terra Nova notes. - ------------------------------------------------------------------------------------------------------------------------------------ Payment of Taxes and Other Claims Payment of Taxes and Other Claims Under the Terra Nova indentures, Bermuda Holdings covenants to The Markel indenture will contain a comparable covenant except pay or discharge before the following becomes delinquent, that the Markel covenant will not require that Markel maintain reserves in connection with any tax, assessment, charge, or . all material taxes, assessments and governmental claim which is being contested in good faith. charges levied or imposed upon Bermuda Holdings or any subsidiary or upon the income, profits or property of Bermuda Holdings or any subsidiary, and . all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of Bermuda Holdings or any subsidiary. Bermuda Holdings is not required to pay or discharge any tax, assessment charge or claim which is being contested in good faith by appropriate proceedings and for which appropriate reserves are being maintained in accordance with generally accepted accounting principles. - ------------------------------------------------------------------..---------------------------------------------------------------- Meetings Meetings The Terra Nova indentures do not provide for noteholder The Markel indentures will provide that meetings of holders of meetings. Markel notes may be convened on notice: . by the Markel trustee, . by us, if we ask the Markel trustee to call a
28
The Terra Nova Notes The Markel Notes -------------------- ---------------- - ------------------------------------------------------------------------------------------------------------------------------------ meeting and it fails to do so, or . by the holders of 10% in principal amount of the Markel notes, if they ask the Markel trustee to call a meeting and it fails to do so. Holders entitled to vote a majority in principal amount of the Markel notes constitute a quorum at any meeting of holders. - ------------------------------------------------------------------------------------------------------------------------------------ Maintenance of Properties Maintenance of Properties In the Terra Nova indentures, Bermuda Holdings agrees to cause In the Markel indentures, Markel will agree to cause all all properties owned by or leased to it or its subsidiaries and properties owned by or leased to it or its subsidiaries and used used or useful in the conduct of its business or the business of or useful in the conduct of its business or the business of its its subsidiaries to be maintained and kept in normal condition, subsidiaries to be maintained and kept in normal condition, ordinary wear and tear excepted. However, nothing in the ordinary wear and tear excepted. However, nothing in the Markel indenture prevents Bermuda Holdings or its subsidiaries from indentures will prevent Markel or its subsidiaries from discontinuing the use, operation or maintenance of its discontinuing the use, operation or maintenance of its properties or disposing of them, if, in the judgment of Bermuda properties or disposing of them, if, in the judgment of Markel's Holdings' board of directors or the board of the applicable board of directors or the board of the applicable subsidiary, or subsidiary, or of any officer having managerial responsibility of any officer having managerial responsibility for the for the applicable property, this action is desirable in the applicable property, this action is desirable in the conduct of conduct of the business of Bermuda Holdings or any of its the business of Markel or any of its subsidiaries. subsidiaries and the discontinuance or disposal is not adverse in any material respect to the holders of the applicable Terra Nova notes. - ------------------------------------------------------------------------------------------------------------------------------------ Other Covenants Other Covenants The Terra Nova indentures also provide: There will be no comparable covenants in the Markel indentures. . Bermuda Holdings and its subsidiaries will carry insurance against loss or damage of the kinds customarily insured against by similarly situated corporations; . Bermuda Holdings and its subsidiaries will keep proper and true books of record and account; . Bermuda Holdings and its subsidiaries will comply with all applicable statutes and regulations except where a failure to do so is not likely to have a material adverse effect on the business prospects, assets or condition or results of operation of Bermuda Holdings and its subsidiaries taken as a whole; and . Terra Nova and Bermuda Holdings waive, to the extent they may lawfully do so, any stay, extension or usury law affecting the covenants or performance of the Terra Nova indentures or the execution of any power granted to the trustee.
29 THE PROPOSED AMENDMENTS Markel is soliciting the consent of the holders of Terra Nova notes to . eliminate some covenants in the Terra Nova indentures, . eliminate restrictions on Terra Nova's ability to consolidate, merge or sell all or substantially all of its assets and . eliminate some events of default under the Terra Nova indentures. You are urged to read the forms of supplemental indentures that have been filed as exhibits to the registration statement of which this prospectus and consent solicitation statement forms a part for a complete understanding of the provisions of the Terra Nova indentures to be eliminated. The forms of supplemental indentures are available from the Information Agent upon request. See "Where You Can Find More Information" for information as to how you can obtain a copy of the Terra Nova indentures, the forms of supplemental indentures and the Markel indenture from the SEC. Provisions or the Terra Nova Indentures to be Deleted Markel is proposing to delete the following covenants from the Terra Nova indentures: . The covenant in Section 9.2 entitled "Corporate Existence," which is described above under "Description of Differences Between the Terra Nova Notes and the Markel Notes - Corporate Existence." . The covenant in Section 9.3 entitled "Payment of Taxes and Other Claims." Under Section 9.3, Bermuda Holdings covenants to pay or discharge, before the same becomes delinquent, -- all material taxes, assessments and governmental charges levied or imposed upon Terra Nova or any subsidiary or upon the income, profits or property of Bermuda Holdings or any subsidiary, and -- all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of Bermuda Holdings or any subsidiary. . The covenants in Sections 9.4 under the title "Maintenance of Properties; Insurance; Books and Records; Compliance with Law," which are described above under "Description of Differences Between the Terra Nova Notes and the Markel Notes - Maintenance of Properties" and the first three paragraphs of "Description of Differences Between the Terra Nova Notes and the Markel Notes - Other Covenants." . The covenant in Section 9.8 entitled "Liens," which is described above under "Description of Differences Between the Terra Nova Notes and the Markel Notes -- Limitation on Liens." . The covenant in Section 9.18(b) under the title "Statement as to Compliance; Notice of Default; Provision of Financial Statements." Under Section 9.18(b), Terra Nova must deliver to the Trustee a certificate specifying any default that has occurred and is continuing or any notice given or action taken by a trustee for or holder of any indebtedness of Terra Nova or Bermuda Holdings, other than indebtedness in the aggregate principal of less than $5,000,000, with respect to a claimed default within five days of its occurrence. . The covenants in Section 9.18(c) and (d) under the title "Statement as to Compliance; Notice of Default; Provision of Financial Statements," which are described above under "Description of Differences Between the Terra Nova Notes and the Markel Notes - Reports." . The covenant in Section 9.19 entitled "Waiver of Stay, Extension of Usury Laws," which is described above under the last paragraph of "Description of Differences Between the Terra Nova Notes and the Markel - Other Covenants." . The covenants in Section 7.1 and 7.2 entitled "Bermuda Holdings May Consolidate, etc., Only on Certain Terms" and "Successor Substituted," respectively, which is described above under "Description of Differences Between the Terra Nova Notes and the Markel Notes - Merger, Consolidation, or Sale of Assets." 30 In conjunction with the deletion of the covenants identified above, Markel is proposing to delete the following defined terms in the indenture, which are used only in those covenants or in other defined terms being deleted: "Permitted Liens", "Restricted Subsidiary"; and "Wholly-owned Restricted Subsidiary." Markel is also requesting a waiver with respect to any default, event of default or other consequence under the Terra Nova indentures of failing to comply with the terms of the covenants identified above (whether before or after the date of the supplemental indentures) and to delete clauses (d), (e), (f) and (g) from the definition of "Event of Default" in Section 4.1, "Events of Default." These clauses provide, respectively, that each of the following constitutes an "event of default": . a default in any payment when due at final stated maturity of any indebtedness outstanding in an aggregate principal amount of not less than $10.0 million and the default has not been cured or the indebtedness has not been satisfied within ten business days; or . final judgments are rendered against Bermuda Holdings, Terra Nova or any restricted subsidiary which require the payment in money, either individually or in an aggregate amount, that is more than $10.0 million, other than any judgment to the extent a reputable non-affiliated insurance company has accepted liability, and the judgment or order is not discharged and either - any creditor has commenced an enforcement proceeding upon the judgment or order, which enforcement proceeding has remained unstayed for a period of 10 days, or - a period of 60 days, during which a stay of enforcement has not been in effect, has elapsed following the date on which any period for appeal has expired; or . Terra Nova, Bermuda Holdings or any principal insurance subsidiary institutes a voluntary case or proceeding under applicable bankruptcy or similar law, or Terra Nova, Bermuda Holdings or any principal insurance subsidiary files a petition or answer or consent seeking reorganization or relief under applicable bankruptcy or similar law, or Terra Nova, Bermuda Holding or any principal insurance subsidiary consents to the entry of a decree or order for relief in any involuntary case or proceeding under applicable bankruptcy law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian or other similar official of any of Terra Nova, Bermuda Holdings or any principal insurance subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. 31 CERTAIN RELATED TRANSACTIONS At December 31, 2001, Terra Nova had outstanding interest free short-term borrowings of $54.8 million due to Markel. Effective January 1, 2001, Terra Nova entered into a quota share reinsurance agreement with certain United States insurance subsidiaries of Markel. Under the quota share reinsurance agreement, Terra Nova's subsidiary, Markel Capital Limited, cedes 24% of 2001 year of account net written premiums and related losses and expenses to these subsidiaries. For the year ended December 31, 2001, Terra Nova ceded premiums totaling $71.3 million. A subsidiary of Markel provides administrative support services to Terra Nova. Markel charges Terra Nova a proportional share of its administrative costs based on estimates of the percentage of work the individual Markel departments perform for Terra Nova. In the opinion of management, Terra Nova is being charged for all costs incurred on its behalf by Markel under a comprehensive and reasonable cost allocation method. As of April 5, 2002, Markel or its subsidiaries held approximately $2.0 million in total principal amount of the 7.2% Terra Nova notes and $2.5 million in total principal amount of the 7.0% Terra Nova notes. The Terra Nova notes held by Markel or its subsidiaries will not be deemed outstanding for determining the amount required for consent to the amendments to the Terra Nova indentures. 32 DESCRIPTION OF THE MARKEL NOTES If the exchange offers are consummated, the Markel notes to be issued in exchange for the Terra Nova notes will be issued under indentures, dated as of May 1, 2002, as amended, with JPMorgan Chase Bank as trustee referred to as the "Markel trustee." The Markel indentures will for purposes of the following description of the Markel notes, be referred to as the "Markel indentures." The Markel notes will be issued only in book-entry form in denominations of $1,000 and integral multiples of $1,000. The following summary of some of the provisions of the Markel indentures does not purport to be complete and is subject to, and is qualified in its entirety by reference to the Trust Indenture Act of 1939, and to all of the provisions of the Markel indentures, including the definitions of terms in the Markel indentures. The Markel indentures are subject to and governed by the Trust Indenture Act. Copies of the Markel indentures may be obtained from the information agent and are also filed as exhibits to the registration statement of which this prospectus and consent solicitation statement is a part. See "Where You Can Find More Information" for information as to how you can obtain copies of the Markel indentures from the SEC. Principal, Maturity and Interest The Markel 7.0% notes will be limited in an aggregate principal amount to $100.0 million. The Markel 7.0% notes will mature on May 15, 2008. Interest on the Markel 7.0% notes will accrue at the rate of 7% per annum and will be payable semi-annually in arrears in cash on each November 15 and May 15, commencing on November 15, 2002, to holders of record on the immediately preceding November 1 and May 1, respectively. Each Markel 7.0% note will bear interest from the last date to which interest has been paid on the Terra Nova 7% notes. The Markel 7.2% notes will be limited in an aggregate principal amount to $75.0 million. The Markel 7.2% notes will mature on August 15, 2007. Interest on the Markel 7.2% notes will accrue at the rate of 7.2% per annum and will be payable semi-annually in arrears in cash on each February 15 and August 15, commencing on August 15, 2002, to holders of record on the immediately preceding January 31 and July 31, respectively. Each Markel 7.2% note will bear interest from the last date to which interest has been paid on the Terra Nova 7.2% notes. Ranking; Additional Debt The Markel notes will be our unsecured obligations. The Markel notes will rank senior in right of payment to all subordinated indebtedness of Markel and equally in right of payment with all indebtedness of Markel not expressly subordinated or secured. The Markel indentures will not limit the amount of debt that we or any of our subsidiaries may incur or issue, nor will they restrict transactions between us and our affiliates or dividends and other distributions by us or our subsidiaries. Because Markel is a holding company that conducts all of its operations through its subsidiaries, its ability to meet its obligations under the Markel notes is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to Markel. Payment of dividends or advances from Markel's insurance subsidiaries may require prior regulatory notice or approval. Holders of Markel notes will generally have a junior position to claims of creditors of Markel's subsidiaries, including any holders of Terra Nova notes not validly tendered and accepted in the exchange offers. As of March 31, 2002, the aggregate amount of outstanding long-term debt of Markel's subsidiaries to which holders of the Markel notes would have been structurally subordinated was approximately $170.5 million, all of which consists of both series of Terra Nova notes for which Markel is making the exchange offers less the amount of Terra Nova notes held by Markel and its subsidiaries. See "Risk Factors -- Risks Relating to the Exchange Offers and Consent Solicitation Statement -- Our holding company structure results in substantial structural subordination and may affect our ability to make payments on the Markel notes." Optional Redemption Markel will have the right to redeem the Markel notes, in whole or in part, at any time, at a redemption price equal to: . the sum of the principal amount of the Markel notes being redeemed, plus accrued and unpaid interest, and . the excess, if any, of (i) the sum, as determined by a quotation agent, of the present values of the principal amount of the Markel notes, together with scheduled payments of interest from the redemption date to the stated maturity of the Markel notes, in each case discounted to the redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months at the adjusted treasury rate over (ii) 100% of the principal amount of the Markel notes to be redeemed. 33 The quotation agent means the reference treasury dealer appointed by Markel. The term reference treasury dealer means a primary treasury dealer selected by Markel and its respective successors and two other primary treasury dealers selected by the primary treasury dealer selected by Markel and any other primary treasury dealer selected by the Markel trustee after consultation with Markel. If however, either of the reference treasury dealers selected by the primary treasury dealer selected by Markel ceases to be a primary U.S. government securities dealer in New York City, the primary treasury dealer selected by Markel will substitute another primary treasury dealer unless that dealer has ceased to be a primary treasury dealer, in which case Markel shall substitute another primary treasury dealer. A reference treasury dealer quotations means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the comparable treasury issue, expressed in each case as a percentage of its principal amount, furnished to the Markel trustee on the third business day preceding the redemption date. The "adjusted treasury rate" means, for any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the comparable treasury issue, calculated using a price for the comparable treasury issue, expressed as a percentage of its principal amount, equal to the comparable treasury price for that redemption date, calculated on the third business day preceding the redemption date, plus in each case 0.20%. "Comparable treasury issue" means the United States Treasury security selected by the quotation agent as having a maturity comparable to the remaining term of the Markel notes that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Markel notes. The "comparable treasury price" means for any redemption date: . the average of the bid and asked prices for the comparable treasury issue, expressed as a percentage of its principal amount, on the third business day before the redemption date, as set forth in the daily statistical release, or any successor release, published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or . if that release or any successor release, is not published or does not contain those prices on that business day, the average of the reference treasury dealer quotations for that redemption date, after excluding the highest and lowest reference treasury dealer quotations, or if the quotation agent obtains fewer than three reference treasury dealer quotations, the average of all the quotations. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Markel notes to be redeemed at its registered address. Unless Markel defaults in payment of the redemption price, on and after the redemption date interest ceases to accrue on such Markel notes called for redemption. Markel may purchase Markel notes at any price in the open market or otherwise. Notes so purchased by Markel may, at Markel's discretion, be held or resold or surrendered to the Markel trustee for cancellation. Limitation on Liens The Markel indentures will provide that Markel will not, and will not permit any of its subsidiaries to create, incur or suffer to exist any lien, other than a purchase money lien, upon any capital stock, of any restricted subsidiary to secure any obligation of Markel, any subsidiary or other person, without making effective provision for all of the outstanding Markel notes to be directly secured on an equal and ratable basis with the obligations; provided, however, that the foregoing restriction will not apply to liens existing as of the date of the Markel indentures. Merger, Consolidation or Sale of Assets The Markel indentures will provide that Markel will not, consolidate with or merge with or into any other person or, directly or indirectly, sell, or otherwise dispose of all or substantially all of its assets in one or more related transactions to any person unless at the time: . Markel will be the continuing corporation, or the person formed by that consolidation or merger, or the person that acquires by sale or other disposition the assets of Markel, substantially as an entirety, is a corporation duly organized and validly existing under the laws of any domestic or foreign jurisdiction and, if any person other than Markel, expressly assumes, by supplemental indenture, in form reasonably satisfactory to the Markel trustee, all the obligations of Markel under the applicable Markel indenture; . immediately before and after that transaction, giving effect to that transaction, no default or event of default occurred and is continuing; . if any of the property or assets of Markel would thereupon become subject to any lien, the outstanding Markel notes shall be secured equally and ratably with (or prior to) the obligation or liability secured by that lien, unless Markel could create that lien without equally and ratably securing the Markel notes; and 34 . Markel delivers to the Markel trustee an officers' certificate and an opinion of counsel, each stating that the consolidation, merger, transfer or lease and the supplemental indenture, if any, complies with the applicable Markel indenture and that all conditions precedent provided for in the applicable Markel indenture relating to that transaction have been complied with. Upon any consolidation or merger or any sale, assignment, transfer, lease or conveyance or other disposition of all or substantially all of the assets of Markel in accordance with the provisions described above, the successor person formed by that consolidation or into which Markel is merged or to whom that sale, assignment, conveyance, transfer, lease or other disposition is made will succeed to, and be substituted for, and may exercise every right and power of Markel under the applicable Markel indenture with the same effect as if that successor person had been named as Markel in the applicable Markel indenture. When a successor assumes all the obligations of its predecessor under the Markel indenture and the Markel notes, the predecessor will be released from those obligations; provided that, in the case of a transfer by lease, the predecessor corporation will not be released from the payment of principal and interest on the Markel notes. Events of Default and Remedies The Markel indentures will provide that each of the following constitutes an event of default: . default in the payment of interest on any Markel note for a period of 30 days after the payment becomes due and payable; or . default in the payment of the principal of, or premium, if any, on, any Markel note at its maturity; or . default in the performance, or breach, of any covenant or agreement of Markel under the applicable Markel indenture (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with in the immediately preceding two paragraphs), for a period of 60 days after there has been given, by registered or certified mail, to Markel by the Markel trustee or to Markel and the Markel trustee by the holders of at least 25% in principal amount of the outstanding Markel notes, a written notice specifying the default or breach and stating that the notice is a "notice of default" under the applicable Markel indenture; or . An event of default shall have occurred under any mortgage, bond, indenture, loan agreement or other document evidencing any issue of indebtedness of Markel which issue has an aggregate outstanding principal amount of not less than $10.0 million, and that default results in that indebtedness becoming due and payable prior to the date on which it would otherwise become due and payable, or a default in any payment when due at final stated maturity of any indebtedness outstanding in an aggregate principal amount of not less than $10.0 million and, in each case, within 10 days after notice has been given, by registered or certified mail, to Markel by the Markel trustee, or to Markel and the Markel trustee by the Holders of at least 25% in aggregate principal amount of all of the Markel notes at the time outstanding; provided that if that indebtedness shall be remedied or cured by Markel or waived by the holders of that indebtedness, then: -- the event of default under the applicable Markel indenture by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action on the part of either the Markel trustee or any holders of the Markel notes and -- any acceleration of the principal of the Markel notes will be rescinded without further action on the part of either the Markel trustee or any holders of the Markel notes; or . a decree or order is entered by a court having jurisdiction: -- for relief in respect of Markel or any material subsidiary in an involuntary case or proceeding under the Federal Bankruptcy Code or any other federal or state bankruptcy, insolvency, reorganization or similar law, or -- adjudging Markel or any material subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of Markel or any subsidiary under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Markel or any material subsidiary or of any substantial part of any of their properties, or ordering the winding up or liquidation of any of their affairs, and any 35 such decree or order remains unstayed and in effect for a period of 60 consecutive days; or . Markel or any material subsidiary institutes a voluntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or any other case or proceedings to be adjudicated bankrupt or insolvent, or Markel or any material subsidiary consents to the entry of a decree or order for relief in respect of Markel or any material subsidiary in any involuntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or to the institution of bankruptcy or insolvency proceedings against Markel or any material subsidiary files a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of any of Markel or any material subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. If any event of default (other than an event of default described in the immediately preceding two paragraphs above) occurs and is continuing, the Markel trustee or the holders of at least 25% in principal amount of the outstanding Markel notes, by written notice to Markel (and to the Markel trustee, if that notice is given by the holders), may, and the Markel trustee at the request of those holders must, declare all unpaid principal of, premium, if any, and accrued interest on all the Markel notes to be due and payable immediately. In the case of an event of default described in the last two paragraphs above, all outstanding Markel notes will become due and payable without further action or notice. Holders of the Markel notes may not enforce the applicable Markel indenture or the Markel notes except as provided in the applicable Markel indenture. Subject to some limitations, holders of a majority in principal amount of the then outstanding Markel notes may direct the Markel trustee in its exercise of any trust or power. The Markel trustee may withhold from holders of the Markel notes notice of any continuing default or event of default (except a default or event of default relating to the payment of principal, any premium or interest) if the board of directors, the executive committee or a trust committee of directors or responsible officers of the Markel trustee determine in good faith that withholding the notice is in the interest of the holders. A "material subsidiary" is, at any date, any consolidated subsidiary of Markel whole total assets after excluding intercompany accounts, are in excess of 10% of the total assets of Markel and its consolidated subsidiaries, with any determination being made as at the end of the most recently completed fiscal year for which consolidated financial statements have been prepared except to the extent that on that date the principal financial officers of Markel have actual reason to know to the contrary. After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Markel trustee, the holders of at least a majority in aggregate principal amount of the outstanding Markel notes, by written notice to Markel and the Markel trustee, may annul such declaration if Markel has paid or deposited with the Markel trustee a sum sufficient to pay: . all sums paid or advanced by the Markel trustee under the applicable Markel indenture and the reasonable compensation, expenses, disbursements and advances of the Markel trustee, its agents and counsel, . all overdue interest on all Markel notes, . the principal of and premium, if any, on any Markel notes which have become due otherwise than by that declaration of acceleration and interest thereon at the rate born by the Markel notes, and . to the extent that payment of the interest is lawful, interest upon overdue interest at the rate of the Markel notes; and all events of default, other than the non-payment of principal of the Markel notes which have become due solely by the declaration or acceleration, have been waived as provided in the applicable Markel Indenture or cured. No such rescission will affect any subsequent default or impair any right. The holders of a majority in aggregate principal amount of the outstanding Markel notes by notice to the Markel trustee may on the behalf of the holders of all of the Markel notes waive any existing or past default or event of default and its consequences under the applicable Markel indenture except a continuing default or event of default in the payment of interest on, or the principal of, or premium, if any, on the Markel notes or in respect of covenants or provisions in the Markel indenture which cannot be modified or amended without the consent of the holders of a greater percentage of the principal amount of, or all of, the outstanding Markel notes. 36 Markel will be required to deliver to the Markel trustee annually a statement regarding compliance with the applicable Markel indenture, and Markel is required, upon becoming aware of any default or event of default, to deliver to the Markel trustee a statement specifying such default or event of default. No Personal Liability of Directors, Officers, Employees and Stockholders No director, officer, employee or stockholder of Markel or any subsidiary of Markel, will have any liability for any obligations of Markel under the Markel notes or the Markel indentures or for any claim based on, those obligations or their creation. Each holder of the Markel notes by accepting a Markel note will waive and release all such liability. The waiver and release will be part of the consideration for issuance of the Markel notes. That waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that some waivers are against public policy. Defeasance or Covenant Defeasance Under some conditions, Markel may elect to have its obligations discharged with respect to the outstanding Markel notes. This defeasance means that Markel will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Markel notes, except for: . the rights of holders of outstanding Markel notes to receive payments in respect of the principal of, premium, if any, and interest on the Markel notes when those payments are due, or on the redemption date, as the case may be; . Markel's obligations with respect to the Markel notes concerning issuing temporary Markel notes, registration of Markel notes, mutilated, destroyed, lost or stolen Markel notes and the maintenance of an office or agency for payment and money for security payments held in trust; . the rights, powers, trust, duties and immunities of the Markel trustee, and Markel's related obligations; . the defeasance provisions of the applicable Markel indenture. In addition, under some conditions, Markel may elect to have its obligations released with respect to some covenants that are described in the Markel indentures and thereafter any omission to comply with those obligations will not constitute a default or an event of default with respect to the Markel notes. In the event covenant defeasance occurs, some events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "--Events of Default and Remedies" will no longer constitute an event of default with respect to the Markel notes. In order to exercise either defeasance or covenant defeasance: . Markel must irrevocably deposit with the Markel trustee, in trust, for the benefit of the holders of the applicable Markel notes, cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in amounts that will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the applicable outstanding Markel notes; . in the case of defeasance, Markel must deliver to the Markel trustee an opinion of counsel in the United States reasonably acceptable to the Markel trustee confirming that Markel has received from, or there has been published by, the Internal Revenue Service a ruling; or since the date of the applicable Markel indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, confirmed by an opinion of counsel, the holders of the applicable outstanding Markel notes will not recognize income, gain or loss for federal income tax purposes as a result of defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if defeasance had not occurred; . in the case of covenant defeasance, Markel must deliver to the Markel trustee an opinion of counsel in the United States reasonably acceptable to the Markel trustee confirming that the holders of the outstanding Markel notes will not recognize income, gain or loss for federal income tax purposes as a result of covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; . no default or event of default may have occurred and be continuing on the date of the deposit or insofar as events of default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; 37 . the defeasance or covenant defeasance will not result in a breach or violation of, or constitute a default under the applicable Markel indenture, or any other material agreement or instrument to which Markel is bound, . Markel must deliver to the Markel trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; . Markel must deliver to the Markel trustee an officers' certificate stating that the deposit was not made by Markel with the intent of preferring the holders of Markel notes over the other creditors of Markel or with the intent of defeating, hindering, delaying or defrauding creditors of Markel or others; and . Markel must deliver to the Markel trustee an officers' certificate and an opinion of counsel, each stating that all conditions relating to either the defeasance or the covenant defeasance, as the case may be, have been complied with. Amendment, Supplement and Waiver The Markel indentures will provide that the consent of holders of a majority in outstanding aggregate principal amount of the applicable Markel notes will be required with respect to amendments which do not affect the payment terms of the Markel notes or the amount of Markel notes whose holders must consent to any amendment or the relative ranking of the Markel notes. The latter amendments may only be made with the consent of each holder of applicable Markel notes. With the consent of the holders of not less than a majority in principal amount of the applicable outstanding Markel notes (including consents obtained in connection with a tender offer or exchange offer for the Markel notes), Markel when authorized by a board resolution, and the Markel trustee may enter into one or more supplemental indentures for the purpose of adding any provisions to or changing in any manner the rights of the holders under the applicable Markel indenture or of waiving or modifying in any manner the rights of the holders under the applicable Markel indenture; provided, however, that no supplemental indenture, amendment or waiver will without the consent of the holder of each outstanding Markel note affected thereby: . change the stated maturity or the principal of, or any installment of interest on, any Markel note or reduce the principal amount of or the rate of interest on the Markel notes or any provisions relating to the redemption price of the Markel notes or the periods during which redemption may be effected, or change the coin or currency in which the principal of any Markel note or any premium or the interest is payable, or impair the right to institute suit for the enforcement of any payment after the stated maturity (or, in the case of redemption, on or after the redemption date); or . reduce the percentage in principal amount of the outstanding Markel notes, the consent of whose holders is required for any supplemental indenture or the consent of whose holders is required for any waiver (of compliance with provisions of the applicable Markel indenture or defaults and their consequences) provided for in the applicable Markel indenture; or . modify any of the provisions of the applicable Markel indenture relating to amendments or waivers of payment or covenant defaults, except to increase any percentage or to provide that other provisions of the applicable Markel indenture cannot be modified or waived without the consent of the holder of each Markel note affected. Without the consent of any holder of Markel notes, Markel and the Markel trustee may amend or supplement the Markel indenture or the Markel notes: . to cure any ambiguity or to correct any provision in the applicable Markel indenture which may be defective or inconsistent with any other provision therein; or . to provide for the assumption of Markel's obligations under the Markel notes in the case of a merger or consolidation; or . to secure the Markel notes pursuant to the requirements of the provisions described under "--Merger, Consolidation or Sale of Assets" or "--Liens," or otherwise; or . to comply with the requirements of the SEC in order to maintain the qualification of the applicable Markel indenture under the Trust Indenture Act; or . to evidence and provide the acceptance of the appointment of a successor trustee; or 38 . to make any other change that would provide any additional rights or benefits to the holders or that does not adversely affect the legal rights of any holder under the applicable Markel indenture or the Markel notes. Concerning the Trustee JPMorgan Chase Bank will be the trustee under the Markel indentures. Markel may borrow money and maintain other banking relationships, in the ordinary course of business, with the trustee and its affiliates. JPMorgan Chase Bank also serves as trustee under other indentures pursuant to which securities of Markel are outstanding. The Markel indentures will, however, contain limitations on the right of the trustee, if it becomes one of our creditors, to obtain payment of claims or to realize on property received for any claim, as security or otherwise. If the trustee acquires any conflicting interest, it must eliminate that conflict or resign. J.P.Morgan Securities Inc., the dealer manager, is an affiliate of JPMorgan Chase Bank, the trustee. The Markel indentures will contain limitations on the rights of the Markel trustee, should it become a creditor of Markel, to obtain payment of claims in some cases or to realize on property received in respect of those claims as security or otherwise. The Markel trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate that conflict within 90 days, apply to the SEC for permission to continue or resign. The holders of a majority in principal amount of the applicable outstanding Markel notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Markel trustee, subject to some exceptions. The Markel indentures will provide that in case an event of default occurs (which is not cured), the Markel trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to those provisions, the Markel trustee will be under no obligation to exercise any of its rights or powers under the Markel indentures at the request of any holder of Markel notes, unless that holder has offered to the Markel trustee security and indemnity satisfactory to it against any loss, liability or expense. Book-Entry System The Markel notes will be represented by one or more global securities. A global security is a special type of indirectly held security. Each global security will be deposited with, or on behalf of, The Depository Trust Company or "DTC" and be registered in the name of a nominee of DTC. Except under the circumstances described below, the Markel notes will not be issued in definitive form in the name of individual holders. Upon the issuance of a global security, DTC will credit on its book-entry registration and transfer system the accounts of persons designated by the exchange agent with the respective principal amounts of the Markel notes represented by the global security. Ownership of beneficial interests in a global security will be limited to DTC participants (that is, persons that have accounts with DTC or its nominee) or persons that may hold interests through DTC participants. Ownership of beneficial interests in a global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (except with respect to persons that are themselves DTC participants). So long as DTC or its nominee is the registered owner of a global security, DTC or the nominee will be considered the sole owner or holder of the Markel notes represented by that global security under the applicable Markel indenture. Except as described below, owners of beneficial interests in a global security will not be entitled to have Markel notes represented by that global security registered in their names, will not receive or be entitled to receive physical delivery of Markel notes in definitive form and will not be considered the owners or holders of the Markel notes under the Markel indentures. Principal and interest payments on Markel notes registered in the name of DTC or its nominee will be made to DTC or the nominee, as the registered owner. Neither Markel, the Markel trustee, any paying agent or the registrar for the Markel notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in a global security or for maintaining, supervising or reviewing any records relating to such beneficial interests. The laws of some states require that some purchasers of securities take physical delivery of securities in definitive form. Those limits and laws may impair the ability to transfer beneficial interests in a global security. We expect that DTC or its nominee, upon receipt of any payment of principal or interest, will credit immediately the participants' accounts with payments in amounts proportionate to their beneficial interests in the principal amount of the relevant global security as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in a global security held through those participants will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of those participants. If DTC is at any time unwilling or unable to continue as a depositary and a successor depositary is not appointed by us within 90 days, we will issue the Markel notes in definitive form in exchange for the entire global security for the 39 Markel notes. In addition, we may at any time choose not to have the Markel notes represented by a global security and will then issue the Markel notes in definitive form in exchange for the entire global security relating to the Markel notes. In any such instance, an owner of a beneficial interest in a global security will be entitled to physical delivery in definitive form of the Markel notes represented by the global security equal in principal amount to that beneficial interest and to have the Markel notes registered in its name. Markel notes so issued in definitive form will be issued as registered Markel notes in denominations of $1,000 and integral multiples thereof, unless otherwise specified by us. Transfer and Exchange Markel has appointed the Markel trustee as security registrar for the Markel notes. Markel will be required to maintain an office or agency for transfers and exchanges in each place of payment. Markel may at any time designate additional transfer agents for the Markel notes or rescind the designation of any transfer agent. In the case of any redemption of the Markel notes, Markel will not be required: . to issue, register the transfer of, or exchange the Markel notes during a period beginning 15 days before the day of mailing of the relevant notice of redemption and ending on the close of business on the day of mailing of the relevant notice of redemption, or . to register the transfer or exchange of a Markel note, or portion of a note, selected for redemption, except for the unredeemed portion of any Markel note we are redeeming in part. Meetings Meetings of holders of Markel notes may be convened on notice: . by the Markel trustee, . by us, if we ask the Markel trustee to call a meeting and it fails to do so, or . by the holders of 10% in principal amount of the Markel notes, if they ask the Markel trustee to call a meeting and it fails to do so. Holders entitled to vote a majority in principal amount of the Markel notes constitute a quorum at any meeting of holders. Except for actions requiring the consent of all holders of the applicable Markel notes affected by the action, any action at a meeting adopted by the holders of a majority in principal amount of the applicable Markel notes (or a lesser percentage required for the action by the applicable Markel indenture) will be binding on all holders of the applicable Markel notes. Notices Notices to holders of the Markel notes will be given by mail to the holder's address as it appears in the security register. Governing Law New York law will govern the Markel indentures and the Markel notes. 40 MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES The following is a discussion of: . the material U.S. federal income tax considerations relating to the exchange offers and consent solicitations and to the ownership and disposition of the Markel notes to initial holders of those securities who are U.S. holders, as described below, and . the material U.S. federal income and estate tax considerations relating to the exchange offers and consent solicitations and to the ownership and disposition of the Markel notes to initial holders of those securities who are non-U.S. holders, as described below. This discussion only addresses tax considerations relevant to holders that hold Terra Nova notes, and will hold Markel notes, as capital assets. This discussion does not address all tax considerations that may be important to you in light of your particular circumstances (such as the alternative minimum tax provisions) or under certain special rules. Special rules may apply, for instance, to: . banks, . tax-exempt organizations, . insurance companies, . dealers in securities or currencies, . persons who hold Terra Nova notes or Markel notes as part of a hedge, conversion or constructive sale transaction, or straddle or other risk reduction transaction, . traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, . persons whose functional currency for tax purposes is not the U.S. dollar, or . persons who have ceased to be United States citizens or to be taxed as resident aliens. This discussion is limited to holders of Markel notes who acquire such securities in connection with the exchange offer. This discussion also does not address the tax consequences arising under the laws of any foreign, state or local jurisdiction. This discussion is based upon the Internal Revenue Code of 1986, as amended (which we refer to as the Internal Revenue Code), its legislative history, existing and proposed U.S. Treasury regulations, and judicial decisions and administrative interpretations thereunder, as of the date hereof, all of which are subject to change or different interpretations, possibly with retroactive effect. We cannot assure you that the Internal Revenue Service will not challenge one or more of the tax results described herein, and we have not obtained, nor do we intend to obtain, a ruling from the Internal Revenue Service with respect to the U.S. federal tax consequences of the exchange offers and consent solicitations and of the ownership and disposition of the Markel notes. Please consult your own tax advisors as to the particular tax consequences to you of the exchange offers and consent solicitations and of the ownership and disposition of the Markel notes, including the effect and applicability of state, local or foreign tax laws. U.S. Holders You are a U.S. holder for purposes of this discussion if you are a beneficial owner of Terra Nova notes or Markel notes that is, for U.S. federal income tax law purposes: . a citizen or resident of the United States, . a corporation organized in or under the laws of the United States or of any political subdivision thereof, . an estate the income of which is subject to U.S. federal income taxation regardless of its source, or . a trust if a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions of the trust. 41 In the case of a holder of Terra Nova notes or Markel notes which is a partnership, the tax consequences will generally affect the partner rather than the partnership, but special considerations not here set forth may apply. Exchange Offers The exchange of Terra Nova notes for Markel notes pursuant to the exchange offers will be a taxable transaction for U.S. federal income tax purposes. Accordingly, if you tender your Terra Nova notes, you will generally recognize gain or loss equal to the difference between the amount realized by you on the exchange and your adjusted basis in the Terra Nova notes. The amount realized by you on the exchange will be the issue price, as defined below, of the Markel notes which you receive; based on the position that Markel intends to take with regard to the consent payments, such payments would also be included in your amount realized. [See "Consent Payments"]. Your gain or loss will generally be capital gain or loss except for gain attributable to accrued market discount, if any. In addition, you will recognize ordinary interest income on the amount of accrued and unpaid interest on the Terra Nova notes which you have not previously included in income. If the Markel notes are publicly traded, within the meaning of the applicable U.S. Treasury regulations, or the Markel notes are not publicly traded but the Terra Nova notes are publicly traded, the issue price of the Markel notes will be the fair market value of such publicly traded notes reduced by the amount of pre-issuance accrued interest on the Markel notes. We believe that the requisite public trading will exist and intend to take this position for all relevant reporting and other purposes. Moreover, we intend to reduce the issue price of the Markel notes by the amount of pre-issuance accrued interest on such notes, and you should also compute the issue price in such manner. See "-- Taxation of Interest." Consent Payments The proper treatment of the consent payments is unclear. However, we intend to take the position that the payments will represent additional consideration received by you in exchange for your Terra Nova notes. You should consult your own tax advisor as to possible alternative treatments of the consent payments. Taxation of Interest Generally, you will be required to include interest received on a Markel note as ordinary income at the time it accrues or is received, in accordance with your regular method of accounting for U.S. federal income tax purposes. However, Markel intends to treat, and you should also treat, a portion of the interest paid on the first payment date as a return of pre-issuance accrued interest that is not taxable and is not income. Discount or Premium If the face amount of any Markel note exceeds the issue price of the note (other than by an amount qualifying for a de minimis exception), the excess will constitute original issue discount. You must include this original issue discount in income as ordinary income as it accrues on the basis of a constant yield to maturity, regardless of the receipt of cash representing that income. Your basis in the Markel notes will be increased by the amount of original issue discount includible in your gross income as it accrues. The excess will qualify for a de minimis exception if it is less than 0.25% of the face amount of a note, multiplied by the number of complete years to maturity. Because we intend to determine the issue price of a note by reference to the fair market value of either the Terra Nova notes or the Markel notes on the exchange date, we cannot know before the exchange date whether any Markel note will have original issue discount. Recent estimates by Markel and Terra Nova indicate that, if the fair market value of the Markel notes and Terra Nova notes were the same on the date of the exchange as on the date when the estimates were made, there would be original issue discount on both Markel notes. If the issue price of a Markel note were to exceed its face amount, you would be considered to have purchased that security with "amortizable bond premium" equal in amount to such excess. You would be able to elect to amortize that premium by offsetting against the interest otherwise required to be included in income in respect of that security during any taxable year the allocable portion of that premium, determined under the constant yield method over the remaining term. In such a case, your basis in the security would be reduced by the amount of bond premium offset against interest. The rules concerning discounts and premiums are complex, and you should consult your tax advisor to determine how, and to what extent, any discount or premium will be included in your income (in the case of any discount) or amortized (in the case of any premium), and as to the desirability, mechanics and consequences of making any elections in connection therewith. 42 Sale, Exchange or Retirement of the Markel Notes With some exceptions, upon the sale, exchange or retirement of a Markel note, you will recognize gain or loss equal to the difference between the sale or redemption proceeds and your adjusted tax basis in that security. Your adjusted tax basis in a Markel note will generally equal your cost for that security, which is the issue price, increased by any accrued original issue discount or decreased by any amortized premium applied to reduce interest on your note during your holding period of the note. Gain or loss realized on the sale, exchange or retirement of a Markel note (except for certain payments of accrued interest, see below) will generally be capital gain or loss and will be long-term capital gain or loss if that security is held for more than one year. You are urged to consult your tax advisors regarding the treatment of capital gains (which may be taxed at lower rates than ordinary income for taxpayers who are individuals) and losses (the deductibility of which is subject to limitations). Payments for accrued interest not previously included in income will be treated as ordinary interest income. Non U.S. Holders You generally are a non-U.S. holder for purposes of this discussion if you are a beneficial owner of Terra Nova notes or Markel notes that is not a U.S. holder, as described above. Exchange Offers You generally will not be subject to U.S. federal income and withholding tax on gain realized on the exchange of Terra Nova notes for Markel notes pursuant to the exchange offers unless: . you are an individual present in the United States for 183 days or more in the year of such exchange and either -- you have a "tax home" in the United States and certain other requirements are met or -- the gain from the exchange is attributable to an office or other fixed place of business maintained by you in the United States, or . the gain is effectively connected with your conduct of a U.S. trade or business. See "-- Income Effectively Connected with U.S. Trade or Business." However, to the extent that disposition proceeds represent interest on the Terra Nova notes accruing between interest payment dates, you will be required to establish an exemption from United States federal income tax. See "-- Taxation of Interest" for a discussion of the requirements of the exemption. Consent Payments The proper treatment of the consent payments is unclear. We intend to take the position that the consent payments are additional consideration in exchange for the Terra Nova notes and therefore would be taken into account in determining the amount of gain or loss on the exchange as described above. You are urged to consult your own tax advisor on this matter, including possible treatment of the consent payments that could result in their being subject to U.S. taxation at a 30% rate, or lower treaty rate, if applicable. Taxation of Interest The payment of interest on a Markel note by us or any paying agent of ours to you will not be subject to U.S. federal income and withholding tax, provided that the interest is not effectively connected with a U.S. trade or business of yours and: . you do not actually or constructively own 10% or more of the total combined voting power of all classes of our shares, . you are not a controlled foreign corporation that is related to us within the meaning of the Internal Revenue Code, and . the U.S. payor does not have actual knowledge or reason to know that you are a U.S. person and either -- the beneficial owner of the Markel note certifies to the applicable payor or its agent, under penalties of perjury, that it is not a U.S. holder and provides its name and address on IRS Form W-8BEN, or a suitable substitute form or -- a securities clearing organization, bank or other financial institution, that holds customers' securities in the ordinary course of its trade or business (a "financial institution") and 43 holds the Markel note, certifies under penalties of perjury that a Form W-8BEN (or a suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy of the form or the U.S. payor otherwise possesses documentation upon which it may rely to treat the payment as made to a non-U. S. person in accordance with U.S. Treasury regulations. If that interest is effectively connected with a U.S. trade or business of yours, see "-- Income Effectively Connected with U.S. Trade or Business." Payments made to a non-U.S. holder which are attributable to original issue discount will generally be treated in the same manner as payments of interest, as just described. A portion of the first payment of stated interest made by us on the Markel notes will represent pre-issuance interest in the amount of interest on the Terra Nova notes which was accrued and unpaid on the date of the exchange. This payment will be treated as a payment by us and subject to the same U.S. federal withholding tax rules and exemptions applicable to interest payments, as described above. Gain on Disposition of the Markel Notes You generally will not be subject to U.S. federal income and withholding tax on gain realized on the sale, exchange or redemption of a Markel note unless: . you are an individual present in the United States for 183 days or more in the year of such sale, exchange or redemption and either -- you have a "tax home" in the United States and other requirements are met or -- the gain from the disposition is attributable to an office or other fixed place of business maintained by you in the United States, or . the gain is effectively connected with your conduct of a U.S. trade or business. See "-- Income Effectively Connected with U.S. Trade or Business." However, to the extent that disposition proceeds represent either interest accruing between interest payment dates or original issue discount accruing while you held the Markel note, you may be required to establish an exemption from United States federal income and withholding tax. See "-- Taxation of Interest." Income Effectively Connected with U.S. Trade or Business Except to the extent otherwise provided under an applicable tax treaty, you generally will be taxed in the same manner as a U.S. holder with respect to income or gain on a Markel note or Terra Nova note if such income or gain is effectively connected with a U.S. trade or business of yours. Effectively connected income received or gain realized by a corporate non-U.S. holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate), subject to certain adjustments. This effectively connected income or gain will not be subject to withholding tax if the holder delivers the appropriate form, currently IRS Form W-8ECI, to the payor. U.S. Federal Estate Tax A Markel note held by an individual who at the time of death is not a citizen or resident of the United States, as specially defined for U.S. federal estate tax purposes, will not be subject to U.S. federal estate tax if: . the individual did not own 10% of Markel's voting stock at the time of death, and . the income on the Markel note was not connected to a United States business of the individual at the time of death. Backup Withholding and Information Reporting U.S. Holders Consent payments and interest payments made on, or the proceeds of the sale or other disposition of, the Terra Nova notes or Markel notes may be subject to information reporting and U.S. federal backup withholding tax (currently at the rate of 30%) if the recipient of those payments fails to supply an accurate taxpayer identification number or otherwise fails to comply with applicable United States information reporting or certification requirements. Any 44 amount withheld from a payment to a U.S. holder under the backup withholding rules is allowable as a credit against the holder's federal income tax, provided that the required information is furnished to the IRS. Non-U.S. Holders In general, backup withholding and information reporting will not apply to consent payments and interest payments made on, or the proceeds of the sale or other disposition of, the Terra Nova notes or Markel notes if the holder establishes by providing a certificate or, in some cases, by providing other evidence, that the holder is not a U.S. person. Additional exemptions are available for certain payments made outside the United States. Non-U.S. holders of Terra Nova notes or Markel notes are urged to consult their tax advisers regarding the application of information reporting and backup withholding in their particular situations, the availability of exemptions, and the procedure for obtaining such an exemption, if available. Any amount withheld from a payment to a non-U.S. holder under the backup withholding rules will be allowable as a credit against the holder's U.S. federal income tax, provided that the required information is furnished to the IRS. Holders Not Tendering in an Exchange Offer Although the matter is not entirely free from doubt, if you do not elect to exchange your Terra Nova notes for Markel notes pursuant to the exchange offers, the proposed modifications to the Terra Nova notes should not be treated as a taxable exchange of the Terra Nova notes for new Terra Nova notes. See "The Proposed Amendments." VALIDITY OF NOTES Certain legal matters in connection with the Markel notes offered in the exchange offers will be passed upon for us by McGuireWoods LLP, Richmond, Virginia. Leslie A. Grandis, a partner in McGuireWoods LLP, is Secretary and a member of the Board of Directors of Markel. As of April 11, 2002, partners of McGuireWoods LLP owned 20,631 of our common shares, or less than 1% of our common shares outstanding on that date. The validity of the Markel notes offered in the exchange offers will be passed upon for the dealer manager by Sullivan & Cromwell. EXPERTS The consolidated financial statements of Markel Corporation and subsidiaries as of December 31, 2001 and 2000 and for each of the years in the three-year period ended December 31, 2001 have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent accountants, incorporated by reference herein, and upon the authority of that firm as experts in accounting and auditing. The consolidated financial statements and schedules of Terra Nova (Bermuda) Holdings Ltd. and subsidiaries as of December 31, 2001 and 2000 and for each of the years in the two-year period ended December 31, 2001 have been incorporated by reference herein in reliance upon the report of KPMG Audit plc, independent accountants, incorporated by reference herein, and upon the authority of that firm as experts in accounting and auditing. The consolidated financial statements and schedules of Terra Nova (Bermuda) Holdings Ltd. and subsidiaries for the year ended December 31, 1999 have been incorporated by reference herein in reliance upon the report of PricewaterhouseCoopers, independent accountants, incorporated by reference herein, and upon the authority of that firm as experts in accounting and auditing. 45 In order to tender, a holder of Terra Nova notes should send or deliver a properly completed and signed letter of transmittal and consent and any other required documents to the exchange agent at its address set forth below or tender pursuant to DTC's Automated Tender Offer Program. The exchange agent for the exchange offers and consent solicitations is: By Mail: By Hand: By Overnight Delivery: JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank 55 Wator Street 55 Wator Street 55 Wator Street Room 234, North Building Room 234, North Building Room 234, North Building New York, New York 10041 New York, New York 10041 New York, New York 10041 Attention: Victor Matis Attention: Victor Matis Attention: Victor Matis By Facsimile Transmission: (212) 638-7875 (For Eligible Institutions only) Confirm facsimile by telephone only: (212) 638-0459 Any questions or requests for assistance or for additional copies of this prospectus and consent solicitation statement, the letter of transmittal and consent or related documents may be directed to the information agent at the telephone numbers listed below. You may also contact the dealer manager at their telephone number set forth below or your custodian bank, depositary, broker, trust company or other nominee for assistance concerning the exchange offers and consent solicitations. The information agent for the exchange offers and consent solicitations is: Mackenzie Partners, Inc. Attn: Toll Free: Banks and brokers: The dealer manager for the exchange offers and consent solicitations are: JPMorgan 270 Park Avenue, 8/th/ Floor New York, NY 10017 Toll Free: (866) 839-4666 46 PART II Information Not Required In The Prospectus Item 20. Indemnification of Directors And Officers. Virginia law provides that, unless limited by its articles of incorporation, a corporation shall indemnify a director or officer who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director or officer of the corporation against reasonable expenses incurred by him in connection with the proceeding. Virginia law permits a corporation to indemnify, after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the following standard of conduct, an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: . he conducted himself in good faith; . he believed in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests and in all other cases that his conduct was at least not opposed to its best interests; and . in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. A Virginia corporation, however, may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation or in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. In addition, Virginia law permits a corporation to make any further indemnify, including indemnity with respect to a proceeding by or in the right of the corporation, and to make additional provision for advances and reimbursement of expenses, to any director, officer, employee or agent that may be authorized by the articles of incorporation or any bylaw made by the shareholders or any resolution adopted by the shareholders, except an indemnity against his willful misconduct or a knowing violation of the criminal law. Our Articles of Incorporation provide mandatory indemnification of officers and directors to the full extent permitted by Virginia law. We maintain directors' and officers' liability insurance which may provide indemnification, including indemnification against liabilities under the Securities Act of 1933 as amended, to our officers and directors in certain circumstances. II-1 Limitations on Director Liability Virginia law provides that a director is not liable to the corporation, its shareholders, or any person asserting rights on behalf of the corporation or its shareholders for liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as director, unless the person asserting liability proves that the breach or failure to perform was in violation of the director's duty to discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith business judgment of the best interests of the corporation, provided, that the director, unless he has knowledge or information concerning the matter in question that makes reliance unwarranted, is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by: . one or more officers or employees of the corporation whom the director believes, in good faith, to be reliable and competent in the matters presented; . legal counsel, public accountants, or other persons as to matters the director believes, in good faith, are within the person's professional or expert competence; or . a committee of the board of directors of which he is not a member if the director believes, in good faith, that the committee merits confidence. In addition, Virginia law provides that in any proceeding brought by or in the right of a corporation or brought by or on behalf of shareholders of the corporation, the damages assessed against an officer or director arising out of a single transaction, occurrence or course of conduct shall not exceed the lesser of: . the monetary amount, including the elimination of liability, specified in the articles of incorporation or, if approved by the shareholders, in the bylaws; or . the greater of $100,000 or the amount of cash compensation received by the officer or director from the corporation during the twelve months immediately preceding the act or omission for which liability was imposed. Our articles of incorporation provide for the elimination of liability of officers and directors in every instance permitted under Virginia law. The liability of an officer or director is not limited if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any federal or state securities law, including any claim of unlawful insider trading or manipulation of the market for any security. Item 16. Exhibits And Financial Statement Schedules. The following instruments and documents are included as Exhibits to this Registration Statement. Exhibits incorporated by reference are indicated below. II-2 NO. DESCRIPTION OF EXHIBITS - --- ----------------------- **1.1 Form of Dealer Manager Agreement between Markel Corporation and J.P. Morgan Securities Inc. 3.1 Amended and Restated Articles of Incorporation of Markel Corporation (incorporated by reference to Exhibit 3(i) of Markel's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000) 3.2 Bylaws of Markel Corporation (incorporated by reference to Exhibit 4.2 of Markel's Registration Statement on Form S-4 filed as of October 7, 1999 (Registration No. 333-88609)) 4.1 Indenture, dated August 26, 1997, among Terra Nova Insurance (UK) Holdings Plc ("Terra Nova"), Terra Nova Bermuda Holdings Ltd. ("Bermuda Holdings"), and The Chase Manhattan Bank, as Trustee. (Filed as Exhibit 4.1 to the Terra Nova's Registration Statement on Form F-4/S-4, Registration No. 333-38063 and incorporated herein by reference) 4.2 Indenture, dated May 18, 1998, among Terra Nova, Bermuda Holdings, The Chase Manhattan Bank, as Trustee. (Filed as Exhibit 4.2 to the Terra Nova's Registration Statement on Form F-4/S-4, Registration No. 333-53999 and incorporated herein by reference) *4.10 Form of Indenture between Markel Corporation and The Chase Manhattan Bank, as trustee, relating to the 7.2% Notes *4.11 Form of Indenture between Markel Corporation and The Chase Manhattan Bank, as trustee, relating to the 7.0% Notes *4.12 Form of First Supplemental Indenture, among Terra Nova, Bermuda Holdings, The Chase Manhattan Bank, as Trustee, amending the Indenture dated August 26, 1997 *4.13 Form of First Supplemental Indenture, among Terra Nova, Bermuda Holdings, The Chase Manhattan Bank, as Trustee, amending the Indenture dated May 18, 1998 *5.1 Opinion of McGuireWoods LLP regarding the legality of the securities *8.1 Opinion of McGuireWoods LLP regarding material U.S. federal income tax consequences *12.1 Markel statement of computation of ratio of earnings to fixed charges II-3 *12.2 Bermuda Holdings statement of computation of ratio of earnings to fixed charges *23.1 Consent of KPMG LLP *23.2 Consent of KPMG Audit plc *23.3 Consent of PricewaterhouseCoopers LLP *23.4 Consent of McGuireWoods LLP (included in Exhibits 5.1 and 8.1) *24 Powers of Attorney *25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank, as trustee *99.1 Form of Letter of Transmittal *99.2 Form of Letter to Depository Trust Company Participants *99.3 Form of Letter to Beneficial Owners __________________________________ ** To be filed by amendment. * Filed herewith. (B) FINANCIAL STATEMENT SCHEDULES Not applicable. ITEM 22. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration II-4 statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless, in the opinion of its counsel, the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (e) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Markel Corporation certifies that it has reasonable ground to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Richmond, State of Virginia, on April 12, 2002. MARKEL CORPORATION By: /s/ DARRELL D. MARTIN -------------------------- Darrell D. Martin Title: [Executive Vice President and Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer)]
Signature Title - ------------------------------------ ------------------------------------------------- /s/ ALAN I. KIRSHNER* Director, Chairman and Chief Executive - ------------------------------------ Officer (Principal Executive Officer) Alan I. Kirshner /s/ ANTHONY F. MARKEL* President, Director - ------------------------------------ Anthony F. Markel /s/ STEVEN A. MARKEL* Vice-Chairman, Director - ------------------------------------ Steven A. Markel /s/ DARRELL D. MARTIN* Director, Executive Vice President and - ------------------------------------ Chief Financial Officer (Principal Financial Darrell D. Martin Officer, Principal Accounting Officer) /s/ MARK J. BYRNE* Director - ------------------------------------ Mark J. Byrne /s/ DOUGLAS C. EBY* Director - ------------------------------------ Douglas C. Eby /s/ LESLIE A. GRANDIS* Director - ------------------------------------ Leslie A. Grandis
II-6 /s/ STEWART M. KASEN* Director - -------------------------------------------- Stewart M. Kasen /s/ GARY L. MARKEL* Director - -------------------------------------------- Gary L. Markel /s/ THOMAS S. GAYNER* Director - -------------------------------------------- Thomas S. Gayner *By: /s/ GREGORY B. NEVERS --------------------------------------- Gregory B. Nevers Attorney-in-fact II-7 Exhibit Index NO. DESCRIPTION OF EXHIBITS - --- ----------------------- *1.1 Form of Dealer Manager Agreement between Markel Corporation and J.P. Morgan Securities Inc. 3.1 Amended and Restated Articles of Incorporation of Markel Corporation (incorporated by reference to Exhibit 3(i) of Markel's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000) 3.2 Bylaws of Markel Corporation (incorporated by reference to Exhibit 4.2 of Markel's Registration Statement on Form S-4 filed as of October 7, 1999 (Registration No. 333-88609)) 4.1 Indenture, dated August 26, 1997, among Terra Nova Insurance (UK) Holdings Plc ("Terra Nova"), Terra Nova Bermuda Holdings Ltd. ("Bermuda Holdings"), and The Chase Manhattan Bank, as Trustee. (Filed as Exhibit 4.1 to the Issuer's Registration Statement on Form F-4/S-4, Registration No. 333-38063 and incorporated herein by reference) 4.2 Indenture, dated May 18, 1998, among Terra Nova, Bermuda Holdings, The Chase Manhattan Bank, as Trustee. (Filed as Exhibit 4.2 to the Terra Nova's Registration Statement on Form F-4/S-4, Registration No. 333-53999 and incorporated herein by reference) *4.10 Form of Indenture, between Markel Corporation and The Chase Manhattan Bank, as trustee, relating to the 7.2% Notes *4.11 Form of Indenture, between Markel Corporation and The Chase Manhattan Bank, as trustee, relating to the 7.0% Notes *4.12 Form of First Supplemental Indenture, among Terra Nova, Bermuda Holdings,The Chase Manhattan Bank, as Trustee, amending the Indenture ated August 26,1997 *4.13 Form of First Supplemental Indenture, among Terra Nova, Bermuda Holdings,The Chase Manhattan Bank, as Trustee, amending the Indenture dated May 18, 1998 *5.1 Opinion of McGuireWoods LLP regarding the legality of the securities *8.1 Opinion of McGuireWoods LLP regarding material U.S. federal income tax consequences *12.1 Markel statement of computation of ratio of earnings to fixed charges II-8 *12.2 Bermuda Holdings statement of computation of ratio of earnings to fixed charges *23.1 Consent of KPMG LLP 23.2 Consent of KPMG Audit plc *23.3 Consent of PricewaterhouseCoopers LLP *23.4 Consent of McGuireWoods LLP (included in Exhibits 5.1 and 8.1) *24 Powers of Attorney *25.1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank, as trustee *99.1 Form of Letter of Transmittal *99.2 Form of Letter to Depository Trust Company Participants *99.3 Form of Letter to Beneficial Owners ________________________________ ** To be filed by amendment. * Filed herewith. II-9 EX-4.10 3 dex410.txt FORM OF INDENTURE -------------- MARKEL CORPORATION, as Issuer and JPMORGAN CHASE BANK, as Trustee ___________________ INDENTURE Dated as of May __, 2002 ___________________ 7.2% Senior Notes due 2007 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ........................................... 6 Section 1.1 Definitions ....................................................................... 6 Section 1.2 Other Definitions ................................................................. 15 Section 1.3 Compliance Certificates and Opinions .............................................. 15 Section 1.4 Form of Documents Delivered to Trustee ............................................ 16 Section 1.5 Acts of Holders ................................................................... 16 Section 1.6 Notices, etc., to Trustee and the Issuer .......................................... 17 Section 1.7 Notice to Holders; Waiver. ........................................................ 18 Section 1.8 Conflict of Any Provision of Indenture with Trust Indenture Act ................... 18 Section 1.9 Effect of Headings and Table of Contents .......................................... 18 Section 1.10 Successor and Assigns ............................................................. 19 Section 1.11 Separability Clause ............................................................... 19 Section 1.12 Benefits of Indenture ............................................................. 19 Section 1.13 Governing Law ..................................................................... 19 Section 1.14 Legal Holidays .................................................................... 19 Section 1.15 No Recourse Against Others ........................................................ 19 ARTICLE II ...................................................................................... 20 THE SENIOR NOTES .................................................................................. 20 Section 2.1 Form and Dating ................................................................... 20 Section 2.2 Execution and Authentication ...................................................... 22 Section 2.3 Senior Note Registrar and Paying Agent ............................................ 22 Section 2.4 Paying Agent To Hold Money in Trust ............................................... 23 Section 2.5 Senior Note Holder Lists .......................................................... 24 Section 2.6 Transfer and Exchange ............................................................. 25 Section 2.7 Replacement Securities ............................................................ 28 Section 2.8 Outstanding Securities ............................................................ 29 Section 2.9 Temporary Senior Notes ............................................................ 29 Section 2.10 Cancellation ...................................................................... 29 Section 2.11 Interest; Defaulted Interest ...................................................... 29 Section 2.12 CUSIP and CINS Numbers ............................................................ 30 ARTICLE III ....................................................................................... 30 SATISFACTION AND DISCHARGE ........................................................................ 30 Section 3.1 Satisfaction and Discharge of Indenture ........................................... 30 Section 3.2 Application of Trust Money ........................................................ 31 ARTICLE IV ........................................................................................ 32 DEFAULTS AND REMEDIES ............................................................................. 32
2 Section 4.1 Events of Default .......................................................................... 32 Section 4.2 Acceleration of Maturity; Rescission ....................................................... 33 Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee ............................ 34 Section 4.4 Trustee May File Proofs of Claim ........................................................... 35 Section 4.5 Trustee May Enforce Claims Without Possession of Senior Notes .............................. 35 Section 4.6 Application of Money Collected ............................................................. 36 Section 4.7 Limitation on Suits ........................................................................ 36 Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest .................. 37 Section 4.9 Restoration of Rights and Remedies ......................................................... 37 Section 4.10 Rights and Remedies Cumulative ............................................................. 37 Section 4.11 Delay or Omission Not Waiver ............................................................... 37 Section 4.12 Control by Holders ......................................................................... 37 Section 4.13 Waiver of Defaults ......................................................................... 38 Section 4.14 Undertaking for Costs ...................................................................... 38 ARTICLE V .................................................................................................. 39 THE TRUSTEE ................................................................................................ 39 Section 5.1 Notice of Events of Default ................................................................ 39 Section 5.2 Certain Rights of Trustee .................................................................. 39 Section 5.3 Not Responsible for Recitals or Issuance of Senior Notes ................................... 41 Section 5.4 Trustee and Agents May Hold Senior Notes; Collections; etc ................................. 41 Section 5.5 Money Held in Trust ........................................................................ 41 Section 5.6 Compensation and Reimbursement ............................................................. 41 Section 5.7 Conflicting Interests ...................................................................... 42 Section 5.8 Corporate Trustee Required; Eligibility .................................................... 42 Section 5.9 Resignation and Removal; Appointment of Successor .......................................... 43 Section 5.10 Acceptance of Appointment by Successor ..................................................... 44 Section 5.11 Merger, Conversion, Consolidation or Succession to Business ................................ 45 Section 5.12 Preferential Collection of Claims Against the Issuer ....................................... 45 ARTICLE VI ................................................................................................. 45 HOLDERS' LISTS AND REPORTS BY TRUSTEE ...................................................................... 45 Section 6.1 Disclosure of Names and Addresses of Holders ............................................... 45 Section 6.2 Reports by Trustee ......................................................................... 46 ARTICLE VII ................................................................................................ 46 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ....................................................... 46 Section 7.1 Issuer May Consolidate, etc., Only on Certain Terms ........................................ 46 Section 7.2 Successor Substituted ...................................................................... 47 ARTICLE VIII ............................................................................................... 47 SUPPLEMENTAL INDENTURES .................................................................................... 47 Section 8.1 Supplemental Indentures Without Consent of Holders ......................................... 47 Section 8.2 Supplemental Indentures with Consent of Holders ............................................ 48 Section 8.3 Execution of Supplemental Indentures ....................................................... 48 Section 8.4 Effect of Supplemental Indentures .......................................................... 49
3 Section 8.5 Conformity with Trust Indenture Act ............................... 49 Section 8.6 Reference in Senior Notes to Supplemental Indentures .............. 49 ARTICLE IX ........................................................................ 49 COVENANTS ......................................................................... 49 Section 9.1 Payment of Principal, Premium and Interest ........................ 49 Section 9.2 Corporate Existence ............................................... 49 Section 9.3 Payment of Taxes and Other Claims ................................. 50 Section 9.4 Maintenance of Properties ......................................... 50 Section 9.5 [Intentionally Omitted] ........................................... 50 Section 9.6 [Intentionally Omitted] ........................................... 50 Section 9.7 [Intentionally Omitted] ........................................... 50 Section 9.8 Liens ............................................................. 50 Section 9.9 [Intentionally Omitted] ........................................... 50 Section 9.10 [Intentionally Omitted] ........................................... 50 Section 9.11 [Intentionally Omitted] ........................................... 51 Section 9.12 [Intentionally Omitted] ........................................... 51 Section 9.13 [Intentionally Omitted] ........................................... 51 Section 9.14 [Intentionally Omitted] ........................................... 51 Section 9.15 [Intentionally Omitted] ........................................... 51 Section 9.16 [Intentionally Omitted] ........................................... 51 Section 9.17 Withholding Tax ................................................... 51 Section 9.18 Statement as to Compliance ........................................ 51 Section 9.19 [Intentionally Omitted] ........................................... 51 Section 9.20 Waiver of Certain Covenants ....................................... 51 ARTICLE X ......................................................................... 51 REDEMPTION OF SENIOR NOTES ........................................................ 51 Section 10.1 Right of Redemption ............................................... 52 Section 10.2 Applicability of Article .......................................... 52 Section 10.3 Election to Redeem; Notice to Trustee ............................. 52 Section 10.4 Selection by Trustee of Senior Notes to Be Redeemed ............... 52 Section 10.5 Notice of Redemption .............................................. 52 Section 10.6 Deposit of Redemption Price ....................................... 53 Section 10.7 Senior Notes Payable on Redemption Date ........................... 54 Section 10.8 Senior Notes Redeemed in Part ..................................... 54 Section 10.9 Optional Redemption ............................................... 54 ARTICLE XI ........................................................................ 55 DEFEASANCE AND COVENANT DEFEASANCE ................................................ 55 Section 11.1 Option to Effect Defeasance or Covenant Defeasance ................ 55 Section 11.2 Defeasance and Discharge .......................................... 55 Section 11.3 Covenant Defeasance ............................................... 56 Section 11.4 Conditions to Defeasance or Covenant Defeasance ................... 56
4 Section 11.5 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions ..................................................................... 58 Section 11.6 Reinstatement ................................................................... 58 ARTICLE XII................................................................................... 59 MEETINGS OF HOLDERS OF SENIOR NOTES........................................................... 59 Section 12.1 Purposes For Which Meetings may be Called........................................ 59 Section 12.2 Call, Notice and Place of Meetings............................................... 59 Section 12.3 Persons Entitled to Vote at Meetings............................................. 59 Section 12.4 Quorum; Action................................................................... 59 Section 12.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.............. 60 Section 12.6 Counting Votes and Recording Action of Meetings.................................. 61
EXHIBITS Exhibit A Form of Global Note Exhibit B Form of Definitive Senior Note 5 INDENTURE, dated as of May __, 2002, between Markel Corporation, a Virginia corporation (hereinafter called the "Issuer"), and JPMorgan Chase Bank, a New York banking corporation, as trustee (hereinafter called the "Trustee"). RECITALS WHEREAS, the Issuer has duly authorized the issue of its 7.2% Senior Notes due 2007 (hereinafter called the "Senior Notes") in an aggregate principal amount not to exceed $75,000,000, such Senior Notes to be issued in connection with the exchange of certain 7.2% Senior Notes due 2007 issued by Markel International Limited pursuant to an indenture dated as of August 26, 1997 (the "Terra Nova Exchange Offer"), all as more particularly described in the Offers to Exchange and Consent Solicitation and related Letter of Transmittal dated April __, 2002; WHEREAS, to provide the terms and conditions upon which the Senior Notes are to be authenticated, issued and delivered, the Issuer has duly authorized the execution and delivery of this Indenture; WHEREAS, all acts and things necessary have been done to make the Senior Notes, when executed by the Issuer and authenticated and delivered hereunder and duly issued by the Issuer, the valid, binding and legal obligations of the Issuer, and to make this Indenture a valid agreement of the Issuer in accordance with its terms; NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the consummation of the Terra Nova Exchange Offer, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Senior Notes, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article I have the meanings assigned to them in this Article 1 and include the plural as well as the singular 6 (a) the terms defined in this Article 1 have the meanings assigned to them in this Article 1 and include the plural as well as the singular; (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (e) all references to "$" or "dollars" shall refer to the lawful currency of the United States of America; (f) the words "include," "included" and "including" as used herein shall be deemed in each case to be followed by the phrase "without limitation", if not expressly followed by such phrase or the phrase "but not limited to"; (g) any reference to a Section or Article refers to such Section or Article of this Indenture unless otherwise indicated. Certain terms used principally in Articles 2, 9, and 11 are defined in those Articles. "Adjusted Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, calculated on the third Business Day preceding the Redemption Date, plus in each case .20%. "Affiliate" means, with respect to any specified Person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person (except in cases where substantially all of the control that would ordinarily be exercisable by virtue of ownership of stock, other than the election of directors, has been eliminated by applicable regulatory authorities). For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Note or beneficial interest therein, the rules and procedures of the Depositary for such 7 Global Note, in each case to the extent applicable to such transaction and as in effect from time to time. "Board of Directors" means the board of directors of the Issuer or any duly authorized committee of such board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to close. "Capital Stock" of any Person means any and all shares, interests, participation or other equivalents (however designated) of such Person's capital stock and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase the foregoing whether now outstanding or issued after the date hereof. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to the Stated Maturity Date of the Senior Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Senior Notes. "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any successor release) is not published or does not contain such prices on such Business Day, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations. 8 "Consolidated Subsidiary" means, at any date, with respect to any Person, any Subsidiary or other entity the accounts of which are consolidated with those of such Person in the consolidated financial statements of such Person as of such date in accordance with generally accepted accounting principles. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "Corporation" includes corporations, associations, partnerships, companies and business trusts. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Definitive Senior Note" means any Senior Note substantially in the form of Exhibit B to this Indenture issued in accordance with this Indenture. "Depositary" means, with respect to the Global Notes, DTC and any nominee thereof, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include such successor and any nominee thereof. "DTC" means The Depository Trust Company. "Event of Default" has the meaning specified in Article 4. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United States Code, as amended from time to time. "Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, consistently applied, as in effect from time to time. "Global Note" means the Global Note substantially in the form of Exhibit A to this Indenture. 9 "Holder" means in the case of any Senior Note, the Person in whose name such Senior Note is registered in the Senior Note Register. "Indenture" means this instrument as originally executed (including all exhibits and schedules hereto) and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Senior Notes. "Issue Date" means the date on which Senior Notes are originally issued under this Indenture. "Issuer" means the Person named as the "Issuer" in the first paragraph of this instrument, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Issuer" shall mean such successor Person. To the extent necessary to comply with the requirements of the provisions of Sections 310 through 317 of the Trust Indenture Act as they are applicable to the Issuer, the term "Issuer" shall include any other obligor with respect to the Senior Notes for the purposes of complying with such provisions. "Lien" means any mortgage, charge, pledge, lien, security interest or other encumbrance of any kind. "Make-Whole Amount" means, in connection with any optional redemption of any Senior Notes, the excess, if any, of (i) the sum, as determined by a Quotation Agent of the present values of the principal amount of such Senior Notes, together with scheduled payments of interest from the redemption date to the Stated Maturity of the Senior Notes, in each case discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, over (ii) 100% of the principal amount of the Senior Notes to be redeemed. "Material Subsidiary" means, at any date, any Consolidated Subsidiary of the Issuer whose total assets after excluding intercompany accounts, are in excess of 10% of the total assets of the Issuer and its Consolidated Subsidiaries, with any determination being made as at the end of the most recently completed fiscal year for which consolidated financial statements have been prepared except to the extent that on such date the principal financial officers of the Issuer have actual reason to know to the contrary. "Maturity" when used with respect to any Senior Note means the date on which the principal of (and premium, if any) and interest on such Senior Note becomes due and payable as 10 therein provided, whether at Stated Maturity or redemption date and whether by declaration of acceleration call for redemption or otherwise. "Obligation" means indebtedness for money borrowed or indebtedness evidenced by a bond, note, debenture or other evidence of indebtedness. "Officer" means the Chairman of the Board and Chief Executive Officer, the President and Chief Operating Officer, the Vice Chairman, or the Executive Vice President and Chief Financial Officer of the Issuer. "Officers' Certificate" means a certificate signed by (1) the Chairman, a Vice Chairman, the President, a Vice President, or the Treasurer of the Issuer, and (2) the Secretary or an Assistant Secretary of the Issuer and delivered to the Trustee; provided, however, that such certificate may be signed by two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2) above. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Issuer. Each such opinion shall include the statements provided for in Section 314(e) of the Trust Indenture Act to the extent applicable. "Order" means a written order signed in the name of the Issuer (1) by its Chairman, a Vice Chairman, its President, a Vice President or its Treasurer and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2) above. "Outstanding" when used with respect to the Senior Notes means, as of the date of determination, all Senior Notes theretofore authenticated and delivered under this Indenture, except:(1) Senior Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (2) Senior Notes, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer) in trust or set aside and segregated in trust by the Issuer (if the Issuer shall act as its own Paying Agent) for the Holders of such Senior Notes; provided that, if such Senior Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Senior Notes, except to the extent provided in Section 11.2 and Section 11.3, with respect to which the Issuer has effected defeasance or covenant defeasance as provided in Article 11; and (4) Senior Notes in exchange for or in lieu of which other Senior Notes have been authenticated and delivered pursuant to this Indenture, other than any such Senior Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Senior Notes are held by a protected purchaser in whose hands the Senior Notes are valid obligations of the Issuer; provided, however, that, in 11 determining whether the Holders of the requisite principal amount of Outstanding Senior Notes have given any request, demand, authorization, notice, direction, consent or waiver hereunder, Senior Notes owned by the Issuer, any other obligor upon the Senior Notes or any Affiliate of the Issuer or such other obligor shall be disregarded and deemed not to be Outstanding solely for purposes of such determination, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, notice, direction, consent or waiver, only Senior Notes which the Trustee knows to be so owned shall be so disregarded. Senior Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Senior Notes and that the pledgee is not the Issuer or any other obligor upon the Senior Notes or any Affiliate of the Issuer or such other obligor. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture, association, joint stock company, trust, fund, unincorporated organization or government or any agency or political subdivision thereof. "Purchase Money Lien" means (i) any mortgage, pledge, hypothecation, lien, encumbrance, charge or security interest of any kind upon any capital stock of any Restricted Subsidiary acquired after the date hereof if such Purchase Money Lien is for the purpose of financing, and does not exceed, the cost to the Issuer or any Subsidiary of acquiring the capital stock or property of such Restricted Subsidiary and such financing is effected concurrently with, or within six months after, the date of such acquisition, and (ii) any extension, renewal or refinancing of any Purchase Money Lien so long as the principal amount of obligations secured thereby shall not exceed the original principal amount of obligations so secured at the time of such extension, renewal or refinancing. "Quotation Agent" means the Reference Treasury Dealer appointed by the Issuer. "Redemption Date", when used with respect to any Senior Notes to be redeemed, means the date fixed for such redemption pursuant to this Indenture. "Redemption Price", when used with respect to any Senior Notes to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Reference Treasury Dealer" means, at any time, (i) a primary U.S. Government securities dealer in New York City selected by the Issuer, and its respective successors ("Issuer Selected Dealer") and two additional Primary Treasury Dealers (as defined below) selected by the Issuer Selected Dealer; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Issuer Selected Dealer will substitute therefor another Primary Treasury Dealer unless the Issuer Selected Dealer has ceased to be a Primary Treasury Dealer in which case the Issuer shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer 12 selected by the Indenture Trustee after consultation with the Issuer, it being understood that the Trustee shall under no circumstances have any duty or responsibility to select any such other Primary Treasury Dealer, and should it select such Primary Treasury Dealer, shall have no liability for any such selection, except for its gross negligence or bad faith, in selecting such Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any prepayment date, the arithmetic average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) furnished in writing to the Indenture Trustee by such Quotation Agent at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. "Regular Record Date" for the interest payable on any Interest Payment Date means the January 31 or July 31 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Request" means a written request signed in the name of the Issuer (1) by its Chairman, a Vice Chairman, its President, a Vice President or its Treasurer and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2)above. "Responsible Officer" when used with respect to the Trustee, means any officer assigned to the Corporate Trust Administration of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Subsidiary" means any Subsidiary that is a licensed insurance company. "Securities Act" means the Securities Act of 1933, as amended. "Senior Notes" means (a) the Global Notes, substantially in the form of Exhibit A to this Indenture or (b) the Definitive Senior Notes, substantially in the form of Exhibit B to this Indenture, issued in accordance with this Indenture. For purposes of this Indenture, all Senior Notes shall vote as one series of Senior Notes under this Indenture. 13 "Special Record Date" means a date fixed by the Trustee for the payment of any defaulted Interest. "Stated Maturity" means, when used with respect to any indebtedness or any installment of principal or of interest thereon, the date specified in such indebtedness as the fixed date on which the principal of such indebtedness or such installment of principal or of interest is due and payable. "Subsidiary" means any Person, a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by the Issuer or by one or more other Subsidiaries, or by the Issuer and one or more other Subsidiaries. "Terra Nova Exchange Offer" shall have the meaning assigned to such term in the first recital to this indenture. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. "Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). 14 Section 1.2 Other Definitions. Defined in Term Section ---- ------- "Act" ................................................................ 1.5 "Agent Members" ...................................................... 2.6 "Covenant Defeasance" ................................................ 11.2 "Defaulted Interest" ................................................. 2.11 "Defeasance" ......................................................... 11.2 "Incorporated Provision" ............................................. 1.8 "Notice of Default" .................................................. 4.1 "Senior Note Register" ............................................... 2.5 "Senior Note Registrar" .............................................. 2.3 "Surviving Entity" ................................................... 7.1 Section 1.3 Compliance Certificates and Opinions. Upon any application or request by the Issuer to the Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel such action is authorized or permitted by this Indenture and that all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion (other than the certificates required by Section 9.18(a)) with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; 15 (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.4 Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which the certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Issuer stating that the information with respect to such factual matters is in the possession of the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.5 Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such request, demand, authorization, direction, notice, consent, waiver or other action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the request, demand, authorization, direction, notice, consent, waiver or other action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 315 of 16 the Trust Indenture Act) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient. (c) The ownership of Senior Notes shall be proved by the Senior Note Register. (d) If the Issuer shall solicit from the Holders of Senior Notes any request, demand, authorization, direction, notice, consent, waiver or other Act, the Issuer may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of such Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Issuer shall have no obligation to do so. Notwithstanding Section 316(c) of the Trust Indenture Act, any such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not more than 30 days prior to the first solicitation of Holders generally in connection therewith and no later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record of Senior Notes at the close of business on such record date shall be deemed to be Holders of Senior Notes for the purposes of determining whether Holders of the requisite proportion of Senior Notes then outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Senior Notes then outstanding shall be computed as of such record date; provided that no such request, demand, authorization, direction, notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Senior Notes shall bind every future Holder of the same Senior Notes or the Holder of every Senior Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to be done by the Trustee, any Paying Agent or the Issuer in reliance thereon, whether or not notation of such action is made upon such Senior Notes. Section 1.6 Notices, etc., to Trustee and the Issuer. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with (a) the Trustee by any Holders, any representative or the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or delivered in writing or mailed, first-class postage prepaid, or by facsimile, to or with the Trustee at its Corporate Trust Office at 450 West 33rd Street, 15th Floor, 17 New York, New York 10001, Attention: Institutional Trust Services, facsimile number (212) 946-8154; or (b) the Issuer by the Trustee, any representative or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing or mailed, first-class postage prepaid, or by facsimile, to the Issuer at 4521 Highwoods Parkway, Glen Allen, VA 23060, Attention: Chief Financial Officer, facsimile number (804) 965-1600, or at any other address or facsimile number furnished in writing to the Trustee by the Issuer. Section 1.7 Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event at his address as it appears in the Senior Note Register or at the address provided by such Holder in writing to the Trustee not later than the latest date and not earlier than the earliest date prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice when mailed to a Holder in the aforesaid manner shall be conclusively deemed to have been received by such Holder whether or not actually received by such Holder. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event as required by any provisions of this Indenture, then any method of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. Section 1.8 Conflict of Any Provision of Indenture with Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 318 of the Trust Indenture Act, inclusive, or conflicts with any provision (an "incorporated provision") required by or deemed to be included in this Indenture by operation of such Trust Indenture Act Sections, such imposed duties or incorporation provision of the Trust Indenture Act shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, such provision of the Trust Indenture Act shall be deemed to apply to this Indenture as so modified or excluded, as the case may be, if this Indenture shall then be qualified under the Trust Indenture Act. Section 1.9 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 18 Section 1.10 Successor and Assigns. All covenants and agreements in this Indenture by the Issuer and the Trustee shall bind its respective successors and assigns, whether so expressed or not. Section 1.11 Separability Clause. In case any provision in this Indenture or in the Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.12 Benefits of Indenture. Nothing in this Indenture or in the Senior Notes, express or implied, shall give to any Person (other than the parties hereto and their successors hereunder, any Paying Agent and the Holders) any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.13 Governing Law. This Indenture and the Senior Notes shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Section 1.14 Legal Holidays. In any case where any Interest Payment Date, any date established for payment of Defaulted Interest pursuant to Section 2.11, or any Maturity with respect to any Senior Note shall not be a Business Day, then (notwithstanding any other provisions of this Indenture or of the Senior Notes) payment of the principal of, or any premium and interest on the Senior Notes need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or date established for payment of Defaulted Interest pursuant to Section 2.11 or Maturity, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or date established for payment of Defaulted Interest pursuant to Section 2.11 or Maturity, as the case may be, to the next succeeding Business Day. Section 1.15 No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Issuer or any subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Senior Notes, or any other obligations of the Issuer under the Senior Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting any of the Senior Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Senior Notes. 19 ARTICLE II THE SENIOR NOTES Section 2.1 Form and Dating. (a) (1) The Global Notes shall be substantially in the form of Exhibit A, and the Trustee's certificate of authentication shall be substantially in the form set forth in such exhibit, which is hereby incorporated in and expressly made a part of this Indenture and (2) the Definitive Senior Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit B, which is hereby incorporated in and expressly made a part of this Indenture. The Global Notes and the Definitive Senior Notes may have notations, legends or endorsements required by law, governmental rule or regulation, stock or other securities exchange rule, depositary rule or usage agreements to which the Issuer is subject, if any, or usage (provided that any such notation, legend or endorsement is approved by the Issuer). The Issuer shall furnish any such legend not contained in Exhibit A or Exhibit B to the Trustee in writing. The Global Notes and each Definitive Senior Note shall be dated the date of its authentication. The terms of the Global Notes and of the Definitive Senior Notes set forth in Exhibit A and Exhibit B, respectively, are part of the terms of this Indenture. The Senior Notes are being offered by the Issuer pursuant to the Terra Nova Exchange Offer. The Senior Notes will be initially issued as one or more global notes in definitive fully registered form without interest coupons, deposited on behalf of those holders tendering notes pursuant to 20 the Terra Nova Exchange Offer for the Senior Notes represented thereby with the Trustee at its Institutional Trust Service office, as custodian for the Depositary and registered in the name of DTC or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made in the records of the Trustee and the Depositary as hereinafter provided. (b) This Section 2.1(b) shall apply only to Global Notes. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and Section 2.2, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary or a nominee thereof, (ii) shall be delivered by the Trustee to the Depositary or a custodian thereof or act or pursuant to the Depositary's instructions and (iii) shall bear legends substantially to the following effect: "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF." (c) Definitive Senior Notes. Except as otherwise set forth in this Indenture, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of Definitive Senior Notes. Beneficial interests in a Global Note transferred to the beneficial holders thereof pursuant to Section 2.6 will be issued in certificated, registered form without interest coupons. 21 (d) U.S. Tax Legend. All Senior Notes shall, if required by law, bear a legend to reflect the fact that the Note includes original issue discount under applicable law. Section 2.2 Execution and Authentication. Any Officer shall sign the Senior Notes for the Issuer by manual or facsimile signature. If an Officer whose signature is on a Senior Note no longer holds that office at the time the Trustee authenticates the Senior Note, the Senior Note shall be valid nevertheless. A Senior Note shall not be valid until an authorized officer of the Trustee manually signs the certificate of authentication on the Senior Note. The signature shall be conclusive evidence that the Senior Note has been authenticated under this Indenture. The Trustee shall authenticate and deliver the Global Notes for original issue in an aggregate principal amount at maturity not in excess of $75,000,000 upon receipt of an Order. Such order shall specify the principal amount of the Global Notes to be authenticated and the date on which the original issue of the Global Notes are to be authenticated and shall further provide instructions concerning delivery of the Global Notes. The aggregate principal amount of Senior Notes outstanding at any time may not exceed that amount, except as provided in Section 2.7 hereof. Each Global Note shall be dated the date of its authentication, shall bear interest from the applicable date and shall be payable on the dates specified on the face of the form of Global Notes set forth as Exhibit A hereto. Each Definitive Senior Note shall be dated the date of its authentication, shall bear interest from the applicable date and shall be payable on the dates specified on the face of the form of Definitive Senior Note set forth in Exhibit B hereto. The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Senior Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Senior Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Senior Note Registrar or Paying Agent. Section 2.3 Senior Note Registrar and Paying Agent. The Issuer will maintain in the City of New York, an office or agency where Senior Notes may be presented or surrendered for payment (the "Paying Agent"), where Senior Notes may be surrendered for registration of transfer or exchange (the "Senior Note Registrar") and where notices and demands to or upon the Issuer in respect of the Senior Notes and this Indenture may be served. Until otherwise designated by the Issuer, such office or agency in The City of New York shall be the office maintained by the Trustee for such purpose. The Issuer will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the 22 address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Issuer may from time to time designate one or more other offices or agencies (in or outside The City of New York) where the Senior Notes may be presented or surrendered for any or all such purposes, and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in The City of New York for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such office or agency. The Issuer shall enter into an appropriate agency agreement with any Senior Note Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. The Issuer may change any Paying Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice to any holder of Senior Notes. If the Issuer fails to maintain a Senior Note Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 5.6. The Issuer initially appoints the Trustee as Senior Note Registrar and Paying Agent in connection with the Senior Notes. Section 2.4 Paying Agent To Hold Money in Trust. If the Issuer shall at any time act as its own Paying Agent, it will, by 10:00 a.m. (New York City time) on or before each due date of the principal of and any premium and interest on the Senior Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest on the Senior Notes so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Issuer shall have one or more Paying Agents for the Senior Notes, it will, at least one Business Day before such due date of the principal of and any premium and interest on the Senior Notes, deposit with a Paying Agent a sum in same day funds (or New York Clearing House funds if such deposit is made prior to the date on which such deposit is required to be made) sufficient to pay the principal and any premium and interest to become due on the Senior Notes, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest on the Senior Notes and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of such action or any failure so to act. 23 The Issuer will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of and any premium and interest on the Senior Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Issuer (or any other obligor upon the Senior Notes) in the making of any payment of principal and any premium and interest on the Senior Notes; (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent; and (d) acknowledge, accept and agree to comply in all respects with the provisions of this Indenture relating to the duties, rights and obligations of such Paying Agent. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by an order of the Issuer direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of and any premium and interest on the Senior Notes and remaining unclaimed for two years after such principal and any premium and interest on the Senior Notes has become due and payable shall be paid to the Issuer upon Request by the Issuer; and the Holder of such Senior Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. Section 2.5 Senior Note Holder Lists. The Trustee, or such other Person designated by the Issuer, shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of the Senior Notes (the "Senior Note Register"). If the Trustee is not the Senior Note Registrar, the Issuer shall furnish to the Trustee, 24 in writing on or before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of the Senior Notes. Section 2.6 Transfer and Exchange. Notwithstanding any provision to the contrary herein, so long as a Global Note remains Outstanding and is held by or on behalf of the Depositary, transfers of a Global Note, in whole or in part, shall be made only in accordance with Section 2.6(a); transfers of a beneficial interest in a Global Note for Definitive Senior Note shall comply with Section 2.6(b), and transfers of a Definitive Senior Note shall comply with Section 2.6(c) and (d) below. (a) Transfer of Global Note. A Global Note may not be transferred, in whole or in part, to any Person other than the Depositary or a nominee thereof, and no such transfer to any such other Person may be registered; provided that this clause (a) shall not prohibit any transfer of a Senior Note that is issued in exchange for a Global Note but is not itself a Global Note. No transfer of a Senior Note to any Person shall be effective as against the Trustee or the Issuer this Indenture or the Senior Notes unless and until such Senior Note has been registered in the name of such Person. Nothing in this Section shall prohibit or render ineffective any transfer of a beneficial interest in a Global Note effected in accordance with the other provisions of this Section 2.6. (b) Restrictions on Transfer of a Beneficial Interest in a Global Note for a Definitive Senior Note. A beneficial interest in a Global Note may not be exchanged for a Definitive Senior Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a request for transfer of a beneficial interest in a Global Note in accordance with Applicable Procedures for a Definitive Senior Note in the form satisfactory to the Trustee, together with written instructions to the Trustee to make, or direct the Senior Note Registrar to make, an adjustment on its books and records with respect to such Global Note to reflect a decrease in the aggregate amount of the Senior Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such decrease, then the Trustee shall cause, or direct the Senior Note Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Senior Note Registrar, the aggregate amount of Senior Notes represented by the Global Note to be decreased by the aggregate amount of the Definitive Senior Note to be issued, shall issue such Definitive Senior Note and shall debit or cause to be debited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Senior Note so issued. (c) Transfer and Exchange of Definitive Senior Notes. When Definitive Senior Notes are presented to the Senior Note Registrar with a request: (x) to register the transfer of such Definitive Senior Notes; or 25 (y) to exchange such Definitive Senior Notes for an equal principal amount of Definitive Senior Notes of other authorized denominations, the Senior Note Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, -------- however, that the Definitive Senior Notes surrendered for registration of - ------- transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Senior Note Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. (d) Restrictions on Transfer of a Definitive Senior Note for a Beneficial Interest in a Global Note. A Definitive Senior Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Senior Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with written instructions directing the Trustee to make, or to direct the Senior Note Registrar to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Senior Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Senior Note and cause, or direct the Senior Note Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Senior Note Registrar, the aggregate amount of Senior Notes represented by the Global Note to be increased by the aggregate amount of the Definitive Senior Note to be exchanged, and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the amount of the Definitive Senior Note so cancelled. If no Global Notes are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon receipt of an Order, a new Global Note in the appropriate amount. The provisions of clauses (i), (ii), (iii), (iv) and (v) below shall apply only to Global Notes: (i) Notwithstanding any other provisions of this Indenture or the Senior Notes, except as provided in Section 2.6(b), a Global Note shall not be exchanged in whole or in part for a Senior Note registered in the name of any Person other than the Depositary or one or more nominees thereof, provided that a Global Note may be exchanged -------- for Senior Notes registered in the names of any Person designated by the Depositary in the event that (A) the Depositary has notified the Issuer that it is unwilling or unable to continue as depositary for such Global Note or the Depositary has ceased to be a "clearing agency" registered under the Exchange Act, and a successor Depositary is not appointed by the Issuer within 90 days, (B) an Event of Default has occurred and is continuing with 26 respect to the Senior Notes or (C) if the Company issues an Order that the Global Note shall be exchangeable. Any Global Note exchanged pursuant to clause (A) above shall be so exchanged in whole and not in part, and any Global Note exchanged pursuant to clause (B) above may be exchanged in whole or from time to time in part as directed by the Depositary. (ii) Senior Notes issued in exchange for a Global Note or any portion thereof shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate amount equal to that of such Global Note or portion thereof to be so exchanged and shall be registered in such names and be in such authorized denominations as the Depositary shall designate. Any Global Note to be exchanged in whole shall be surrendered by the Depositary to the Senior Note Registrar. With regard to any Global Note to be exchanged in part, either such Global Note shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Note, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Senior Note issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof. (iii) Subject to the provisions of clause (v) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members (as defined below) and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Senior Notes. (iv) In the event of the occurrence of any of the events specified in clause (i) above, the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Senior Notes. (v) Neither any members of, or participants in, the Depositary (collectively, the "Agent Members") nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Note registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner and holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its 27 Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Senior Note. The Issuer shall not be required to make and the Senior Note Registrar need not register transfers or exchanges of Definitive Senior Notes selected for redemption (except, in the case of Definitive Senior Notes to be redeemed in part, the portion thereof not to be redeemed) or any Definitive Senior Notes for a period of 15 days before a selection of Definitive Senior Notes to be redeemed. Prior to the due presentation for registration of transfer of any Definitive Senior Note, the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar or any co-registrar shall deem and treat the Person in whose name a Definitive Senior Note is registered as the absolute owner of such Definitive Senior Note for the purpose of receiving payment of principal of, or premium, if any, and interest on, such Definitive Senior Note and for all other purposes whatsoever, whether or not such Definitive Senior Note is overdue, and none of the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar or any co-registrar shall be affected by notice to the contrary. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.6. All Senior Notes issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Senior Notes surrendered upon such transfer or exchange. The Senior Note Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.6 in accordance with its customary procedures. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable notice to the Senior Note Registrar. In connection with any transfer of Senior Notes, the Trustee, the Senior Note Registrar and the Issuer shall be entitled to receive, shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the certificate, opinions and other information referred to herein (or in the forms provided herein, attached hereto or to the Senior Notes, or otherwise) received from any Holder and any transferee of any Senior Notes regarding the validity, legality and due authorization of any such transfer, the eligibility of the transferee to receive such Senior Notes and any other facts and circumstances related to such transfer. Section 2.7 Replacement Securities. If a mutilated Definitive Senior Note is surrendered to the Senior Note Registrar, if a mutilated Global Note is surrendered to the Issuer, or if the Holder of a Senior Note claims that the Senior Note has been lost, destroyed or 28 wrongfully taken, the Issuer shall issue, and the Trustee shall authenticate, a replacement Senior Note in such form as the Senior Note mutilated, lost, destroyed or wrongfully taken, if the Holder satisfies any reasonable requirements of the Trustee, the Senior Note Registrar or the Issuer. If required by the Trustee, the Senior Note Registrar or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer, the Senior Note Registrar and the Trustee to protect the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Issuer, the Senior Note Registrar and the Trustee may charge the Holder for their expenses in replacing a Senior Note. Every replacement Senior Note is an additional obligation of the Issuer. Section 2.8 Outstanding Securities. If a Senior Note is replaced pursuant to Section 2.7 hereof, it ceases to be Outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Senior Note is held by a protected purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date, money sufficient to pay all principal and interest payable on that date with respect to the Senior Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Senior Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue, as the case may be. Section 2.9 Temporary Senior Notes. Until definitive Senior Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Senior Notes. Temporary Senior Notes shall be substantially in the form of definitive Senior Notes but may have variations that the Issuer considers appropriate for temporary Senior Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Senior Notes and deliver them in exchange for temporary Senior Notes. Section 2.10 Cancellation. The Issuer at any time may deliver Senior Notes to the Trustee for cancellation. The Senior Notes Registrar and the Paying Agent shall forward to the Trustee any Senior Notes surrendered to them for registration of transfer, exchange, purchase or payment. The Trustee (and no one else) shall cancel all Senior Notes surrendered for registration of transfer, exchange, purchase, payment or cancellation and shall dispose of cancelled Senior Notes in accordance with its customary procedures. The Issuer may not issue new Senior Notes to replace Senior Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Senior Notes in place of cancelled Senior Notes other than pursuant to the terms of this Indenture. Section 2.11 Interest; Defaulted Interest. Interest on the Senior Notes shall accrue from the most recent date to which interest has been paid on the note for which the Senior Notes was exchanged pursuant to the Terra Nova Exchange Offer at the rate set forth in Exhibit A and Exhibit B. If the Issuer defaults in a payment of interest on the Senior Notes, the Issuer shall pay 29 defaulted interest (plus interest on such defaulted interest to the extent lawful at the applicable interest rate on the Senior Notes) in any lawful manner. The Issuer may pay the defaulted interest to the Holder of such Senior Note on a subsequent Special Record Date. The Issuer shall fix or cause to be fixed any such Special Record Date and payment date and shall promptly mail to each Holder of Senior Notes and the Trustee a notice that states the special record date, if any, the payment date and the amount of defaulted interest to be paid. The Issuer may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this paragraph, such manner of payment shall be deemed practicable by the Trustee. Section 2.12 CUSIP and CINS Numbers. The Issuer in issuing the Senior Notes may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or exchange as a convenience to holders; provided that any such notice shall state that no representation is made as the correctness of such numbers either as printed on the Senior Notes or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Senior Notes. The Issuer shall promptly notify the Trustee of any change in CUSIP or CINS numbers. ARTICLE III SATISFACTION AND DISCHARGE Section 3.1 Satisfaction and Discharge of Indenture. This Indenture shall, upon request of the Issuer, cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Senior Notes herein expressly provided for) and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when: (a) either: (1) all Senior Notes theretofore authenticated and delivered (other than (A) Senior Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.7 and (B) Senior Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 2.4) have been delivered to the Trustee for cancellation; or (2) all such Senior Notes not theretofore delivered to the Trustee for cancellation, (A) have become due and payable, or 30 (B) will become due and payable at their Stated Maturity within one year, or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of Section 3.1(a)(2)(A), Section 3.1(a)(2)(B) or Section 3.1(a)(2)(C) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose an amount of money or U.S. Government Obligations sufficient to pay and discharge the entire indebtedness on such Senior Notes not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Senior Notes which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (c) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; (d) such satisfaction and discharge shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound; and (e) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that (1) all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with and (2) such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer to the Trustee under Section 5.6 and, if money shall have been deposited with the Trustee pursuant to this Section 3.1, the obligations of the Trustee under Sections 2.4 and 3.2 shall survive. Section 3.2 Application of Trust Money. Subject to the provisions of Section 2.4, all money deposited with the Trustee pursuant to Section 3.1 shall be held in trust and applied by it, in accordance with the provisions of the Senior Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of and any premium and interest on the Senior Notes for whose payment such money has been deposited with the Trustee. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 3.1 by reason of any legal proceeding or by reason of any order or 31 judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer's obligations under this Indenture and the Senior Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 3.1; provided that if the Issuer has made any payment of principal of, and any premium and interest on, any Senior Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Senior Notes to receive such payment for the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE IV DEFAULTS AND REMEDIES Section 4.1 Events of Default. "Event of Default," wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether or not it shall be voluntary or involuntary or be effected by the operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation or any administrative or governmental body): (a) default in the payment of interest on any Senior Note when the same becomes due and payable and the continuance of such default for a period of 30 days; or (b) default in the payment of the principal of and any premium on any Senior Note at its Maturity, upon acceleration, optional redemption, required purchase or otherwise; or (c) default in the performance, or breach, of any covenant or agreement of the Issuer hereunder (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with in clauses (a) and (b) in this Section 4.1), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Senior Notes, a written notice specifying such default or breach and stating that such notice is a "Notice of Default" hereunder; or (d) (1) an event of default shall have occurred under any mortgage, bond, indenture, loan agreement or other document evidencing any issue of indebtedness of the Issuer for money borrowed, which issue has an aggregate outstanding principal amount of not less than $10,000,000, and such default shall have resulted in such indebtedness becoming, whether by declaration or otherwise, due and payable prior to the date on which it would otherwise become due and payable or (2) a default in any payment when due at final Stated Maturity of any such indebtedness outstanding in an aggregate principal amount of not less than $10,000,000 and, in each case, within 10 days after notice thereof shall have been given, by registered or certified mail, to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of all of the Senior Notes at the time Outstanding; provided that if such indebtedness shall be remedied or cured by the Issuer or - -------- waived by the holders of such 32 indebtedness, then (1) the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action on the part of either the Trustee or any Holders of the Senior Notes and (2) any acceleration of the principal of the Senior Notes pursuant to Section 4.2 shall be deemed to be rescinded and annulled without further action on the part of either the Trustee or any Holders of the Senior Notes; and provided -------- further that, subject to the provisions of Sections 5.1 and 5.2, the Trustee - ------- shall not be charged with knowledge of any such default unless written notice thereof shall have been given to the Trustee by the Issuer, by a holder or an agent of the holder of any such indebtedness, by a trustee then acting under any indenture or other instrument under which such default shall have occurred, or by the Holders of not less than 25% in aggregate principal amount of all Outstanding Senior Notes; or (e) a decree or order is entered by a court having jurisdiction (1) for relief in respect of the Issuer or any Material Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy Code or any other federal or state bankruptcy, insolvency, reorganization or similar law or (2) adjudging the Issuer or any Material Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or any Material Subsidiary under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or any Material Subsidiary or of any substantial part of any of their properties, or ordering the winding up or liquidation of any of their affairs, and any such decree or order remains unstayed and in effect for a period of 60 consecutive days; or (f) the Issuer or any Material Subsidiary institutes a voluntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or any other case or proceedings to be adjudicated bankrupt or insolvent, or the Issuer or any Material Subsidiary consents to the entry of a decree or order for relief in respect of the Issuer or any Material Subsidiary in any involuntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or to the institution of bankruptcy or insolvency proceedings against the Issuer or any Material Subsidiary, or the Issuer or any Material Subsidiary files a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of any of the Issuer or any Material Subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. Section 4.2 Acceleration of Maturity; Rescission. If an Event of Default (other than an Event of Default specified in Section 4.1(e) or Section 4.1(f)) occurs and is continuing, the Trustee or the Holders of at least 25% of the principal amount of the Outstanding Senior Notes, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare all unpaid principal of, and any 33 premium and accrued interest on, all the Senior Notes to be due and payable immediately. Notwithstanding the foregoing, in the event of an Event of Default specified in Section 4.1(e) or Section 4.1(f), the amounts described above shall by such fact itself become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of at least a majority in aggregate principal amount of the Outstanding Senior Notes, by written notice to the Issuer and the Trustee, may annul such declaration if (a) the Issuer has paid or deposited with the Trustee a sum sufficient to pay (1) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6, (2) all overdue interest on all Senior Notes, (3) the principal of and premium, if any, on any Senior Notes which have become due and otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Senior Notes, and (4) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Senior Notes; and (b) all Events of Default, other than the non-payment of principal of the Senior Notes which have become due solely by such declaration of acceleration, have been waived as provided in Section 4.13 or cured. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuer covenants that if: (a) default is made in the payment of any interest on any Senior Note when such interest becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of and any premium on any Senior Note at the Maturity thereof, the Issuer will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Senior Notes, the whole amount then due and payable on such Senior Notes for principal and interest and, to the extent that payment of such interest shall be legally enforceable, interest on overdue installments of interest at the rate borne by the Senior Notes; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6. If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Issuer or any other obligor upon the Senior Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Issuer or any other obligor upon the Senior Notes, wherever situated. 34 If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture by such appropriate private or judicial proceedings as the Trustee shall deem most effectual to protect and enforce such rights. Section 4.4 Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Issuer or any other obligor upon the Senior Notes or the property of the Issuer or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Senior Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal and any premium and interest owing and unpaid in respect of the Senior Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 5.6. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any proposal, plan of reorganization, arrangement, adjustment or composition or other similar arrangement affecting the Senior Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 4.5 Trustee May Enforce Claims Without Possession of Senior Notes. All rights of action and claims under this Indenture or the Senior Notes may be prosecuted and enforced by the Trustee without the possession of any of the Senior Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6, be for the ratable benefit of the Holders of the Senior Notes in respect of which such judgment has been recovered. 35 Section 4.6 Application of Money Collected. Any money, securities or other property collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium and interest, upon presentation of the Senior Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 5.6; SECOND: To the payment of the amounts then due and unpaid upon the Senior Notes for principal or any premium and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Senior Notes for principal or any premium and interest; and THIRD: The balance, if any, to the Issuer. Section 4.7 Limitation on Suits. No Holder of any Senior Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or the Senior Notes, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (b) the Holders of not less than 25% in principal amount of the Outstanding Senior Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in the Trustee's own name; (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Senior Notes; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture except in the manner provided in this Indenture and for the equal and ratable benefit of all the Holders. 36 Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture or any provision of the Senior Notes, the Holder of any Senior Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 2.11) interest on such Senior Note on the respective due dates expressed in such Senior Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired or affected without the consent of such Holder. Section 4.9 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Issuer, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 4.10 Rights and Remedies Cumulative. Except as provided in Section 2.7, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 4.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Senior Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 4 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 4.12 Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Senior Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that: (a) such direction shall not be in conflict with any rule of law or with this Indenture or expose the Trustee to personal liability, and 37 (b) subject to the provisions of Section 315 of the Trust Indenture Act, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 4.13 Waiver of Defaults. Subject to Section 4.2, the Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Notes by notice to the Trustee may on behalf of the Holders of all the Senior Notes waive any existing or past Default or Event of Default hereunder and its consequences, except a Default or Event of Default: (a) in the payment of the principal of and any premium or interest on any Senior Note, (b) in respect of a covenant or provision hereof which under Article 8 cannot be modified or amended without the consent of the Holder of each Outstanding Senior Note affected, or (c) in respect of a covenant or provision hereof which under Article 8 cannot be modified or amended without the consent of the Holders of a greater percentage in principal amount of, or all of, the Outstanding Senior Notes. The Holders of not less than the percentage in principal amount of Outstanding Senior Notes specified in Article 8 may on behalf of the Holders of all the Senior Notes waive any past Default or Event of Default hereunder and its consequences arising under a covenant or provision specified in Section 4.13(c). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 4.14 Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Senior Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant, in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 4.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Senior Notes, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or any premium or interest on any Senior Note on or after the respective Stated Maturities expressed in such Senior Note (or, in the case of redemption, on or after the Redemption Date). 38 ARTICLE V THE TRUSTEE Section 5.1 Notice of Events of Default. Within 60 days after the occurrence of any Event of Default, the Trustee shall transmit by mail to all Holders of the Senior Notes, as their names and addresses appear in the Senior Note Register or at the addresses provided by Holders in writing to the Trustee, notice of such Event of Default hereunder known to the Trustee, unless such Event of Default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of or any premium and interest on any Senior Note, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders. Section 5.2 Certain Rights of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the period when an Event of Default is continuing: (1) the Trustee is required to perform only those duties as are specifically set forth in this Indenture and no covenants or obligations shall be implied in this Indenture that are adverse to the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided that the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) this Section 5.2(c) does not limit the effect of Section 5.2(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; 39 (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 4.12; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to this Section 5.2. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense, including such reasonable advances as may be requested by the Trustee. (f) Subject to the foregoing Sections 5.2(a), 5.2(b), 5.2(c), 5.2 (d) and 5.2(e): (1) The Trustee may rely and shall be protected in acting or in refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by a Request or Order of the Issuer and any resolution by the Board of Directors of the Issuer may be sufficiently evidenced by a Board Resolution. (2) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. In addition, in determining the compliance of the Issuer with the financial covenants set forth herein, the Trustee may rely on the certificate delivered to the Trustee pursuant to Section 9.18. (3) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. (5) The Trustee may consult with counsel, accountants or other experts and any advice of such counsel, accountants or other experts shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice. 40 (6) The Trustee shall not be deemed to have notice of any Default hereunder, except for Events of Default described in Paragraphs (a) or (b) of Section 4.1 (only to the extent that the Trustee acts as the Paying Agent), unless the Trustee shall be specifically notified by a writing delivered to it of such Default by the Issuer, , the Paying Agent (to the extent the Trustee is not acting as the Paying Agent) or by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Notes, and in the absence of such notice so delivered, the Trustee may conclusively assume that there is no Default except as aforesaid. (7) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as duties. Section 5.3 Not Responsible for Recitals or Issuance of Senior Notes. The recitals contained herein and in the Senior Notes, except the Trustee's certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Senior Notes. The Trustee shall not be accountable for the use or application by the Issuer of Senior Notes or the proceeds thereof, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Senior Notes and perform its obligations hereunder. Section 5.4 Trustee and Agents May Hold Senior Notes; Collections; etc. The Trustee and any Paying Agent, Senior Note Registrar or other agent of the Issuer in its individual or any other capacity, may become the owner or pledgee of Senior Notes with the same rights it would have if it were not the Trustee, Paying Agent, Senior Note Registrar or such other agent and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not Trustee, Paying Agent, Senior Note Registrar or such other agent. Section 5.5 Money Held in Trust. All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust hereunder for the purposes for which they were received and need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer. Section 5.6 Compensation and Reimbursement. The Issuer covenants and agrees: (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and 41 (c) to indemnify the Trustee and each of its officers, directors, employees, agents and counsel for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation of the Issuer under this Section 5.6 to compensate the Trustee and to pay and reimburse the Trustee for such expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. As security for the performance of the obligation of the Issuer under this Section 5.6, the Trustee shall have a claim prior to the Senior Notes upon all money, securities or other property held or collected by the Trustee as such and the Senior Notes are hereby subordinated to such claim. If the Trustee incurs expenses or renders services after an Event of Default specified in Section 4.1(e) or Section 4.1(f) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under the Federal Bankruptcy Code and any other applicable federal or state bankruptcy law. Section 5.7 Conflicting Interests. The Trustee shall comply with the provisions of Section 310(b) of the Trust Indenture Act. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture; the Indenture of even date herewith between Markel Corporation and JPMorgan Chase Bank (including the 7.0% Senior Notes due 2008 issued thereunder); the Indenture dated as of June 5, 2001 between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank, with respect to securities of more than one series (including the Liquid Yield Option Notes due 2031 issued thereunder); the Indenture (for 8.71% Junior Subordinated Deferrable Interest Debentures) dated as of January 13, 1997 between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; the Indenture dated as of May 18, 1998, among Terra Nova Insurance (UK) Holdings plc, Terra Nova (Bermuda) Holdings Ltd., and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; the Indenture dated as of August 26, 1997, among Terra Nova Insurance (UK) Holdings plc, Terra Nova (Bermuda) Holdings Ltd., and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; and the Indenture dated as of October 26, 1993, between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank (including the 7.25% Notes due November 1, 2003 issued thereunder). Section 5.8 Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be eligible to act as Trustee under Section 310(a)(1) of the Trust 42 Indenture Act and which shall have a combined capital and surplus of at least $50,000,000 and have its Corporate Trust Office located in The City of New York (or if its Corporate Trust Office shall not be located in The City of New York, the Issuer shall, pursuant to Section 2.3, maintain an office or agency in The City of New York where the Senior Notes may be presented or surrendered and notices and demands hereunder may be made or served) to the extent there is such an institution eligible and willing to serve. If such corporation publishes reports of condition at least annually pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 5. Section 5.9 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article 5 shall become effective until the acceptance of appointment by the successor Trustee under Section 5.10, at which time the retiring Trustee shall be fully discharged from its obligations hereunder. (b) The Trustee may resign at any time by giving written notice thereof to the Issuer. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor Trustee by written instrument executed by authority of the Board of Directors of the Issuer, a copy of which shall be delivered to the resigning Trustee and a copy to the successor Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the Issuer, or any Holder who has been a bona fide Holder of a Senior Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper, appoint a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Senior Notes, delivered to the Trustee and the Issuer. (d) If at any time: (1) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act after written request therefor by the Issuer or by any Holder who has been a bona fide Holder of a Senior Note for at least six months, or 43 (2) the Trustee shall cease to be eligible under Section 5.8 and shall fail to resign after written request therefor by the Issuer or by any Holder who has been a bona fide Holder of a Senior Note for at least six months, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any case, (i) the Issuer by a Board Resolution may remove the Trustee, or (ii) subject to Section 4.14, the Holder of any Senior Note who has been a bona fide Holder of a Senior Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Issuer, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Senior Notes delivered to the Issuer and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 5.10, become the successor Trustee and supersede the successor Trustee appointed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or the Holders of the Senior Notes and so accepted appointment, the Holder of any Senior Note who has been a bona fide Holder for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Issuer shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first class mail, postage prepaid, to the Holders of Senior Notes as their names and addresses appear in the Senior Note Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. Section 5.10 Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the 44 retiring Trustee; provided, however, that the retiring Trustee shall continue to be entitled to the benefit of Section 5.6(c); but, on request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 5. Upon acceptance of appointment by any successor Trustee as provided in this Section 5.10, the Issuer shall give notice thereof to the Holders of the Senior Notes, by mailing such notice to the Holders of Senior Notes as their names and addresses appear on the Senior Note Register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.9. If the Issuer fails to give such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be given at the expense of the Issuer. Section 5.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Senior Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Senior Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Senior Notes. Section 5.12 Preferential Collection of Claims Against the Issuer. If and when the Trustee shall be or become a creditor of the Issuer (or any other obligor under the Senior Notes), the Trustee shall be subject to the provisions of Section 311(b) of the Trust Indenture Act regarding the collection of claims against the Issuer (or any such other obligor). ARTICLE V HOLDERS' LISTS AND REPORTS BY TRUSTEE Section 6.1 Disclosure of Names and Addresses of Holders. Every Holder of Senior Notes, by receiving and holding the same, agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee or any agent of either of them shall be held accountable by reason of the 45 disclosure of any information as to the names and addresses of the Holders in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312 of the Trust Indenture Act. Section 6.2 Reports by Trustee. Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of Senior Notes, the Trustee shall transmit by mail to all Holders of Senior Notes, as their names and addresses appear in the Senior Note Register, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15 if required by Trust Indenture Act Section 313(a). ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 7.1 Issuer May Consolidate, etc., Only on Certain Terms. After the Issue Date, the Issuer shall not consolidate with or merge with or into any other Person, or, directly or indirectly, sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its assets in one or more related transactions to any Person or group of affiliated Persons unless, at the time and after giving effect thereto: (a) (1) the Issuer shall be the continuing corporation, or (2) the Person (if other than the Issuer) formed by such consolidation, or into which the Issuer is merged or the Person that acquires by sale, assignment, transfer, lease, conveyance or other disposition the assets of the Issuer, substantially as an entirety (the "Surviving Entity"), is a corporation duly organized and validly existing under the laws of any domestic or foreign jurisdiction and shall, in the case of clause (2), expressly assume, by supplemental indenture hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Issuer under this Indenture; (b) immediately before and after such transaction, giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (c) if any of the property or assets of the Issuer would thereupon become subject to any Lien, the outstanding Senior Notes shall be secured equally and ratably with (or prior to) the obligation or liability secured by such Lien, unless the Issuer could create such Lien hereunder without equally and ratably securing the Senior Notes; and 46 (d) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and such supplemental indenture, if one is required by this Section 7.1, comply with this Section 7.1 and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 7.2 Successor Substituted. Upon any consolidation or merger or any sale, assignment, transfer, lease or conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 7.1, the successor Person formed by such consolidation or into which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein. When a successor assumes all the obligations of its predecessor under this Indenture and the Senior Notes, the predecessor will be released from those obligations, provided that in the case of a transfer by lease, the predecessor corporation shall not be released from the payment of principal and interest on the Senior Notes. ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.1 Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Issuer, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto in form satisfactory to the Trustee, for any of the following purposes: (a) to cure any ambiguity or to correct any provision herein which may be defective or inconsistent with any other provision herein; (b) to provide for the assumption of the Issuer's obligations to Holders of the Senior Notes in the case of a merger or consolidation; (c) to secure the Senior Notes pursuant to the requirements of Section 7.1; (d) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act, as contemplated by Section 8.5 or otherwise; (e) to evidence and provide the acceptance of the appointment of a successor Trustee hereunder; or 47 (f) to make any other change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any Holder under this Indenture or the Senior Notes. Section 8.2 Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Senior Notes (including consents obtained in connection with a tender offer or exchange offer for the Senior Notes), by Act of such Holders delivered to the Issuer and the Trustee, the Issuer, when authorized by a Board Resolution, and the Trustee may enter into one or more indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of waiving or modifying in any manner the rights of the holders under this Indenture; provided, however, that no such supplemental indenture, amendment or waiver shall without the consent of the Holder of each Outstanding Senior Note affected thereby: (1) change the Stated Maturity or the principal of, or any installment of interest on, any Senior Note or reduce the principal amount thereof or the rate of interest thereon or any provision relating to redemption price of Senior Notes or the periods during which redemption may be effected, or change the coin or currency in which the principal of any Senior Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or (2) reduce the percentage in principal amount of the Outstanding Senior Notes, the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (3) modify any of the provisions of this Section 8.2, Section 4.13 or Section 9.20, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Senior Note affected thereby. It shall not be necessary for any Act of Holders under this Section 8.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.3 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article 8 or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the documents required by Section 1.3, and (subject to Section 315(a) through 315(d) of the Trust Indenture Act and Section 5.2 48 hereof) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 8.4 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article 8, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Senior Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 8.5 Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article 8 shall conform to the requirements of the Trust Indenture Act as then in effect. Section 8.6 Reference in Senior Notes to Supplemental Indentures. Senior Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 8 may, and shall if required by the Issuer, bear a notation in form approved by the Issuer as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Senior Notes so modified as to conform, in the opinion of the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and shall be authenticated and delivered by the Trustee in exchange for Outstanding Senior Notes. ARTICLE IX COVENANTS Section 9.1 Payment of Principal, Premium and Interest. The Issuer will duly and punctually pay the principal of and any premium and interest on the Senior Notes in accordance with the terms of the Senior Notes and this Indenture. Principal and interest shall be considered paid on the date due if the Paying Agent (other than the Issuer) holds on that date money sufficient to pay all principal and interest then due. The Issuer shall pay interest on overdue principal and, to the extent lawful, interest on overdue installments of interest, at the rate per annum set forth in the Senior Notes. Section 9.2 Corporate Existence. Subject to Article 7, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate rights (charter and statutory), corporate licenses and corporate franchises of the Issuer; provided that the Issuer shall not be required to preserve any such right, license, or franchise if the Board of Directors of the Issuer shall determine that the preservation thereof is no 49 longer desirable in the conduct of the business of the Issuer and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 9.3 Payment of Taxes and Other Claims. The Issuer will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon it or any Subsidiary and (b) all material lawful claims for labor, materials and supplies, which, if unpaid, might by law become a Lien upon the property of the Issuer or any of its Subsidiaries that could produce a material adverse effect on the consolidated financial condition of the Issuer (in the good faith judgment of management); provided, however, that the Issuer shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. Section 9.4 Maintenance of Properties. The Issuer shall cause all properties owned by or leased to it or its Subsidiaries and used or useful in the conduct of its business or the business of such Subsidiary to be maintained and kept in normal condition, repair and working order, ordinary wear and tear excepted; provided that nothing in this Section 9.4 shall prevent the Issuer or any of its Subsidiaries from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Board of Directors the Issuer or the Subsidiary concerned, or of any officer (or other agent employed by the Issuer or any of its Subsidiaries) of the Issuer or such Subsidiary having managerial responsibility for any such property, desirable in the conduct of the business of the Issuer or any of its Subsidiaries. Section 9.5 [Intentionally Omitted]. Section 9.6 [Intentionally Omitted]. Section 9.7 [Intentionally Omitted]. Section 9.8 Liens. The Issuer will not, and will not permit any of its Subsidiaries to create, incur, or suffer to exist any Lien (other than a Purchase Money Lien) upon any capital stock, whether owned on the date of this Indenture or hereafter acquired, of any Restricted Subsidiary, to secure any Obligation of the Issuer, any Subsidiary or any other Person, without in any such case making effective provision whereby all of the Outstanding Senior Notes shall be directly secured equally and ratably with such Obligations; provided, however, that the foregoing restrictions shall not apply to Liens existing on the date hereof securing Obligations outstanding on the date hereof. Section 9.9 [Intentionally Omitted]. Section 9.10 [Intentionally Omitted]. 50 Section 9.11 [Intentionally Omitted]. Section 9.12 [Intentionally Omitted]. Section 9.13 [Intentionally Omitted]. Section 9.14 [Intentionally Omitted]. Section 9.15 [Intentionally Omitted]. Section 9.16 [Intentionally Omitted]. Section 9.17 Withholding Tax. All payments made by the Issuer under the Senior Notes will be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. Section 9.18 Statement as to Compliance. The Issuer will deliver to the Trustee, within 120 days after the end of each fiscal year ending after the date hereof, a certificate of its principal executive officer, principal financial officer or principal accounting officer stating whether, to such officer's knowledge, the Issuer is in compliance with all covenants and conditions to be complied with by it under this Indenture. For purposes of this Section 9.18, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. Section 9.19 [Intentionally Omitted] Section 9.20 Waiver of Certain Covenants. The Issuer may omit in any particular instance to comply with any covenant or condition set forth in Sections 9.3, 9.4, 9.8, 9.17 and 9.18, if, before or after the time for such compliance, the Holders of not less than a majority in aggregate principal amount of the Senior Notes at the time Outstanding shall, by Act of such Holders, waive such compliance in such instance with such covenant or condition. No such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuer and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. ARTICLE X REDEMPTION OF SENIOR NOTES 51 Section 10.1 Right of Redemption. The Issuer shall have the right to redeem the Senior Notes, in whole or in part, at any time and from time to time. Section 10.2 Applicability of Article. Redemption of Senior Notes at the election of the Issuer or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article 10. Section 10.3 Election to Redeem; Notice to Trustee. The election of the Issuer to redeem any Senior Notes pursuant to Section 10.1 shall be evidenced by a Board Resolution. In case of such redemption, the Issuer shall, at least 60 days prior to the Redemption Date fixed by it (unless a shorter notice period shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Senior Notes to be redeemed. Section 10.4 Selection by Trustee of Senior Notes to Be Redeemed. If less than all of the Senior Notes are to be redeemed, the particular Senior Notes or portions thereof to be redeemed shall be selected not more than 60 days and not less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Senior Notes not previously called for redemption on a pro rata basis, by lot or by any other method the Trustee shall deem fair and appropriate and in compliance with the requirements of such principal national securities exchange, if any, on which the Senior Notes are listed or, if the Senior Notes are not so listed, on a pro rata basis, by lot or by any other method the Trustee shall deem fair and appropriate, provided that the amounts to be redeemed shall be equal to $1,000 or any integral multiple thereof. The Trustee shall promptly notify the Issuer and the Senior Note Registrar in writing of the Senior Notes selected for redemption and, in the case of any Senior Notes selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Senior Notes shall relate, in the case of any Senior Note redeemed or to be redeemed only in part, to the portion of the principal amount of such Senior Note which has been or is to be redeemed. Section 10.5 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Senior Notes to be redeemed at the Redemption Prices specified in Section 10.9. All notices of redemption shall state: (a) the Redemption Date; 52 (b) the Redemption Price including, in connection with an optional redemption pursuant to Section 10.9, the estimated Make-Whole Amount due in connection with such redemption (calculated as if the date of such notice were the date of the prepayment) and setting forth the details of such calculation of Make-Whole Amount; (c) if less than all Outstanding Senior Notes are to be redeemed, the identification (and, if the case of a Senior Note to be redeemed in part, the principal amount) of the particular Senior Notes to be redeemed; (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Senior Note or portion thereof, and that (unless the Issuer shall default in payment of the Redemption Price) interest thereon shall cease to accrue on and after said date; (e) the place or places where such Senior Notes are to be surrendered for payment of the Redemption Price; (f) that Senior Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (g) the CUSIP number or numbers, if any, relating to such Senior Notes, but that no representation is made as to the correctness or accuracy of the CUSIP number listed in such notice or printed on the Senior Notes and that reliance may be placed only on the other identification numbers printed on the Senior Notes; (h) in the case of a Definitive Senior Note to be redeemed in part, the principal amount of such Senior Note to be redeemed and that after the Redemption Date upon surrender of such Definitive Senior Note, a new Definitive Senior Note or Definitive Senior Notes in the aggregate principal amount equal to the unredeemed portion thereof will be issued; and (i) in the case of a Global Note to be redeemed in part, the principal amount of such Global Note to be redeemed and that after the Redemption Date upon surrender of such Global Note a new Global Note in principal amount equal to the unredeemed portion will be issued or an adjustment will be made to the existing Global Note such that the aggregate principal amount of the Global Note will equal the unredeemed portion of the Global Note. Notice of redemption of Senior Notes to be redeemed at the election of the Issuer shall be given by the Issuer or, at its request, by the Trustee in the name and at the expense of the Issuer. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. Section 10.6 Deposit of Redemption Price. On or prior to 10:00 a.m., New York City time, on any Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own 53 Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount of money in same-day funds (or New York Clearing House funds if such deposit is made prior to the applicable Redemption Date) sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Senior Notes or portions thereof which are to be redeemed on that date. Section 10.7 Senior Notes Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Senior Notes to be redeemed shall, subject to the provisions of Section 10.3, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Issuer shall default in the payment of the Redemption Price and accrued interest) such Senior Notes shall cease to bear interest. Upon surrender of any such Senior Note for redemption in accordance with said notice, such Senior Note shall be paid by the Issuer at the Redemption Price together with accrued interest to the Redemption Date; provided, however, that installments of interest on any Definitive Senior Notes whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Definitive Senior Notes, or one or more predecessor Definitive Senior Notes, registered as such on the relevant Regular Record Dates according to the terms and the provisions of Section 2.5. If any Senior Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal thereof (and premium, if any, thereon) shall, until paid, bear interest from the Redemption Date at the rate borne by such Senior Note. Section 10.8 Senior Notes Redeemed in Part. Any Senior Note which is to be redeemed only in part shall be surrendered at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3 (with, if the Issuer, the Senior Note Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer, the Senior Note Registrar or the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing). Upon surrender of a Definitive Senior Note that is redeemed in part, the Issuer shall execute, and the Trustee shall authenticate and deliver to the Holder of such Definitive Senior Note without service charge, a new Definitive Senior Note or Definitive Senior Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Definitive Senior Note so surrendered. Upon surrender of a Global Note that is redeemed in part, the Paying Agent shall forward the Global Note to the Trustee who shall reduce the principal amount of such Global Note to an amount equal to the unredeemed portion of the Global Note surrendered. Section 10.9 Optional Redemption. (a) The Senior Notes are subject to redemption at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date (subject to the right of Holders of record on relevant Regular Record Dates to receive interest due on an Interest Payment Date) as provided in the Indenture, plus the Make-Whole Amount, if any, with respect to such Senior Notes. 54 Three Business Days prior to such prepayment, the Issuer shall give notice to the Quotation Agent requesting the Quotation Agent to provide a quote of the Comparable Treasury Price and the Quotation Agent shall provide such quotation to the Issuer on or before one Business Day prior to such prepayment. One Business Day prior to such prepayment, the Quotation Agent or the Issuer shall give notice to the Indenture Trustee specifying the calculation of the Make-Whole Amount as of the Redemption Date. (a) The Senior Notes are not subject to redemption through operation of a sinking fund. ARTICLE XI DEFEASANCE AND COVENANT DEFEASANCE Section 11.1 Option to Effect Defeasance or Covenant Defeasance. The Issuer may, at its option by Board Resolution, at any time, elect to have either Section 11.2 or Section 11.3 be applied to all Outstanding Senior Notes upon compliance with the conditions set forth below in this Article 11. Section 11.2 Defeasance and Discharge. Upon the Issuer's exercise under Section 11.1 of the option applicable to this Section 11.2, the Issuer shall be deemed to have been discharged from its obligations with respect to all Outstanding Senior Notes on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Senior Notes, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 11.5 and the other sections of this Indenture referred to in Section 11.2(a) and Section 11.2(b) below, and to have satisfied all other obligations under such Senior Notes and this Indenture (and the Trustee, on demand of and at the expense of the Issuer shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of Outstanding Senior Notes to receive solely from the trust fund described in Section 11.5 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Senior Notes when such payments are due, or on the Redemption Date, as the case may be, (b) the Issuer's obligations with respect to such Senior Notes under Section 2.3, Section 2.4, Section 2.6, Section 2.7, Section 2.12 and Section 2.13, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer's obligations in connection therewith, and (d) this Article 11. Subject to compliance with this Article 11, the Issuer may exercise its option under this Section 11.2 notwithstanding the prior exercise of its option under Section 11.3 with respect to the Senior Notes. 55 Section 11.3 Covenant Defeasance. Upon the Issuer's exercise under Section 11.1 of the option applicable to this Section 11.3, the Issuer, and, if applicable, the Trustee and each Holder of Senior Notes, shall be released from its obligations under the covenants contained in Article 7, Sections 9.2 through 9.4, Section 9.8, Section 9.17 and Section 9.18 inclusive, with respect to the Outstanding Senior Notes on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Senior Notes shall thereafter be deemed to be not "Outstanding" for the purposes of any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "Outstanding" for all other purposes hereunder (it being understood that such Senior Notes shall not be deemed Outstanding for financial accounting purposes). For this purpose, such covenant defeasance means that, with respect to the Outstanding Senior Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under Section 4.1(c) but, except as specified above, the remainder of this Indenture and such Senior Notes shall be unaffected thereby. Section 11.4 Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 11.2 or Section 11.3 to the Outstanding Senior Notes: (a) The Issuer shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Senior Notes, (1) cash in U.S. Dollars in an amount, or (2) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, cash in U.S. Dollars in an amount, or (3) a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge the principal of (and premium, if any) and interest on the Outstanding Senior Notes on the Stated Maturity or on the applicable Optional Redemption Date, as the case may be, of such principal or installment of principal of and any premium and interest on the Senior Notes; provided that the Trustee shall have been irrevocably instructed by the Issuer in writing to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Senior Notes. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and 56 credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt; (b) In the case of an election under Section 11.2, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably satisfactory to the Trustee confirming that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (2) since the date hereof, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Senior Notes will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (c) In the case of an election under Section 11.3, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably satisfactory to the Trustee confirming that the Holders of the Outstanding Senior Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; (d) No Default or Event of Default with respect to the Senior Notes shall have occurred and be continuing on the date of such deposit or, insofar as Section 4.1(e) or Section 4.1(f) is concerned, at any time in the period ending on the 91st day after the date of such deposit; (e) Such election under Section 11.2 or Section 11.3 shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound; (f) In the case of an election under either Section 11.2 or Section 11.3, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; 57 (g) In the case of an election under either Section 11.2 or Section 11.3, the Issuer shall have delivered to the Trustee an Officers' Certificate stating that the deposit made by the Issuer pursuant to its election under Section 11.2 or Section 11.3 was not made by the Issuer with the intent of preferring the Holders over other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding creditors of the Issuer or others; and (h) The Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel in the United States, each stating that all conditions precedent provided for relating to either the defeasance under Section 11.2 or the covenant defeasance under Section 11.3 (as the case may be) have been complied with as contemplated by this Section 11.4. Section 11.5 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of Section 2.4, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 11.5, the "Trustee") pursuant to Section 11.4 in respect of the Outstanding Senior Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Senior Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Senior Notes of all sums due and to become due thereon in respect of principal and any premium and interest, but such money need not be segregated from other funds except to the extent required by law. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 11.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Senior Notes. Anything in this Article 11 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request any money or U.S. Government Obligations held by it as provided in Section 11.4 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 11.4(a)) are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance. Section 11.6 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Obligations in accordance with Section 11.2 or Section 11.3, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer's obligations under this Indenture and the Senior Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.2 or Section 11.3, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 11.2 or Section 11.3, as the case may be; provided, however, that, if the Issuer makes 58 ARTICLE XII MEETINGS OF HOLDERS OF SENIOR NOTES Section 12.1 Purposes for Which Meetings may be Called. A meeting of Holders may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders. Section 12.2 Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders for any purpose specified in Section 12.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York. Notice of every meeting of Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.7, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) In case at any time the Issuer (by or pursuant to a Board Resolution) or the Holders of at least 10% in aggregate principal amount of all the Senior Notes at the time shall have requested the Trustee to call a meeting of the Holders for any purpose specified in Section 12.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to Section 1.7) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Issuer or the Holders in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (a) of this Section. Section 12.3 Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders, a Person shall be (1) a Holder of one or more Outstanding Senior Notes, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Senior Notes by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Issuer and its counsel. Section 12.4 Quorum; Action. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes shall constitute a quorum for a meeting of Holders; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of not less than a specified percentage in principal amount of the Outstanding Senior Notes, the Persons entitled to vote such specified percentage in Outstanding Senior Notes shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of Holders, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 12.2(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Senior Notes which shall constitute a quorum. Except as limited by the proviso to Section 8.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of Senior Notes Outstanding; provided, however, that, except as limited by the proviso to Section 8.2, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of not less than a specified percentage in aggregate principal amount of the Outstanding Senior Notes may be adopted at a meeting or an adjourned meeting duly convened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of such specified percentage. Any resolution passed or decision taken at any meeting of Holders duly held in accordance with this Section shall be binding on all the Holders, whether or not such Holders were present or represented at the meeting. Section 12.5 Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders in regard to proof of the holding of Outstanding Senior Notes and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Senior Notes shall be proved in the manner specified in Section 1.5 and the appointment of any proxy shall be proved in the manner specified in Section 1.5. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.5 or other proof. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Issuer or by Holders as provided in Section 12.2(b) in which case the Issuer or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes represented at the meeting. (c) At any meeting, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Senior Notes held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Senior Note challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder or proxy. (d) Any meeting of Holders duly called pursuant to Section 12.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes represented at the meeting; and the meeting may be held as so adjourned without further notice. Section 12.6 Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Senior Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 12.2 and, if applicable, Section 12.4. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Issuer, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. any payment of principal of or any premium and interest on any Senior Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Senior Notes to receive such payment from the money held by the Trustee or Paying Agent. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first above written. MARKEL CORPORATION By: _______________________ JPMORGAN CHASE BANK, as Trustee By: _______________________ 59 EXHIBIT A [FORM OF FACE OF GLOBAL NOTE] [U.S. TAX LEGEND IF APPROPRIATE] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. MARKEL CORPORATION 7.2% Senior Notes due 2007 No. ____________ CUSIP: __________________ Issue Date: May __, 2002 MARKEL CORPORATION, a Virginia corporation, promises to pay to Cede & Co. or registered assigns, the principal sum of U.S. [$75,000,000] on August 15, 2007. Interest Payment Dates: February 15, and August 15, commencing August 15, 2002. Additional provisions of this Global Note are set forth on the other side of this Global Note. 60 Dated: May__, 2002 MARKEL CORPORATION By: __________________ TRUSTEE'S CERTIFICATE OF AUTHENTICATION JPMorgan Chase Bank as Trustee, certifies that this is the Global Note referred to in the Indenture. ______________________________ Authorized Officer 61 [REVERSE SIDE OF GLOBAL NOTE] MARKEL CORPORATION 7.2% Senior Notes due 2007 1. Interest - -------- (a) Markel Corporation, a Virginia corporation (such company, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer"), promises to pay interest on the principal amount of this Note to the Holder hereof at the rate per annum shown above. (b) The principal of this Note shall mature on August 15, 2007. Interest on this Note shall accrue at the rate of 7.2% per annum from the most recent date to which interest has been paid on the note for which this Note was exchanged pursuant to the Terra Nova Exchange Offer (as defined in the Indenture), and is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2002. (c) Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest at the applicable interest rate on the Notes on overdue principal, interest (to the extent lawful) or premium, if any, on demand. 2. Withholding Tax All payments made by the Issuer on this Note shall be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. 3. Method of Payment The Issuer through the Paying Agent shall pay interest on this Note to the Holder of this Note or as instructed in writing by the Holder of this Note. The Holder of this Note must surrender this Note to the Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. 4. Paying Agent and Registrar Initially, JPMorgan Chase Bank, a New York banking corporation (the "Trustee"), will act as Paying Agent and Senior Note Registrar. The Issuer may appoint and change any Paying 62 Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice. The Issuer may act as Paying Agent, Senior Note Registrar, co-registrar or transfer agent to the Holder of this Note. 5. Indenture The Issuer issued this Note under an Indenture, dated as of May __, 2002 (the "Indenture"), between the Issuer and the Trustee. The terms of this Note include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)77aaa-77bbbb) as in effect from time to time (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. This Note is subject to all such terms, and Holders of this Note are referred to the Indenture and the Act for a statement of those terms. This Note is a senior unsecured obligation of the Issuer limited to $75,000,000 aggregate principal amount at maturity (subject to Section 2.7 of the Indenture). 6. Optional Redemption (a) This Note is subject to redemption in whole or in part, of any time and from time to time, upon not less than 30 nor more than 60 days' notice, in an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date, as provided in the Indenture, plus the Make-Whole amount, if any. (b) This Note is not subject to redemption through operation of a sinking fund. 7. [Intentionally Omitted] 8. Notice of Redemption Notice of redemption shall be mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Notes to be redeemed at the Holder's registered address. 9. Denominations; Transfer; Exchange The Notes are in fully registered form, without coupons, in denominations of $1,000 of principal amount at maturity and integral multiples of $1,000. A Holder of this Note may only transfer or exchange this Note in accordance with the Indenture. 10. Persons Deemed Owners 63 The registered Holder of this Note will be treated as the owner of it for all purposes. 11. Defeasance and Covenant Defeasance. The Indenture contains provisions for defeasance at any time, upon compliance by the Issuer with certain conditions set forth in the Indenture, of (a) the entire indebtedness of the Issuer with respect to this Note and (b) certain restrictive covenants and the related defaults and Events of Default. 12. Amendment, Waiver The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Trustee with the consent of the holders of a majority in aggregate principal amount of the Senior Notes outstanding at the time of amendment or modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Senior Notes at any time outstanding, on behalf of the holders of all the Senior Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any Senior Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. 13. Defaults and Remedies This Note has the Events of Default as set forth in Section 4.1 of the Indenture. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Senior Notes, subject to certain limitations, may declare all the Senior Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Senior Notes being due and payable immediately upon the occurrence of such Events of Default. Holders of Senior Notes may not enforce the Indenture or the Senior Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Senior Notes unless it receives reasonable indemnity or security. Subject to certain limitations, holders of a majority in principal amount of the Senior Notes may direct the Trustee in its exercise of any trust or power. The holders of a majority in principal amount of the Senior Notes then outstanding by written notice to the Trustee may rescind a declaration of acceleration if the rescission is prior to a judgment or decree for payment and if all Events of Default have been cured or waived except nonpayment of principal and interest that has been due solely because of the acceleration. The Trustee may withhold from holders of Senior Notes notice of any continuing default (except a default in payment of principal or interest) if it determines that 64 withholding notice is in the interest of the holders. The above description of Events of Default and remedies is qualified by reference, and subject in its entirety, to the more complete description thereof contained in the Indenture. 14. Trustee Dealings with the Issuer Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of this Note and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or such other agent may do the same with like rights. 15. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Issuer or any Subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Notes or any other obligations of the Issuer under this Note or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting this Note, the Holder of this Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Note. 16. Authentication This Note shall not be valid until an authorized officer of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 17. Governing Law The internal laws of the State of New York shall govern the Indenture and this Note without regard to conflict of law provisions thereof. The Issuer will furnish upon written request and without charge to the Holder of this Note a copy of the Indenture which has in it the text of this Global Note in larger type. Requests may be made to: Markel Corporation 4521 Highwoods Parkway Glen Allen, Virginia 23060 Attention: Gregory B. Nevers 65 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. ________________________________________________________________________________ Please print or typewrite name and address including zip code of assignee ________________________________________________________________________________ the within Senior Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________ attorney to transfer said Senior Note on the books of the Issuer with full power of substitution in the premises. 66 EXHIBIT B [FORM OF FACE OF DEFINITIVE SENIOR NOTE] [U.S. TAX LEGEND IF APPROPRIATE] MARKEL CORPORATION 7.2% Senior Notes due 2007 No. ________________ CUSIP: __________________ Issue Date: May __, 2002 MARKEL CORPORATION, a Virginia corporation, promises to pay to [Cede & Co.] or registered assigns, the principal sum of U.S. ______________, on August 15, 2007. Interest Payment Dates: February 15, and August 15, commencing August 15, 2002. Additional provisions of this Definitive Senior Note are set forth on the other side of this Definitive Senior Note. Dated: __________,_______ MARKEL CORPORATION By: _______________________ TRUSTEE'S CERTIFICATE OF AUTHENTICATION JPMorgan Chase Bank, as Trustee, certifies that this is one of the Senior Notes referred to in the Indenture. 67 _____________________________ Authorized Officer 68 [FORM OF REVERSE SIDE OF DEFINITIVE SENIOR NOTE] MARKEL CORPORATION 7.2% Senior Notes due 2007 1. Interest (a) Markel Corporation, a Virginia corporation (such company, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer"), promises to pay interest on the principal amount of this Note to [Cede & Co.] or registered assigns at the rate per annum shown above. (b) The principal of this Senior Note shall mature on August 15, 2007. Interest on this Senior Note shall accrue at the rate of 7.2% per annum from the most recent date to which interest has been paid on the note for which this Note was exchanged pursuant to the Terra Nova Exchange Offer (as defined in the Indenture), and is payable semiannually on February 15 and August 15 of each year, commencing on August 15, 2002. (c) Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest at the applicable interest rate on the Senior Notes, on overdue principal, interest (to the extent lawful) or premium, if any, on demand. 2. Withholding Tax All payments made by the Issuer on this Senior Note shall be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. 3. Method of Payment The Issuer through the Paying Agent shall pay interest on this Senior Note to the registered holder of this Senior Note or as instructed in writing by such holder of this Senior Note. The holder of this Senior Note must surrender this Senior Note to the Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. 4. Paying Agent and Registrar Initially, JPMorgan Chase Bank, a New York banking corporation (the "Trustee"), will act as Paying Agent and Senior Note Registrar. The Issuer may appoint and change any Paying 69 Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice. The Issuer may act as Paying Agent, Senior Note Registrar, co-registrar or transfer agent to the holder of this Note. 5. Indenture The Issuer issued this Senior Note under an Indenture, dated as of April __, 2002 (the "Indenture"), between the Issuer and the Trustee. The terms of this Senior Note include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect from time to time (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. This Senior Note is subject to all such terms, and holders of the Senior Notes are referred to the Indenture and the Act for a statement of those terms. The Senior Notes are senior unsecured obligations of the Issuer limited to $75,000,000 aggregate principal amount at maturity (subject to Section 2.7 of the Indenture). 6. Optional Redemption (a) This Senior Note is subject to redemption in whole or in part, of any time and from time to time, upon not less than 30 nor more than 60 days' notice, in an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date, as provided in the Indenture, plus the Make-Whole amount, if any. (b) This Senior Note is not subject to redemption through operation of a sinking fund. 7. Notice of Redemption Notice of redemption shall be mailed not less than 30 nor more than 60 days prior to the Redemption Date to the each holder of the Senior Notes to be redeemed at the Holder's registered address. Senior Notes in denominations larger than $1,000 of principal amount at maturity may be redeemed in part but only in whole multiples of $1,000 at maturity. In the event of a redemption of less than all of the Senior Notes, the Senior Notes for redemption will be chosen by the Trustee in accordance with the Indenture. If any Senior Note is redeemed subsequent to a record date with respect to any interest payment date specified above and/or prior to such interest payment date, then any accrued interest will be paid to the holder of the Senior Note at the close of business on such record date. If money sufficient to pay the redemption price of and accrued interest on all Senior Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Senior Notes (or such portions thereof) called for redemption. 70 8. Denominations; Transfer; Exchange This Senior Note is in registered form without coupons, in denominations of $1,000 of principal amount at maturity and integral multiples of $1,000. The holder of this Senior Note may only transfer or exchange this Senior Note in accordance with the Indenture. The Senior Note Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Senior Note Registrar need not register the transfer of or exchange any Senior Notes selected for redemption (except, in the case of a Senior Note to be redeemed in part, the portion of the Senior Note need not be redeemed) or any Senior Notes for a period of 15 days before a selection of Senior Notes to be redeemed. 9. Persons Deemed Owners The registered holder of this Senior Note will be treated as the owner of it for all purposes. 10. Defeasance and Covenant Defeasance. The Indenture contains provisions for defeasance at any time, upon compliance by the Issuer with certain conditions set forth in the Indenture, of (a) the entire indebtedness of the Issuer with respect to this Senior Note and (b) certain restrictive covenants and the related defaults and Events of Default. 11. Amendment, Waiver The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Trustee with the consent of the holders of a majority in aggregate principal amount of the Senior Notes outstanding at the time of amendment or modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Senior Notes at any time outstanding, on behalf of the holders of all the Senior Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the holder of this Senior Note shall be conclusive and binding upon such holder and upon all future holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Senior Note. 12. Defaults and Remedies This Senior Note has the Events of Default as set forth in Section 4.1 of the Indenture. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in 71 principal amount of the Senior Notes, subject to certain limitations, may declare all the Senior Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Senior Notes being due and payable immediately upon the occurrence of such Events of Default. Holders of Senior Notes may not enforce the Indenture or the Senior Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Senior Notes unless it receives reasonable indemnity or security. Subject to certain limitations, holders of a majority in principal amount of the Senior Notes may direct the Trustee in its exercise of any trust or power. The holders of a majority in principal amount of the Senior Notes then outstanding by written notice to the Trustee may rescind a declaration of acceleration if the rescission is prior to a judgment or decree for payment and if all Events of Default have been cured or waived except nonpayment of principal and interest that has been due solely because of the acceleration. The Trustee may withhold from holders of Senior Notes notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in the interest of the holders. The above description of Events of Default and remedies is qualified by reference, and subject in its entirety, to the more complete description thereof contained in the Indenture. 13. Trustee Dealings with the Issuer Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of this Senior Note and may otherwise deal with and collect obligations owed to it by the Issuer or their Affiliates and may otherwise deal with the Issuer or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or such other agent may do the same with like rights. 14. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Issuer or any Subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Senior Notes or any other obligations of the Issuer under this Senior Note or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting this Senior Note, the bearer of this Senior Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Senior Note. 15. Authentication 72 This Senior Note shall not be valid until an authorized officer of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Senior Note. 16. Governing Law The internal laws of the State of New York shall govern the Indenture and this Senior Note without regard to conflict of law provisions thereof. The Issuer will furnish to the holder of this Note upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Definitive Senior Note in larger type. Requests may be made to: Markel Corporation 4521 Highwoods Parkway Glen Allen, VA 23060 Attention: Gregory B. Nevers 73 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. ______________________________________________________________________________ Please print or typewrite name and address including zip code of assignee ______________________________________________________________________________ the within Senior Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________ attorney to transfer said Senior Note on the books of the Issuer with full power of substitution in the premises. 74 EX-4.11 4 dex411.txt FORM OF INDENTURE -------------- MARKEL CORPORATION, as Issuer and JPMORGAN CHASE BANK, as Trustee ------------------- INDENTURE Dated as of May __, 2002 ------------------- 7.0% Senior Notes due 2008 TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ................. 6 Section 1.1 Definitions .......................................... 6 Section 1.2 Other Definitions .................................... 14 Section 1.3 Compliance Certificates and Opinions ................. 15 Section 1.4 Form of Documents Delivered to Trustee ............... 16 Section 1.5 Acts of Holders ...................................... 16 Section 1.6 Notices, etc., to Trustee and the Issuer ............. 17 Section 1.7 Notice to Holders; Waiver ............................ 18 Section 1.8 Conflict of Any Provision of Indenture with Trust Indenture Act .................................. 18 Section 1.9 Effect of Headings and Table of Contents ............. 18 Section 1.10 Successor and Assigns ................................ 18 Section 1.11 Separability Clause .................................. 18 Section 1.12 Benefits of Indenture ................................ 19 Section 1.13 Governing Law ........................................ 19 Section 1.14 Legal Holidays ....................................... 19 Section 1.15 No Recourse Against Others ........................... 19 ARTICLE II .............................................................. 19 THE SENIOR NOTES ........................................................ 19 Section 2.1 Form and Dating ...................................... 19 Section 2.2 Execution and Authentication ......................... 21 Section 2.3 Senior Note Registrar and Paying Agent ............... 21 Section 2.4 Paying Agent To Hold Money in Trust .................. 22 Section 2.5 Senior Note Holder Lists ............................. 24 Section 2.6 Transfer and Exchange ................................ 24 Section 2.7 Replacement Securities ............................... 28 Section 2.8 Outstanding Securities ............................... 28 Section 2.9 Temporary Senior Notes ............................... 28 Section 2.10 Cancellation ......................................... 28 Section 2.11 Interest; Defaulted Interest ......................... 29 Section 2.12 CUSIP and CINS Numbers ............................... 29 ARTICLE III ............................................................. 29 SATISFACTION AND DISCHARGE .............................................. 29 Section 3.1 Satisfaction and Discharge of Indenture .............. 29 Section 3.2 Application of Trust Money ........................... 30 ARTICLE IV .............................................................. 31 DEFAULTS AND REMEDIES ................................................... 31 Section 4.1 Events of Default .................................... 31 Section 4.2 Acceleration of Maturity; Rescission ................. 33 2 Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee .................................................... 33 Section 4.4 Trustee May File Proofs of Claim .............................. 34 Section 4.5 Trustee May Enforce Claims Without Possession of Senior Notes ............................................... 34 Section 4.6 Application of Money Collected ................................ 35 Section 4.7 Limitation on Suits ........................................... 35 Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest .......................................... 36 Section 4.9 Restoration of Rights and Remedies ............................ 36 Section 4.10 Rights and Remedies Cumulative ................................ 36 Section 4.11 Delay or Omission Not Waiver .................................. 36 Section 4.12 Control by Holders ............................................ 36 Section 4.13 Waiver of Defaults............................................. 37 Section 4.14 Undertaking for Costs.......................................... 37 ARTICLE V .................................................................. 38 THE TRUSTEE ................................................................ 38 Section 5.1 Notice of Events of Default. .................................. 38 Section 5.2 Certain Rights of Trustee. .................................... 38 Section 5.3 Not Responsible for Recitals or Issuance of Senior Notes. ..... 40 Section 5.4 Trustee and Agents May Hold Senior Notes; Collections; etc. ... 40 Section 5.5 Money Held in Trust............................................ 40 Section 5.6 Compensation and Reimbursement................................. 40 Section 5.7 Conflicting Interests.......................................... 41 Section 5.8 Corporate Trustee Required; Eligibility........................ 41 Section 5.9 Resignation and Removal; Appointment of Successor.............. 42 Section 5.10 Acceptance of Appointment by Successor......................... 43 Section 5.11 Merger, Conversion, Consolidation or Succession to Business.................................................... 44 Section 5.12 Preferential Collection of Claims Against the Issuer. ......... 44 ARTICLE VI ................................................................. 44 HOLDERS' LISTS AND REPORTS BY TRUSTEE ...................................... 44 Section 6.1 Disclosure of Names and Addresses of Holders................... 44 Section 6.2 Reports by Trustee............................................. 45 ARTICLE VII ................................................................ 45 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ....................... 45 Section 7.1 Issuer May Consolidate, etc., Only on Certain Terms. 45 Section 7.2 Successor Substituted.......................................... 46 ARTICLE VIII ............................................................... 46 SUPPLEMENTAL INDENTURES .................................................... 46 Section 8.1 Supplemental Indentures Without Consent of Holders. ........... 46 Section 8.2 Supplemental Indentures with Consent of Holders. 46 Section 8.3 Execution of Supplemental Indentures........................... 47 Section 8.4 Effect of Supplemental Indentures.............................. 47 Section 8.5 Conformity with Trust Indenture Act............................ 48 Section 8.6 Reference in Senior Notes to Supplemental Indentures........... 48 ARTICLE IX .................................................................. 48 3 COVENANTS ................................................................. 48 Section 9.1 Payment of Principal, Premium and Interest............. 48 Section 9.2 Corporate Existence.................................... 48 Section 9.3 Payment of Taxes and Other Claims...................... 48 Section 9.4 Maintenance of Properties.............................. 49 Section 9.5 [Intentionally Omitted]................................ 49 Section 9.6 [Intentionally Omitted]................................ 49 Section 9.7 [Intentionally Omitted]................................ 49 Section 9.8 Liens.................................................. 49 Section 9.9 [Intentionally Omitted]................................ 49 Section 9.10 [Intentionally Omitted]................................ 49 Section 9.11 [Intentionally Omitted]................................ 49 Section 9.12 [Intentionally Omitted]................................ 49 Section 9.13 [Intentionally Omitted]................................ 49 Section 9.14 [Intentionally Omitted]................................ 49 Section 9.15 [Intentionally Omitted]................................ 49 Section 9.16 [Intentionally Omitted]................................ 49 Section 9.17 Withholding Tax........................................ 50 Section 9.18 Statement as to Compliance............................. 50 Section 9.19 [Intentionally Omitted]................................ 50 Section 9.20 Waiver of Certain Covenants............................ 50 ARTICLE X ................................................................. 50 REDEMPTION OF SENIOR NOTES ................................................ 50 Section 10.1 Right of Redemption. .................................. 50 Section 10.2 Applicability of Article............................... 50 Section 10.3 Election to Redeem; Notice to Trustee. ................ 50 Section 10.4 Selection by Trustee of Senior Notes to Be Redeemed.... 51 Section 10.5 Notice of Redemption................................... 51 Section 10.6 Deposit of Redemption Price............................ 52 Section 10.7 Senior Notes Payable on Redemption Date................ 52 Section 10.8 Senior Notes Redeemed in Part.......................... 53 Section 10.9 Optional Redemption.................................... 53 ARTICLE XI ................................................................ 53 DEFEASANCE AND COVENANT DEFEASANCE ........................................ 53 Section 11.1 Option to Effect Defeasance or Covenant Defeasance..... 54 Section 11.2 Defeasance and Discharge............................... 54 Section 11.3 Covenant Defeasance.................................... 54 Section 11.4 Conditions to Defeasance or Covenant Defeasance........ 55 Section 11.5 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions....... 56 Section 11.6 Reinstatement.......................................... 57 ARTICLE XII ............................................................... 57 MEETINGS OF HOLDERS OF SENIOR NOTES ....................................... 57 Section 12.1 Purposes for which Meetings may be Called ............. 57 Section 12.2 Call, Notice and Place of Meetings .................... 57 Section 12.3 Persons Entitled to Vote at Meetings .................. 58 Section 12.4 Quorum; Action ........................................ 58 Section 12.5 Determination of Voting Rights; Conduct and Adjournment of Meetings ............................... 59 Section 12.6 Counting Votes and Recording Action of Meetings ....... 60 4 EXHIBITS Exhibit A Form of Global Note Exhibit B Form of Definitive Senior Note 5 INDENTURE, dated as of May __, 2002, between Markel Corporation, a Virginia corporation (hereinafter called the "Issuer"), and JPMorgan Chase Bank, a New York banking corporation, as trustee (hereinafter called the "Trustee"). RECITALS WHEREAS, the Issuer has duly authorized the issue of its 7.0% Senior Notes due 2008 (hereinafter called the "Senior Notes") in an aggregate principal amount not to exceed $100,000,000, such Senior Notes to be issued in connection with the exchange of certain 7% Senior Notes due 2008 as of issued by Markel International Limited pursuant to an indenture dated as of May 18, 1998 (the "Terra Nova Exchange Offer"), all as more particularly described in the Offers to Exchange and Consent Solicitations and related Letter of Transmittal dated April __, 2002; WHEREAS, to provide the terms and conditions upon which the Senior Notes are to be authenticated, issued and delivered, the Issuer has duly authorized the execution and delivery of this Indenture; WHEREAS, all acts and things necessary have been done to make the Senior Notes, when executed by the Issuer and authenticated and delivered hereunder and duly issued by the Issuer, the valid, binding and legal obligations of the Issuer, and to make this Indenture a valid agreement of the Issuer in accordance with its terms; NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the consummation of the Terra Nova Exchange Offer, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Senior Notes, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article 1 have the meanings assigned to them in this Article 1 and include the plural as well as the singular; 6 (b) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (e) all references to "$" or "dollars" shall refer to the lawful currency of the United States of America; (f) the words "include," "included" and "including" as used herein shall be deemed in each case to be followed by the phrase "without limitation", if not expressly followed by such phrase or the phrase "but not limited to"; (g) any reference to a Section or Article refers to such Section or Article of this Indenture unless otherwise indicated. Certain terms used principally in Articles 2, 9, and 11 are defined in those Articles. "Adjusted Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, calculated on the third Business Day preceding the Redemption Date, plus in each case .20%. "Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person (except in cases where substantially all of the control that would ordinarily be exercisable by virtue of ownership of stock, other than the election of directors, has been eliminated by applicable regulatory authorities). For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, in each case to the extent applicable to such transaction and as in effect from time to time. 7 "Board of Directors" means the board of directors of the Issuer or any duly authorized committee of such board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to close. "Capital Stock" of any Person means any and all shares, interests, participation or other equivalents (however designated) of such Person's capital stock and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase the foregoing whether now outstanding or issued after the date hereof. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to the Stated Maturity Date of the Senior Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Senior Notes. "Comparable Treasury Price" means, with respect to any Redemption Date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any successor release) is not published or does not contain such prices on such Business Day, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations. "Consolidated Subsidiary" means, at any date, with respect to any Person, any Subsidiary or other entity the accounts of which are consolidated with those of such Person in the consolidated financial statements of such Person as of such date in accordance with generally accepted accounting principles. 8 "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "Corporation" includes corporations, associations, partnerships, companies and business trusts. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Definitive Senior Note" means any Senior Note substantially in the form of Exhibit B to this Indenture issued in accordance with this Indenture. "Depositary" means, with respect to the Global Notes, DTC and any nominee thereof, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include such successor and any nominee thereof. "DTC" means The Depository Trust Company. "Event of Default" has the meaning specified in Article 4. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United States Code, as amended from time to time. "Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, consistently applied, as in effect from time to time. "Global Note" means the Global Note substantially in the form of Exhibit A to this Indenture. "Holder" means in the case of any Senior Note, the Person in whose name such Senior Note is registered in the Senior Note Register. 9 "Indenture" means this instrument as originally executed (including all exhibits and schedules hereto) and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Senior Notes. "Issue Date" means the date on which Senior Notes are originally issued under this Indenture. "Issuer" means the Person named as the "Issuer" in the first paragraph of this instrument, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Issuer" shall mean such successor Person. To the extent necessary to comply with the requirements of the provisions of Sections 310 through 317 of the Trust Indenture Act as they are applicable to the Issuer, the term "Issuer" shall include any other obligor with respect to the Senior Notes for the purposes of complying with such provisions. "Lien" means any mortgage, charge, pledge, lien, security interest or other encumbrance of any kind. "Make-Whole Amount" means, in connection with any optional redemption of any Senior Notes, the excess, if any, of (i) the sum, as determined by a Quotation Agent of the present values of the principal amount of such Senior Notes, together with scheduled payments of interest from the redemption date to the Stated Maturity of the Senior Notes, in each case discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, over (ii) 100% of the principal amount of the Senior Notes to be redeemed. "Material Subsidiary" means, at any date, any Consolidated Subsidiary of the Issuer whose total assets after excluding intercompany accounts, are in excess of 10% of the total assets of the Issuer and its Consolidated Subsidiaries, with any determination being made as at the end of the most recently completed fiscal year for which consolidated financial statements have been prepared except to the extent that on such date the principal financial officers of the Issuer have actual reason to know to the contrary. "Maturity" when used with respect to any Senior Note means the date on which the principal of (and premium, if any) and interest on such Senior Note becomes due and payable as therein provided, whether at Stated Maturity or redemption date and whether by declaration of acceleration call for redemption or otherwise. "Obligation" means indebtedness for money borrowed or indebtedness evidenced by a bond, note, debenture or other evidence of indebtedness. 10 "Officer" means the Chairman of the Board and Chief Executive Officer, the President and Chief Operating Officer, the Vice Chairman, or the Executive Vice President and Chief Financial Officer of the Issuer. "Officers' Certificate" means a certificate signed by (1) the Chairman, a Vice Chairman, the President, a Vice President, or the Treasurer of the Issuer, and (2) the Secretary or an Assistant Secretary of the Issuer and delivered to the Trustee; provided, however, that such certificate may be signed by two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2) above. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Issuer. Each such opinion shall include the statements provided for in Section 314(e) of the Trust Indenture Act to the extent applicable. "Order" means a written order signed in the name of the Issuer (1) by its Chairman, a Vice Chairman, its President, a Vice President or its Treasurer and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2) above. "Outstanding" when used with respect to the Senior Notes means, as of the date of determination, all Senior Notes theretofore authenticated and delivered under this Indenture, except:(1) Senior Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (2) Senior Notes, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer) in trust or set aside and segregated in trust by the Issuer (if the Issuer shall act as its own Paying Agent) for the Holders of such Senior Notes; provided that, if such Senior Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (3) Senior Notes, except to the extent provided in Section 11.2 and Section 11.3, with respect to which the Issuer has effected defeasance or covenant defeasance as provided in Article 11; and (4) Senior Notes in exchange for or in lieu of which other Senior Notes have been authenticated and delivered pursuant to this Indenture, other than any such Senior Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Senior Notes are held by a protected purchaser in whose hands the Senior Notes are valid obligations of the Issuer; provided, however, that, in determining whether the Holders of the requisite principal amount of Outstanding Senior Notes have given any request, demand, authorization, notice, direction, consent or waiver hereunder, Senior Notes owned by the Issuer, any other obligor upon the Senior Notes or any Affiliate of the Issuer or such other obligor shall be disregarded and deemed not to be Outstanding solely for purposes of such determination, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, notice, direction, consent or 11 waiver, only Senior Notes which the Trustee knows to be so owned shall be so disregarded. Senior Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Senior Notes and that the pledgee is not the Issuer or any other obligor upon the Senior Notes or any Affiliate of the Issuer or such other obligor. "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture, association, joint stock company, trust, fund, unincorporated organization or government or any agency or political subdivision thereof. "Purchase Money Lien" means (i) any mortgage, pledge, hypothecation, lien, encumbrance, charge or security interest of any kind upon any capital stock of any Restricted Subsidiary acquired after the date hereof if such Purchase Money Lien is for the purpose of financing, and does not exceed, the cost to the Issuer or any Subsidiary of acquiring the capital stock or property of such Restricted Subsidiary and such financing is effected concurrently with, or within six months after, the date of such acquisition, and (ii) any extension, renewal or refinancing of any Purchase Money Lien so long as the principal amount of obligations secured thereby shall not exceed the original principal amount of obligations so secured at the time of such extension, renewal or refinancing. "Quotation Agent" means the Reference Treasury Dealer appointed by the Issuer. "Redemption Date", when used with respect to any Senior Notes to be redeemed, means the date fixed for such redemption pursuant to this Indenture. "Redemption Price", when used with respect to any Senior Notes to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Reference Treasury Dealer" means, at any time, (i) a primary U.S. Government securities dealer in New York City selected by the Issuer, and its respective successors ("Issuer Selected Dealer") and two additional Primary Treasury Dealers (as defined below) selected by the Issuer Selected Dealer; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Issuer Selected Dealer will substitute therefor another Primary Treasury Dealer unless the Issuer Selected Dealer has ceased to be a Primary Treasury Dealer in which case the Issuer shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by the Indenture Trustee after consultation with the Issuer, it being understood that the Trustee shall under no circumstances have any duty or responsibility to select any such other Primary Treasury Dealer, and should it select such Primary Treasury Dealer, shall have no liability for any such selection, except for its gross negligence or bad faith, in selecting such Primary Treasury Dealer. 12 "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any prepayment date, the arithmetic average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) furnished in writing to the Indenture Trustee by such Quotation Agent at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. "Regular Record Date" for the interest payable on any Interest Payment Date means the May 1 or November 1(whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Request" means a written request signed in the name of the Issuer (1) by its Chairman, a Vice Chairman, its President, a Vice President or its Treasurer and (2) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two of the officers listed in clause (1) above in lieu of being signed by one of such officers listed in such clause (1) and one of the officers listed in clause (2) above. "Responsible Officer" when used with respect to the Trustee, means any officer assigned to the Corporate Trust Administration of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Subsidiary" means any Subsidiary that is a licensed insurance company. "Securities Act" means the Securities Act of 1933, as amended. "Senior Notes" means (a) the Global Notes, substantially in the form of Exhibit A to this Indenture or (b) the Definitive Senior Notes, substantially in the form of Exhibit B to this Indenture, issued in accordance with this Indenture. For purposes of this Indenture, all Senior Notes shall vote as one series of Senior Notes under this Indenture. "Special Record Date" means a date fixed by the Trustee for the payment of any defaulted Interest. "Stated Maturity" means, when used with respect to any indebtedness or any installment of principal or of interest thereon, the date specified in such indebtedness as the fixed date on which the principal of such indebtedness or such installment of principal or of interest is due and payable. 13 "Subsidiary" means any Person, a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by the Issuer or by one or more other Subsidiaries, or by the Issuer and one or more other Subsidiaries. "Terra Nova Exchange Offer" shall have the meaning assigned to such term in the first recital to this indenture. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. "Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). Section 1.2 Other Definitions. Defined in Term Section ---- ------- "Act" ................................................................ 1.5 "Agent Members" ...................................................... 2.6 14 "Covenant Defeasance" ................................................... 11.2 "Defaulted Interest" .................................................... 2.11 "Defeasance" ............................................................ 11.2 "Incorporated Provision" ................................................ 1.8 "Notice of Default" ..................................................... 4.1 "Senior Note Register" .................................................. 2.5 "Senior Note Registrar" ................................................. 2.3 "Surviving Entity" ...................................................... 7.1 Section 1.3 Compliance Certificates and Opinions. Upon any application or request by the Issuer to the Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel such action is authorized or permitted by this Indenture and that all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion (other than the certificates required by Section 9.18(a)) with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. 15 Section 1.4 Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which the certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Issuer stating that the information with respect to such factual matters is in the possession of the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.5 Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such request, demand, authorization, direction, notice, consent, waiver or other action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the request, demand, authorization, direction, notice, consent, waiver or other action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any reasonable manner which the Trustee deems sufficient. (c) The ownership of Senior Notes shall be proved by the Senior Note Register. 16 (d) If the Issuer shall solicit from the Holders of Senior Notes any request, demand, authorization, direction, notice, consent, waiver or other Act, the Issuer may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of such Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Issuer shall have no obligation to do so. Notwithstanding Section 316(c) of the Trust Indenture Act, any such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not more than 30 days prior to the first solicitation of Holders generally in connection therewith and no later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record of Senior Notes at the close of business on such record date shall be deemed to be Holders of Senior Notes for the purposes of determining whether Holders of the requisite proportion of Senior Notes then outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Senior Notes then outstanding shall be computed as of such record date; provided that no such request, demand, authorization, direction, notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Senior Notes shall bind every future Holder of the same Senior Notes or the Holder of every Senior Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to be done by the Trustee, any Paying Agent or the Issuer in reliance thereon, whether or not notation of such action is made upon such Senior Notes. Section 1.6 Notices, etc., to Trustee and the Issuer. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with (a) the Trustee by any Holders, any representative or the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or delivered in writing or mailed, first-class postage prepaid, or by facsimile, to or with the Trustee at its Corporate Trust Office at 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional Trust Services, facsimile number (212) 946-8154; or (b) the Issuer by the Trustee, any representative or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or delivered in writing or mailed, first-class postage prepaid, or by facsimile, to the Issuer at 4521 Highwoods Parkway, Glen Allen, VA 23060, Attention: Chief Financial Officer, facsimile number (804) 965-1600, or at any other address or facsimile number furnished in writing to the Trustee by the Issuer. 17 Section 1.7 Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event at his address as it appears in the Senior Note Register or at the address provided by such Holder in writing to the Trustee not later than the latest date and not earlier than the earliest date prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice when mailed to a Holder in the aforesaid manner shall be conclusively deemed to have been received by such Holder whether or not actually received by such Holder. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be impracticable to mail notice of any event as required by any provisions of this Indenture, then any method of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. Section 1.8 Conflict of Any Provision of Indenture with Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 318 of the Trust Indenture Act, inclusive, or conflicts with any provision (an "incorporated provision") required by or deemed to be included in this Indenture by operation of such Trust Indenture Act Sections, such imposed duties or incorporation provision of the Trust Indenture Act shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, such provision of the Trust Indenture Act shall be deemed to apply to this Indenture as so modified or excluded, as the case may be, if this Indenture shall then be qualified under the Trust Indenture Act. Section 1.9 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.10 Successor and Assigns. All covenants and agreements in this Indenture by the Issuer and the Trustee shall bind its respective successors and assigns, whether so expressed or not. Section 1.11 Separability Clause. In case any provision in this Indenture or in the Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 18 Section 1.12 Benefits of Indenture. Nothing in this Indenture or in the Senior Notes, express or implied, shall give to any Person (other than the parties hereto and their successors hereunder, any Paying Agent and the Holders) any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.13 Governing Law. This Indenture and the Senior Notes shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Section 1.14 Legal Holidays. In any case where any Interest Payment Date, any date established for payment of Defaulted Interest pursuant to Section 2.11, or any Maturity with respect to any Senior Note shall not be a Business Day, then (notwithstanding any other provisions of this Indenture or of the Senior Notes) payment of the principal of, or any premium and interest on the Senior Notes need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or date established for payment of Defaulted Interest pursuant to Section 2.11 or Maturity, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or date established for payment of Defaulted Interest pursuant to Section 2.11 or Maturity, as the case may be, to the next succeeding Business Day. Section 1.15 No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Issuer or any subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Senior Notes, or any other obligations of the Issuer under the Senior Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting any of the Senior Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Senior Notes. ARTICLE II THE SENIOR NOTES Section 2.1 Form and Dating. (a) (1) The Global Notes shall be substantially in the form of Exhibit A, and the Trustee's certificate of authentication shall be substantially in the form set forth in such exhibit, which is hereby incorporated in and expressly made a part of this Indenture and (2) the Definitive Senior Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit B, which is hereby incorporated in and expressly made a part of this Indenture. The Global Notes and the Definitive Senior Notes may have notations, legends or endorsements required by law, governmental rule or regulation, stock or other securities exchange rule, depositary rule or usage agreements to which the Issuer is subject, if any, or usage (provided that any such notation, legend or endorsement is approved by the Issuer). The Issuer 19 shall furnish any such legend not contained in Exhibit A or Exhibit B to the Trustee in writing. The Global Notes and each Definitive Senior Note shall be dated the date of its authentication. The terms of the Global Notes and of the Definitive Senior Notes set forth in Exhibit A and Exhibit B, respectively, are part of the terms of this Indenture. The Senior Notes are being offered by the Issuer pursuant to the Terra Nova Exchange Offer. The Senior Notes will be initially issued as one or more global notes in definitive fully registered form without interest coupons, deposited on behalf of those holders tendering notes pursuant to the Terra Nova Exchange Offer for the Senior Notes represented thereby with the Trustee at its Institutional Trust Service office, as custodian for the Depositary and registered in the name of DTC or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made in the records of the Trustee and the Depositary as hereinafter provided. (b) This Section 2.1(b) shall apply only to Global Notes. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and Section 2.2, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary or a nominee thereof, (ii) shall be delivered by the Trustee to the Depositary or a custodian thereof or pursuant to the Depositary's instructions and (iii) shall bear legends substantially to the following effect: "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF." 20 (c) Definitive Senior Notes. Except as otherwise set forth in this Indenture, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of Definitive Senior Notes. Beneficial interests in a Global Note transferred to the beneficial holders thereof pursuant to Section 2.6 will be issued in certificated, registered form without interest coupons. (d) U.S. Tax Legend. All Senior Notes shall, if required by law, a legend to reflect the fact that the Note includes original issue discount under applicable law. Section 2.2 Execution and Authentication. Any Officer shall sign the Senior Notes for the Issuer by manual or facsimile signature. If an Officer whose signature is on a Senior Note no longer holds that office at the time the Trustee authenticates the Senior Note, the Senior Note shall be valid nevertheless. A Senior Note shall not be valid until an authorized officer of the Trustee manually signs the certificate of authentication on the Senior Note. The signature shall be conclusive evidence that the Senior Note has been authenticated under this Indenture. The Trustee shall authenticate and deliver the Global Notes for original issue in an aggregate principal amount at maturity not in excess of $100,000,000 upon receipt of an Order. Such order shall specify the principal amount of the Global Notes to be authenticated and the date on which the original issue of the Global Notes are to be authenticated and shall further provide instructions concerning delivery of the Global Notes. The aggregate principal amount of Senior Notes outstanding at any time may not exceed that amount, except as provided in Section 2.7 hereof. Each Global Note shall be dated the date of its authentication, shall bear interest from the applicable date and shall be payable on the dates specified on the face of the form of Global Notes set forth as Exhibit A hereto. Each Definitive Senior Note shall be dated the date of its authentication, shall bear interest from the applicable date and shall be payable on the dates specified on the face of the form of Definitive Senior Note set forth in Exhibit B hereto. The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Senior Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Senior Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Senior Note Registrar or Paying Agent. Section 2.3 Senior Note Registrar and Paying Agent. The Issuer will maintain in the City of New York, an office or agency where Senior Notes may be presented or surrendered for 21 payment (the "Paying Agent"), where Senior Notes may be surrendered for registration of transfer or exchange (the "Senior Note Registrar") and where notices and demands to or upon the Issuer in respect of the Senior Notes and this Indenture may be served. Until otherwise designated by the Issuer, such office or agency in The City of New York shall be the office maintained by the Trustee for such purpose. The Issuer will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Issuer may from time to time designate one or more other offices or agencies (in or outside The City of New York) where the Senior Notes may be presented or surrendered for any or all such purposes, and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in The City of New York for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such office or agency. The Issuer shall enter into an appropriate agency agreement with any Senior Note Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. The Issuer may change any Paying Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice to any holder of Senior Notes. If the Issuer fails to maintain a Senior Note Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 5.6. The Issuer initially appoints the Trustee as Senior Note Registrar and Paying Agent in connection with the Senior Notes. Section 2.4 Paying Agent To Hold Money in Trust. If the Issuer shall at any time act as its own Paying Agent, it will, by 10:00 a.m. (New York City time) on or before each due date of the principal of and any premium and interest on the Senior Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest on the Senior Notes so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Issuer shall have one or more Paying Agents for the Senior Notes, it will, at least one Business Day before such due date of the principal of and any premium and interest on the Senior Notes, deposit with a Paying Agent a sum in same day funds (or New York Clearing House funds if such deposit is made prior to the date on which such deposit is required 22 to be made) sufficient to pay the principal and any premium and interest to become due on the Senior Notes, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest on the Senior Notes and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of such action or any failure so to act. The Issuer will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (a) hold all sums held by it for the payment of the principal of and any premium and interest on the Senior Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Issuer (or any other obligor upon the Senior Notes) in the making of any payment of principal and any premium and interest on the Senior Notes; (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent; and (d) acknowledge, accept and agree to comply in all respects with the provisions of this Indenture relating to the duties, rights and obligations of such Paying Agent. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by an order of the Issuer direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of and any premium and interest on the Senior Notes and remaining unclaimed for two years after such principal and any premium and interest on the Senior Notes has become due and payable shall be paid to the Issuer upon Request by the Issuer; and the Holder of such Senior Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. 23 Section 2.5 Senior Note Holder Lists. The Trustee, or such other Person designated by the Issuer, shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of the Senior Notes (the "Senior Note Register"). If the Trustee is not the Senior Note Registrar, the Issuer shall furnish to the Trustee, in writing on or before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of the Senior Notes. Section 2.6 Transfer and Exchange. Notwithstanding any provision to the contrary herein, so long as a Global Note remains Outstanding and is held by or on behalf of the Depositary, transfers of a Global Note, in whole or in part, shall be made only in accordance with Section 2.6(a); transfers of a beneficial interest in a Global Note for Definitive Senior Note shall comply with Section 2.6(b), and transfers of a Definitive Senior Note shall comply with Section 2.6(c) and (d) below. (a) Transfer of Global Note. A Global Note may not be transferred, in whole or in part, to any Person other than the Depositary or a nominee thereof, and no such transfer to any such other Person may be registered; provided that this clause (a) shall not prohibit any transfer of a Senior Note that is issued in exchange for a Global Note but is not itself a Global Note. No transfer of a Senior Note to any Person shall be effective as against the Trustee or the Issuer under this Indenture or the Senior Notes unless and until such Senior Note has been registered in the name of such Person. Nothing in this Section shall prohibit or render ineffective any transfer of a beneficial interest in a Global Note effected in accordance with the other provisions of this Section 2.6. (b) Restrictions on Transfer of a Beneficial Interest in a Global Note for a Definitive Senior Note. A beneficial interest in a Global Note may not be exchanged for a Definitive Senior Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a request for transfer of a beneficial interest in a Global Note in accordance with Applicable Procedures for a Definitive Senior Note in the form satisfactory to the Trustee, together with written instructions to the Trustee to make, or direct the Senior Note Registrar to make, an adjustment on its books and records with respect to such Global Note to reflect a decrease in the aggregate amount of the Senior Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such decrease, then the Trustee shall cause, or direct the Senior Note Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Senior Note Registrar, the aggregate amount of Senior Notes represented by the Global Note to be decreased by the aggregate amount of the Definitive Senior Note to be issued, shall issue such Definitive Senior Note and shall debit or cause to be debited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Senior Note so issued. 24 (c) Transfer and Exchange of Definitive Senior Notes. When Definitive Senior Notes are presented to the Senior Note Registrar with a request: (x) to register the transfer of such Definitive Senior Notes; or (y) to exchange such Definitive Senior Notes for an equal principal amount of Definitive Senior Notes of other authorized denominations, the Senior Note Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, -------- ------- that the Definitive Senior Notes surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Senior Note Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. (d) Restrictions on Transfer of a Definitive Senior Note for a Beneficial Interest in a Global Note. A Definitive Senior Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Senior Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with written instructions directing the Trustee to make, or to direct the Senior Note Registrar to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Senior Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Senior Note and cause, or direct the Senior Note Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Senior Note Registrar, the aggregate amount of Senior Notes represented by the Global Note to be increased by the aggregate amount of the Definitive Senior Note to be exchanged, and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the amount of the Definitive Senior Note so cancelled. If no Global Notes are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon receipt of an Order, a new Global Note in the appropriate amount. The provisions of clauses (i), (ii), (iii), (iv) and (v) below shall apply only to Global Notes: (i) Notwithstanding any other provisions of this Indenture or the Senior Notes, except as provided in Section 2.6(b), a Global Note shall not be exchanged in whole or in part for a Senior Note registered in the name of any Person other than the Depositary or one or more nominees thereof, provided that a Global Note may be exchanged -------- for Senior Notes registered in the names of any Person designated by the Depositary in the event that (A) the Depositary has 25 notified the Issuer that it is unwilling or unable to continue as depositary for such Global Note or the Depositary has ceased to be a "clearing agency" registered under the Exchange Act, and a successor Depositary is not appointed by the Issuer within 90 days, (B) an Event of Default has occurred and is continuing with respect to the Senior Notes or (C) if the Company issues an Order that the Global Note shall be exchangeable. Any Global Note exchanged pursuant to clause (A) above shall be so exchanged in whole and not in part, and any Global Note exchanged pursuant to clause (B) above may be exchanged in whole or from time to time in part as directed by the Depositary. (ii) Senior Notes issued in exchange for a Global Note or any portion thereof shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate amount equal to that of such Global Note or portion thereof to be so exchanged and shall be registered in such names and be in such authorized denominations as the Depositary shall designate. Any Global Note to be exchanged in whole shall be surrendered by the Depositary to the Senior Note Registrar. With regard to any Global Note to be exchanged in part, either such Global Note shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Note, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Senior Note issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof. (iii) Subject to the provisions of clause (v) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members (as defined below) and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Senior Notes. (iv) In the event of the occurrence of any of the events specified in clause (i) above, the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Senior Notes. (v) Neither any members of, or participants in, the Depositary (collectively, the "Agent Members") nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Note registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner and holder of such Global Note for all purposes 26 (v) whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Senior Note. The Issuer shall not be required to make and the Senior Note Registrar need not register transfers or exchanges of Definitive Senior Notes selected for redemption (except, in the case of Definitive Senior Notes to be redeemed in part, the portion thereof not to be redeemed) or any Definitive Senior Notes for a period of 15 days before a selection of Definitive Senior Notes to be redeemed. Prior to the due presentation for registration of transfer of any Definitive Senior Note, the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar or any co-registrar shall deem and treat the Person in whose name a Definitive Senior Note is registered as the absolute owner of such Definitive Senior Note for the purpose of receiving payment of principal of, or premium, if any, and interest on, such Definitive Senior Note and for all other purposes whatsoever, whether or not such Definitive Senior Note is overdue, and none of the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar or any co-registrar shall be affected by notice to the contrary. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.6. All Senior Notes issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Senior Notes surrendered upon such transfer or exchange. The Senior Note Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.6 in accordance with its customary procedures. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable notice to the Senior Note Registrar. In connection with any transfer of Senior Notes, the Trustee, the Senior Note Registrar and the Issuer shall be entitled to receive, shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon the certificate, opinions and other information referred to herein (or in the forms provided herein, attached hereto or to the Senior Notes, or otherwise) received from any Holder and any transferee of any Senior Notes regarding the validity, legality and due authorization of any such transfer, the eligibility of the transferee to receive such Senior Notes and any other facts and circumstances related to such transfer. 27 Section 2.7 Replacement Securities. If a mutilated Definitive Senior Note is surrendered to the Senior Note Registrar, if a mutilated Global Note is surrendered to the Issuer, or if the Holder of a Senior Note claims that the Senior Note has been lost, destroyed or wrongfully taken, the Issuer shall issue, and the Trustee shall authenticate, a replacement Senior Note in such form as the Senior Note mutilated, lost, destroyed or wrongfully taken, if the Holder satisfies any reasonable requirements of the Trustee, the Senior Note Registrar or the Issuer. If required by the Trustee, the Senior Note Registrar or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuer, the Senior Note Registrar and the Trustee to protect the Issuer, the Trustee, the Paying Agent, the Senior Note Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Issuer, the Senior Note Registrar and the Trustee may charge the Holder for their expenses in replacing a Senior Note. Every replacement Senior Note is an additional obligation of the Issuer. Section 2.8 Outstanding Securities. If a Senior Note is replaced pursuant to Section 2.7 hereof, it ceases to be Outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Senior Note is held by a protected purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date, money sufficient to pay all principal and interest payable on that date with respect to the Senior Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Senior Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue, as the case may be. Section 2.9 Temporary Senior Notes. Until definitive Senior Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Senior Notes. Temporary Senior Notes shall be substantially in the form of definitive Senior Notes but may have variations that the Issuer considers appropriate for temporary Senior Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Senior Notes and deliver them in exchange for temporary Senior Notes. Section 2.10 Cancellation. The Issuer at any time may deliver Senior Notes to the Trustee for cancellation. The Senior Notes Registrar and the Paying Agent shall forward to the Trustee any Senior Notes surrendered to them for registration of transfer, exchange, purchase or payment. The Trustee (and no one else) shall cancel all Senior Notes surrendered for registration of transfer, exchange, purchase, payment or cancellation and shall dispose of cancelled Senior Notes in accordance with its customery procedures. The Issuer may not issue new Senior Notes to replace Senior Notes in accordance with its customary procedures it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Senior Notes in place of cancelled Senior Notes other than pursuant to the terms of this Indenture. 28 Section 2.11 Interest; Defaulted Interest. Interest on the Senior Notes shall accrue from the most recent date to which interest has been paid on the note for which the Senior Notes was exchanged pursuant to the Terra Nova Exchange Offer at the rate set forth in Exhibit A and Exhibit B. If the Issuer defaults in a payment of interest on the Senior Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful at the applicable interest rate on the Senior Notes) in any lawful manner. The Issuer may pay the defaulted interest to the Holder of such Senior Note on a subsequent Special Record Date. The Issuer shall fix or cause to be fixed any such Special Record Date and payment date and shall promptly mail to each Holder of Senior Notes and the Trustee a notice that states the special record date, if any, the payment date and the amount of defaulted interest to be paid. The Issuer may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this paragraph, such manner of payment shall be deemed practicable by the Trustee. Section 2.12 CUSIP and CINS Numbers. The Issuer in issuing the Senior Notes may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or exchange as a convenience to holders; provided that any such notice shall state that no representation is made as the correctness of such numbers either as printed on the Senior Notes or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Senior Notes. The Issuer shall promptly notify the Trustee of any change in CUSIP or CINS numbers. ARTICLE III SATISFACTION AND DISCHARGE Section 3.1 Satisfaction and Discharge of Indenture. This Indenture shall, upon request of the Issuer, cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Senior Notes herein expressly provided for) and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when: (a) either: (1) all Senior Notes theretofore authenticated and delivered (other than (A) Senior Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.7 and (B) Senior Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 2.4) have been delivered to the Trustee for cancellation; or 29 (2) all such Senior Notes not theretofore delivered to the Trustee for cancellation, (A) have become due and payable, or (B) will become due and payable at their Stated Maturity within one year, or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of Section 3.1(a)(2)(A), Section 3.1(a)(2)(B) or Section 3.1(a)(2)(C) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose an amount of money or U.S. Government Obligations sufficient to pay and discharge the entire indebtedness on such Senior Notes not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Senior Notes which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (c) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; (d) such satisfaction and discharge shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound; and (e) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that (1) all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with and (2) such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer to the Trustee under Section 5.6 and, if money shall have been deposited with the Trustee pursuant to this Section 3.1, the obligations of the Trustee under Sections 2.4 and 3.2 shall survive. Section 3.2 Application of Trust Money. Subject to the provisions of Section 2.4, all money deposited with the Trustee pursuant to Section 3.1 shall be held in trust and applied by it, in accordance with the provisions of the Senior Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the 30 Trustee may determine, to the Persons entitled thereto, of the principal of and any premium and interest on the Senior Notes for whose payment such money has been deposited with the Trustee. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 3.1 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer's obligations under this Indenture and the Senior Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 3.1; provided that if the Issuer has made any payment of principal of, and any premium and interest on, any Senior Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Senior Notes to receive such payment for the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE IV DEFAULTS AND REMEDIES Section 4.1 Events of Default. "Event of Default," wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether or not it shall be voluntary or involuntary or be effected by the operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation or any administrative or governmental body): (a) default in the payment of interest on any Senior Note when the same becomes due and payable and the continuance of such default for a period of 30 days; or (b) default in the payment of the principal of and any premium on any Senior Note at its Maturity, upon acceleration, optional redemption, required purchase or otherwise; or (c) default in the performance, or breach, of any covenant or agreement of the Issuer hereunder (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with in clauses (a) and (b) in this Section 4.1), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Senior Notes, a written notice specifying such default or breach and stating that such notice is a "Notice of Default" hereunder; or (d) (1) an event of default shall have occurred under any mortgage, bond, indenture, loan agreement or other document evidencing any issue of indebtedness of the Issuer for money borrowed, which issue has an aggregate outstanding principal amount of not less than $10,000,000, and such default shall have resulted in such indebtedness becoming, whether by declaration or otherwise, due and payable prior to the date on which it would otherwise become due and payable or (2) a default in any payment when due at final Stated Maturity of any such indebtedness outstanding in an aggregate principal amount of not less than $10,000,000 and, in 31 each case, within 10 days after notice thereof shall have been given, by registered or certified mail, to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of all of the Senior Notes at the time Outstanding; provided that if such indebtedness -------- shall be remedied or cured by the Issuer or waived by the holders of such indebtedness, then (1) the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action on the part of either the Trustee or any Holders of the Senior Notes and (2) any acceleration of the principal of the Senior Notes pursuant to Section 4.2 shall be deemed to be rescinded and annulled without further action on the part of either the Trustee or any Holders of the Senior Notes; and provided -------- further that, subject to the provisions of Sections 5.1 and 5.2, the Trustee - ------- shall not be charged with knowledge of any such default unless written notice thereof shall have been given to the Trustee by the Issuer, by a holder or an agent of the holder of any such indebtedness, by a trustee then acting under any indenture or other instrument under which such default shall have occurred, or by the Holders of not less than 25% in aggregate principal amount of all Outstanding Senior Notes; or (e) a decree or order is entered by a court having jurisdiction (1) for relief in respect of the Issuer or any Material Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy Code or any other federal or state bankruptcy, insolvency, reorganization or similar law or (2) adjudging the Issuer or any Material Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or any Material Subsidiary under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or any Material Subsidiary or of any substantial part of any of their properties, or ordering the winding up or liquidation of any of their affairs, and any such decree or order remains unstayed and in effect for a period of 60 consecutive days; or (f) the Issuer or any Material Subsidiary institutes a voluntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or any other case or proceedings to be adjudicated bankrupt or insolvent, or the Issuer or any Material Subsidiary consents to the entry of a decree or order for relief in respect of the Issuer or any Material Subsidiary in any involuntary case or proceeding under the Federal Bankruptcy Code or any other applicable federal or state law or to the institution of bankruptcy or insolvency proceedings against the Issuer or any Material Subsidiary, or the Issuer or any Material Subsidiary files a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or consents to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of any of the Issuer or any Material Subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due or takes corporate action in furtherance of any such action. 32 Section 4.2 Acceleration of Maturity; Rescission. If an Event of Default (other than an Event of Default specified in Section 4.1(e) or Section 4.1(f) occurs and is continuing, the Trustee or the Holders of at least 25% of the principal amount of the Outstanding Senior Notes, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare all unpaid principal of, and any premium and accrued interest on, all the Senior Notes to be due and payable immediately. Notwithstanding the foregoing, in the event of an Event of Default specified in Section 4.1(e) or Section 4.1(f), the amounts described above shall by such fact itself become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of at least a majority in aggregate principal amount of the Outstanding Senior Notes, by written notice to the Issuer and the Trustee, may annul such declaration if (a) the Issuer has paid or deposited with the Trustee a sum sufficient to pay (1) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6 (2) all overdue interest on all Senior Notes, (3) the principal of and premium, if any, on any Senior Notes which have become due and otherwise than by such declaration of acceleration and interest thereon at the rate borne by the Senior Notes, and (4) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Senior Notes; and (b) all Events of Default, other than the non-payment of principal of the Senior Notes which have become due solely by such declaration of acceleration, have been waived as provided in Section 4.13 or cured. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 4.3 Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuer covenants that if: (a) default is made in the payment of any interest on any Senior Note when such interest becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of and any premium on any Senior Note at the Maturity thereof, the Issuer will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Senior Notes, the whole amount then due and payable on such Senior Notes for principal and interest and, to the extent that payment of such interest shall be legally enforceable, interest on overdue installments of interest at the rate borne by the Senior Notes; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6. If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid and may prosecute such proceeding to judgment or final decree, 33 and may enforce the same against the Issuer or any other obligor upon the Senior Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Issuer or any other obligor upon the Senior Notes, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders under this Indenture by such appropriate private or judicial proceedings as the Trustee shall deem most effectual to protect and enforce such rights. Section 4.4 Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Issuer or any other obligor upon the Senior Notes or the property of the Issuer or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Senior Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer for the payment of overdue principal or interest and any other amounts due to the Trustee under Section 5.6) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal and any premium and interest owing and unpaid in respect of the Senior Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 5.6. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any proposal, plan of reorganization, arrangement, adjustment or composition or other similar arrangement affecting the Senior Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 4.5 Trustee May Enforce Claims Without Possession of Senior Notes. All rights of action and claims under this Indenture or the Senior Notes may be prosecuted and enforced by the Trustee without the possession of any of the Senior Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment 34 shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due to the Trustee under Section 5.6, be for the ratable benefit of the Holders of the Senior Notes in respect of which such judgment has been recovered. Section 4.6 Application of Money Collected. Any money, securities or other property collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium and interest, upon presentation of the Senior Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 5.6; SECOND: To the payment of the amounts then due and unpaid upon the Senior Notes for principal or any premium and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Senior Notes for principal or any premium and interest; and THIRD: The balance, if any, to the Issuer. Section 4.7 Limitation on Suits. No Holder of any Senior Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture or the Senior Notes, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (b) the Holders of not less than 25% in principal amount of the Outstanding Senior Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in the Trustee's own name; (c) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Senior Notes; it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference 35 over any other Holders or to enforce any right under this Indenture except in the manner provided in this Indenture and for the equal and ratable benefit of all the Holders. Section 4.8 Unconditional Right of Holders to Receive Principal, Premium and Interest. Notwithstanding any other provision in this Indenture or any provision of the Senior Notes, the Holder of any Senior Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 2.11) interest on such Senior Note on the respective due dates expressed in such Senior Note (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired or affected without the consent of such Holder. Section 4.9 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Issuer, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 4.10 Rights and Remedies Cumulative. Except as provided in Section 2.7, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 4.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Senior Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 4 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 4.12 Control by Holders. The Holders of not less than a majority in principal amount of the Outstanding Senior Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, provided that: (a) such direction shall not be in conflict with any rule of law or with this Indenture or expose the Trustee to personal liability, and 36 (b ) subject to the provisions of Section 315 of the Trust Indenture Act, the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 4.13 Waiver of Defaults. Subject to Section 4.2, the Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Notes by notice to the Trustee may on behalf of the Holders of all the Senior Notes waive any existing or past Default or Event of Default hereunder and its consequences, except a Default or Event of Default: (a) in the payment of the principal of and any premium or interest on any Senior Note, (b) in respect of a covenant or provision hereof which under Article 8 cannot be modified or amended without the consent of the Holder of each Outstanding Senior Note affected, or (c) in respect of a covenant or provision hereof which under Article 8 cannot be modified or amended without the consent of the Holders of a greater percentage in principal amount of, or all of, the Outstanding Senior Notes. The Holders of not less than the percentage in principal amount of Outstanding Senior Notes specified in Article 8 may on behalf of the Holders of all the Senior Notes waive any past Default or Event of Default hereunder and its consequences arising under a covenant or provision specified in Section 4.13(c). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 4.14 Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Senior Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant, in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 4.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Senior Notes, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or any premium or interest on any Senior Note on or after the respective Stated Maturities expressed in such Senior Note (or, in the case of redemption, on or after the Redemption Date). 37 ARTICLE V THE TRUSTEE Section 5.1 Notice of Events of Default. Within 60 days after the occurrence of any Event of Default, the Trustee shall transmit by mail to all Holders of the Senior Notes, as their names and addresses appear in the Senior Note Register or at the addresses provided by Holders in writing to the Trustee, notice of such Event of Default hereunder known to the Trustee, unless such Event of Default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of or any premium and interest on any Senior Note, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders. Section 5.2 Certain Rights of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the period when an Event of Default is continuing: (1) the Trustee is required to perform only those duties as are specifically set forth in this Indenture and no covenants or obligations shall be implied in this Indenture that are adverse to the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided that the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) this Section 5.2(c) does not limit the effect of Section 5.2(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; 38 (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 4.12; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to this Section 5.2. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense, including such reasonable advances as may be requested by the Trustee. (f) Subject to the foregoing Sections 5.2(a), 5.2(b), 5.2(c), 5.2(d) and 5.2(e): (1) The Trustee may rely and shall be protected in acting or in refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by a Request or Order of the Issuer and any resolution by the Board of Directors of the Issuer may be sufficiently evidenced by a Board Resolution. (2) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. In addition, in determining the compliance of the Issuer with the financial covenants set forth herein, the Trustee may rely on the certificate delivered to the Trustee pursuant to Section 9.18. (3) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (4) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. (5) The Trustee may consult with counsel, accountants or other experts and any advice of such counsel, accountants or other experts shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice. 39 (6) The Trustee shall not be deemed to have notice of any Default hereunder, except for Events of Default described in Paragraphs (a) or (b) of Section 4.1 (only to the extent that the Trustee acts as the Paying Agent), unless the Trustee shall be specifically notified by a writing delivered to it of such Default by the Issuer, , the Paying Agent (to the extent the Trustee is not acting as the Paying Agent) or by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Notes, and in the absence of such notice so delivered, the Trustee may conclusively assume that there is no Default except as aforesaid. (7) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as duties. Section 5.3 Not Responsible for Recitals or Issuance of Senior Notes. The recitals contained herein and in the Senior Notes, except the Trustee's certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Senior Notes. The Trustee shall not be accountable for the use or application by the Issuer of Senior Notes or the proceeds thereof, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Senior Notes and perform its obligations hereunder. Section 5.4 Trustee and Agents May Hold Senior Notes; Collections; etc. The Trustee and any Paying Agent, Senior Note Registrar or other agent of the Issuer in its individual or any other capacity, may become the owner or pledgee of Senior Notes with the same rights it would have if it were not the Trustee, Paying Agent, Senior Note Registrar or such other agent and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not Trustee, Paying Agent, Senior Note Registrar or such other agent. Section 5.5 Money Held in Trust. All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust hereunder for the purposes for which they were received and need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer. Section 5.6 Compensation and Reimbursement. Issuer covenants and agrees: (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and 40 (c) to indemnify the Trustee and each of its officers, directors, employees, agents and counsel for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation of the Issuer under this Section 5.6 to compensate the Trustee and to pay and reimburse the Trustee for such expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. As security for the performance of the obligation of the Issuer under this Section 5.6, the Trustee shall have a claim prior to the Senior Notes upon all money, securities or other property held or collected by the Trustee as such and the Senior Notes are hereby subordinated to such claim. If the Trustee incurs expenses or renders services after an Event of Default specified in Section 4.1(e) or Section 4.1(f) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under the Federal Bankruptcy Code and any other applicable federal or state bankruptcy law. Section 5.7 Conflicting Interests. The Trustee shall comply with the provisions of Section 310(b) of the Trust Indenture Act. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture; the Indenture of even date herewith between Markel Corporation and JPMorgan Chase Bank (including the 7.2% Senior Notes due 2007 issued thereunder); the Indenture dated as of June 5, 2001 between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank, with respect to securities of more than one series (including the Liquid Yield Option Notes due 2031 issued thereunder); the Indenture (for 8.71% Junior Subordinated Deferrable Interest Debentures) dated as of January 13, 1997 between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; the Indenture dated as of May 18, 1998, among Terra Nova Insurance (UK) Holdings plc, Terra Nova (Bermuda) Holdings Ltd., and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; the Indenture dated as of August 26, 1997, among Terra Nova Insurance (UK) Holdings plc, Terra Nova (Bermuda) Holdings Ltd., and The Chase Manhattan Bank, now known as JPMorgan Chase Bank; and the Indenture dated as of October 26, 1993, between Markel Corporation and The Chase Manhattan Bank, now known as JPMorgan Chase Bank (including the 7.25% Notes due November 1, 2003 issued thereunder). Section 5.8 Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act and which shall have a combined capital and surplus of at least $50,000,000 and 41 have its Corporate Trust Office located in The City of New York (or if its Corporate Trust Office shall not be located in The City of New York, the Issuer shall, pursuant to Section 2.3, maintain an office or agency in The City of New York where the Senior Notes may be presented or surrendered and notices and demands hereunder may be made or served) to the extent there is such an institution eligible and willing to serve. If such corporation publishes reports of condition at least annually pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 5. Section 5.9 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article 5 shall become effective until the acceptance of appointment by the successor Trustee under Section 5.10, at which time the retiring Trustee shall be fully discharged from its obligations hereunder. (b) The Trustee may resign at any time by giving written notice thereof to theIssuer. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor Trustee by written instrument executed by authority of the Board of Directors of the Issuer, a copy of which shall be delivered to the resigning Trustee and a copy to the successor Trustee. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the Issuer, or any Holder who has been a bona fide Holder of a Senior Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper, appoint a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Senior Notes, delivered to the Trustee and the Issuer. (d) If at any time: (1) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act after written request therefor by the Issuer or by any Holder who has been a bona fide Holder of a Senior Note for at least six months, or (2) the Trustee shall cease to be eligible under Section 5.8 and shall fail to resign after written request therefor by the Issuer or by any Holder who has been a bona fide Holder of a Senior Note for at least six months, or 42 (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any case, (i) the Issuer by a Board Resolution may remove the Trustee, or (ii) subject to Section 4.14, the Holder of any Senior Note who has been a bona fide Holder of a Senior Note for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Issuer, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Senior Notes delivered to the Issuer and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with Section 5.10, become the successor Trustee and supersede the successor Trustee appointed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or the Holders of the Senior Notes and so accepted appointment, the Holder of any Senior Note who has been a bona fide Holder for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Issuer shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first class mail, postage prepaid, to the Holders of Senior Notes as their names and addresses appear in the Senior Note Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. Section 5.10 Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; provided, however, that the retiring Trustee shall continue to be entitled to the benefit of Section 5.6(c); but, on request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, 43 transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 5. Upon acceptance of appointment by any successor Trustee as provided in this Section 5.10, the Issuer shall give notice thereof to the Holders of the Senior Notes, by mailing such notice to the Holders of Senior Notes as their names and addresses appear on the Senior Note Register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.9. If the Issuer fails to give such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be given at the expense of the Issuer. Section 5.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Senior Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Senior Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Senior Notes. Section 5.12 Preferential Collection of Claims Against the Issuer. If and when the Trustee shall be or become a creditor of the Issuer (or any other obligor under the Senior Notes), the Trustee shall be subject to the provisions of Section 311(b) of the Trust Indenture Act regarding the collection of claims against the Issuer (or any such other obligor). ARTICLE VI HOLDERS' LISTS AND REPORTS BY TRUSTEE Section 6.1 Disclosure of Names and Addresses of Holders. Every Holder of Senior Notes, by receiving and holding the same, agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee or any agent of either of them shall be held accountable by reason of the disclosure of any information as to the names and addresses of the Holders in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 312 of the Trust Indenture Act. 44 Section 6.2 Reports by Trustee. Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of Senior Notes, the Trustee shall transmit by mail to all Holders of Senior Notes, as their names and addresses appear in the Senior Note Register, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15 if required by Trust Indenture Act Section 313(a). ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 7.1 Issuer May Consolidate, etc., Only on Certain Terms. After the Issue Date, the Issuer shall not consolidate with or merge with or into any other Person, or, directly or indirectly, sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its assets in one or more related transactions to any Person or group of affiliated Persons unless, at the time and after giving effect thereto: (a) (1) the Issuer shall be the continuing corporation, or (2) the Person (if other than the Issuer) formed by such consolidation, or into which the Issuer is merged or the Person that acquires by sale, assignment, transfer, lease, conveyance or other disposition the assets of the Issuer, substantially as an entirety (the "Surviving Entity"), is a corporation duly organized and validly existing under the laws of any domestic or foreign jurisdiction and shall, in the case of clause (2), expressly assume, by supplemental indenture hereto, executed and delivered to the Trustee, all the obligations of the Issuer under this Indenture; (b) immediately before and after such transaction, giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (c) if any of the property or assets of the Issuer would thereupon become subject to any Lien, the outstanding Senior Notes shall be secured equally and ratably with (or prior to) the obligation or liability secured by such Lien, unless the Issuer could create such Lien hereunder without equally and ratably securing the Senior Notes; and (d) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer or lease and such supplemental indenture, if one is required by this Section 7.1, comply with this Section 7.1 and that all conditions precedent herein provided for relating to such transaction have been complied with. 45 Section 7.2 Successor Substituted. Upon any consolidation or merger or any sale, assignment, transfer, lease or conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 7.1, the successor Person formed by such consolidation or into which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein. When a successor assumes all the obligations of its predecessor under this Indenture and the Senior Notes, the predecessor will be released from those obligations, provided that in the case of a transfer by lease, the predecessor corporation shall not be released from the payment of principal and interest on the Senior Notes. ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.1 Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Issuer, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto in form satisfactory to the Trustee, for any of the following purposes: (a) to cure any ambiguity or to correct any provision herein which may be defective or inconsistent with any other provision herein; (b) to provide for the assumption of the Issuer's obligations to Holders of the Senior Notes in the case of a merger or consolidation; (c) to secure the Senior Notes pursuant to the requirements of Section 7.1; (d) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act, as contemplated by Section 8.5 or otherwise; (e) to evidence and provide the acceptance of the appointment of a successor Trustee hereunder; or (f) to make any other change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any Holder under this Indenture or the Senior Notes. Section 8.2 Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Senior Notes (including consents obtained in connection with a tender offer or exchange offer for the Senior Notes), by Act of such Holders delivered to the Issuer and the Trustee, the Issuer, when authorized by a Board Resolution, and the Trustee may enter into one or more indentures 46 supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of waiving or modifying in any manner the rights of the holders under this Indenture; provided, however, that no such supplemental indenture, amendment or waiver shall without the consent of the Holder of each Outstanding Senior Note affected thereby: (1) change the Stated Maturity or the principal of, or any installment of interest on, any Senior Note or reduce the principal amount thereof or the rate of interest thereon or any provision relating to redemption price of Senior Notes or the periods during which redemption may be effected, or change the coin or currency in which the principal of any Senior Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or (2) reduce the percentage in principal amount of the Outstanding Senior Notes, the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (3) modify any of the provisions of this Section 8.2, Section 4.13 or Section 9.20, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Senior Note affected thereby. It shall not be necessary for any Act of Holders under this Section 8.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.3 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article 8 or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the documents required by Section 1.3, and (subject to Section 315(a) through 315(d) of the Trust Indenture Act and Section 5.2 hereof) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 8.4 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article 8, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; 47 and every Holder of Senior Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 8.5 Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article 8 shall conform to the requirements of the Trust Indenture Act as then in effect. Section 8.6 Reference in Senior Notes to Supplemental Indentures. Senior Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 8 may, and shall if required by the Issuer, bear a notation in form approved by the Issuer as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Senior Notes so modified as to conform, in the opinion of the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and shall be authenticated and delivered by the Trustee in exchange for Outstanding Senior Notes. ARTICLE IX COVENANTS Section 9.1 Payment of Principal, Premium and Interest. The Issuer will duly and punctually pay the principal of and any premium and interest on the Senior Notes in accordance with the terms of the Senior Notes and this Indenture. Principal and interest shall be considered paid on the date due if the Paying Agent (other than the Issuer) holds on that date money sufficient to pay all principal and interest then due. The Issuer shall pay interest on overdue principal and, to the extent lawful, interest on overdue installments of interest, at the rate per annum set forth in the Senior Notes. Section 9.2 Corporate Existence. Subject to Article 7, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate rights (charter and statutory), corporate licenses and corporate franchises of the Issuer; provided that the Issuer shall not be required to preserve any such right, license, or franchise if the Board of Directors of the Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 9.3 Payment of Taxes and Other Claims. The Issuer will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon it or any Subsidiary and (b) all material lawful claims for labor, materials and supplies, which, if unpaid, might by law become a Lien upon the property of the Issuer or any of its Subsidiaries that could produce a material adverse effect on the consolidated financial condition of the Issuer (in the good faith judgment of management); provided, however, that the Issuer shall not be required to pay or discharge or 48 cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. Section 9.4 Maintenance of Properties. The Issuer shall cause all properties owned by or leased to it or its Subsidiaries and used or useful in the conduct of its business or the business of such Subsidiary to be maintained and kept in normal condition, repair and working order, ordinary wear and tear excepted; provided that nothing in this Section 9.4 shall prevent the Issuer or any of its Subsidiaries from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Board of Directors the Issuer or the Subsidiary concerned, or of any officer (or other agent employed by the Issuer or any of its Subsidiaries) of the Issuer or such Subsidiary having managerial responsibility for any such property, desirable in the conduct of the business of the Issuer or any of its Subsidiaries. Section 9.5 [Intentionally Omitted]. Section 9.6 [Intentionally Omitted]. Section 9.7 [Intentionally Omitted]. Section 9.8 Liens. The Issuer will not, and will not permit any of its Subsidiaries to create, incur, or suffer to exist any Lien (other than a Purchase Money Lien) upon any capital stock, whether owned on the date of this Indenture or hereafter acquired, of any Restricted Subsidiary, to secure any Obligation of the Issuer, any Subsidiary or any other Person, without in any such case making effective provision whereby all of the Outstanding Senior Notes shall be directly secured equally and ratably with such Obligations; provided, however, that the foregoing restrictions shall not apply to Liens existing on the date hereof securing Obligations outstanding on the date hereof. Section 9.9 [Intentionally Omitted]. Section 9.10 [Intentionally Omitted]. Section 9.11 [Intentionally Omitted]. Section 9.12 [Intentionally Omitted]. Section 9.13 [Intentionally Omitted]. Section 9.14 [Intentionally Omitted]. Section 9.15 [Intentionally Omitted]. Section 9.16 [Intentionally Omitted]. 49 Section 9.17 Withholding Tax. All payments made by the Issuer under the Senior Notes will be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. Section 9.18 Statement as to Compliance. The Issuer will deliver to the Trustee, within 120 days after the end of each fiscal year ending after the date hereof, a certificate of its principal executive officer, principal financial officer or principal accounting officer stating whether, to such officer's knowledge, the Issuer is in compliance with all covenants and conditions to be complied with by it under this Indenture. For purposes of this Section 9.18, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. Section 9.19 [Intentionally Omitted] Section 9.20 Waiver of Certain Covenants. The Issuer may omit in any particular instance to comply with any covenant or condition set forth in Sections 9.3, 9.4, 9.8, 9.17 and 9.18, if, before or after the time for such compliance, the Holders of not less than a majority in aggregate principal amount of the Senior Notes at the time Outstanding shall, by Act of such Holders, waive such compliance in such instance with such covenant or condition. No such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuer and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. ARTICLE X REDEMPTION OF SENIOR NOTES Section 10.1 Right of Redemption. The Issuer shall have the right to redeem the Senior Notes, in whole or in part, at any time and from time to time. Section 10.2 Applicability of Article. Redemption of Senior Notes at the election of the Issuer or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article 10. Section 10.3 Election to Redeem; Notice to Trustee. The election of the Issuer to redeem any Senior Notes pursuant to Section 10.1 shall be evidenced by a Board Resolution. In case of such redemption, the Issuer shall, at least 60 days prior to the Redemption Date fixed by it (unless a shorter notice period shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Senior Notes to be redeemed. 50 Section 10.4 Selection by Trustee of Senior Notes to Be Redeemed. If less than all of the Senior Notes are to be redeemed, the particular Senior Notes or portions thereof to be redeemed shall be selected not more than 60 days and not less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Senior Notes not previously called for redemption on a pro rata basis, by lot or by any other method the Trustee shall deem fair and appropriate and in compliance with the requirements of such principal national securities exchange, if any, on which the Senior Notes are listed or, if the Senior Notes are not so listed, on a pro rata basis, by lot or by any other method the Trustee shall deem fair and appropriate, provided that the amounts to be redeemed shall be equal to $1,000 or any integral multiple thereof. The Trustee shall promptly notify the Issuer and the Senior Note Registrar in writing of the Senior Notes selected for redemption and, in the case of any Senior Notes selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Senior Notes shall relate, in the case of any Senior Note redeemed or to be redeemed only in part, to the portion of the principal amount of such Senior Note which has been or is to be redeemed. Section 10.5 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Senior Notes to be redeemed at the Redemption Prices specified in Section 10.9. All notices of redemption shall state: (a) the Redemption Date; (b) the Redemption Price including, in connection with an optional redemption pursuant to Section 10.9, the estimated Make-Whole Amount due in connection with such redemption (calculated as if the date of such notice were the date of the prepayment) and setting forth the details of such calculation of Make-Whole Amount; (c) if less than all Outstanding Senior Notes are to be redeemed, the identification (and, if the case of a Senior Note to be redeemed in part, the principal amount) of the particular Senior Notes to be redeemed; (d) that on the Redemption Date the Redemption Price will become due and payable upon each such Senior Note or portion thereof, and that (unless the Issuer shall default in payment of the Redemption Price) interest thereon shall cease to accrue on and after said date; (e) the place or places where such Senior Notes are to be surrendered for payment of the Redemption Price; 51 (f) that Senior Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (g) the CUSIP number or numbers, if any, relating to such Senior Notes, but that no representation is made as to the correctness or accuracy of the CUSIP number listed in such notice or printed on the Senior Notes and that reliance may be placed only on the other identification numbers printed on the Senior Notes; (h) in the case of a Definitive Senior Note to be redeemed in part, the principal amount of such Senior Note to be redeemed and that after the Redemption Date upon surrender of such Definitive Senior Note, a new Definitive Senior Note or Definitive Senior Notes in the aggregate principal amount equal to the unredeemed portion thereof will be issued; and (i) in the case of a Global Note to be redeemed in part, the principal amount of such Global Note to be redeemed and that after the Redemption Date upon surrender of such Global Note a new Global Note in principal amount equal to the unredeemed portion will be issued or an adjustment will be made to the existing Global Note such that the aggregate principal amount of the Global Note will equal the unredeemed portion of the Global Note. Notice of redemption of Senior Notes to be redeemed at the election of the Issuer shall be given by the Issuer or, at its request, by the Trustee in the name and at the expense of the Issuer. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. Section 10.6 Deposit of Redemption Price. On or prior to 10:00 am, New York City time, on any Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount of money in same-day funds (or New York Clearing House funds if such deposit is made prior to the applicable Redemption Date) sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Senior Notes or portions thereof which are to be redeemed on that date. Section 10.7 Senior Notes Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Senior Notes to be redeemed shall, subject to the provisions of Section 10.3, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Issuer shall default in the payment of the Redemption Price and accrued interest) such Senior Notes shall cease to bear interest. Upon surrender of any such Senior Note for redemption in accordance with said notice, such Senior Note shall be paid by the Issuer at the Redemption Price together with accrued interest to the Redemption Date; provided, however, that installments of interest on any Definitive Senior Notes whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Definitive Senior Notes, or one or more predecessor Definitive Senior Notes, 52 registered as such on the relevant Regular Record Dates according to the terms and the provisions of Section 2.5. If any Senior Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal thereof (and premium, if any, thereon) shall, until paid, bear interest from the Redemption Date at the rate borne by such Senior Note. Section 10.8 Senior Notes Redeemed in Part. Any Senior Note which is to be redeemed only in part shall be surrendered at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3 (with, if the Issuer, the Senior Note Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer, the Senior Note Registrar or the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing). Upon surrender of a Definitive Senior Note that is redeemed in part, the Issuer shall execute, and the Trustee shall authenticate and deliver to the Holder of such Definitive Senior Note without service charge, a new Definitive Senior Note or Definitive Senior Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Definitive Senior Note so surrendered. Upon surrender of a Global Note that is redeemed in part, the Paying Agent shall forward the Global Note to the Trustee who shall reduce the principal amount of such Global Note to an amount equal to the unredeemed portion of the Global Note surrendered. Section 10.9 Optional Redemption. (a) The Senior Notes are subject to redemption at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date (subject to the right of Holders of record on relevant Regular Record Dates to receive interest due on an Interest Payment Date) as provided in the Indenture, plus the Make-Whole Amount, if any, with respect to such Senior Notes. Three Business Days prior to such prepayment, the Issuer shall give notice to the Quotation Agent requesting the Quotation Agent to provide a quote of the Comparable Treasury Price and the Quotation Agent shall provide such quotation to the Issuer on or before one Business Day prior to such prepayment. One Business Day prior to such prepayment, the Quotation Agent or the Issuer shall give notice to the Indenture Trustee specifying the calculation of the Make-Whole Amount as of the Redemption Date. (a) The Senior Notes are not subject to redemption through operation of a sinking fund. ARTICLE XI DEFEASANCE AND COVENANT DEFEASANCE 53 Section 11.1 Option to Effect Defeasance or Covenant Defeasance. The Issuer may, at its option by Board Resolution, at any time, elect to have either Section 11.2 or Section 11.3 be applied to all Outstanding Senior Notes upon compliance with the conditions set forth below in this Article 11. Section 11.2 Defeasance and Discharge. Upon the Issuer's exercise under Section 11.1 of the option applicable to this Section 11.2, the Issuer shall be deemed to have been discharged from its obligations with respect to all Outstanding Senior Notes on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Senior Notes, which shall thereafter be deemed to be "Outstanding" only for the purposes of Section 11.5 and the other sections of this Indenture referred to in Section 11.2(a) and Section 11.2(b) below, and to have satisfied all other obligations under such Senior Notes and this Indenture (and the Trustee, on demand of and at the expense of the Issuer shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of Outstanding Senior Notes to receive solely from the trust fund described in Section 11.5 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Senior Notes when such payments are due, or on the Redemption Date, as the case may be, (b) the Issuer's obligations with respect to such Senior Notes under Section 2.3, Section 2.4, Section 2.6, Section 2.7, Section 2.12 and Section 2.13, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer's obligations in connection therewith, and (d) this Article 11. Subject to compliance with this Article 11, the Issuer may exercise its option under this Section 11.2 notwithstanding the prior exercise of its option under Section 11.3 with respect to the Senior Notes. Section 11.3 Covenant Defeasance. Upon the Issuer's exercise under Section 11.1 of the option applicable to this Section 11.3, the Issuer, and, if applicable, the Trustee and each Holder of Senior Notes, shall be released from its obligations under the covenants contained in Article 7, Sections 9.2 through 9.4, Section 9.8, Section 9.17 and Section 9.18 inclusive, with respect to the Outstanding Senior Notes on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"), and the Senior Notes shall thereafter be deemed to be not "Outstanding" for the purposes of any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "Outstanding" for all other purposes hereunder (it being understood that such Senior Notes shall not be deemed Outstanding for financial accounting purposes). For this purpose, such covenant defeasance means that, with respect to the Outstanding Senior Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under Section 4.1(c) but, 54 except as specified above, the remainder of this Indenture and such Senior Notes shall be unaffected thereby. Section 11.4 Conditions to Defeasance or Covenant Defeasance. The following shall be the conditions to application of either Section 11.2 or Section 11.3 to the Outstanding Senior Notes: (a) The Issuer shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Senior Notes, (1) cash in U.S. Dollars in an amount, or (2) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, cash in U.S. Dollars in an amount, or (3) a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge the principal of (and premium, if any) and interest on the Outstanding Senior Notes on the Stated Maturity or on the applicable Optional Redemption Date, as the case may be, of such principal or installment of principal of and any premium and interest on the Senior Notes; provided that the Trustee shall have been irrevocably instructed by the Issuer in writing to apply such money or the proceeds of such U.S. Government Obligations to said payments with respect to the Senior Notes. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt; (b) In the case of an election under Section 11.2, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably satisfactory to the Trustee confirming that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (2) since the date hereof, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Senior Notes will not recognize 55 income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (c) In the case of an election under Section 11.3, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably satisfactory to the Trustee confirming that the Holders of the Outstanding Senior Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; (d) No Default or Event of Default with respect to the Senior Notes shall have occurred and be continuing on the date of such deposit or, insofar as Section 4.1(e) or Section 4.1(f) is concerned, at any time in the period ending on the 91st day after the date of such deposit; (e) Such election under Section 11.2 or Section 11.3 shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Issuer is a party or by which the Issuer is bound; (f) In the case of an election under either Section 11.2 or Section 11.3, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) In the case of an election under either Section 11.2 or Section 11.3, the Issuer shall have delivered to the Trustee an Officers' Certificate stating that the deposit made by the Issuer pursuant to its election under Section 11.2 or Section 11.3 was not made by the Issuer with the intent of preferring the Holders over other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding creditors of the Issuer or others; and (h) The Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel in the United States, each stating that all conditions precedent provided for relating to either the defeasance under Section 11.2 or the covenant defeasance under Section 11.3 (as the case may be) have been complied with as contemplated by this Section 11.4. Section 11.5 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of Section 2.4, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 11.5, the "Trustee") pursuant to Section 11.4 in respect of the Outstanding Senior Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Senior Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Senior Notes of all sums due 56 and to become due thereon in respect of principal and any premium and interest, but such money need not be segregated from other funds except to the extent required by law. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 11.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Senior Notes. Anything in this Article 11 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon Issuer Request any money or U.S. Government Obligations held by it as provided in Section 11.4 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 11.4(a)) are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance. Section 11.6 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Obligations in accordance with Section 11.2 or Section 11.3, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer's obligations under this Indenture and the Senior Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.2 or Section 11.3, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 11.2 or Section 11.3, as the case may be; provided, however, that, if the Issuer makes any payment of principal of or any premium and interest on any Senior Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Senior Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE XII MEETINGS OF HOLDERS OF SENIOR NOTES Section 12.1 Purposes for Which Meetings may be Called. A meeting of Holders may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders. Section 12.2 Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders for any purpose specified in Section 12.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York. Notice of every meeting of Holders, setting forth the time and the place 57 of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.7, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) In case at any time the Issuer (by or pursuant to a Board Resolution) or the Holders of at least 10% in aggregate principal amount of all the Senior Notes at the time shall have requested the Trustee to call a meeting of the Holders for any purpose specified in Section 12.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to Section 1.7) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Issuer or the Holders in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (a) of this Section. Section 12.3 Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders, a Person shall be (1) a Holder of one or more Outstanding Senior Notes, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Senior Notes by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Issuer and its counsel. Section 12.4 Quorum; Action. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes shall constitute a quorum for a meeting of Holders; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of not less than a specified percentage in principal amount of the Outstanding Senior Notes, the Persons entitled to vote such specified percentage in Outstanding Senior Notes shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of Holders, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 12.2(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Senior Notes which shall constitute a quorum. 58 Except as limited by the proviso to Section 8.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of Senior Notes Outstanding; provided, however, that, except as limited by the proviso to Section 8.2, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of not less than a specified percentage in aggregate principal amount of the Outstanding Senior Notes may be adopted at a meeting or an adjourned meeting duly convened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of such specified percentage. Any resolution passed or decision taken at any meeting of Holders duly held in accordance with this Section shall be binding on all the Holders, whether or not such Holders were present or represented at the meeting. Section 12.5 Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders in regard to proof of the holding of Outstanding Senior Notes and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Senior Notes shall be proved in the manner specified in Section 1.5 and the appointment of any proxy shall be proved in the manner specified in Section 1.5. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.5 or other proof. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Issuer or by Holders as provided in Section 12.2(b) in which case the Issuer or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes represented at the meeting. (c) At any meeting, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Senior Notes held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Senior Note challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder or proxy. 59 (d) Any meeting of Holders duly called pursuant to Section 12.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Senior Notes represented at the meeting; and the meeting may be held as so adjourned without further notice. Section 12.6 Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Senior Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 12.2 and, if applicable, Section 12.4. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Issuer, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first above written. MARKEL CORPORATION By:________________________ JPMORGAN CHASE BANK, as Trustee By:________________________ 60 EXHIBIT A [FORM OF FACE OF GLOBAL NOTE] [U.S. TAX LEGEND IF APPROPRIATE] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. MARKEL CORPORATION 7.0% Senior Notes due 2008 No. ____________ CUSIP: __________________ Issue Date: May __, 2002 MARKEL CORPORATION, a Virginia corporation, promises to pay to Cede & Co. or registered assigns, the principal sum of U.S. [$100,000,000] on May 15, 2008. Interest Payment Dates: May 15, and November 15, commencing November 15, 2002. Additional provisions of this Global Note are set forth on the other side of this Global Note. 61 Dated: May__, 2002 MARKEL CORPORATION By: _______________________ TRUSTEE'S CERTIFICATE OF AUTHENTICATION JPMorgan Chase Bank as Trustee, certifies that this is the Global Note referred to in the Indenture. _____________________________ Authorized Officer 62 [REVERSE SIDE OF GLOBAL NOTE] MARKEL CORPORATION 7.0% Senior Notes due 2008 1. Interest - -------- (a) Markel Corporation, a Virginia corporation (such company, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer"), promises to pay interest on the principal amount of this Note to the Holder hereof at the rate per annum shown above. (b) The principal of this Note shall mature on May 15, 2008. Interest on this Note shall accrue at the rate of 7.0% per annum from the most recent date to which interest has been paid on the note for which this Note was exchanged pursuant to the Terra Nova Exchange Offer (as defined in the Indenture), and is payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2002. (c) Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest at the applicable interest rate on the Notes on overdue principal, interest (to the extent lawful) or premium, if any, on demand. 2. Withholding Tax All payments made by the Issuer on this Note shall be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. 3. Method of Payment The Issuer through the Paying Agent shall pay interest on this Note to the Holder of this Note or as instructed in writing by the Holder of this Note. The Holder of this Note must surrender this Note to the Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. 4. Paying Agent and Registrar Initially, JPMorgan Chase Bank, a New York banking corporation (the "Trustee"), will act as Paying Agent and Senior Note Registrar. The Issuer may appoint and change any Paying 63 Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice. The Issuer may act as Paying Agent, Senior Note Registrar, co-registrar or transfer agent to the Holder of this Note. 5. Indenture The Issuer issued this Note under an Indenture, dated as of May __, 2002 (the "Indenture"), between the Issuer and the Trustee. The terms of this Note include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)77aaa-77bbbb) as in effect from time to time (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. This Note is subject to all such terms, and Holders of this Note are referred to the Indenture and the Act for a statement of those terms. This Note is a senior unsecured obligation of the Issuer limited to $100,000,000 aggregate principal amount at maturity (subject to Section 2.7 of the Indenture). 6. Optional Redemption (a) This Note is subject to redemption in whole or in part, of any time and from time to time, upon not less than 30 nor more than 60 days' notice, in an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date, as provided in the Indenture, plus the Make-Whole amount, if any. (b) This Note is not subject to redemption through operation of a sinking fund. 7. [Intentionally Omitted] 8. Notice of Redemption Notice of redemption shall be mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Notes to be redeemed at the Holder's registered address. 9. Denominations; Transfer; Exchange The Notes are in fully registered form, without coupons, in denominations of $1,000 of principal amount at maturity and integral multiples of $1,000. A Holder of this Note may only transfer or exchange this Note in accordance with the Indenture. 10. Persons Deemed Owners The registered Holder of this Note will be treated as the owner of it for all purposes. 64 11. Defeasance and Covenant Defeasance. The Indenture contains provisions for defeasance at any time, upon compliance by the Issuer with certain conditions set forth in the Indenture, of (a) the entire indebtedness of the Issuer with respect to this Note and (b) certain restrictive covenants and the related defaults and Events of Default. 12. Amendment, Waiver The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Trustee with the consent of the holders of a majority in aggregate principal amount of the Senior Notes outstanding at the time of amendment or modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Senior Notes at any time outstanding, on behalf of the holders of all the Senior Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any Senior Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. 13. Defaults and Remedies This Note has the Events of Default as set forth in Section 4.1 of the Indenture. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Senior Notes, subject to certain limitations, may declare all the Senior Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Senior Notes being due and payable immediately upon the occurrence of such Events of Default. Holders of Senior Notes may not enforce the Indenture or the Senior Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Senior Notes unless it receives reasonable indemnity or security. Subject to certain limitations, holders of a majority in principal amount of the Senior Notes may direct the Trustee in its exercise of any trust or power. The holders of a majority in principal amount of the Senior Notes then outstanding by written notice to the Trustee may rescind a declaration of acceleration if the rescission is prior to a judgment or decree for payment and if all Events of Default have been cured or waived except nonpayment of principal and interest that has been due solely because of the acceleration. The Trustee may withhold from holders of Senior Notes notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in the interest of the holders. The above description of Events of Default 65 and remedies is qualified by reference, and subject in its entirety, to the more complete description thereof contained in the Indenture. 14. Trustee Dealings with the Issuer Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of this Note and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or such other agent may do the same with like rights. 15. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Issuer or any Subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Notes or any other obligations of the Issuer under this Note or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting this Note, the Holder of this Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Note. 16. Authentication This Note shall not be valid until an authorized officer of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 17. Governing Law The internal laws of the State of New York shall govern the Indenture and this Note without regard to conflict of law provisions thereof. The Issuer will furnish upon written request and without charge to the Holder of this Note a copy of the Indenture which has in it the text of this Global Note in larger type. Requests may be made to: Markel Corporation 4521 Highwoods Parkway Glen Allen, Virginia 23060 Attention: Gregory B. Nevers 66 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. ________________________________________________________________________________ Please print or typewrite name and address including zip code of assignee ________________________________________________________________________________ the within Senior Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________ attorney to transfer said Senior Note on the books of the Issuer with full power of substitution in the premises. 67 EXHIBIT B [FORM OF FACE OF DEFINITIVE SENIOR NOTE] [U.S. TAX LEGEND IF APPROPRIATE] MARKEL CORPORATION 7.0% Senior Notes due 2008 No. ____________ CUSIP: __________________ Issue Date: May __, 2002 MARKEL CORPORATION, a Virginia corporation, promises to pay to [Cede & Co.] or registered assigns, the principal sum of U.S. ______________, on May 15, 2008. Interest Payment Dates: May 15, and November 15, commencing November 15, 2002. Additional provisions of this Definitive Senior Note are set forth on the other side of this Definitive Senior Note. Dated: __________,_______ MARKEL CORPORATION By: _______________________ TRUSTEE'S CERTIFICATE OF AUTHENTICATION JPMorgan Chase Bank, as Trustee, certifies that this is one of the Senior Notes referred to in the Indenture. 68 _____________________________ Authorized Officer 69 [FORM OF REVERSE SIDE OF DEFINITIVE SENIOR NOTE] MARKEL CORPORATION 7.0% Senior Notes due 2008 1. Interest (a) Markel Corporation, a Virginia corporation (such company, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Issuer"), promises to pay interest on the principal amount of this Note to [Cede & Co.] or registered assigns at the rate per annum shown above. (b) The principal of this Senior Note shall mature on May 15, 2008. Interest on this Senior Note shall accrue at the rate of 7.0% per annum from the most recent date to which interest has been paid on the note for which this Note was exchanged pursuant to the Terra Nova Exchange Offer (as defined in the Indenture), and is payable semiannually on May 15 and November 15 of each year, commencing on November 15, 2002. (c) Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest at the applicable interest rate on the Senior Notes, on overdue principal, interest (to the extent lawful) or premium, if any, on demand. 2. Withholding Tax All payments made by the Issuer on this Senior Note shall be made without deduction or withholding, for or on account of, any and all present and future taxes, duties, assessments, or governmental charges of whatever nature unless the deduction or withholding of such taxes, duties, assessments or governmental charges is then required by law. 3. Method of Payment The Issuer through the Paying Agent shall pay interest on this Senior Note to the registered holder of this Senior Note or as instructed in writing by such holder of this Senior Note. The holder of this Senior Note must surrender this Senior Note to the Paying Agent to collect principal payments. The Issuer shall pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. 4. Paying Agent and Registrar Initially, JPMorgan Chase Bank, a New York banking corporation (the "Trustee"), will act as Paying Agent and Senior Note Registrar. The Issuer may appoint and change any Paying 70 Agent, Senior Note Registrar, co-registrar or transfer agent without prior notice. The Issuer may act as Paying Agent, Senior Note Registrar, co-registrar or transfer agent to the holder of this Note. 5. Indenture The Issuer issued this Senior Note under an Indenture, dated as of April __, 2002 (the "Indenture"), between the Issuer and the Trustee. The terms of this Senior Note include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect from time to time (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. This Senior Note is subject to all such terms, and holders of the Senior Notes are referred to the Indenture and the Act for a statement of those terms. The Senior Notes are senior unsecured obligations of the Issuer limited to $100,000,000 aggregate principal amount at maturity (subject to Section 2.7 of the Indenture). 6. Optional Redemption (a) This Senior Note is subject to redemption in whole or in part, of any time and from time to time, upon not less than 30 nor more than 60 days' notice, in an amount of $1,000 or an integral multiple of $1,000, at a Redemption Price equal to 100% of the principal amount, together with accrued and unpaid interest to the Redemption Date, as provided in the Indenture, plus the Make-Whole amount, if any. (b) This Senior Note is not subject to redemption through operation of a sinking fund. 7. Notice of Redemption Notice of redemption shall be mailed not less than 30 nor more than 60 days prior to the Redemption Date to the each holder of the Senior Notes to be redeemed at the Holder's registered address. Senior Notes in denominations larger than $1,000 of principal amount at maturity may be redeemed in part but only in whole multiples of $1,000 at maturity. In the event of a redemption of less than all of the Senior Notes, the Senior Notes for redemption will be chosen by the Trustee in accordance with the Indenture. If any Senior Note is redeemed subsequent to a record date with respect to any interest payment date specified above and/or prior to such interest payment date, then any accrued interest will be paid to the holder of the Senior Note at the close of business on such record date. If money sufficient to pay the redemption price of and accrued interest on all Senior Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Senior Notes (or such portions thereof) called for redemption. 71 8. Denominations; Transfer; Exchange This Senior Note is in registered form without coupons, in denominations of $1,000 of principal amount at maturity and integral multiples of $1,000. The holder of this Senior Note may only transfer or exchange this Senior Note in accordance with the Indenture. The Senior Note Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Senior Note Registrar need not register the transfer of or exchange any Senior Notes selected for redemption (except, in the case of a Senior Note to be redeemed in part, the portion of the Senior Note need not be redeemed) or any Senior Notes for a period of 15 days before a selection of Senior Notes to be redeemed. 9. Persons Deemed Owners The registered holder of this Senior Note will be treated as the owner of it for all purposes. 10. Defeasance and Covenant Defeasance. The Indenture contains provisions for defeasance at any time, upon compliance by the Issuer with certain conditions set forth in the Indenture, of (a) the entire indebtedness of the Issuer with respect to this Senior Note and (b) certain restrictive covenants and the related defaults and Events of Default. 11. Amendment, Waiver The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Trustee with the consent of the holders of a majority in aggregate principal amount of the Senior Notes outstanding at the time of amendment or modification. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Senior Notes at any time outstanding, on behalf of the holders of all the Senior Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the holder of this Senior Note shall be conclusive and binding upon such holder and upon all future holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Senior Note. 12. Defaults and Remedies This Senior Note has the Events of Default as set forth in Section 4.1 of the Indenture. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Senior Notes, subject to certain limitations, may declare all the Senior 72 Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default and shall result in the Senior Notes being due and payable immediately upon the occurrence of such Events of Default. Holders of Senior Notes may not enforce the Indenture or the Senior Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Senior Notes unless it receives reasonable indemnity or security. Subject to certain limitations, holders of a majority in principal amount of the Senior Notes may direct the Trustee in its exercise of any trust or power. The holders of a majority in principal amount of the Senior Notes then outstanding by written notice to the Trustee may rescind a declaration of acceleration if the rescission is prior to a judgment or decree for payment and if all Events of Default have been cured or waived except nonpayment of principal and interest that has been due solely because of the acceleration. The Trustee may withhold from holders of Senior Notes notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in the interest of the holders. The above description of Events of Default and remedies is qualified by reference, and subject in its entirety, to the more complete description thereof contained in the Indenture. 13. Trustee Dealings with the Issuer Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of this Senior Note and may otherwise deal with and collect obligations owed to it by the Issuer or their Affiliates and may otherwise deal with the Issuer or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Senior Note Registrar or such other agent may do the same with like rights. 14. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Issuer or any Subsidiary of the Issuer shall not have any liability for any payment of the principal of, or premium, if any, or interest on, any of the Senior Notes or any other obligations of the Issuer under this Senior Note or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting this Senior Note, the bearer of this Senior Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Senior Note. 15. Authentication This Senior Note shall not be valid until an authorized officer of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Senior Note. 73 16. Governing Law The internal laws of the State of New York shall govern the Indenture and this Senior Note without regard to conflict of law provisions thereof. The Issuer will furnish to the holder of this Note upon written request and without charge to the holder a copy of the Indenture which has in it the text of this Definitive Senior Note in larger type. Requests may be made to: Markel Corporation 4521 Highwoods Parkway Glen Allen, VA 23060 Attention: Gregory B. Nevers 74 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. ________________________________________________________________________________ Please print or typewrite name and address including zip code of assignee ________________________________________________________________________________ the within Senior Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________ attorney to transfer said Senior Note on the books of the Issuer with full power of substitution in the premises. 75 EX-4.12 5 dex412.txt FORM OF FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture") dated as of May __, 2002, among MARKEL INTERNATIONAL LIMITED (formerly Terra Nova Insurance (UK) Holdings plc), a private company organized under the laws of England and Wales (the "Issuer"), TERRA NOVA (BERMUDA) HOLDINGS LTD., a company organized under the laws of Bermuda ("Bermuda Holdings"), and JPMORGAN CHASE BANK (formerly The Chase Manhattan Bank), a New York banking corporation, as Trustee (the "Trustee"). RECITALS WHEREAS, the Issuer, Bermuda Holdings and the Trustee have heretofore executed and delivered a certain Indenture, dated as of August 26, 1997 (the "Original Indenture") with respect to the Issuer's 7.2% Senior Notes due August 15, 2007 (the "Senior Notes"); WHEREAS, Section 8.2 of the Original Indenture provides that, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Senior Notes (including consents obtained in connection with a tender offer or exchange offer for the Senior Notes), by Act of such Holders delivered to the Issuer and the Trustee, the Issuer and Bermuda Holdings, each when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into a supplemental indenture to amend the Original Indenture for the purpose of, among other things, changing in any manner or eliminating any of the provisions of the Original Indenture or of waiving or modifying in any manner the rights of the holders under this Indenture; and WHEREAS, Markel Corporation, a Virginia corporation ("Markel") has offered to exchange all of the outstanding Senior Notes, upon the terms and subject to the conditions set forth in its Prospectus and Consent Solicitation Statement, dated April __, 2002, and in the related Letter of Transmittal and Consent (the "Exchange Offer"); in connection therewith Markel has been soliciting written consents of the Holders to the amendments to the Indenture set forth herein (and to the execution of the Supplemental Indenture), and Markel has now obtained such written consents from the Holders of majority in principal amount of the Outstanding Senior Notes; accordingly, the First Supplemental Indenture and the amendments set forth herein are authorized pursuant to Section 8.2 of the Original Indenture; WHEREAS, the execution and delivery of this First Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this First Supplemental Indenture a valid and binding supplement to the Original Indenture effectively amending the Original Indenture as set forth herein have been duly taken; 1 NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows: ARTICLE ONE Upon consummation of the exchange by Markel of all Senior Notes validly tendered pursuant to the Exchange Offer and not withdrawn before the expiration date for such Exchange offer (as notified to the Trustee by Markel upon which notification the Trustee may rely), then automatically (without further act by any person) with respect to all outstanding Senior Notes, the Original Indenture is amended in the following respects: 1.1 Sections 7.1, 7.2, 9.2, 9.3, 9.4, 9.8, 9.18(b), 9.18(c), 9.18(d), and 9.19 of the Original Indenture shall be deleted and each of the Issuer and Bermuda Holdings shall be released from its respective obligations thereunder. 1.2 Any failure by the Issuer or Bermuda Holdings to comply with the terms of any of the foregoing Sections of the original Indenture (whether before or after the execution of this First Supplemental Indenture) shall no longer constitute a default or an Event of Default under the Original Indenture and shall no longer have any other consequence under the Indenture. 1.3 Clauses (d), (e), (f), (g) and (h) of Section 4.1 of the Indenture shall be deleted and the events described therein no longer constitute Events of Default under the Original Indenture. The reference to clause "(h)" contained in clause (c) of Section 4.1 shall be deleted. 1.4 In connection with the amendments identified above, the following defined terms used in the Original Indenture shall be deleted: Permitted Liens, Restricted Subsidiary, Unrestricted Subsidiary, Wholly-Owned Restricted Subsidiary. ARTICLE TWO 2.1 All terms used in this First Supplemental Indenture which are defined in the Original Indenture and not otherwise defined herein shall have the meanings assigned to such terms in the Original Indenture. 2.2 All of the provisions of this First Supplemental Indenture shall be deemed to be incorporated in, and made part of, the Original Indenture, and the Original Indenture, as amended and supplemented by this First Supplemental Indenture, shall be read, taken and construed as one and the same instrument and shall be binding upon all the Holders. 2.3 This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 2 2.4 In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 2.5 Nothing in this First Supplemental Indenture, express or implied, shall give any person, other that the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture. Except as expressly supplemented or amended as set forth in this First Supplemental Indenture, the Original Indenture is hereby ratified and confirmed, and all the terms, provisions and conditions thereof shall be and continue in full force and effect. The Trustee accepts the trusts created by the Original Indenture, as amended and supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Original Indenture as amended and supplemented by this First Supplemental Indenture. 2.6 The Trustee shall not be responsible in any matter whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture, except with respect to the execution hereof by the Trustee, or for or in respect of the recitals contained herein, all of which are made solely by the Issuer and Bermuda Holdings. 2.7 This First Supplemental Indenture shall be construed and governed by and in accordance with the laws of the State of New York without regard to its conflict of laws principles. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first written above. MARKEL INTERNATIONAL LIMITED By: ______________________________________ Name: Title: Attest: _________________________ Name: Title: TERRA NOVA (BERMUDA) HOLDINGS, LTD. Attest: _________________________ Name: Title: By: ______________________________________ Name: Title: 3 JPMORGAN CHASE BANK, AS TRUSTEE By: ______________________________________ Name: Title: Attest: ______________________________ Name: Title: 4 EX-4.13 6 dex413.txt FORM OF FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture") dated as of May __, 2002, among MARKEL INTERNATIONAL LIMITED (formerly Terra Nova Insurance (UK) Holdings plc), a private company organized under the laws of England and Wales (the "Issuer"), TERRA NOVA (BERMUDA) HOLDINGS LTD., a company organized under the laws of Bermuda ("Bermuda Holdings"), and JPMORGAN CHASE BANK (formerly The Chase Manhattan Bank), a New York banking corporation, as Trustee (the "Trustee"). RECITALS WHEREAS, the Issuer, Bermuda Holdings and the Trustee have heretofore executed and delivered a certain Indenture, dated as of May 18, 1998 (the "Original Indenture") with respect to the Issuer's 7% Senior Notes due May 15, 2008 (the "Senior Notes"); WHEREAS, Section 8.02 of the Original Indenture provides that, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Senior Notes (including consents obtained in connection with a tender offer or exchange offer for the Senior Notes), by Act of such Holders delivered to the Issuer and the Trustee, the Issuer and Bermuda Holdings, each when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into a supplemental indenture to amend the Original Indenture for the purpose of, among other things, changing in any manner or eliminating any of the provisions of the Original Indenture or of waiving or modifying in any manner the rights of the holders under this Indenture; and WHEREAS, Markel Corporation, a Virginia corporation ("Markel") has offered to exchange all of the outstanding Senior Notes, upon the terms and subject to the conditions set forth in its Prospectus and Consent Solicitation Statement, dated April __, 2002, and in the related Letter of Transmittal and Consent (the "Exchange Offer"); in connection therewith Markel has been soliciting written consents of the Holders to the amendments to the Indenture set forth herein (and to the execution of the Supplemental Indenture), and Markel has now obtained such written consents from the Holders of majority in principal amount of the Outstanding Senior Notes; accordingly, the First Supplemental Indenture and the amendments set forth herein are authorized pursuant to Section 8.02 of the Original Indenture; WHEREAS, the execution and delivery of this First Supplemental Indenture has been duly authorized by the parties hereto, and all other acts necessary to make this First Supplemental Indenture a valid and binding supplement to the Original Indenture effectively amending the Original Indenture as set forth herein have been duly taken; 1 NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows: ARTICLE ONE Upon consummation of the exchange by Markel of all Senior Notes validly tendered pursuant to the Exchange Offer and not withdrawn before the expiration date for such Exchange offer (as notified to the Trustee by Markel upon which notification the Trustee may rely), then automatically (without further act by any person) with respect to all outstanding Senior Notes, the Original Indenture is amended in the following respects: 1.1 Sections 7.01, 7.02, 9.02, 9.03, 9.04, 9.08, 9.18(b), 9.18(c), 9.18(d), and 9.19 of the Original Indenture shall be deleted and each of the Issuer and Bermuda Holdings shall be released from its respective obligations thereunder. 1.2 Any failure by the Issuer or Bermuda Holdings to comply with the terms of any of the foregoing Sections of the original Indenture (whether before or after the execution of this First Supplemental Indenture) shall no longer constitute a default or an Event of Default under the Original Indenture and shall no longer have any other consequence under the Indenture. 1.3 Clauses (d), (e), (f), (g) and (h) of Section 4.01 of the Indenture shall be deleted and the events described therein no longer constitute Events of Default under the Original Indenture. The reference to clause "(h)" contained in clause (c) of Section 4.01 shall be deleted. 1.4 In connection with the amendments identified above, the following defined terms used in the Original Indenture shall be deleted: Permitted Liens, Restricted Subsidiary, Unrestricted Subsidiary, Wholly-Owned Restricted Subsidiary. ARTICLE TWO 2.1 All terms used in this First Supplemental Indenture which are defined in the Original Indenture and not otherwise defined herein shall have the meanings assigned to such terms in the Original Indenture. 2.2 All of the provisions of this First Supplemental Indenture shall be deemed to be incorporated in, and made part of, the Original Indenture, and the Original Indenture, as amended and supplemented by this First Supplemental Indenture, shall be read, taken and construed as one and the same instrument and shall be binding upon all the Holders. 2.3 This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 2 2.4 In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 2.5 Nothing in this First Supplemental Indenture, express or implied, shall give any person, other that the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture. Except as expressly supplemented or amended as set forth in this First Supplemental Indenture, the Original Indenture is hereby ratified and confirmed, and all the terms, provisions and conditions thereof shall be and continue in full force and effect. The Trustee accepts the trusts created by the Original Indenture, as amended and supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Original Indenture as amended and supplemented by this First Supplemental Indenture. 2.6 The Trustee shall not be responsible in any matter whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture, except with respect to the execution hereof by the Trustee, or for or in respect of the recitals contained herein, all of which are made solely by the Issuer and Bermuda Holdings. 2.7 This First Supplemental Indenture shall be construed and governed by and in accordance with the laws of the State of New York without regard to its conflict of laws principles. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first written above. MARKEL INTERNATIONAL LIMITED By: ______________________________________ Name: Title: Attest: ________________________ Name: Title: TERRA NOVA (BERMUDA) HOLDINGS, LTD. Attest: ________________________ Name: Title: By: ______________________________________ Name: Title: 3 JPMORGAN CHASE BANK, AS TRUSTEE By: ______________________________ Name: Title: Attest: ______________________________ Name: Title: 4 EX-5.1 7 dex51.txt OPINION OF MCGUIREWOODS LLP Exhibit 5.1 McGuireWoods LLP One James center 901 East Cary Street Richmond, VA 23219 April 12, 2002 Markel Corporation 4521 Highwoods Parkway Glen Allen, Virginia 23060-6148 Markel Corporation Registration Statement on Form S-4 ---------------------------------- Ladies and Gentlemen: Markel Corporation (the "Company"), has requested our opinion in connection with various legal matters relating to the filing of a Registration Statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), covering the offer to exchange: . $1,000 principal amount of Markel's Notes due August 15, 2007 (the "Markel 7.2% Notes") in exchange for each $1,000 principal amount of outstanding 7.2% Notes due August 15, 2007 of Terra Nova (the "Terra Nova" 7.2% Notes") properly tendered and accepted; . $1,000 principal amount of Markel's 7.0% Notes due May 15, 2008 (the "Markel 7.0% Notes") in exchange for each $1,000 principal amount of outstanding 7.0% Notes due May 15, 2008 of Terra Nova (the "Terra Nova" 7.0% Notes") properly tendered and accepted. The Terra Nova 7.2% Notes and 7.0% Notes are collectively referred to as the "Terra Nova Notes." The Markel 7.2% Notes, and the Markel 7.0% Notes are collectively referred to as the "Markel Notes." The exchange will be made pursuant to the exchange offers (the "Exchange Offers") contemplated by the Registration Statement. We have examined copies of such records of the Company and such other certificates and documents as we have deemed relevant and necessary for the opinions hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as certified or reproduced copies. We have also assumed the legal capacity of all persons executing such documents and the truth and correctness of any representations or warranties therein contained. As to various questions of fact material to such opinions, we have relied upon certificates of officers of the Company and of public officials. Markel Corporation April 12, 2002 Page 2 Based upon the foregoing, we are of the opinion that: 1. The Company is duly formed and validly existing under the laws of the Commonwealth of Virginia. 2. The Markel Notes will, upon approval by an authorized officer of Markel and the due issuance and authentication of the Markel Notes and exchange thereof for the Terra Nova Notes in the manner referred to in the Registration Statement, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar laws affecting the enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). This opinion is limited to the laws of the Commonwealth of Virginia, the State of New York and the federal laws of the United States of the type typically applicable to transactions contemplated by the Exchange Offers, and we do not express any opinion with respect to the laws of any other jurisdiction. This letter speaks only as of the date hereof and is limited to present statutes, regulations and administrative and judicial interpretations. We undertake no responsibility to update or supplement this letter after the date hereof. We consent to being named in the Registration Statement and related Prospectus as counsel who are passing upon the legality of the Markel Notes for the Company and to the reference to our name under the caption "Validity of the Notes" in such Prospectus. We also consent to your filing copies of this opinion as an exhibit to the Registration Statement or any amendment thereto. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act. Very truly yours, /s/ McGuireWoods LLP EX-8.1 8 dex81.txt OPINION OF MCGUIREWOODS LLP Exhibit 8.1 McGuireWoods LLP One James Center 901 East Cary Street Richmond, VA 23219 April 12, 2001 Markel Corporation 4521 Highwoods Parkway Glen Allen, VA 23060-6148 Ladies and Gentlemen: Reference is made to the prospectus and consent solicitation statement (the "Prospectus and Consent Solicitation Statement") included in the registration statement on Form S-4 (the "Registration Statement") being filed by you with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to (1) a proposed public offering (the "Offering") by you of 7.2% Notes due August 15, 2007 and 7.0% Notes due May 15, 2008 (the "Markel Notes") in exchange for outstanding Markel International Limited notes having the same principal amount, interest rate, redemption terms and payment and maturity dates (the "Terra Nova Notes") and (2) a proposed solicitation by Markel Corporation of consents from holders of Terra Nova Notes to amend the indentures under which such notes were given, in respect of which holders of Terra Nova Notes who receive Markel Notes pursuant to the Offering would receive cash payments. At your request, this opinion of counsel is being furnished to you for filing as Exhibit 8.1 to the Registration Statement. In providing this opinion, we have examined and are relying on the truth and accuracy at all relevant times of the statements and representations contained in (i) the Registration Statement, (ii) a certificate provided to us by an officer of Markel Corporation, and (iii) other information provided to us by Markel Corporation. In rendering this opinion, we have assumed that the transactions contemplated by the Prospectus and Consent Solicitation Statement will be consummated in the manner described therein. We have further assumed in rendering this opinion that the representations made in the Officer's Certificate, which are made "to the best of [the] knowledge and belief" of the officer who signed such certificate, are and will be correct without such qualification. Based on the foregoing, it is our opinion that the discussion (the "Tax Discussion") in the Prospectus and Consent Solicitation Statement that is contained under the caption "Material U.S. Federal Income Tax Consequences", in so far as it concerns conclusions of law, is an accurate general description, subject to the assumptions, qualifications and limitations set forth therein, of the material federal income tax consequences relating to the Offering and Consent Solicitation and of the ownership of the Markel Notes. Our opinion is not binding on the Internal Revenue Service or the courts and merely represents our best judgment based upon existing authorities and the assumptions, qualifications and limitations noted above. Thus, no assurance can be given that the Internal Revenue Service will not take a position contrary to one or more of the tax results described in the Tax Discussion, or that a court would not uphold such a contrary opinion, potentially with adverse tax consequences. Our opinion is limited to the tax matters specifically addressed herein and speaks as of the date hereof. We undertake no obligation to update this opinion in the event there is either a change in the legal authorities or facts upon which this opinion is based, or an inaccuracy in any of the representations upon which we have relied in rendering this opinion, even though such a change or inaccuracy may affect the accuracy of the Tax Discussion. Pursuant to the provisions of Rule 436(a) of the Rules and Regulations of the Commission under the Securities Act, we hereby consent to the reference to our Firm under the caption "Legal Matters" in the Prospectus and Consent Solicitation Statement and to the filing of this opinion with the Commission as an exhibit to the Registration Statement. In giving such opinion, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission thereunder. Very truly yours, /s/ McGuireWoods LLP EX-12.1 9 dex121.txt MARKEL COMPUTATION OF RATIO OF EARNINGS Exhibit 12.1 Markel Corporation Ratio of Earnings to Fixed Charges (Dollars in Thousands)
Year Ended December 31, ------------------------------------------------------------------------- 2001 2000 1999 1998 1997 ------------------------------------------------------------------------- Earnings: - --------- Earnings (loss) from continuing operations before income taxes ($182,198) ($51,806) $53,440 $75,385 $66,351 Fixed charges 52,511 56,030 27,058 22,026 21,496 ------------------------------------------------------------------------- Earnings (loss) from continuing operations, as adjusted ($129,687) $ 4,224 $80,498 $97,411 $87,847 ========================================================================= Fixed Charges: - -------------- Interest Expense $ 48,647 $52,348 $25,150 $20,406 $20,124 Portion of rental expense representative of interest 3,864 3,682 1,908 1,620 1,372 ------------------------------------------------------------------------- Fixed Charges $ 52,511 $56,030 $27,058 $22,026 $21,496 ========================================================================= Ratio of Earnings to Fixed Charges -2.5 0.1 3.0 4.4 4.1 Deficiency in the coverage of fixed charges by earnings before fixed charges $182,198 $51,806 - - -
Notes: - ------ . The Company's consolidated insurance company subsidiaries are subject to certain regulatory restrictions on the payment of dividends or advances to the Company. The ratio of earnings to fixed charges is computed by dividing pretax income from continuing operations before fixed charges by fixed charges. Fixed charges consist of interest charges and amortization of debt expense and discount or premium related to indebtedness, whether expensed or capitalized, and that portion of rental expense we believe representative of interest. EX-12.2 10 dex122.txt BERMUDA HOLDINGS COMPUATATION OF EARNINGS Exhibit 12.2 Terra Nova (Bermuda) Holdings Ratio of Earnings to Fixed Charges (Dollars in Thousands)
Year Ended December 31, -------------------------------------------------------------------- 2001 2000 1999 1998 1997 -------------------------------------------------------------------- Earnings: - --------- Earnings (loss) from continuing operations before income taxes ($180,223) ($144,726) ($72,602) $101,261 $ 91,049 Fixed charges 13,844 14,069 13,874 15,098 14,064 -------------------------------------------------------------------- Earnings (loss) from continuing operations, as adjusted ($166,379) ($130,657) ($58,728) $116,359 $105,113 ==================================================================== Fixed Charges: - -------------- Interest Expense $ 12,365 $ 12,400 $12,400 $ 13,697 $ 12,710 Portion of rental expense representative of interest 1,479 1,669 1,474 1,401 1,354 -------------------------------------------------------------------- Fixed Charges $ 13,844 $ 14,069 $13,874 $ 15,098 $ 14,064 ==================================================================== Ratio of Earnings to Fixed Charges -12.0 -9.3 -4.2 7.7 7.5 Deficiency in the coverage of fixed charges by earnings before fixed charges $180,223 $144,726 $72,602 - -
Notes: - ------ . The Company's consolidated insurance company subsidiaries are subject to certain regulatory restrictions on the payment of dividends or advances to the Company. The ratio of earnings to fixed charges is computed by dividing pretax income from continuing operations before fixed charges by fixed charges. Fixed charges consist of interest charges and amortization of debt expense and discount or premium related to indebtedness, whether expensed or capitalized, and that portion of rental expense we believe representative of interest. EX-23.1 11 dex231.txt CONSENT OF KPMG AUDIT PLCLLP Exhibit 23.1 Consent of Independent Accountants The Board of Directors Markel Corporation: We consent to the use of our report dated February 1, 2002, with respect to the consolidated balance sheets of Markel Corporation and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2001, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP Richmond, Virginia April 12, 2002 EX-23.2 12 dex232.txt CONSENT OF KPMG AUDIT PLC DESCRIPTION Exhibit 23.2 Consent of Independent Accountants ---------------------------------- The Board of Directors Markel Corporation: We consent to the use of our report dated March 28, 2002, relating to the consolidated balance sheets of Terra Nova (Bermuda) Holdings Ltd. and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, comprehensive loss, shareholder's equity, and cash flows for each of the years in the two-year period ended December 31, 2001, and the related financial statement schedules, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG Audit Plc London, United Kingdom April 12, 2002 EX-23.3 13 dex233.txt CONSENT OF PRICEWATERHOUSECOOPERS DRAFT Exhibit 23.3 CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of our report dated March 10, 2000, relating to the financial statements and financial statement schedules, which appears in Terra Nova (Bermuda) Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the references to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers PricewaterhouseCoopers Hamilton, Bermuda April 12, 2002 EX-24.1 14 dex241.txt POWERS OF ATTORNEY Exhibit 24 POWER OF ATTORNEY The undersigned hereby appoints Gregory B. Nevers, Linda S. Rotz or Richard W. Whitt (each with full power to act alone), as his true and lawful attorneys-in-fact, and grants unto said attorneys the authority in his name and on his behalf to execute and file (individually and in the capacity stated below) any documents relating to the registration by Markel Corporation (the "Company") of debt securities in connection with the Company's filing of a Registration Statement on Form S-4 and any and all amendments or supplements to any of the foregoing, with all exhibits and documents required to be filed in connection therewith. The undersigned further grants unto said attorneys, and each of them, full power and authority to perform each and every act necessary in order to accomplish the foregoing registration as fully as he himself might do. IN WITNESS WHEREOF, the undersigned has signed this power of attorney this 12th day of April, 2002. /s/ Thomas S. Gayner _________________________________________________ Thomas S. Gayner, Director /s/ Alan I. Kirshner _________________________________________________ Alan I. Kirshner, Director (Chief Executive Officer) /s/ Anthony F. Markel _________________________________________________ Anthony F. Markel, President, Director /s/ Steven A. Markel _________________________________________________ Steven A. Markel, Vice-Chairman, Director /s/ Darrell D. Martin _________________________________________________ Darrell D. Martin, Director, Executive Vice President and Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer) /s/ Mark J. Byrne _________________________________________________ Mark J. Byrne, Director /s/ Douglas C. Eby _________________________________________________ Douglas C. Eby, Director /s/ Leslie A. Grandis _________________________________________________ Leslie A. Grandis, Director /s/ Stewart M. Kasen _________________________________________________ Stewart M. Kasen, Director /s/ Gary L. Markel _________________________________________________ Gary L. Markel, Director EX-25.1 15 dex251.txt STATEMENT OF ELIGIBILITY AND QUALIFICATION ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- Markel Corporation Virginia 54-1959284 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 4521 Highwoods Parkway Glen Allen, Virginia 23060 (Address of principal executive offices) (Zip Code) -------------------------------- 7.2% Notes due 2007 7.0% Notes due 2008 -------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connections with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 12/th/ day of April, 2002. JPMORGAN CHASE BANK By /s/ Philbert G. Jones ---------------------- /s/ Philbert G. Jones -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2001, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ............................................... $ 21,396 Interest-bearing balances ....................................... 12,495 Securities: Held to maturity securities .......................................... 442 Available for sale securities ........................................ 52,916 Federal funds sold and securities purchased under agreements to resell ............................................ 75,076 Loans and lease financing receivables: Loans and leases held for sale .................................. 4,515 Loans and leases, net of unearned income ........................ $173,654 Less: Allowance for loan and lease losses ....................... 3,275 Loans and leases, net of unearned income and allowance ....................................................... 170,379 Trading Assets ....................................................... 140,469 Premises and fixed assets (including capitalized leases) ............. 5,502 Other real estate owned .............................................. 41 Investments in unconsolidated subsidiaries and associated companies ............................................ 360 Customers' liability to this bank on acceptances outstanding ..................................................... 270 Intangible assets Goodwill ..................................................... 1,739 Other Intangible assets ...................................... 4,762 Other assets ......................................................... 47,464 TOTAL ASSETS ......................................................... $537,826 ========
-4- LIABILITIES Deposits In domestic offices ......................................... $ 160,102 Noninterest-bearing ......................................... $ 70,338 Interest-bearing ............................................ 89,764 In foreign offices, Edge and Agreement subsidiaries and IBF's ...................................... 120,371 Noninterest-bearing ......................................... $ 7,610 Interest-bearing ............................................ 112,761 Federal funds purchased and securities sold under agreements to repurchase .................................................. 79,946 Trading liabilities .............................................. 92,208 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ................... 11,399 Bank's liability on acceptances executed and outstanding ......... 293 Subordinated notes and debentures ................................ 9,467 Other liabilities ................................................ 30,651 TOTAL LIABILITIES ................................................ 504,437 Minority Interest in consolidated subsidiaries ................... 116 EQUITY CAPITAL Perpetual preferred stock and related surplus .................... 0 Common stock ..................................................... 1,476 Surplus (exclude all surplus related to preferred stock) ......... 16,020 Retained earnings ................................................ 16,149 Accumulated other comprehensive income ........................... (372) Other equity capital components .................................. 0 TOTAL EQUITY CAPITAL ............................................. 33,273 --------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL $ 537,826 ========= I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR.) HELENE L. KAPLAN ) DIRECTORS H.W. BECHERER ) -5- EX-99.1 16 dex991.txt LETTER OF TRANSMITTAL Exhibit 99.1 Markel Corporation Letter of Transmittal and Consent Pursuant to the Exchange Offers In Respect of the Following Series Of Notes Issued by Markel Corporation's Indirect Wholly-Owned Subsidiary, Markel International Limited, formerly Terra Nova Insurance (U.K.) Holdings plc And Solicitation of Consents for Amendment of the Related Indentures - -------------------------------------------------------------------------------- 7.2% Terra Nova Notes 7.0% Terra Nova Notes Due August 15, 2007 for Due May 15, 2008 For 7.2% Markel Notes 7.0% Markel Notes due August 15, 2007 due May 15, 2008 - -------------------------------------------------------------------------------- Pursuant to the Prospectus And Consent Solicitation Statement dated April ____, 2002 - -------------------------------------------------------------------------------- The Consent Payment Deadline for each Exchange Offer (that is, the time by which holders must tender the applicable series of notes of Terra Nova Insurance (UK) Holdings plc ("Terra Nova") in order to be eligible to receive the Consent Payment) will be 5:00 p.m., New York City time, on May ____, 2002 (the "Consent Payment Deadline"), unless extended. Consents may be revoked at any time prior to the Consent Payment Deadline. Each Exchange Offer will expire at 5:00 p.m., New York City time, on May ___, 2002, unless extended. Tenders may be withdrawn at anytime prior to the Consent Payment Deadline. Tenders made after the Consent Payment Deadline may not be withdrawn. - -------------------------------------------------------------------------------- Deliver to the Exchange Agent: JPMorgan Chase Bank - -------------------------------------------------------------------------------- BY MAIL (REGISTERED BY HAND: BY OVERNIGHT OR CERTIFIED MAIL DELIVERY: RECOMMENDED): JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank 55 Water Street 55 Water Street 55 Water Street Room 234, North Building Room 234, North Building Room 234, North Building New York, New York 10041 New York, New York 10041 New York, New York 10041 Attention: Victor Matis Attention: Victor Matis Attention: Victor Matis - -------------------------------------------------------------------------------- By Facsimile Transmission (Eligible Institutions Only): (212) 638-7875 Confirm Facsimile by Telephone: (212) 638-0459 -1- DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT ("LETTER OF TRANSMITTAL") TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. Questions regarding the exchange offers and consent solicitations or the completion of this Letter of Transmittal should be directed to Mackenzie Partners, Inc., the Information Agent, at the following telephone number, toll-free: ___________ Markel Corporation, a Virginia corporation ("Markel"), is offering, upon the terms and subject to the conditions set forth in the Prospectus and Consent Solicitation Statement (the "Prospectus") and this Letter of Transmittal: $1,000 principal amount of Markel's Notes due August 15, 2007 (the "Markel 7.2% Notes") in exchange for each $1,000 principal amount of outstanding 7.2% Notes due August 15, 2007 of Terra Nova (the "Terra Nova 7.2% Notes") properly tendered and accepted; $1,000 principal amount of Markel's 7.0% Notes due May 15, 2008 (the "Markel 7.0% Notes") in exchange for each $1,000 principal amount of outstanding 7.0% Notes due May 15, 2008 of Terra Nova (the "Terra Nova" 7.0% Notes") properly tendered and accepted. The Terra Nova 7.2% Notes and 7.0% Notes are collectively referred to as the "Terra Nova Notes." The Markel 7.2% Notes, and the Markel 7.0% Notes are collectively referred to as the "Markel Notes." The exchange offers with respect to the above series of Terra Nova Notes are collectively referred to as the "Exchange Offers." This Letter of Transmittal is to be used to accept one or more of the Exchange Offers if the applicable Terra Nova Notes are to be tendered by effecting a book-entry transfer into the Exchange Agent's account at DTC and instructions are not being transmitted through DTC's Automated Tender Offer Program ("ATOP"). Unless you intend to tender Terra Nova Notes through ATOP you should complete, execute and deliver this Letter of Transmittal to indicate the action you desire to take with respect to the Exchange Offers. Holders of Terra Nova Notes tendering Terra Nova Notes by book-entry transfer to the Exchange Agent's account at DTC may execute the tender through ATOP, and in that case need not complete, execute and deliver this Letter of Transmittal. DTC participants accepting the applicable Exchange Offer may transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will then send an "agent's message" (as described in the Prospectus) to the Exchange Agent for its acceptance. Delivery of the -2- agent's message by DTC will satisfy the terms of the Exchange Offers as to execution and delivery of a Letter of Transmittal by the DTC participant identified in the agent's message. Holders tendering Terra Nova Notes pursuant to the Exchange Offers will thereby consent to certain proposed amendments to the indentures under which Terra Nova issued such Terra Nova Notes, as described in the Prospectus. The completion, execution and delivery of this Letter of Transmittal (or the delivery by DTC of an agent's message in lieu thereof) constitutes the delivery of a consent with respect to the Terra Nova Notes tendered. Subject to the terms and conditions of the Exchange Offers and the consent solicitation and applicable law, Markel will deposit with the Exchange Agent; - Markel Notes of the applicable series (in book-entry form), and - Cash representing the consent payment, if any, as described in the Prospectus. This will occur on the third business day following the expiration date of the Exchange Offer or as soon as practicable thereafter (the "Exchange Date"). The Exchange Agent will act as agent for the tendering holders for the purpose of receiving payments and the Markel Notes from Markel and then delivering payments and Markel Notes (in book-entry form) to or at the direction of those holders. The Exchange Agent will make this delivery on the same day Markel deposits the Markel Notes and causes Terra Nova to deposit the payment for the Terra Nova Notes accepted for exchange, or as soon thereafter practicable. TENDER OF TERRA NOVA NOTES To effect a valid tender of Terra Nova Notes through the completion, execution and delivery of this Letter of Transmittal, the undersigned must complete the table entitled "Description of Terra Nova Notes Tendered and in Request of which a Consent is Given" below and sign this Letter of Transmittal where indicated. The Markel Notes will be delivered only in book-entry form through DTC and only to the DTC account of the undersigned or the undersigned's custodian as specified in the table below, and the appropriate consent payment, if any, will be made by check to the undersigned (unless specified otherwise in the "Special Issuance and Payment Instructions" or as soon as practicable thereafter. Failure to provide the information necessary to effect delivery of Markel Notes will render a tender defective and Markel will have the right, which it may waive, to reject such tender. -3- DESCRIPTION OF TERRA NOVA NOTES TENDERED AND IN RESPECT OF WHICH CONSENT IS GIVEN
------------------------------------------------- Terra Nova Note(s) - ------------------------------------------------------------------------------------------------------ Aggregate Principal Name of DTC Participant's Account Amount Principal Number in which Terra Nova Notes are Title of Represented by Amount Held Series Terra Nova Notes Tendered* - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------
_______________________ * The principal amount of each series of the Terra Nova Notes tendered hereby must be in a denomination of $1,000 or any integral multiple thereof. See instruction 3. -4- Ladies and Gentlemen: The undersigned hereby (a) tenders to Markel Corporation, upon the terms and subject to the conditions set forth in the Prospectus and in this Letter of Transmittal (collectively, the "Terms and Conditions"), receipt of which is hereby acknowledged, the principal amount or amounts of each series of Terra Nova Notes indicated in the table above entitled "Description of Terra Nova Notes Rendered and in Respect of which Consent is Given" (or, if nothing is indicated therein, with respect to the entire aggregate principal amount represented by the series of Terra Nova Notes indicated in such table) and (b) consents, with respect to such principal amount or amounts of each such series of Terra Nova Notes, to the proposed amendments described in the Prospectus to the relevant indenture under which such Terra Nova Notes were issued and to the execution of a supplemental indenture (each, a "Supplemental Indenture") effecting such amendment. The undersigned understands that the tender and consent made hereby will remain in full force and effect unless and until such tender and consent are revoked in accordance with the procedures set forth in the Prospectus. The undersigned understands that after the Consent Payment Deadline, the consent may not be revoked. If the undersigned is not the registered holder of the Terra Nova Notes indicated in the table above entitled "Description of Terra Nova Notes Tendered and in Respect of which Consent is Given" or such holder's legal representative or attorney-in-fact (or, in the case of Terra Nova Notes held through DTC, the DTC participant for whose account such Terra Nova Notes are held), then the undersigned has obtained a properly completed irrevocable proxy that authorizes the undersigned (or the undersigned's legal representative or attorney-in-fact) to deliver a consent in respect of such Terra Nova Notes on behalf of the holder thereof, and such proxy is being delivered with this Letter of Transmittal. The undersigned understands that Markel's obligation to complete the Exchange Offer or to make consent payments relating to that Exchange Offer is conditioned on, among other things, the receipt (and no withdrawal) of consents to the amendments to the indentures with respect to the Terra Nova Notes from the holders of a majority in principal amount of each of the two series of Terra Nova notes (the "Consent Condition"), although Markel is free to waive this or any other condition with respect to any or all of the Exchange Offers. The undersigned understands that, upon the terms and subject to the conditions of the Exchange Offers, Terra Nova Notes of any series properly tendered and accepted and not withdrawn will be exchanged for Markel Notes of the corresponding series. The undersigned understands that, under certain circumstances, Markel may not be required to accept any of the Terra Nova Notes tendered (including any such Terra Nova Notes tendered after the expiration date). If any Terra Nova Notes are not accepted for exchange for any reason or if Terra Nova Notes are withdrawn, such unexchanged or withdrawn Terra Nova Notes will be returned without expense to the undersigned's -5- account at DTC or such other account as designated herein pursuant to the book-entry transfer procedures described in the Prospectus as promptly as practicable after the expiration or termination of the applicable Exchange Offer. Subject to, and effective upon, acceptance for exchange of, and payment for, the principal amount of each series of Terra Nova Notes tendered hereby upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby (1) sells, assigns and transfers to or upon the order of Markel, all right title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the undersigned's status as a holder of, such Terra Nova Notes, (2) waives any and all rights with respect to such Terra Nova Notes (including any existing or past defaults and their consequences in respect of such Terra Nova Notes), and (3) releases and discharges Markel, Terra Nova, Terra Nova (Bermuda) Holdings Ltd. and the trustee under the indentures related to the Terra Nova Notes (the "Terra Nova trustee"), from any and all claims the undersigned may have now or in the future, arising out of or related to such Terra Nova Notes, including any claims that the undersigned is entitled to receive additional principal or interest payments with respect to such Terra Nova Notes (other than as expressly provided in the Prospectus and in this Letter of Transmittal) or to participate in any redemption or defeasance of such Terra Nova Notes. The undersigned understands that tenders of Terra Nova Notes pursuant to any of the procedures described in the Prospectus and in the instructions in this Letter of Transmittal, if and when accepted by Markel, will constitute a binding agreement between the undersigned and Markel upon the Terms and Conditions. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned with respect to the Terra Nova Notes tendered hereby (with full knowledge that the Exchange Agent also acts as the agent of Markel) with full powers of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (1) transfer ownership of such Terra Nova Notes on the account books maintained by DTC together with all accompanying evidences of transfer and authenticity to or upon the order of Markel, (2) present such Terra Nova Notes for transfer of ownership on the books of Terra Nova, -6- (3) deliver to Markel and the Terra Nova trustee this Letter of Transmittal as evidence of the undersigned's consent to the proposed amendments and as certification that the Consent Condition has been satisfied, and (4) receive all benefits and otherwise exercise all rights of beneficial ownership of such Terra Nova Notes, all in accordance with the terms of the Exchange Offers, as described in the Prospectus. All authority conferred or agreed to be conferred by this Letter of Transmittal shall not be affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned. The undersigned hereby represents and warrants that: (1) The undersigned (i) has full power and authority to tender the Terra Nova Notes tendered hereby and to sell, assign and transfer all right, title and interest in and to such Terra Nova Notes and (ii) either has full power and authority to consent to the proposed amendments to the indenture or indentures relating to such Terra Nova Notes or is delivering a duly executed consent (which is included in this Letter of Transmittal) from a person or entity having such power and authority, (2) The Terra Nova Notes being tendered hereby were owned as of the date of tender, free and clear of any liens, charges, claims, encumbrances, interests and restrictions of any kind, and upon acceptance of such Terra Nova Notes by Markel, Markel will acquire good, indefeasible and unencumbered title to such Terra Nova Notes, free and clear of all liens, charges, claims, encumbrance, interests and restrictions of any kind, when the same are accepted by Markel, and (3) The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or Markel to be necessary or desirable to complete the sale assignment and transfer of the Terra Nova Notes tendered hereby, to perfect the undersigned's consent to the proposed amendments or to complete the execution of the Supplemental Indentures. The undersigned understands that tenders of Terra Nova Notes may be withdrawn at any time prior to the Consent Payment Deadline. A valid withdrawal of tendered Terra Nova Notes prior to the Consent Payment Deadline will constitute the concurrent valid revocation of such holder's related consent. For a holder to revoke a consent a holder must withdraw the related tendered Terra Nova Notes prior to the Consent Payment Deadline. A tender of Terra Nova Notes may not be withdrawn at any time after the Consent Payment Deadline unless the Exchange Offer is extended with changes in the -7- terms thereof that are materially adverse to the tendering holder, in which case tenders of Terra Nova Notes may be withdrawn under the conditions described in the extension. A notice of withdrawal will be effective only if delivered to the Exchange Agent in accordance with the specific procedures set forth in the Prospectus. If any of the Exchange Offers is amended in a manner determined by Markel to constitute a material change, Markel will promptly disclose such amendment to the holders of the applicable series of Terra Nova Notes, and Markel will extend such Exchange Offer to a date five to ten business days after disclosing the amendment, depending on the significance of the amendment and the manner of disclosure to the holders if such Exchange Offer would otherwise have expired during such five to ten business day period. Unless otherwise indicated under "Special Issuance and Payment Instructions," Markel will issue the check for any applicable consent payment for any Terra Nova Notes accepted for exchange in the name of the undersigned or the undersigned's custodian as specified in the table entitled "Description of Terra Nova Notes Tendered and in Respect of which Consent is Given," and credit the DTC account specified therein for any book-entry transfers of Terra Nova Notes not accepted for exchange. Unless otherwise indicated under "Special Delivery Instructions," please mail the check for any applicable consent payment for any Terra Nova Notes accepted for exchange to the undersigned at the address shown below the undersigned's signature(s). The undersigned recognizes that Markel has no obligations under the "Special Issuance and Payment Instructions" or the "Special Delivery Instructions" provisions of this Letter of Transmittal to effect the transfer of any Terra Nova Notes from the holder(s) thereof if Markel does not accept for exchange any of the principal amount of the Terra Nova Notes tendered pursuant to this Letter of Transmittal. -8- - -------------------------------------------------------------------------------- SPECIAL ISSUANCE AND PAYMENT INSTRUCTIONS (See Instructions 2 and 5.) To be completed ONLY if Terra Nova Notes in the principal amount not accepted for exchange are to be returned in the name of, or the check for the applicable consent payment, if any, is to be sent to, someone other than the person or persons whose signature(s)) appear(s) within this Letter of Transmittal. Please issue (indicate one or both): Terra Nova Notes not accepted for exchange, [_] the check for the applicable consent payment, if any, to [_] Name of DTC Participant:______________________________________ DTC Participant Account Number:_______________________________ Contact at DTC Participant:___________________________________ - -------------------------------------------------------------------------------- -9- - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS - (See Instructions 1, 3, 4, 5 and 6.) To be completed ONLY if the check for the applicable consent payment is to be sent to someone other than the person(s) whose signature(s) appear(s) within this Letter of Transmittal or to an address different from that shown below such signatures: Please send the check to: Name of Consenting Holder: _______________________________ Address for Delivery of Consent Payment: _______________________________ _______________________________ _______________________________ Telephone No. of Tendering Holder: _______________________________ Taxpayer ID No.: _______________________________ - -------------------------------------------------------------------------------- -10- - -------------------------------------------------------------------------------- SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS OF TERRA NOVA NOTES) By completing, executing and delivering this Letter of Transmittal, the undersigned hereby tenders, and consents to the proposed amendments to the applicable indenture or indentures (and to the execution of the Supplemental Indenture or Supplemental Indentures effecting such amendments) with respect to, the principal amount of each series of Terra Nova Notes listed in the table above entitled "Description of Terra Nova Notes Tendered and in respect of which Consent is given." _____________________________________________________________ ________________ Signature of Registered Holder(s) or Authorized Signatory Date (See guarantee requirement below.) _____________________________________________________________ ________________ Signature of Registered Holder(s) or Authorized Signatory Date (See guarantee requirement below.) _____________________________________________________________ ________________ Signature of Registered Holder(s) or Authorized Signatory Date (See guarantee requirement below.) Area Code and Telephone Number: ______________________ If a holder of any Terra Nova Notes is tendering any Terra Nova Notes, this Letter of Transmittal must be signed by the Registered Holders exactly as the name appears on a securities position listing of DTC or by any persons authorized to become the Registered Holders by endorsements and documents transmitted herewith. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, please so indicate at the line entitled "Capacity (full title)" and submit evidence satisfactory to the Exchange Agent and Markel of such person's authority to so act. See Instruction 4. Name(s): ________________________________________________________________________________ ________________________________________________________________________________ (Please Type or Print) Capacity (full title): ________________________________________________________________________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address: ________________________________________________________________________________ (Including Zip Code) MEDALLION SIGNATURE GUARANTEE (If required - See Instruction 4.) Signature(s) Guaranteed by an Eligible Institution: ________________________________________________________________________________ (Authorized Signature) ________________________________________________________________________________ (Title) ________________________________________________________________________________ (Name of Firm) ________________________________________________________________________________ (Title) ________________________________________________________________________________ (Address) Dated:______________, 2002 -12- - -------------------------------------------------------------------------------- Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. ______________________________ Form W-9 Social Security Number(s) OR __________________________ Employer Identification Number(s) ---------------------------------------------------------------------------------------------------------------- Department of the Part 2-- Part 3-- Treasury Internal Certification -- Under Penalties of Perjury, I certify that: Awaiting TIN [_] Revenue Service (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued for me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. (3) I am a U.S. person (including a U.S. resident alien). ---------------------------------------------------------------------------------------------------------------- Payer's Request for Certification Instructions -- You must cross out item (2) above if you have been notified by the IRS that you Taxpayer are currently subject to backup withholding because of underreporting interest or dividends on your tax return. Identification Number ("TIN") and Name ______________________________ Certifications Check appropriate box: [_]Individual/ [_]Corporation [_]Partnership [_]Other [_]Exempt From Sole Proprietor Backup Withholding Address____________________________ (Number and Street) ____________________________ (City) (State) (Zip Code) SIGNATURE_______________________________ DATE____________________ - ------------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 30% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO AN OFFER TO EXCHANGE AND SOLICITATION OF CONSENT. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. --------------------------------------------------------------------- CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 30% of all reportable cash payments made to me thereafter will be withheld until I provide a taxpayer identification number to the payer and that, if I do not provide my taxpayer identification number within sixty days, such retained amounts shall be remitted to the IRS as backup withholding. SIGNATURE____________________________________DATE___________________ --------------------------------------------------------------------------- 13 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFERS 1. Delivery of Letter of Transmittal. This Letter of Transmittal is to be completed by tendering holders of Terra Nova Notes if tender of such Terra Nova Notes is to be made by book-entry transfer to the Exchange Agent's account at DTC and instructions are not being transmitted through ATOP. Holders who tender their Terra Nova Notes through DTC's ATOP procedures shall be bound by, but need not complete, this Letter of Transmittal; thus, a Letter of Transmittal need not accompany tenders effected through ATOP. A confirmation of a book-entry transfer into the Exchange Agent's account at DTC of all Terra Nova Notes delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) or properly transmitted agent's message, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the expiration date of the applicable Exchange Offers. Any financial institution that is a participant in DTC may electronically transmit its acceptance of the Exchange Offer by causing DTC to transfer Terra Nova Notes to the Exchange Agent in accordance with DTC's ATOP procedures for such transfer on or prior to the Expiration Date. The Exchange Agent will make available its general participant account at DTC for the Terra Nova Notes for purposes of the Exchange Offers. Delivery of a Letter of Transmittal to DTC will not constitute valid delivery to the Exchange Agent. No Letter of Transmittal should be sent to Markel, Terra Nova, DTC or the Dealer Manager. The method of delivery of this Letter of Transmittal and all other required documents, including delivery through DTC and any acceptance or agent's message delivered through ATOP, is at the option and risk of the tendering holder. If delivery is by mail, registered mail with return receipt requested and properly insured is recommended. Instead of delivery by mail, it is recommended that the holder use an overnight or hand-delivery service. In all cases, sufficient time should be allowed to ensure timely delivery. Neither Markel nor the Exchange Agent is under any obligation to notify any tendering holder of Terra Nova Notes of Markel's acceptance of tendered Terra Nova Notes prior to the expiration of the Exchange Offers. 2. Delivery of the Markel Notes. Markel Notes will be delivered only (i) in book-entry form through DTC and only to the DTC account of the tendering holder or the tendering holder's custodian. Accordingly, the appropriate DTC participant name and number (along with any other required -14- account information) needed to permit such delivery must be provided in the table hereof entitled "Description of the Terra Nova Notes Tendered and in respect of which Consent is Given." Failure to do so will render a tender of Terra Nova Notes defective, and Markel will have the right, which it may waive, to reject such tender without notice. Holders who anticipate tendering by a method other than through DTC (other than accredited investors that will receive Exchange Notes in certificated form) are urged to promptly contact a bank, broker or other intermediary (that has the facility to hold securities custodially through DTC) to arrange for receipt of any Markel Notes delivered pursuant to the Exchange Offers and to obtain the information necessary to complete the table. 3. Amount of Tenders. Tenders of Terra Nova Notes will be accepted only in denominations of U.S.$1,000 and integral multiples thereof. Book-entry transfers to the Exchange Agent should be made in the exact principal amount of Terra Nova Notes tendered in respect of which a consent is given. 4. Signatures on Letter of Transmittal; Instruments of Transfer; Guarantee of Signatures. For purposes of this Letter of Transmittal, the term "Registered Holder" means an owner of record as well as any DTC participant that ----------------- has Terra Nova Notes credited to its DTC account. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program (each, a "Medallion Signature Guarantor"). Signatures on the Letter of Transmittal need ----------------------------- not be guaranteed if: . the Letter of Transmittal is signed by a participant in DTC whose name appears on a security position listing as the owner of the Terra Nova Notes and the holder has not completed either of the boxes entitled "Special Issuance and Payment Instructions" or "Special Delivery Instructions" on this Letter of Transmittal; or . the Terra Nova Notes are tendered for the account of an "Eligible Institution." An "Eligible Institution" is one of the following firms or other entities identified in Rule 17Ad-15 under the Securities Exchange Act of 1934 (as such terms are defined in Rule 17Ad-15): (a) a bank; (b) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (c) a credit union; (d) a national securities exchange, registered securities association or clearing agency; or -15- (e) a savings institution that is a participant in a Securities Transfer Association recognized program. If any of the Terra Nova Notes tendered are held by two or more Registered Holders, all of the Registered Holders must sign the Letter of Transmittal. Markel will not accept any alternative, conditional, irregular or contingent tenders. By executing the Letter of Transmittal (or facsimile thereof) or directing DTC to transmit an agent's message, you waive any right to receive any notice of the acceptance of your Terra Nova Notes for exchange. If this Letter of Transmittal or instruments of transfer are signed by trustees, executors, administrators, guardians or attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by Markel, evidence satisfactory to Markel of their authority to so act must be submitted with this Letter of Transmittal. Beneficial Owners whose tendered Terra Nova Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if they desire to tender such Terra Nova Notes. 5. Special Issuance and Delivery Instructions. If a check is to be issued with respect to the consent payment, if any, on the Terra Nova Notes tendered hereby to a person or to an address other than as indicated in the table entitled "Description of the Terra Nova Notes Tendered and in Respect of which Consent is Given," the signer of this Letter of Transmittal should complete the "Special Issuance and Payment Instructions" and/or "Special Delivery Instructions" boxes on this Letter of Transmittal. All Terra Nova Notes tendered by book-entry transfer and not accepted for exchange will otherwise be returned by crediting the account at DTC designated above for which Terra Nova Notes were delivered. 6. Transfer Taxes. Except as set forth in this Instruction 7, Markel will pay or cause to be paid any transfer taxes with respect to the transfer and sale of Terra Nova Notes to it, or to its order, pursuant to the Exchange Offers. If payment is to be made to, or if Terra Nova Notes not tendered or not purchased are to be registered in the name of, any persons other than the Registered Holder, or if tendered Terra Nova Notes are registered in the name of any persons other than the persons signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the Registered Holder or such other person) payable on account of the transfer to such other person will be deducted unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. 7. U.S. Federal Backup Withholding, Tax Identification Number. U.S. federal income tax law requires that the holder(s) of any Terra Nova Notes that are accepted for exchange (or other payee) provide the Exchange Agent (as payer) with the -16- holder's correct taxpayer identification number ("TIN") or otherwise establish a basis for an exemption from backup withholding. In the case of a holder who is an individual (other than a resident alien) the TIN is his or her social security number. For holders other than individuals, such holders' TINs are their employer identification numbers. Exempt holders (including, among others, all corporations and certain foreign individuals) are not subject to backup withholding and reporting requirements but must establish that they are so exempt. Each holder should consult with a tax advisor regarding obtaining such exemption. If the Exchange Agent is not provided with either (1) a completed Substitute Form W-9 indicating a correct TIN or an adequate basis for an exemption or (2) a completed IRS Form W-8BEN (Certificate of Foreign Status), the holder (or other payee) may be subject to backup withholding (currently at the rate of 30%) on consent payments. The holder may also be subject to a penalty of $50 imposed by the Internal Revenue Service. A Substitute Form W-9 is provided below. An IRS Form W8-BEN may be obtained from the Exchange Agent. Backup withholding is not an additional federal income tax. Rather, the amount of tax withheld will be credited against the federal income tax liability of the persons subject to backup withholding. If backup withholding results in overpayment of taxes, a refund may be obtained from the IRS. To prevent backup withholding, each holder of tendered Terra Nova Notes must either (1) provide a completed Substitute Form W-9 and indicate (a) a correct TIN or (b) an adequate basis for an exemption or (2) provide a completed IRS Form W-8BEN. Each of Markel and Terra Nova reserves the right in its sole discretion to take all necessary or appropriate measures to comply with its respective obligations regarding backup withholding. 8. Validity of Tenders. All questions concerning the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Terra Nova Notes will be determined by Markel in its sole discretion, which determination will be final and binding. Markel reserves the absolute right to reject any and all tenders of Terra Nova Notes not in proper form or any Terra Nova Notes the acceptance for exchange of which may, in the opinion of its counsel, be unlawful. Markel also reserves the absolute right to waive any defect or irregularity in tenders of Terra Nova Notes, whether or not similar defects or irregularities are waived in the case of other tendered securities. The interpretation of the Terms and Conditions by Markel shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Terra Nova Notes must be cured within such time as Markel shall determine. None of Markel, the Information Agent, the Exchange Agent, the Dealer Manager or any other person will be under any duty to give notification of defects or irregularities with respect to tenders of Terra Nova Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Terra Nova Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Terra Nova Notes received by -17- the Exchange Agent that are not validly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the holders of Terra Nova Notes, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the expiration date of the applicable Exchange Offer or the withdrawal or termination of such Exchange Offer. 9. Waiver of Conditions. Markel reserves the absolute right to amend or waive any of the conditions in any or all of the Exchange Offers and consent solicitations concerning any Terra Nova Notes at any time. 10. Withdrawal. Tenders may be withdrawn only pursuant to the procedures and subject to the terms set forth in the Prospectus under the caption "The Exchange Offers-Withdrawal of Tenders and Revocation of Corresponding Consents." 11. Requests for Assistance or Additional Copies. Questions and requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Information Agent at the address and telephone number indicated herein. Important Tax Information Under U.S. federal income tax law, a holder who delivers a consent is required to (1) provide the Exchange Agent (as payer) with such holder's correct TIN or Substitute Form W-9 (a copy of which, along with instructions, is enclosed) and certify that the TIN provided on the Substitute Form W-9 is correct (or that such holder is awaiting a TIN) or otherwise establish a basis for exemption from backup withholding, or (2) provide the Exchange Agent with a completed IRS Form W-8BEN to certify foreign status. If such holder is an individual the TIN is his or her social security number. If a holder is a resident alien that is not eligible to obtain a social security number, the holder must provide the payer with an IRS individual taxpayer identification number (ITIN). If the Exchange Agent is not provided with the correct TIN, an adequate basis for exemption or an IRS Form W-8BEN (as described below), consent payments may be subject to backup withholdings and a $50 penalty may be imposed by the Internal Revenue Service. Certain holders (including, among others, certain foreign persons) are not subject to backup withholding and reporting requirements. Exempt holders (other than certain foreign persons) should indicate their exempt status on Substitute Form W-9. A foreign person may qualify as an exempt recipient by submitting to the Exchange Agent a properly completed IRS Form W-8BEN, signed under penalties of perjury, attesting to that holder's exempt status. An IRS Form W-8BEN may be obtained from the exchange Agent. If backup withholding applies, the Exchange Agent is required to withhold a portion (currently 30%) of the consent payments for any Terra Nova notes. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. If the holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future, the holder should indicate this as described in the instructions to Substitute Form W-9. Notwithstanding that this may be the case, the Exchange Agent will withhold 30% of the consent payments prior to the time a properly certified TIN is provided to the Exchange Agent. The holder is required to give the Exchange Agent the correct TIN (e.g. Social Security Number or Employer Identification Number) of the record owner of the Terra Nova Notes. If the Terra Nova Notes are registered in more than one name or are not registered in the name of the actual owner consult the section entitled "Guidelines for Determining the Proper Identification Number to Give the Payer" in the instructions to Substitute Form W-9 for guidance on which number to report. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICABILITY OF BACKUP WITHHOLDING REQUIREMENTS AND EXEMPTIONS THEREFROM. ADDITIONAL FORMS AND INSTRUCTIONS CAN BE OBTAINED FROM THE INTERNAL REVENUE SERVICE. -18- In order to tender, a holder of Terra Nova Notes should send or deliver a properly completed and signed Letter of Transmittal and any other required documents to the Exchange Agent at its address set forth below or tender pursuant to DTC's Automated Tender Offer Program. The Exchange Agent for the Exchange Offer is: JPMorgan Chase Bank
By Mail: By Hand: By Overnight Mail or Courier: - ------------------------------------------------------------------------------------------------- JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank - ------------------------------------------------------------------------------------------------- 55 Water Street 55 Water Street 55 Water Street Room 234, North Building Room 234, North Building Room 234, North Building New York, New York 10041 New York, New York 10041 New York, New York 10041 Attention: Victor Matis Attention: Victor Matis Attention: Victor Matis - -------------------------------------------------------------------------------------------------
By Facsimile (for Eligible Institutions only): (212) 638-7375 Confirm Facsimile by Telephone ONLY: (212) 638-0459 Any questions or requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal, or related documents may be directed to the Information Agent at its telephone numbers set forth below. A holder of Terra Nova Notes may also contact the Dealer Manager at the telephone number set forth below or such holder's custodian bank, depositary, broker, trust company or other nominee for assistance concerning the Exchange Offer. The Information Agent for the Exchange Offer is: Mackenzie Partners, Inc. U.S. Toll-Free: (800) Banks, Brokers and From Outside the U.S.: The exclusive Dealer Manager for the Exchange Offer is: JP Morgan 270 Park Avenue, 8th Floor New York, NY 10017 U.S. Toll-Free: (866) 834-4666 From Outside the U.S.: (212) 834-4388 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. - Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
- ---------------------------------------------------------------------------------------------- GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF -- - ---------------------------------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings trust The grantor-trustee(1) account (grantor is also trustee) b. So-called trust account that is not a The actual owner(1) legal or valid trust under State law 5. Sole proprietorship account The owner(3) - ---------------------------------------------------------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT NUMBER FOR -- - ---------------------------------------------------------------------------------------------- 6. Sole proprietorship The owner(s) 7. A valid trust, estate or pension trust The legal entity(4) 8. Corporate account The corporation 9. Association, club, religious, charitable, The organization educational, or other tax-exempt organization 10. Partnership account The partnership 11. A broker or registered nominee The broker or nominee 12. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district or prison) that receives agricultural program payments - ------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "DBA" name. You may use either your SSN or EIN (if you have one). (4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration office. Get Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM (1-800-829-3676) or from the IRS's Internet Web Site at WWW.IRS.GOV. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on all dividend and interest payments and on broker transactions include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or any individual retirement plan, or a custodial account under Section 403(b)(7) if the account satisfies the requirements of section 401(f)(2). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An entity registered at all times during the tax year under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Section 404(k) distributions made by an ESOP. Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including the exempt-interest dividends under section 852) - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Mortgage or student loan interest paid to you. Exempt payees described above should file the Substitute Form W-9 to avoid possible erroneous backup withholding. Complete the Substitute Form W-9 as follows: ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE FACE OF THE FORM, SIGN, DATE, AND RETURN THE FORM TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N of the Internal Revenue Code and the regulations thereunder. PRIVACY ACT NOTICE.--Section 6109 of the Internal Revenue Code requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. The IRS may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, and the District of Columbia to carry out their tax laws. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 30% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. (4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS.--If the payer discloses or uses taxpayer identification numbers in violation of Federal law, the payer may be subject to civil and criminal penalties. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.
- ------------------------------------------------------------------------------------------------------------------------------------ SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND Form W-9 CERTIFY BY SIGNING AND DATING BELOW. ------------------------------- Social Security Number(s) OR ------------------------------- Employer Identification Number(s) --------------------------------------------------------------------------------------------------------- Department of the Part 2-- Part 3-- Treasury Internal Certification -- Under Penalties of Perjury, I certify Awaiting TIN [ ] Revenue Service that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued for me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. (3) I am a U.S. person (including a U.S. resident alien). --------------------------------------------------------------------------------------------------------- Payer's Request for Certification Instructions -- You must cross out item (2) above if you have been notified by the IRS that Taxpayer Identification you are currently subject to backup withholding because of underreporting interest or dividends on your Number ("TIN") and tax return. Certifications Name ------------------------------------------ Check appropriate box: [ ] Individual/ [ ] Corporation [ ] Partnership [ ] Other [ ] Exempt From Sole Proprietor Backup Withholding Address --------------------------------------- (Number and Street) --------------------------------------- (City) (State) (Zip Code) SIGNATURE DATE ------------------------------------- -------------------- - ------------------------------------------------------------------------------------------------------------------------------------ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 30% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO AN OFFER TO EXCHANGE AND SOLICITATION OF CONSENT. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. -------------------------------------------------------------------------------- CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 30% of all reportable cash payments made to me thereafter will be withheld until I provide a taxpayer identification number to the payer and that, if I do not provide my taxpayer identification number within sixty days, such retained amounts shall be remitted to the IRS as backup withholding. SIGNATURE ____________________________________ DATE _______________________ --------------------------------------------------------------------------------
EX-99.2 17 dex992.txt LETTER TO DEPOSITORY TRUST COMPANY PARTICIPANTS LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES MARKEL CORPORATION Offer to Exchange Any and All of the Outstanding 7.2% Terra Nova Notes Due 2007 and 7.0% Terra Nova Notes Due 2008 issued by Markel International Limited (formerly, Terra Nova Insurance (UK) Holdings Plc) and Solicitation of Consents for Amendment of the Related Indentures - -------------------------------------------------------------------------------- THE CONSENT PAYMENT DEADLINE WILL BE 5:00 P.M., NEW YORK CITY TIME, ON MAY __, 2002, UNLESS EXTENDED. EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY __, 2002, UNLESS EXTENDED OR EARLIER TERMINATED. THE COMPANY MAY EXTEND THE CONSENT PAYMENT DEADLINE OR THE EXPIRATION OF THE OFFER FOR EITHER SERIES OF NOTES WITHOUT EXTENDING ANY SUCH TIME FOR THE OTHER SERIES OF NOTES. HOLDERS OF THE APPLICABLE NOTES WHO DESIRE TO RECEIVE A CONSENT PAYMENT MUST VALIDLY CONSENT TO THE PROPOSED AMENDMENTS AND TENDER THEIR NOTES PURSUANT TO THE OFFERS PRIOR TO THE APPLICABLE CONSENT EXPIRATION TIME. HOLDERS MAY ONLY REVOKE A CONSENT BY VALIDLY WITHDRAWING THE NOTES PRIOR TO THE CONSENT PAYMENT DEADLINE. HOLDERS WHO TENDER THEIR NOTES AFTER THE CONSENT PAYMENT DEADLINE WILL NOT RECEIVE THE APPLICABLE CONSENT PAYMENT. TENDERS OF NOTES MADE AFTER THE CONSENT PAYMENT DEADLINE MAY NOT BE WITHDRAWN. THE COMPLETION, EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL AND CONSENT IN CONNECTION WITH A TENDER OF NOTES PURSUANT TO THE OFFERS PRIOR TO THE CONSENT PAYMENT DEADLINE WILL BE DEEMED TO CONSTITUTE THE DELIVERY OF CONSENTS WITH RESPECT TO THE NOTES TENDERED. - -------------------------------------------------------------------------------- April __, 2002 To Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees: We are offering to exchange any and all of the notes of the series listed above for new Markel notes, on the terms and subject to the conditions set forth in our enclosed Prospectus and Consent Solicitation Statement (the "Statement"). We are asking you to contact your clients for whom you hold any of these notes. For your use and for forwarding to those clients, we are enclosing the Statement, the related Letter of Transmittal and Consent and a letter to holders summarizing the Offers. We will not pay you any fees or commissions for soliciting acceptances of the Offers. However, we will reimburse you for customary mailing and handling expenses incurred by you in forwarding these materials to your clients. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. If you or your clients would like you to tender pursuant to the Offers any notes you hold, you may do so through DTC's ATOP program or by following the instructions that appear in the Statement and in the related Letter of Transmittal and Consent. If you tender through ATOP you do not need to complete ------------------------------------------------------ the Letter of Transmittal and Consent. - ------------------------------------- If you have questions about the Offers or procedures for tendering, you should call the Dealer Manager or the Information Agent at one of their telephone numbers listed below. If you would like additional copies of the Statement and the Letter of Transmittal and Consent, you should call the Information Agent at its telephone number set forth below. Very truly yours, MARKEL CORPORATION (Enclosures) NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS CONSTITUTES YOU THE AGENT OF THE COMPANY OR THE DEALER MANAGER, OR AUTHORIZES YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFERS OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN The Information Agent for the Exchange Offers is: Mackenzie Partners, Inc. U.S. Toll-Free: Banks, Brokers and From Outside the U.S.: The exclusive Dealer Manager for the Exchange Offers is: JPMorgan 270 Park Avenue, 8th Floor New York, NY 10017 U.S. Toll-Free: (866) 834-4666 From Outside the U.S.: (212) 834-4388 EX-99.3 18 dex993.txt FORM OF LETTER TO BENEFICIAL OWNERS CLIENT LETTER MARKEL CORPORATION Offer to Exchange Any and All of the Outstanding 7.2% Terra Nova Notes Due 2007 and 7.0% Terra Nova Notes Due 2008 issued by Markel International Limited (formerly, Terra Nova Insurance (UK) Holdings Plc) and Solicitation of Consents for Amendment of the Related Indentures - -------------------------------------------------------------------------------- THE CONSENT PAYMENT DEADLINE WILL BE 5:00 P.M., NEW YORK CITY TIME, ON MAY __, 2002, UNLESS EXTENDED. EACH OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY __, 2002, UNLESS EXTENDED OR EARLIER TERMINATED. THE COMPANY MAY EXTEND THE CONSENT PAYMENT DEADLINE OR THE EXPIRATION OF THE OFFER FOR EITHER SERIES OF NOTES WITHOUT EXTENDING ANY SUCH TIME FOR THE OTHER SERIES OF NOTES. HOLDERS OF THE APPLICABLE NOTES WHO DESIRE TO RECEIVE A CONSENT PAYMENT MUST VALIDLY CONSENT TO THE PROPOSED AMENDMENTS AND TENDER THEIR NOTES PRIOR TO THE APPLICABLE CONSENT PAYMENT DEADLINE. You may only revoke a consent by validly withdrawing the notes prior to the consent payment deadline. HOLDERS WHO TENDER THEIR NOTES AFTER THE CONSENT PAYMENT DEADLINE WILL NOT RECEIVE THE APPLICABLE CONSENT PAYMENT. Tenders of notes made after the Consent Payment Deadline may not be withdrawn. THE COMPLETION, EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL AND CONSENT IN CONNECTION WITH A TENDER OF NOTES PURSUANT TO THE OFFERS PRIOR TO THE CONSENT PAYMENT DEADLINE WILL BE DEEMED TO CONSTITUTE THE DELIVERY OF CONSENTS WITH RESPECT TO THE NOTES TENDERED. - -------------------------------------------------------------------------------- April __, 2002 To Holders of the Notes of each Series Listed Above: We are offering to exchange all of the notes of Markel International Limited, formerly Terra Nova Insurance (UK) Holdings Plc ("Terra Nova"), of each series listed above for new Markel Corporation notes, on the terms and subject to the conditions set forth in our enclosed Prospectus and Consent Solicitation Statement (the "Statement"). If you tender notes, you will, by the act of tendering, be consenting to various amendments to the applicable indenture under which those notes were issued. Our obligation to purchase tendered notes is conditioned on, among other things, satisfaction of the Consent Condition, as defined in the Statement, and a valid tender of a majority in principal amount held by nonaffiliates of Terra Nova of the two series of notes as described in the Statement. For your convenience, we summarize certain terms of the Offers below. This summary is not complete. You should read the Statement for a more detailed description of the terms of the Offers. Consent Payment and Settlement Date We will pay an amount in cash equal to the applicable consent payment listed on the cover page of the Statement for each of your notes accepted for exchange if you tender your notes prior to the applicable consent payment deadline. If you do not validly tender your notes prior to the applicable consent payment deadline, you will not receive the applicable consent payment. We will issue the new Markel notes and pay the consent payment on the third business day after the date the applicable Offer expires. Withdrawal Rights The valid withdrawal of tendered Terra Nova notes prior to the applicable consent payment deadline will be deemed to be a concurrent revocation of the related consent to the proposed amendments to the applicable Terra Nova indenture. You may only revoke a consent by validly withdrawing the related Terra Nova notes prior to the consent payment deadline. Tenders of notes made after the consent payment deadline may not be withdrawn. How to Accept an Offer If you would like to tender notes pursuant to the Offer, you may do so through DTC's ATOP program or by following the instructions that appear in the Statement and in the related Letter of Transmittal and Consent and completing the Letter of Instructions (the "Instructions") attached hereto. If you tender ------------- through ATOP you do not need to complete the Letter of Transmittal and Consent. - ------------------------------------------------------------------------------ If you hold your notes through a broker or other nominee, only that broker or nominee can tender your notes. In that case, you must instruct your broker or nominee if you want to tender those notes. The Instructions should be signed, completed and forwarded to your broker or nominee as promptly as possible in order to permit the tender your notes. If you have questions about the Offers or procedures for tendering, you should contact the Dealer Manager or the Information Agent at one of their telephone numbers set forth below. If you would like additional copies of the Statement and the related Letter of Transmittal and Consent, you should call the Information Agent at its telephone number set forth below. Very truly yours, MARKEL CORPORATION The Information Agent for the Exchange Offers is: Mackenzie Partners, Inc. U.S. Toll-Free: Banks, Brokers and From Outside the U.S.: The exclusive Dealer Manager for the Exchange Offers is: JPMorgan 270 Park Avenue, 8th Floor New York, NY 10017 U.S. Toll-Free: (866) 834-4666 From Outside the U.S.: (212) 834-4388 LETTER OF INSTRUCTIONS WITH RESPECT TO DELIVERY OF CONSENTS IN CONNECTION WITH THE OFFER OF EXCHANGE AND SOLICITATION OF CONSENTS FOR TO BE USED IF YOU WISH YOUR BROKER OR NOMINEE TO CONSENT ON YOUR BEHALF The undersigned acknowledge(s) receipt of the letter and the enclosed Prospectus and Consent Solicitation Statement dated April ___, 2002 (the "Statement") in connection with the Offer of Exchange and Solicitation of Consents for the Proposed Amendments (as defined in the Consent Solicitation Statement) of the Indentures governing the Notes of Markel Corporation referred to in the Statement (the "Notes"). AUTHORIZATION TO CONSENT-This will authorize you to deliver the undersigned's Consents with respect to the principal amount of Notes indicated below held by you for the account or benefit of the undersigned, pursuant to the terms and conditions set forth in the Statement dated April ___, 2002. Please sign below and provide the following information: _____________________________________________ Signature(s) _____________________________________________ Name(s) (please print) _____________________________________________ Address _____________________________________________ Address (continued) _____________________________________________ Zip Code _____________________________________________ Area Code and Telephone Number _____________________________________________ Tax Identification or Social Security Number _____________________________________________ My Account Number with You _____________________________________________ Principal Amount Beneficially Owned _____________________________________________ Principal Amount as to which consent is Given (must be an integral multiple of U.S.$1,000) Dated:___________________, 2002 -----END PRIVACY-ENHANCED MESSAGE-----