Firstmark Corp/ME – ‘PREM14A’ on 12/31/98

As of:  Thursday, 12/31/98   ·   Accession #:  916641-98-1385   ·   File #:  0-20806

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Proxy Statement                           85±   376K 

Document Table of Contents

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SCHEDULE 14A
(Rule 14a-101)
 Information Required in Proxy Statement

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [ X ]                                                   
Filed by a Party other than the Registrant [   ]                                

Check the appropriate box:                                                      

[X] Preliminary Proxy Statement          [ ] Confidential, For Use of the       
                                          Commission Only (as permitted by
                           Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement                                                  
[ ] Definitive Additional Materials                                             
[ ] Soliciting  Material Pursuant to                                            
Rule 14a-11(c) or Rule 14a-12                                           

 FIRSTMARK CORP.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[   ] No fee required.                                                          

[ X ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.  

     (1)  Title of each class of securities to which transaction applies: Common
          Stock,   par   value   $5.00  per   share,   of   Investors   Southern
Corporation                                                 

     (2)  Aggregate  number of  securities  to which  transaction  applies:  499
          shares     of     Common     Stock     of      Investors      Southern
Corporation                                                 

     (3)  Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined): $6,750,000,
          representing the cash payment to be received by the Registrant for all
          shares     of     Common     Stock     of      Investors      Southern
Corporation                                                 

     (4)  Proposed      maximum      aggregate     value     of     transaction:
$6,750,000                                        

(5)  Total fee paid:                                                  
$1,350                                            

[ ]       Fee paid previously with preliminary materials.                       

[ ]       Check box if any part of the fee is offset as provided by Exchange Act
          Rule  0-11(a)(2)  and identify the filing for which the offsetting fee
          was paid  previously.  Identify  the previous  filing by  registration
         statement number, or the form or schedule and the date of its filing.

(1)      Amount previously paid:                              
                 .............................................................
(2)      Form, Schedule or Registration Statement no.:        
                 .............................................................
(3)      Filing Party:                                        
                 .............................................................
(4)      Date Filed:                                          
                 .............................................................

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 FIRSTMARK CORP.

 P.O. Box 1398
Richmond, Virginia 23218
(804) 648-9048

 SPECIAL MEETING OF SHAREHOLDERS

Dear Shareholder:                                                               

         You are cordially  invited to attend a Special  Meeting of Shareholders
of Firstmark  Corp.  (the  "Company") to be held at the office of Southern Title
Insurance  Corporation,  One James  Center,  901 East Cary  Street,  17th Floor,
Richmond, Virginia 23219, on Wednesday, February 17, 1999 at 9:00 a.m.          

         At the Special Meeting,  you will be asked to elect three directors for
terms of one year each.  In addition,  you will be asked to consider and vote to
approve the Stock Purchase Agreement by and among the Company,  Southern Capital
Acquisition  Corporation,  a Virginia corporation  ("SCAC"),  Investors Southern
Corporation,  a Virginia  corporation  ("ISC"),  and  Southern  Title  Insurance
Corporation,  a  Virginia  insurance  company,  and Old  Guard  Group,  Inc.,  a
Pennsylvania corporation ("Old Guard"), dated as of December 2, 1998 (the "Stock
Purchase  Agreement"),  pursuant  to which the Company and SCAC will sell to Old
Guard,  and Old  Guard  will  buy  from  the  Company  and  SCAC,  all of  ISC's
outstanding capital stock in exchange for cash and contingent consideration (the
"Transaction"),  all on the terms and conditions set forth in the Stock Purchase
Agreement.  Enclosed with this letter is a formal notice of the Special Meeting,
a Proxy Statement, which describes the Transaction in further detail, and a form
of proxy.                                                                       

         The  Board  of  Directors  of  the  Company  unanimously  approved  the
Transaction and recommends that all of the  shareholders of the Company vote for
the Transaction.                                                                

         Whether or not you plan to attend the Special Meeting,  it is important
that your shares be  represented  and voted.  Please  complete,  sign,  date and
return the enclosed proxy promptly using the enclosed postage-paid envelope. The
enclosed proxy,  when returned  properly  executed,  will be voted in the manner
directed in the proxy.                                                          

         We hope that you will  participate  in the Special  Meeting,  either in
person or by proxy.                                                             

Sincerely,

            Donald V. Cruickshanks
                           President and Chief Executive Officer

Richmond, Virginia                                                              
________ __, 1999                                                               

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 FIRSTMARK CORP.
 P.O. Box 1398
Richmond, Virginia 23218

 -------------------

 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 -------------------

         A Special Meeting of Shareholders (the "Special  Meeting") of Firstmark
Corp. (the "Company") will be held on Wednesday,  February 17, 1999 at 9:00 a.m.
at the office of Southern Title  Insurance  Corporation,  One James Center,  901
East Cary Street, 17th Floor, Richmond, Virginia, for the following purposes:   

          1.        To elect three directors to serve for terms of one year each
            expiring at the 1999 annual meeting of shareholders;

          2.        To consider and vote to approve the Stock Purchase Agreement
                    by and  among  the  Company,  Southern  Capital  Acquisition
                    Corporation,  a  Virginia  corporation  ("SCAC"),  Investors
                    Southern  Corporation,  a Virginia  corporation ("ISC"), and
                    Southern Title Insurance  Corporation,  a Virginia insurance
                    company,   and  Old  Guard  Group,   Inc.,  a   Pennsylvania
                    corporation ("Old Guard"), dated as of December 2, 1998 (the
                    "Stock Purchase  Agreement"),  pursuant to which the Company
                    and SCAC will sell to Old Guard, and Old Guard will buy from
                    the Company and SCAC, all of ISC's outstanding capital stock
                    in exchange for cash and  contingent  consideration,  all on
                    the terms  and  conditions  set forth in the Stock  Purchase
                    Agreement (the "Transaction").  A copy of the Stock Purchase
                    Agreement is enclosed with the accompanying  Proxy Statement
as Appendix A.                          

          3.        To act upon such other  matters as may properly  come before
the Special Meeting.                    

         SHAREHOLDERS  ARE ENTITLED TO ASSERT  DISSENTERS'  RIGHTS UNDER SECTION
909 OF THE MAINE  BUSINESS  CORPORATION  ACT, A COPY OF WHICH IS ATTACHED TO THE
PROXY  STATEMENT  AS  APPENDIX  C.  SHAREHOLDERS   DISSENTING  TO  THE  PROPOSED
TRANSACTION ARE ENTITLED,  UPON COMPLIANCE WITH SECTION 909, TO BE PAID THE FAIR
VALUE OF THEIR SHARES OF COMMON STOCK.                                          

         Only  holders  of  shares  of  Common  Stock of  record at the close of
business on January __, 1998, the record date fixed by the Board of Directors of
the Company, are entitled to notice of, and to vote at, the Special Meeting.    

                        By Order of The Board of Directors

     Ronald C. Britt
Secretary 

________ __, 1999                                                               

YOU ARE  CORDIALLY  INVITED TO ATTEND THIS  MEETING.  IT IS IMPORTANT  THAT YOUR
SHARES BE  REPRESENTED  REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO BE
PRESENT,  YOU ARE URGED TO COMPLETE,  SIGN,  DATE AND RETURN THE ENCLOSED  PROXY
PROMPTLY IN THE  ENVELOPE  PROVIDED.  IF YOU ATTEND THIS  MEETING,  YOU MAY VOTE
EITHER IN PERSON OR BY YOUR  PROXY.  ANY PROXY  GIVEN MAY BE  REVOKED  BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.                 

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 FIRSTMARK CORP.
 P.O. Box 1398
Richmond, Virginia 23218

 PROXY STATEMENT

         This Proxy  Statement is furnished to holders of the common stock,  par
value $0.20 per share (the "Common Stock"),  of Firstmark Corp. (the "Company"),
in connection with the  solicitation of proxies by the Board of Directors of the
Company to be used at a Special Meeting of Shareholders (the "Special  Meeting")
to be held  Wednesday,  February 17, 1999 at 9:00 a.m. at the office of Southern
Title Insurance Corporation, One James Center, 901 East Cary Street, 17th Floor,
Richmond, Virginia, and any duly reconvened meeting after adjournment thereof.  

         At the Special  Meeting,  the holders of Common  Stock will be asked to
elect three directors for terms of one year each. In addition, holders of Common
Stock will be asked to consider and vote to approve the Stock Purchase Agreement
by and among the Company,  Southern Capital Acquisition Corporation,  a Virginia
corporation  ("SCAC"),  Investors Southern  Corporation,  a Virginia corporation
("ISC"), and Southern Title Insurance Corporation,  a Virginia insurance company
("STIC"),  and Old Guard Group, Inc., a Pennsylvania  corporation ("Old Guard"),
dated as of December 2, 1998 (the "Stock Purchase  Agreement").  Pursuant to the
Stock  Purchase  Agreement,  the Company and SCAC will sell to Old Guard and Old
Guard will buy from the Company and SCAC all of ISC's outstanding  capital stock
in  exchange  for  cash  and  contingent  consideration,  all on the  terms  and
conditions set forth in the Stock Purchase  Agreement (the  "Transaction").  ISC
owns  all  of the  capital  stock  of  STIC,  the  Company's  primary  operating
subsidiary and, following the consummation of the Transaction, ISC and STIC will
become subsidiaries of Old Guard.                                               

         The  purchase   price   payable  to  the  Company  by  Old  Guard  upon
consummation of the Transaction is $6.75 million. In addition, SCAC will also be
entitled to receive  additional cash payments based on the pre-tax net income of
ISC and its  subsidiaries,  including  STIC, for each of the fiscal years ending
December 31, 1999,  2000 and 2001.  See "The  Transaction."  A copy of the Stock
Purchase  Agreement  is  attached  to this Proxy  Statement  as  Appendix A. The
summary of the Stock Purchase  Agreement set forth in this Proxy  Statement does
not purport to be complete  and is subject to, and is  qualified in its entirety
by  reference  to,  the text of the Stock  Purchase  Agreement.  See "The  Stock
Purchase Agreement."                                                            

         Shareholders are entitled to assert  dissenters' rights with respect to
the  Transaction  under Section 909 of the Maine Business  Corporation  Act (the
"MBCA"). In order for a shareholder to perfect dissenters' rights, a notice must
be sent to the Company before the vote is taken on the Stock Purchase  Agreement
at the  Special  Meeting,  and the  shareholder  must  not  vote in favor of the
Transaction by proxy or otherwise.  See "The  Transaction - Rights of Dissenting
Shareholders."                                                                  

         The Company's Board of Directors has approved the nominees for election
to the  board and the  Stock  Purchase  Agreement  and has  determined  that the
election and the  Transaction  are in the best  interests of the Company and its
shareholders and recommends that the  shareholders  vote "FOR" approval of these
proposals at the Special Meeting.                                               

         This proxy  statement is being mailed to  registered  holders of Common
Stock on or about ________ __, 1999.                                            

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 AVAILABLE INFORMATION

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in
accordance therewith files reports,  proxy statements and other information with
the Securities and Exchange Commission (the "Commission").  Such reports,  proxy
statements  and other  information  filed by the  Company can be  inspected  and
copied at the public reference  facilities  maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,  D.C. 20549-1004, and
at the following Regional Offices of the Commission: New York Regional Office, 7
World Trade Center,  Suite 1300, New York,  New York 10048 and Chicago  Regional
Office, 500 West Madison Street, Suite 1400, Chicago,  Illinois 60661. Copies of
such materials can also be obtained by mail from the Public Reference Section of
the Commission at 450 Fifth Street,  N.W.,  Judiciary  Plaza,  Washington,  D.C.
20549-1004,   at  prescribed   rates.  The  Commission   maintains  a  Web  site
(http://www.sec.gov)   that  contains   reports,   proxy  statements  and  other
information regarding registrants, such as the Company, that file electronically
with the Commission.                                                            

         No  person  is  authorized  to give  any  information  or to  make  any
representation  not  contained  or  incorporated  by  reference  in  this  Proxy
Statement,  and, if given or made, such information or representation should not
be relied upon as having been  authorized  by the Company.  The delivery of this
Proxy Statement shall not, under any  circumstances,  create an implication that
there has been no change in the  affairs of the Company or the  information  set
forth herein since the date of this Proxy Statement.                            

 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The  following  reports  and other  documents  previously  filed by the
Company with the Commission under the Exchange Act are incorporated by reference
into this Proxy Statement:                                                      

       (a)    the  Company's  Annual  Report  on Form  10-K for the  year  ended
              December 31, 1997,  as amended by Form 10-K/A  (Amendment  No. 1),
filed April 30, 1998;                               

       (b)    the  Company's  Quarterly  Reports  on Form 10-Q for the  quarters
           ended March 31, 1998, June 30, 1998 and September 30, 1998; and

     (c)    the Company's Current Report on Form 8-K filed December 7, 1998.

         All  reports  and other  documents  filed by the  Company  pursuant  to
Sections  13(a),  13(c),  14 or 15(d) of the Exchange Act after the date of this
Proxy  Statement  and  prior  to the  Special  Meeting  shall  be  deemed  to be
incorporated by reference into this Proxy Statement and to be a part hereof from
the date of filing of such reports and other documents.                         

         Any statement contained herein or in a report or document  incorporated
or deemed to be  incorporated  by reference into this Proxy  Statement  shall be
deemed to be modified or superseded for purposes of this Proxy  Statement to the
extent that a statement  contained  herein (or in any other  subsequently  filed
document that also is  incorporated  or deemed to be  incorporated  by reference
into this Proxy Statement) modifies or supersedes such previous  statement.  Any
such  statement  so modified  or  superseded  shall not be deemed,  except as so
modified or superseded, to constitute a part of this Proxy Statement.           

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         THIS  PROXY  STATEMENT  INCORPORATES  REPORTS  AND OTHER  DOCUMENTS  BY
REFERENCE THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE REPORTS AND
OTHER DOCUMENTS (OTHER THAN EXHIBITS TO SUCH REPORTS AND OTHER DOCUMENTS, UNLESS
SUCH EXHIBITS ARE  SPECIFICALLY  INCORPORATED BY REFERENCE INTO SUCH REPORTS AND
OTHER  DOCUMENTS) ARE AVAILABLE  WITHOUT CHARGE UPON ORAL OR WRITTEN  REQUEST BY
ANY PERSON TO WHOM THIS PROXY STATEMENT HAS BEEN DELIVERED FROM THE SECRETARY OF
THE COMPANY, WHOSE ADDRESS IS P.O. BOX 1398, RICHMOND, VIRGINIA 23218, TELEPHONE
NUMBER (804) 648-9048. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS,  ANY
SUCH REQUEST SHOULD BE MADE BY FEBRUARY __, 1999.                               

FORWARD-LOOKING STATEMENTS

         Certain   statements   in   this   Proxy   Statement   may   constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995. Among other things,  these statements  relate to
the financial  conditions,  results of operations  and businesses of the Company
and STIC.  Although the Company believes that its  expectations  with respect to
certain forward-looking  statements are based upon reasonable assumptions within
the bounds of its and STIC's business and operations,  there can be no assurance
that actual results,  performance or achievements of the Company will not differ
materially  from any future results,  performance or  achievements  expressed or
implied by such forward-looking statements.                                     

         In  connection  with the  Transaction,  factors  that may cause  actual
results to differ  materially from those  contemplated  by such  forward-looking
statements include the following: (i) revenues of STIC following the Transaction
are lower  than  expected;  (ii)  competitive  pressure  in the title  insurance
industry  increases  significantly;  (iii) general economic  conditions,  either
nationally or in one or more of the states in which STIC will conduct  business,
are less  favorable  than expected;  or (iv)  legislation or regulatory  changes
adversely affect the businesses conducted by the Company.                       

         In connection  with the title  insurance  industry in general,  factors
that may cause actual results to differ  materially  from those  contemplated by
such  forward-looking  statements  include  the  following:  (i)  the  costs  of
producing  title  evidence are relatively  high,  whereas  premium  revenues are
subject  to  regulatory  and  competitive  restraints;  (ii) the amount of title
insurance  business  available is influenced by housing starts,  housing resales
and commercial real estate transactions;  (iii) real estate activity levels have
historically  been cyclical and are influenced by such factors as interest rates
and the  condition  of the  overall  economy;  (iv) the  value of the  Company's
investment portfolio is subject to fluctuation based on similar factors; (v) the
title insurance  industry may be exposed to substantial  claims by large classes
of claimants;  and (vi) the industry is regulated by state laws that require the
maintenance  of minimum  levels of capital  and surplus  and that  restrict  the
amount of dividends  that may be paid by the  Company's  insurance  subsidiaries
without prior regulatory approval.                                              

         The Company cautions that the foregoing lists of important  factors are
not  exclusive.  The Company does not  undertake  to update any  forward-looking
statement that may be made from time to time by or on behalf of the Company.    

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 TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Available Information.........................................................2 
Incorporation of Certain Documents by Reference...............................2 
Forward-Looking Statements....................................................3 
Voting Rights.................................................................6 

 PROPOSAL ONE: ELECTION OF DIRECTORS

Election of Directors.........................................................7 
    Nominees for Election....................................................7
    Executive Officers Who Are Not Directors.................................8
    Security Ownership of Management and Certain Beneficial Owners...........8
    Committees of the Board of Directors.....................................9
    Director Compensation....................................................9
    Executive Compensation...................................................9
    Stock Options...........................................................10
    Employment Agreements...................................................10
    Transactions with Management............................................10

PROPOSAL TWO: APPROVAL OF THE STOCK PURCHASE AGREEMENT

The Transaction..............................................................11 
    Description of the Transaction..........................................11
    Old Guard...............................................................11
    Background to the Transaction...........................................12
    Reasons for the Transaction.............................................14
    Effect of the Transaction on the Company's Shareholders.................16
    Comparative Per Share Data..............................................16
    Opinion of the Company's Financial Advisor..............................16
    Interests of Certain Persons in the Transaction.........................19
    Regulatory Approvals....................................................20
    Certain Federal Income Tax Consequences.................................20
    Accounting Treatment....................................................21
    Rights of Dissenting Shareholders.......................................21

The Stock Purchase Agreement.................................................25 
    Acquisition and Purchase Price..........................................25
    Closing Date............................................................25
    Representations and Warranties..........................................25
    Certain Covenants of the Parties........................................26
    Conditions to Closing...................................................26
    Amendment, Waiver and Termination.......................................27
    Indemnification.........................................................28

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Pro Forma Financial Information (Unaudited)..................................29 
    Pro Forma Balance Sheet.................................................30
    Pro Forma Statements of Income..........................................31

Independent Public Accountants...............................................33 

Proposals for 1999 Annual Meeting............................................33 

Other Matters................................................................33 

Appendix A:       Stock  Purchase  Agreement  by and among  Firstmark  Corp.,   
                  Southern   Capital   Acquisition   Corporation,   a   Virginia
                  corporation,   Investors  Southern  Corporation,   a  Virginia
                  corporation,  and  Southern  Title  Insurance  Corporation,  a
                  Virginia  insurance  company,  and Old Guard  Group,  Inc.,  a
          Pennsylvania corporation, dated as of December 2, 1998

Appendix B:       Opinion of Ferris, Baker Watts, Incorporated                  

Appendix C:       Section 909 of the Maine Business Corporation Act             

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 VOTING RIGHTS

         The Board of  Directors  has fixed the close of business on January __,
1999 as the  record  date  (the  "Record  Date")  for the  determination  of the
Company's shareholders entitled to notice of and to vote at the Special Meeting,
or any  adjournment  or  postponement  thereof.  On the Record Date,  there were
__________ shares of Common Stock issued and outstanding. Each outstanding share
of Common  Stock is  entitled to one vote on all matters to be acted upon at the
Special Meeting.  A majority of the shares of the Common Stock entitled to vote,
represented in person or by proxy,  constitutes a quorum for the  transaction of
business at the Special Meeting.                                                

         Approval  of the  Transaction  requires  the  affirmative  vote  of the
holders of at least a majority of the outstanding  shares of Common Stock. As of
the Record  Date,  directors  and  executive  officers  of the Company and their
affiliates owned beneficially 1,088,595 shares of Common Stock, or approximately
20.5% of the shares of Common Stock  outstanding on such date. The directors and
executive  officers of the Company have indicated  their intention to vote their
shares of Common Stock in favor of the Transaction.                             

         The cost of soliciting proxies for the Special Meeting will be borne by
the Company.  The Company does not intend to solicit  proxies  otherwise than by
use of the mails, but certain  officers and regular  employees of the Company or
its  subsidiaries,  without  additional  compensation,  may use  their  personal
efforts,  by telephone or  otherwise,  to obtain  proxies.  The Company may also
reimburse banks, brokerage firms and other custodians,  nominees and fiduciaries
for their reasonable out-of-pocket expenses in forwarding proxy materials to the
beneficial owners of shares of Common Stock.                                    

         Any  shareholder who executes a proxy has the power to revoke it at any
time by written  notice to the  Secretary of the  Company,  by executing a proxy
dated as of a later date, or by voting in person at the Special  Meeting.  It is
expected that this Proxy Statement and the enclosed proxy card will be mailed on
or about ________ __, 1999 to all  shareholders  entitled to vote at the Special
Meeting.                                                                        

         A  shareholder  may  abstain or (only with  respect to the  election of
directors) withhold his vote (collectively,  "Abstentions") with respect to each
item  submitted  for  shareholder  approval.  Abstentions  will be  counted  for
purposes of  determining  the  existence  of a quorum.  Abstentions  will not be
counted as voting in favor of the relevant item.                                

         A broker who holds shares in "street name" has the authority to vote on
certain items when it has not received  instructions  from the beneficial owner.
Except for certain items for which brokers are prohibited from exercising  their
discretion,  a broker is entitled to vote on matters put to shareholders without
instructions  from the  beneficial  owner.  Where  brokers do not have or do not
exercise such  discretion,  the inability or failure to vote is referred to as a
"broker nonvote." Under the circumstances  where the broker is not permitted to,
or does not, exercise its discretion,  assuming proper disclosure to the Company
of such inability to vote,  broker  nonvotes will not be counted for purposes of
determining  the  existence  of a quorum,  and also will not be  counted  as not
voting in favor of the particular matter.                                       

         The Board of  Directors  is not aware of any  matters  other than those
described in the Proxy Statement that may be presented for action at the Special
Meeting.  However, if other matters do properly come before the Special Meeting,
the persons named in the enclosed proxy card possess discretionary  authority to
vote in accordance with their best judgment with respect to such other matters. 

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PROPOSAL ONE

 ELECTION OF DIRECTORS

Nominees for Election                                                           

         The Board of  Directors  consists of three  directors,  all of whom are
nominated for election as directors at the Special Meeting.                     

         The election of each nominee for director requires the affirmative vote
of the holders of a plurality of the shares of Common Stock cast in the election
of  directors.  If the  proxy is  executed  in such  manner  as not to  withhold
authority for the election of any or all of the nominees for directors, then the
persons named in the proxy will vote the shares represented by the proxy for the
election of the three  nominees  named below.  If the proxy  indicates  that the
shareholder  wishes to withhold a vote from one or more  nominees for  director,
such instructions will be followed by the persons named in the proxy.           

         Each nominee has  consented to being named in this Proxy  Statement and
has agreed to serve if elected.  The Board of Directors has no reason to believe
that any of the nominees  will be unable or unwilling to serve.  If, at the time
of the  Special  Meeting,  any  nominee  is  unable or  unwilling  to serve as a
director,  votes  will  be  cast,  pursuant  to the  enclosed  proxy,  for  such
substitute  nominee as may be nominated by the Board of Directors.  There are no
current  arrangements between any nominee and any other person pursuant to which
a nominee was selected. No family relationships exist among any of the directors
or between any of the directors and executive officers of the Company.          

         The biographical information that follows discloses each nominee's age,
business  experience and the year each individual was first elected to the Board
of Directors.  George H. Morison and Steven P.  Settlage are being  presented to
shareholders as nominees for the first time.                                    

Donald   V. Cruickshanks,  41, has been President and Chief Executive Officer of
         the Company since  January 24, 1997 and has been a Director  since June
1996.                                                         
         Mr.  Cruickshanks served as President of Southern Capital Corp. ("SCC")
         from 1992 through 1996, and has served as President and Chief Executive
         Officer of STIC since 1984. Mr.  Cruickshanks is also Chairman of STIC.
         Mr. Cruickshanks is also President of Southern Abstractors Corporation,
         Southern  Title  Agency  Corporation,  Glasgow  Enterprises  Corp.  and
         Southern Title Services, Inc., all of which are subsidiaries of ISC. He
        received his undergraduate degree from Randolph Macon College in 1979.

George   H. Morison,  __, has been a director  since  November 1998.            
         Mr.  Morison has served as  President  and Chief  Executive  Officer of
         Patient First Corporation,  a provider of primary medical care based in
         Richmond,  Virginia, since 1986. Mr. Morison received his undergraduate
         degree  from the  University  of  Virginia  in 1968  and his M.A.  from
Virginia Polytechnic Institute & State University in 1977.    

Steven P. Settlage, 47, has been a director since May 1998.                     
         Mr.  Settlage has served as President and Director of Rowe  Development
         Company,  a  commercial  real estate  development  company in Richmond,
         Virginia,  since 1988, as President  and Director of Phoenix  Ventures,
         Ltd.,  a real  estate  investment  and  consulting  firm  in  Richmond,
         Virginia,  since 1992,  and as President  and Director of Tascon Group,
         Inc.,  a  residential  real  estate  development  company in  Richmond,
         Virginia,  since 1996. From 1995 to 1997, he also served as Chairman of
         Zone Management,  Inc., an entertainment company in Richmond, Virginia.
         Mr.  Settlage  received  his   undergraduate   degree  from  Vanderbilt
    University and his J.D. degree from Washington and Lee University.

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THE BOARD OF DIRECTORS  RECOMMENDS THAT THE  SHAREHOLDERS  VOTE FOR THE NOMINEES
SET FORTH ABOVE.                                                                

Executive Officers Who Are Not Directors                                        

         Ronald C. Britt, 46, has been Chief Financial  Officer and Treasurer of
the Company since May 1997.  Prior to his  engagement by the Company,  Mr. Britt
was  self-employed as an accounting and business  consultant.  He is a certified
public  accountant and has over 15 years  experience in public  accounting.  Mr.
Britt is a 1974 graduate of the University of Virginia.                         

Security Ownership of Management and Certain Beneficial Owners                  

         The  following  table  sets forth  certain  information  regarding  the
beneficial  ownership of Common Stock as of December 18, 1998 by (i) each person
who is known to the  Company to be the  beneficial  owner of more than 5% of the
outstanding  shares of Common  Stock,  (ii) each  nominee  and  director  of the
Company, and (iii) all of the directors and executive officers of the Company as
a group. For the purposes of the following table,  beneficial ownership has been
determined  in accordance  with the  provisions of Rule 13d-3 under the Exchange
Act, under which, in general,  a person is deemed to be a beneficial  owner of a
security  if he or she has or shares  the power to vote or direct  the voting of
the security or the power to dispose or direct  disposition of the security,  or
if he or she has the  right to  acquire  beneficial  ownership  of the  security
within 60 days. Except as otherwise indicated (i) each stockholder identified in
the table possesses sole voting and investment power with respect to his shares,
and (ii) the mailing  address of each  individual is Firstmark  Corp.,  P.O. Box
1398, Richmond, Virginia 23218.                                                 

Name                                         Common Stock              Percent  
----                                         ------------              -------  

Donald V. Cruickshanks                          1,065,995                20.1%  
George Morison                                     10,000                 0.2%  
Steven P. Settlage                                 12,600                 0.2%  

All Directors and executive officers as a                                       
 group (4 persons)                            1,088,595                20.5%

The H. William Coogan Irrevocable Trust         1,162,903                21.9%  
Susan C. Coogan (1)                                                             
4712 Charmian Road                                                        
Richmond, Virginia  23226                                                 

H. William Coogan, Jr.                          1,001,389                18.9%  
4712 Charmian Road                                                        
Richmond, Virginia  23226                                                 
----------                                                                      
(1) Ms. Coogan is sole trustee of The H. William Coogan Irrevocable Trust.      

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Committees of the Board of Directors                                            

         There were  _____  meetings  of the Board of  Directors  in 1998.  Each
director  attended  greater than 75% of the aggregate  number of meetings of the
Board of Directors and meetings of committees of which the director was a member
in 1998.                                                                        

         The Audit  Committee of the Board of Directors  was created on February
20, 1998 and  consists of Messrs.  Cruickshanks,  Morison  and  Settlage  and is
responsible  for  reviewing  the scope and  results of the  annual  audit of the
Company, reviewing the internal accounting and control systems and reviewing and
recommending the auditors to be appointed by the Board of Directors. The Company
does not have a standing nominating or compensation committee.                  

Director Compensation                                                           

         Messrs.  Morison  and  Settlage  will  receive  a fee of $500  for each
meeting of the Board of Directors that they attend,  including  travel expenses.
Messrs.  Morison and Settlage  also  received  grants of 10,000 shares of Common
Stock each for their  service as  directors  and as  consultants  to the Company
prior  to  their  respective  appointments  to  the  Board  of  Directors.   Mr.
Cruickshanks  does not receive any  compensation for his service on the Board of
Directors.                                                                      

Executive Compensation                                                          

         The following table summarizes the compensation  paid or accrued to the
Chief Executive  Officer of the Company and its other most highly paid executive
officers  for the last  fiscal year in all  capacities  in which they served the
Company and its subsidiaries.                                                   

                                                        [Enlarge/Download Table]
                           Summary Compensation Table                                                



                                                                    Annual Compensation              
                                                                    -------------------              

Name and                                                                                 Other Annual
Principal Position                           Year       Salary ($)       Bonus ($)       Compensation
------------------                           ----       ----------       ---------       ------------
                                                                                                     
Donald V. Cruickshanks, President             1998         _____           _____              (4)    
  and Chief Executive Officer (1)             1997       135,000           6,436              (4)    
                                              1996 (2)    68,282             -                (4)    
                                              1996 (3)   126,975             -                (4)    
----------                                                                                           

(1)    Mr.  Cruickshanks  was elected  President and Chief Executive  Officer on
       January 24, 1997.  Prior to January 24,  1997,  he served as President of
       SCC.  SCC merged  with and into a  subsidiary  of the  Company on June 7,
1996.                                                             
(2)    Six months ended December 31, 1996.                                      
(3)    Fiscal year ended June 30, 1996.                                         
(4)    The value of perquisites  and other personal  benefits did not exceed the
       lesser of $50,000 or 10% of the total  annual  salary and bonus  shown in
the table.                                                        

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         The  executive  officers of the Company  participate  in other  benefit
plans  provided to all full-time  employees of the Company who meet  eligibility
requirements,  including group life insurance, hospitalization and major medical
insurance.                                                                      

Stock Options                                                                   

         There were no stock  options  granted to or exercised by the  executive
officers named in the "Summary  Compensation  Table" above during the year ended
December 31, 1998.                                                              

Employment Agreements                                                           

         STIC and Donald V.  Cruickshanks,  the  President  and Chief  Executive
Officer and a Director of the Company,  are parties to an  employment  agreement
for a term commencing  January 2, 1998, and  terminating  December 31, 2000. The
agreement  provides for his employment as President and Chief Executive  Officer
of STIC. Under the agreement,  Mr. Cruickshanks is entitled to base compensation
of $140,000 per year,  with an increase in  compensation of $5,000 per year. Mr.
Cruickshanks is entitled further to receive additional compensation in an amount
up to 10% of  the  annual  after-tax  profits  of  STIC.  Mr.  Cruickshanks  may
terminate  his  employment  at any time by giving  STIC 30 days'  notice of such
termination.                                                                    

         As a condition  to the  obligations  of the Company and Old Guard under
the Stock Purchase Agreement,  Mr. Cruickshanks must enter into a new employment
agreement  with STIC and Old Guard for the period from  January 1, 1999  through
December 31, 2001.  Such employment  agreement will supercede Mr.  Cruickshanks'
current employment agreement with STIC upon the consummation of the Transaction.
See "The Transaction - Interests of Certain Persons in the Transaction."        

Transactions with Management                                                    

         The Company obtains  certain related party  receivables and payables in
the normal  course of  business  and  through  advances  for  accommodation.  In
addition, the Company has certain loans receivable from related parties at terms
consistent with those provided to other customers.  The loans are  substantially
secured by real  estate  mortgages.  The  balances  at  September  30, 1998 that
reflected advances and loans to former employees of Firstmark Financial Services
(formerly  Financial  Capital Corp.),  a subsidiary of the Company until January
24, 1997, amounted to $37,304.                                                  

         Prior to  January  24,  1997,  the  Company  leased its  executive  and
administrative  offices,  consisting  of  approximately  4,000  square  feet  of
commercial  space,  from the Pinnacle  Investment  Group  ("Pinnacle"),  a group
consisting of four individuals, one of whom was an officer of the Company at the
time that the lease was signed.  This facility was leased from Pinnacle  under a
fifteen year lease terminating on December 31, 2003. The lease was renewable and
negotiable after five years.  Effective  January 24, 1997,  Firstmark  Financial
Services (formerly Financial Capital Corp.), a former subsidiary of the Company,
assumed the lease obligation.  The Company owned the parcel of land on which its
administrative offices were located. On January 27, 1997, Pinnacle purchased the
land for $55,000.                                                               

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PROPOSAL TWO
APPROVAL OF STOCK PURCHASE AGREEMENT

 THE TRANSACTION

         The following  information  relating to the Transaction is qualified in
its entirety by reference to the other information  contained  elsewhere in this
Proxy Statement, including the Appendices hereto, and the documents incorporated
herein by  reference.  A copy of the Stock  Purchase  Agreement  is  attached as
Appendix  A to this  Proxy  Statement  and  reference  is made  thereto  for the
complete  terms of the  transaction.  Shareholders  are  urged to read the Stock
Purchase Agreement and each of the other Appendices hereto carefully.           

Description of the Transaction                                                  

         The  Company  is the  parent  company  of SCAC,  which  owns all of the
outstanding  shares of the capital  stock of ISC.  ISC is a holding  company and
owns all of the  outstanding  shares  of the  capital  stock  of  STIC,  a title
insurance  company,  as well as several  other  entities  conducting  activities
related to the title insurance and settlement business. Pursuant to the terms of
the Stock  Purchase  Agreement,  Old Guard will purchase all of the  outstanding
shares of ISC's  capital  stock held by SCAC in exchange for cash.  As a result,
ISC and STIC, the Company's principal operating  subsidiary,  will become wholly
owned subsidiaries of Old Guard.                                                

         The purchase price to be paid by Old Guard consists of two  components:
cash paid upon the  consummation of the Transaction and a three year earn-out to
be paid, if earned, in cash in 2000, 2001 and 2002. Upon the consummation of the
Transaction,  Old Guard  will pay to SCAC  $6.75  million  by wire  transfer  of
immediately  available  funds.  In addition,  in 2000,  2001 and 2002, SCAC will
receive  additional cash payments based on the pre-tax net income of ISC and its
subsidiaries,  including  STIC, for each of the fiscal years ending December 31,
1999, 2000 and 2001. Such earn-out  payments will be paid in cash within 90 days
following the end of each such fiscal year and will be in an amount equal to 25%
of (i) the pre-tax net income of ISC and its  subsidiaries,  including STIC, for
such fiscal year less (ii) the cumulative  net loss of ISC and its  subsidiaries
during all such prior fiscal years.                                             

         Pursuant  to the Stock  Purchase  Agreement,  Old  Guard has  agreed to
continue to operate ISC and its subsidiaries in a manner that is consistent with
past practice.  In addition,  Old Guard has agreed that, when determining  ISC's
pre-tax net income,  it will not  allocate  against the  revenues of ISC and its
subsidiaries  any  liabilities  or expenses  that did not arise in the  ordinary
course of business.  Finally, Old Guard has agreed that it will not transfer any
of the business  operations of ISC and its  subsidiaries to itself or one of its
own subsidiaries or sell,  assign or otherwise  transfer the business of ISC and
its subsidiaries to a third party, whether by sale of assets or stock, merger or
otherwise.                                                                      

         The MBCA entitles any of the Company's  shareholders to exercise his or
her  dissenters'  rights  with  respect  to the  Transaction.  See "-  Rights of
Dissenting Shareholders."                                                       

Old Guard                                                                       

         Old  Guard  was  incorporated  under  the laws of the  Commonwealth  of
Pennsylvania in May 1996 for the purpose of serving as a holding company for Old
Guard Insurance  Company,  Old Guard Fire Insurance  Company,  and First Patriot
Insurance Company  (collectively,  the "Insurance  Companies").  On February 11,
1997,  Old Guard became a holding  company for the Insurance  Companies upon the
completion of their conversion from Pennsylvania  mutual insurance  companies to
Pennsylvania stock insurance  companies and the simultaneous  acquisition of the

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capital  stock of each of the  Insurance  Companies  by Old Guard  pursuant to a
Joint Plan of Conversion adopted by the Boards of Directors of Old Guard and the
Insurance  Companies on May 31,  1996,  as amended and restated on July 19, 1996
and January 10, 1997.                                                           

         Old  Guard's  executive  offices  are  located  at  2929  Lititz  Pike,
Lancaster, Pennsylvania 17601, and its main telephone number is (717) 569-5361. 

Background to the Transaction                                                   

         Through  STIC,  the Company is  principally  engaged in the business of
issuing title insurance.  STIC,  through affiliate  companies,  also holds joint
venture  interests in title  insurance  agencies that operate in STIC's  primary
markets. The Company makes venture capital and real estate investments either in
the form of pure  equity  investments  or in the form of  loans  with an  equity
participation  feature.  Until  January 24,  1997,  former  subsidiaries  of the
Company  traded  public  stocks  and bonds  and  provided  financial  consulting
services to individuals and institutions.                                       

         In June 1996, the Company  acquired STIC through the merger of Southern
Capital  Corp.  ("SCC"),  the  parent  company  of ISC,  with and into  SCAC,  a
subsidiary   created  by  the  Company  to  effect  the  merger.  The  Company's
acquisition  of STIC  quadrupled  its  revenues  and doubled its assets,  as the
Company sought to grow by acquisition.  The primary goal of the  shareholders of
SCC was to  diversify  their  holders out of the title  insurance  business.  In
addition,  they  sought to create  public  ownership  of STIC,  whereby it could
obtain additional resources to promote growth and expansion. The shareholders of
SCC, which included Mr. Cruickshanks,  received shares of the Company's Series A
Preferred  Stock,  which  were  convertible  into  shares  of Common  Stock,  in
connection with the merger and became directors of the Company.                 

         Following the acquisition of SCC and STIC, the Company's management and
new  directors  began  a  close  examination  of the  Company's  operations  and
investments to determine  resources available to promote the Company's continued
growth  and to map  out a plan  to  maximize  shareholders'  equity.  Management
reviewed the Company's  significant venture capital and real estate investments,
as well as the equity and other  investments  in  micro-cap  stocks and start-up
companies. The result of the review was the realization that the quality of many
of these assets were  questionable  and that they were not easily  liquidated so
that the funds  could be put to other use,  as needed.  The value of a number of
the  Company's  venture  capital  investments  and  loans  to  several  start-up
companies,  where the  future  value and  collectibility  of such  amounts  were
uncertain,  had to be written down or  completely  written off. In addition,  in
December 1996 and January 1997, the Company closed or transferred several of its
operations  and  subsidiaries  that were operating  unprofitably.  The remaining
assets of the Company were venture  capital and real estate  investments,  which
were not liquid, and STIC, as the primary operating unit.                       

         Although STIC was  profitable  for the year ended December 31, 1997 and
the nine months ended September 30, 1998, the Company was unable, for regulatory
reasons,  to access the capital  resources that were available at the subsidiary
level to improve the  liquidity of the  Company.  As a title  insurance  company
domiciled  in  Virginia,  STIC is  subject  to  regulations  that  require it to
maintain minimum statutory capital and surplus.  Additionally,  STIC is required
by state  statute to  maintain  assets of a  statutorily  defined  quality in an

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amount equal to its total liabilities,  determined on a statutory basis, plus an
additional amount equal to 50% of statutory equity. State regulations also limit
the types of investments  that STIC can make to relatively  secure  investments,
which  traditionally have low yields.  Such regulatory mandates make the payment
of a dividend  to the  Company  or the use of  available  funds to  promote  the
Company's growth difficult.                                                     

         In  August  1997,   the  Board  of  Directors   instructed   Donald  V.
Cruickshanks,  President  and Chief  Executive  Officer,  to retain a  financial
advisor to explore  strategic  business and financial  alternatives for STIC. On
September 2, 1997 the Company engaged Ferris,  Baker Watts Incorporated  ("FBW")
to advise and assist the Company in this task. FBW contacted potential acquirers
by phone and formally  sent an executive  summary or a discussion  memorandum to
certain  acquirers  to initiate a sale  transaction  for STIC.  These  potential
acquirers included national and regional title insurance companies, property and
casualty insurance companies, financial institutions, real estate developers and
brokers,   other  synergistic  acquirers  and  financial  buyers.  During  FBW's
preliminary  discussions  with  interested  acquirers,  it became clear that Old
Guard was willing to offer the best price and terms for the purchase of STIC.   

         As  a  result  of  FBW's  effort,   Old  Guard  became   interested  in
investigating  the  acquisition of STIC in early 1998. As described  above,  Old
Guard was not engaged in the title  insurance  business  and was  interested  in
adding  profitable  operations  in other  areas to offset the  vulnerability  to
certain  risks  inherent  in the  property  and  casualty  lines  of  insurance,
including the size and frequency of claims, escalating damage awards and natural
disasters.  From early 1998 through August 1998, the  managements of the Company
and Old Guard  worked  together  to  discuss  and  examine  all  aspects  of the
potential  acquisition of STIC. During this time, the managements focused on the
potential  integration of the operations of Old Guard and STIC and the resulting
economic  effects,  the performance of due diligence reviews and the basic terms
of a proposed  transaction.  The  investigation  of these matters  resulted in a
formal offer for the  acquisition of STIC,  which was negotiated over the period
beginning  on  September  23,  1998  until  its  execution.  During  this  time,
representatives  of the Company and Old Guard,  together  with their  respective
legal and financial advisors,  consulted frequently to identify and resolve open
issues and to negotiate the final terms of the Stock Purchase Agreement.        

         A meeting of the Board of Directors of the Company was held on December
1,  1998  to  consider  the  Stock  Purchase   Agreement  and  the  transactions
contemplated  thereby.  At this meeting,  presentations  on the Transaction were
made to the Company's Board of Directors by members of the senior  management of
the  Company;  the  Company's  legal  advisors  reviewed  the terms of the Stock
Purchase  Agreement and advised the Board of Directors of required corporate and
governmental  approvals;  and FBW made a  presentation  regarding  its financial
analysis of the  transaction  and delivered its written opinion to the Company's
Board of  Directors  that,  as of the date of such  opinion  and based  upon and
subject to the  matters  stated  therein,  the  consideration  to be paid to the
Company  pursuant to the Stock  Purchase  Agreement  was fair,  from a financial
point  of  view,  to  the  holders  of  Common  Stock.   After   discussion  and
consideration  of the terms of the Stock  Purchase  Agreement  and  transactions
contemplated thereby, the Company's Board of Directors approved the terms of the
Stock  Purchase  Agreement and  authorized  the execution of the Stock  Purchase
Agreement.                                                                      

         The  parties  then  proceeded,  following  approval  by  the  Board  of
Directors of Old Guard and  finalization of the documents,  to execute the Stock
Purchase  Agreement on December 2, 1998,  subject to shareholder  and regulatory
approvals and  satisfaction  of all  conditions  set forth in the Stock Purchase
Agreement.  Thereafter,  on December 3, 1998, the Company and Old Guard publicly
announced that they had agreed to the acquisition by Old Guard of ISC and STIC. 

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Reasons for the Transaction                                                     

         The  primary   reasons  that  the  Board  of  Directors   approved  the
Transaction are the availability of new capital resources to the Company and the
resulting  flexibility to the Company with respect to future strategic planning.
The Board of Directors also  considered  other factors in determining to approve
the Transaction, which factors are described in further detail below.           

         Prior  to the  merger  of SCC  and  SCAC in June  1996,  the  Company's
previous  management  had made several  investments  in start-up  companies that
resulted  in  losses  to the  Company.  As a  result,  the  Company  experienced
unprofitable operations. While STIC has shown recent profitability,  the Company
was unable to improve its liquidity  position with capital resources that may be
available from STIC. As described above,  insurance regulations limit the amount
of capital  that the  Company is able to access  from  STIC.  As a result,  such
limitations limit further the ability of the Company's management to execute any
future  strategic  planning,  other  than to deal  with its  current  assets  as
efficiently  as possible.  While  STIC's  profitability  may provide  accessible
resources to the Company in the future,  such  profitability can be cyclical due
to the nature of title insurance operations.                                    

         As a result of the Transaction,  additional  capital  resources will be
available to the Company.  Following the  consummation of the  Transaction,  the
Company  will  receive  $6.75  million  in cash  (minus  transaction  costs  and
expenses), with additional earn-out payments possible for each of the next three
fiscal  years.  In  addition,  this  additional  capital will allow the Board of
Directors  to  examine  its  plans  for  1999  and  beyond,  without  regulatory
limitations on the use of its capital resources.                                

         The Board of Directors  will use a certain amount of the capital to pay
off $485,000 of the Company's 9.0%  convertible  notes that will be due March 1,
1999.  While the Board of Directors  has not given formal  consideration  to any
additional  plans, the Board of Directors expects that such  consideration  will
include new and different venture capital or other  investments,  the pursuit of
strategic  alliances  or  acquisitions  of new  operating  subsidiaries,  or the
liquidation  of the  Company.  Until  such  time  as the  Company  makes a final
determination  as to the use of the  consideration,  it  expects  to invest  the
proceeds of the Transaction in short-term  certificates of deposit, money market
funds or other short-term, investment-grade, interest-bearing investments.      

         The Company's Board of Directors also  considered the material  factors
described below in reaching its determination to approve the Transaction and the
Stock Purchase Agreement, and the transactions  contemplated thereby. Due to the
variety of factors that the Board of Directors considered in connection with its
evaluation of the  Transaction  and the Stock Purchase  Agreement,  the Board of
Directors did not consider it practicable to, nor did it attempt to, quantify or
otherwise assign relative weights to these material  factors.  After it examined
all of the following factors both individually and taken together,  the Board of
Directors  determined that the Transaction and the Stock Purchase Agreement were
in the best interests of the Company and its shareholders.                      

o        The Board of Directors  reviewed the historical  and current  financial
         condition,  results  of  operations,  prospects,  and  business  of the
         Company  as  well as the  future  prospects  of the  Company  absent  a
transaction such as the Transaction.                          

o        The  Board  of  Directors   considered  the  Company's   potential  for
         development  of new  opportunities,  the risk that  such  opportunities
         might not  materialize,  the fact that the Company could be required to
         increase  substantially  its  borrowings  and to seek new  infusions of
         capital in order to benefit from such opportunities,  and the increased
     risk associated with financing and developing any such opportunity.

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o        Representatives of FBW made a presentation to the Board of Directors at
         its December 1, 1998, meeting and delivered the FBW Opinion that, as of
         December  1,  1998,  and based  upon and  subject  to the  assumptions,
         limitations,   and  qualifications  set  forth  in  such  opinion,  the
         consideration  to be  paid  to  the  Company  in  connection  with  the
         Transaction  is fair to the  Company's  shareholders  from a  financial
    point of view. See "- Opinion of the Company's Financial Advisor."

o        The Board of Directors  considered  current  market  conditions  in the
         title  insurance  industry,   historical  market  prices,  and  trading
information for shares of Common Stock.                       

o        There was a  general  perception  in the  market,  which the  Company's
         management  confirmed in discussions with various  investment  bankers,
         that the environment for insurance company mergers and acquisitions was
particularly strong in 1998.                                  

o        Based on the analysis of the Company,  the insurance industry,  and the
         market generally by the Company's  management,  the Company's financial
         advisor  contacted   potential  buyers  directly  and  had  preliminary
         discussions  with certain  buyers,  resulting in the proposal  from Old
         Guard,  who was  willing  to offer  the best  price  and  terms for the
purchase of STIC.                                             

o        The Stock Purchase Agreement is the result of arm's-length negotiations
         with Old Guard and includes Old Guard's  agreement to pay approximately
         $6.75 million dollars in cash to the Company, plus 25% of ISC's pre-tax
         net income for the next three fiscal years,  as  consideration  for the
Transaction.                                                  

o        The Stock Purchase  Agreement limits the Company's  ability to consider
other proposals, which could be more attractive.              

o        The  Transaction  is subject to  regulatory  approvals,  including  the
         approval of the  Virginia  Bureau of  Insurance.  Although  the Company
         believes that such approvals will be obtained, delays could prevent the
         timely  consummation  of  the  Transaction  and  result  in  additional
expenditures by the Company.                                  

o        The Board of Directors  concluded  that the various  matters  described
         under "Interests of Certain Persons in the Transaction" do not outweigh
         or  materially  detract  from the  benefits of the  Transaction  to the
Company.                                                      

o        The  Transaction  will  benefit  the  Company's  other  constituencies,
         including  its employees  and  customers,  since STIC will be purchased
         intact by Old Guard,  which is a larger company with greater  financial
         resources.  Old Guard by agreement will provide an additional  $750,000
to STIC's capital and surplus after the Transaction is closed.

         Based on the  foregoing,  the  Board  of  Directors  believes  that the
Transaction  is in the best  interests of the Company and its  shareholders  and
recommends  that the  shareholders  vote "FOR"  approval  of the Stock  Purchase
Agreement and the transactions contemplated thereby.                            

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Effect of the Transaction on the Company's Shareholders                         

         If the  Transaction is  consummated,  the Company's  shareholders  will
retain their equity interest in the Company, and the Transaction will not result
in any changes in the rights of the Company's shareholders.                     

Comparative Per Share Data                                                      

         The following  table sets forth income,  cash  dividends and book value
per share of Common  Stock on a historical  basis and on a pro forma basis.  Pro
forma   information  gives  effect  to  the  Transaction  and  reflects  certain
assumptions  described  in  the  notes  to the  unaudited  Pro  Forma  Financial
Information.  The data set forth below  should be read in  conjunction  with the
audited  and  unaudited  consolidated  historical  financial  statements  of the
Company,  including the notes thereto,  which are incorporated by reference into
this  Proxy  Statement,  and the  unaudited  Pro  Forma  Financial  Information,
including the notes thereto,  appearing  elsewhere in this Proxy Statement.  See
"Incorporation  of Certain  Documents  by  Reference"  and "Pro Forma  Financial
Information (Unaudited)."                                                       

                                                        [Enlarge/Download Table]

                                                    Nine Months Ended                  Year Ended   
                                                    September 30, 1998             December 31, 1997
                                                    ------------------             -----------------
                                                                   (Per Common Share)               
                                                                                                    
Income (Loss):                                                                                      
   Historical per common share and common share                                                     
     equivalent - basic and diluted................     $   0.03                      $   (0.26)    
   Pro forma per common share and common share                                                      
     equivalent - basic and diluted (1)............        (0.06)                         (0.23)    

Dividends:                                                                                          
   Historical......................................         0.00                           0.00     
   Pro forma (1)...................................         0.00                           0.00     

Book Value (at end of period):                                                                      
   Historical......................................         1.68                                    
   Pro forma (1)...................................         1.09                                    

----------                                                                      
(1)      See "Pro Forma Financial Information (Unaudited)."                     

Opinion of the Company's Financial Advisor                                      

         The Company retained Ferris,  Baker Watts,  Incorporated ("FBW") to act
as its  financial  advisor  in  connection  with the  Transaction.  FBW was also
retained to render a written  opinion to the Company's  Board of Directors as to
the fairness, from a financial point of view, to the holders of the Common Stock
of the  consideration  to be paid to the Company and SCAC by Old Guard under the
Stock Purchase Agreement.                                                       

         On December 1, 1998, FBW delivered to the Company's  Board of Directors
its opinion,  to the effect that,  as of the date of such opinion and based upon
and subject to certain matters stated therein,  the sale of the capital stock of
ISC for $6.75  million,  plus 25% of STIC's  pre-tax  net income for each of the
three years  ending  December 31,  2001,  to Old Guard is fair to the  Company's
shareholders  from a financial  point of view. On ________ __, 1999, the date of
this Proxy  Statement,  FBW  delivered  to the  Company's  Board of Directors an
updated  opinion to the effect that the terms of the Transaction are fair to the
Company's  shareholders  from a financial point of view (the "FBW Opinion").  In
rendering the FBW Opinion,  FBW did not undertake to update its analysis or take
into consideration facts or events occurring after December 1, 1998.            

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         The full text of the FBW Opinion,  which sets forth certain assumptions
made,  matters  considered and  limitations on review  undertaken is attached as
Appendix B to this Proxy  Statement,  is  incorporated  herein by reference  and
should be read in its  entirety in  connection  with this Proxy  Statement.  The
summary of the FBW Opinion set forth in this Proxy Statement is qualified in its
entirety by reference  to the full text of the FBW  Opinion.  The FBW Opinion is
directed only to the fairness, from a financial point of view, to the holders of
the Common Stock of the  consideration to be paid to the Company and SCAC by the
Old Guard and does not  constitute a  recommendation  to any  shareholder of the
Company as to how such shareholder should vote on any and all matters related to
the Transaction.                                                                

         In arriving at its written  opinion,  FBW reviewed  the Stock  Purchase
Agreement,  selected audited public and unaudited internal financial information
of the Company and STIC,  and  financial  projections  prepared by the Company's
management.  FBW also held discussions with the management of STIC regarding the
past and current  business  operations and financial  condition,  as well as the
future prospects,  of STIC. In general, these discussions centered on (i) STIC's
market  position,   competitive  position,  business  plan  and  historical  and
projected financial performance; (ii) the Company's market position, competitive
position and business plan; and (iii) the history of similar transactions in the
title  industry  and the  opportunities  available to the Company in relation to
STIC. FBW reviewed  specific data regarding the valuation of companies in STIC's
industry and utilized its own expertise in merger,  acquisition  and divestiture
transactions and valuations.                                                    

         In rendering the FBW Opinion,  FBW assumed and relied upon the accuracy
and  completeness  of all  financial  and other  information  that it  reviewed,
whether  publicly  available or provided to FBW by the Company and STIC. FBW did
not assume any responsibility for independent  verification of such information.
FBW  further  expressed  no opinion as to the value to be received by holders of
interests who may exercise their dissenters' rights under the MBCA.             

         FBW considered  several valuation methods to evaluate the effect of the
Transaction  on  shareholders  of  the  Company  and  STIC  including:  (i)  the
discounted  future  free cash  flows of STIC;  (ii) the  earnings  and  multiple
comparisons to publicly traded companies engaged in similar  businesses as STIC;
(iii) the  merger  and  acquisition  activity  of  companies  engaged in similar
businesses,  and (iv) the control  premiums  paid by  acquirers  over the market
price of target  companies prior to the takeover  announcement  date. FBW relied
most heavily upon the  discounted  future free cash flows method due to the fact
that,  of the methods  used,  it is the only method that derives  value from the
cash  flows  that  should  be  generated  from  the  business  or  assets  under
consideration.  The conclusion  reached by FBW regarding the  transaction  price
using the discounted  future free cash flow valuation method is supported by the
other valuation methods.                                                        

         The  discounted  future free cash flows  methodology is premised on the
assumption  that a buyer  purchases  a time  series of free cash  flows that are
generated  by the assets of a business.  This  analysis  separates  and ascribes
value only to the cash flows that can  ultimately  be taken out of the business.
Cash that is generated  but used to sustain the  business  (such as increases in
working capital and capital  expenditures)  creates no incremental  value to the
buyer.  These free cash flows are then  discounted  to the present at the firm's
weighted  average cost of capital.  The weighted  average cost of capital can be
described as the average  price that a company must pay to attract both debt and
equity to properly  capitalize the firm's growth. It is this series of free cash
flows that, when discounted to the present, and after subtracting claims by debt
holders  and  others,  represents  the  economic  value  of  a  company  to  its
shareholders.                                                                   

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         The accuracy of this method of valuation depends largely on the quality
of the projections  prepared in connection with the analysis of the Transaction.
STIC incurred  operating and net losses in 1995 and 1996.  Due to better overall
market  conditions and  improvement  measures  implemented  by management,  STIC
incurred  slight  operating  and net  profits  in  1997.  As a  result  of these
measures,  STIC's  operating income for the nine months ended September 30, 1998
was $630,000.                                                                   

         FBW also compared the purchase  price in the  Transaction  to the value
paid for publicly-traded title insurance companies in recent acquisitions.  This
analysis found that these companies,  which were significantly  larger than STIC
at the time of the acquisition, were acquired for a premium relative to the book
value of the  particular  company's  capital  stock.  FBW  concluded  that  this
analysis  was  not   instructive  due  primarily  to  the  facts  that  STIC  is
significantly  smaller  than  any of the  comparison  companies  and  has a more
limited  geographical  market and that there was an absence of interested buyers
at a price equal to or above STIC's book value.                                 

         Relying  on  projections  as the  basis  of the  discounted  cash  flow
analysis,  FBW  determined  that the  intrinsic  equity  value for STIC was $6.7
million.  The total  transaction  value  negotiated in the  Transaction is $7.84
million, representing $6.75 million in cash and $1.09 million in future earn-out
payments.  This negotiated value is a 17.06% premium over the intrinsic value of
STIC.                                                                           

         If STIC does not meet the  projections  relied upon for the  discounted
cash flow analysis,  the earn-out payments will be less than set forth above, or
they may not be payable.  In the event that STIC  receives no earn-out  payment,
the intrinsic value of STIC would be  substantially  less than $6.7 million.  In
such a  circumstance,  a premium to the Company would be generated,  as the cash
portion received by the Company in the Transaction would exceed the recalculated
intrinsic value.                                                                

         During its engagement,  FBW contacted potential acquirers to initiate a
transaction for the sale of STIC. Additionally, FBW sent an executive summary or
an information memorandum to certain of these potential acquirers.  As a result,
the transaction  value for STIC's securities was  market-tested,  which provides
the most credible  support for the fairness  from a financial  point of view, of
the  consideration  to be paid to the  Company by Old Guard in  relation  to the
purchase of STIC.                                                               

Following its analysis, FBW concluded:                        

         1.       The  fact  that  the  total   transaction  value  exceeds  the
                  intrinsic  value of STIC's cash flows based on the  discounted
                  cash flow  analysis  supports the  fairness,  from a financial
                  point of view, of the  consideration to be paid to the Company
in relation to the sale of STIC; and        

         2.       The  transaction  value paid by Old Guard for the  purchase of
                  STIC  represents a 154.67%  premium over the Company's  market
                  capitalization  as of December  1, 1998,  based on the closing
                  bid price of shares of Common Stock for the  preceding  60-day
period.                                     

         The Company engaged FBW as its financial  advisor on ________ __, 1998.
FBW will receive a fee of $__________, which is conditioned upon consummation of
the Transaction.  The payment of these fees is not contingent upon FBW rendering
a favorable  opinion with respect to the Transaction.  The Company has agreed to
reimburse FBW for its  out-of-pocket  expenses  incurred in connection  with the
activities contemplated by its engagement, regardless of whether the Transaction
is consummated.  The Company has further agreed to indemnify FBW against certain
liabilities, including liabilities under the federal securities laws.           

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         FBW is a nationally recognized investment banking firm and was selected
by the Company based on FBW's experience and expertise. FBW regularly engages in
the valuation of businesses and their  securities in connection with mergers and
acquisitions,    negotiated    underwritings,    competitive   bids,   secondary
distributions  of  listed  and  unlisted  securities,   private  placements  and
valuations for estate, corporate and other purposes.                            

Interests of Certain Persons in the Transaction                                 

         In  considering  the  recommendation  of the Board of  Directors of the
Company  with  respect  to the  Transaction,  shareholders  should be aware that
certain  members of the  Company's  management  have  certain  interests  in the
Transaction  that are in addition to the interest of the Company's  shareholders
generally.  The Company's  Board of Directors  was aware of these  interests and
considered  them,  among other  factors,  in approving  the  Transaction.  These
interests are described below.                                                  

         Employment  Agreement with President and Chief Executive Officer.  STIC
and Donald V.  Cruickshanks,  the  President and Chief  Executive  Officer and a
director of the  Company,  are  parties to an  employment  agreement  for a term
commencing  January 2, 1998,  and  terminating  December 31, 2000. The agreement
provides for his  employment as President and Chief  Executive  Officer of STIC.
Under the  agreement,  Mr.  Cruickshanks  is  entitled to base  compensation  of
$140,000  per year,  with an increase in  compensation  of $5,000 per year.  Mr.
Cruickshanks is entitled further to receive additional compensation in an amount
up to 10% of  the  annual  after-tax  profits  of  STIC.  Mr.  Cruickshanks  may
terminate  his  employment  at any time by giving  STIC 30 days'  notice of such
termination. This agreement does not require STIC to make any severance payments
to Mr. Cruickshanks in the event that he is terminated.                         

         Following  the  consummation  of  the  Transaction,  Mr.  Cruickshanks'
current employment  agreement will be terminated,  and Mr.  Cruickshanks will be
required to enter into a new employment  agreement (the "Employment  Agreement")
with STIC and Old Guard for a three-year  period beginning at the closing of the
Transaction.  Pursuant to the Employment Agreement,  Mr. Cruickshanks will serve
as President and Chief Executive Officer of STIC. STIC will pay Mr. Cruickshanks
an annual base  compensation  of  $145,000,  with an increase of at least 4% per
year. In addition,  with respect to each of the fiscal years ending December 31,
1999, 2000 and 2001, Mr. Cruickshanks will receive incentive  compensation in an
amount  equal to 10% of the annual  after-tax  profits of STIC.  Such  incentive
compensation,  however,  may not exceed  50% of Mr.  Cruickshanks'  annual  base
salary unless STIC's  after-tax net income for each such fiscal year,  inclusive
of such incentive compensation, equals or exceeds certain pre-determined levels.
Mr.  Cruickshanks  will also be entitled to receive certain  severance  benefits
upon  the  termination  of  the  Employment   Agreement,   including  due  to  a
change-in-control  of Old Guard or STIC.  Each year,  the term of the Employment
Agreement  will  automatically  be  extended  by one  year,  unless  STIC or Mr.
Cruickshanks  gives  notice  90  days  prior  to  the  anniversary  date  of the
Employment Agreement.                                                           

         In addition,  Old Guard will issue to Mr.  Cruickshanks 1,000 shares of
its common stock  following  the  execution  of the  Employment  Agreement  and,
thereafter, on each of the first four anniversaries of the Employment Agreement.

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         While not a director or  executive  officer of the  Company,  Gerald W.
Sklar,  Executive  Vice  President  and  General  Counsel of STIC,  will also be
required to enter into an employment agreement with STIC and Old Guard following
the consummation of the Transaction.  Mr. Sklar's employment  agreement contains
terms  and  provisions  similar  to those  in the  Employment  Agreement.       

         Payment to President and Chief Executive  Officer.  The Company's Board
of Directors has determined that, upon the consummation of the Transaction,  Mr.
Cruickshanks  will  receive a cash  payment in the  amount of  $75,000  from the
Company.  Since his  appointment  in January 1997, Mr.  Cruickshanks  has served
uncompensated  for his services as the Company's  President and Chief  Executive
Officer.  This  payment  represents  compensation  for  the  services  that  Mr.
Cruickshanks rendered as President and Chief Executive Officer and in connection
with the execution of a strategic plan for the sale of the Company.             

         Following the consummation of the Transaction,  Mr.  Cruickshanks  will
continue  as  President  and Chief  Executive  Officer of the  Company.  He will
receive $2,000 per month as long as he remains in these positions.              

         Satisfaction  of  Obligation  to H.  William  Coogan,  Jr.  STIC and H.
William  Coogan,  Jr.,  formerly a director  of the  Company,  are  parties to a
Severance Agreement, dated January 2, 1998 (the "Severance Agreement"). Pursuant
to the  Severance  Agreement,  Mr.  Coogan's  employment  contract with STIC was
terminated  effective as of December 31, 1997 and, in return, STIC agreed to pay
Mr.  Coogan a total  severance  benefit of  $311,000  over a  three-year  period
commencing  January 2, 1998. Such payments take the form of monthly  payments of
$8,639,  less  applicable  withholdings,  a portion  of which may be  applied to
health insurance, disability coverage and a leased automobile. STIC's obligation
to make such monthly payments terminates on December 31, 2000. As a condition to
the consummation of the  Transaction,  the Company must satisfy STIC's remaining
obligations under the Severance Agreement or provide security for the payment of
the monthly benefits otherwise due to Mr. Coogan under the Severance Agreement. 

Regulatory Approvals                                                            

         The  Transaction is subject to the receipt of necessary  approvals from
the Bureau of Insurance  of the  Commonwealth  of Virginia  (the  "Bureau").  On
December __, 1998, Old Guard filed an Application for Approval of Acquisition of
Control of or Merger with a Domestic Insurer (Form A) with the Bureau,  the only
state where such filing was required.  The  insurance  laws and  regulations  of
Virginia do not require a hearing by the Bureau before deciding whether to grant
approval of an acquisition  described in a Form A filing, but Old Guard would be
entitled  to such a hearing in the event that the Bureau  proposed  not to grant
the  approval.  As of the date  hereof,  approval by the Bureau is pending.  The
Company  has no  reason  to  believe  that the  necessary  approval  will not be
obtained.                                                                       

Certain Federal Income Tax Consequences                                         

         The  consummation  of the  Transaction  will not be a taxable event for
federal income tax purposes for the shareholders of the Company.                

         The consummation of the Transaction will be a taxable event for federal
income tax purposes for the Company.  Pursuant to the Stock Purchase  Agreement,
the  Company and SCAC agreed to join with Old Guard in the filing of an election
under Section  338(h)(10) of the Internal  Revenue Code of 1986, as amended (the
"Code"),  and any  comparable  election  under state,  local or foreign tax law.
These  elections  will result in the  Transaction  being  deemed to be a sale of

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         ISC's assets for income tax purposes with ISC being deemed to have sold
their  assets  while  still a member of the  Company's  "affiliated  group"  (as
defined in the Code). Accordingly, the Company will recognize gain in the amount
that the purchase price received exceeds the tax basis of the assets held by ISC
and its  subsidiaries.  This gain will be offset by any  available net operating
losses of the Company prior to the determination of any tax liability.  Based on
financial  information  currently available,  the Company estimates that its tax
liability under the Section 338(h)(10) election would be approximately $________
after offsetting net operating losses carried over from previous years.         

         The  discussion  set forth above as to the material  federal income tax
consequences  of the  Transaction  is based  upon the  provisions  of the  Code,
applicable  Treasury  Regulations  thereunder,  judicial  decisions  and current
administrative rulings, any of which may be changed at any time with retroactive
effect.  The discussion  does not address any aspect of state,  local or foreign
taxation.  No rulings have been or will be requested  from the Internal  Revenue
Service with  respect to any of the matters  discussed  herein.  There can be no
assurance that future legislation, regulations,  administrative rulings or court
decisions would not alter the tax consequences set forth above.                 

Accounting Treatment                                                            

         The  Transaction  will be  accounted  for by the  Company  as a sale of
assets and a transfer of certain  liabilities.  The Company  expects to record a
loss upon the consummation of the Transaction.  Such loss will be reduced by any
payments of contingent  consideration that the Company may receive in connection
with the  Transaction  following  its closing.                                  

Rights of Dissenting Shareholders                                               

         Shareholders  of the  Company  are  entitled  to  appraisal  rights  in
connection  with  the  Transaction  under  Section  909  of the  Maine  Business
Corporation  Act (the  "MBCA").  Section  909 is  reprinted  in its  entirety in
Appendix C to this Proxy Statement.  The following  discussion is not a complete
statement of the law relating to statutory  appraisal rights and is qualified in
its entirety by reference to the full text of Section 909, which is incorporated
herein by  reference.  Any  holder who wishes to  exercise  statutory  appraisal
rights,  or who  wishes  to  preserve  the  right to do so,  should  review  the
following discussion and Appendix C carefully.                                  

         IN VIEW OF THE COMPLEXITY OF SECTION 909 OF THE MBCA,  SHAREHOLDERS  OF
THE COMPANY WHO ARE CONSIDERING  DISSENTING FROM THE TRANSACTION  SHOULD CONSULT
THEIR LEGAL ADVISORS.  FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES
SPECIFIED  WILL RESULT IN THE LOSS OF  DISSENTERS'  APPRAISAL  RIGHTS  UNDER THE
MBCA.                                                                           

         Pursuant to the Stock Purchase Agreement, the obligation of the Company
to consummate the Transaction is conditioned  upon, among other things,  no more
than 15% of the  outstanding  shares  of  Common  Stock  being  the  subject  of
appraisal  rights  pursuant to Section 909 of the MBCA.  See "The Stock Purchase
Agreement - Conditions to Closing."                                             

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         A person  having a  beneficial  interest in shares of Common Stock that
are held of record in the name of another  person,  such as a broker or nominee,
must act  promptly  to cause the record  holder to follow  the steps  summarized
below properly and in a timely manner to perfect  whatever  appraisal rights the
beneficial owner may wish to exercise.                                          

         Shareholders  who  desire to  exercise  their  appraisal  rights  under
Section 909 must (i) deliver a written objection to the proposed  Transaction to
the Company  prior to or at the Special  Meeting  (at P.O.  Box 1398,  Richmond,
Virginia 23218, attention: Ronald C. Britt, Secretary; or at the Special Meeting
at the One James Center, 901 East Cary Street,  17th floor,  Richmond,  Virginia
23219, attention:  Ronald C. Britt, Secretary) and (ii) not vote in favor of the
adoption  of the Stock  Purchase  Agreement.  The written  objection  must be in
addition to and separate from any abstention or vote against the approval of the
Stock Purchase Agreement.  Voting against,  abstaining from voting or failing to
vote on the approval of the Stock  Purchase  Agreement  will not  constitute  an
objection to the  Transaction  within the meaning of Section 909.  (Shareholders
who timely file such written objection and who do not vote their shares in favor
of the Transaction are referred to hereinafter as "Dissenting Shareholders".)   

         In  addition,  if the  Transaction  is approved by the  required  vote,
within 15 days after the date on which the vote of  shareholders  was taken (the
"Shareholder Demand Date"),  Dissenting Shareholders must make written demand on
the Company for payment of the fair value of their shares of Common Stock.  Such
written demand must be delivered in person or by registered or certified mail to
the Company (at its  principal  place of  business at P.O.  Box 1398,  Richmond,
Virginia  23218,  attention:  Ronald C. Britt,  Secretary  or at its  registered
office at 44 Elm Street,  P.O.  Box 708,  Waterville,  Maine  04901,  attention:
William  P.  Dubord)  and must  specify  the  Dissenting  Shareholder's  current
address.  Dissenting  Shareholders who fail to make such a written demand within
such period in the prescribed form and manner lose their appraisal  rights under
Section 909.                                                                    

         A  written  demand  for  payment  of the  fair  value  of a  Dissenting
Shareholder's  shares of Common Stock may not be withdrawn without the Company's
consent.  Any shareholder  making an objection or demand pursuant to Section 909
will thereafter be entitled only to payment as provided  therein and will not be
entitled to vote or to exercise any other rights of a shareholder.              

         At the time of filing with the  Company the written  demand for payment
or  within  20  days  thereafter,   Dissenting   Shareholders  must  submit  the
certificate(s)  representing  their shares to the Company or its transfer  agent
for notation  thereon that such demand had been made. Such  certificate(s)  will
promptly  be  returned  after  entry  thereon  of such  notation.  A  Dissenting
Shareholder's  failure to submit shares for notation shall, at the option of the
Company, terminate such shareholder's rights under Section 909 unless a court of
competent  jurisdiction,  for good and sufficient  cause shown,  shall otherwise
direct.                                                                         

         Section 909  requires the Company to give each  Dissenting  Shareholder
who has made a demand as provided  therein  written notice that the  Transaction
has been  effected and a written offer stating the price the Company deems to be
the fair value of its shares of Common Stock,  together with a balance sheet and
profit and loss statement of the Company,  as of the latest  available date, for
the  12-month  period  ended as of the date of the balance  sheet.  Such written
notice,  offer and financial  statements must be provided within the later of 10
days after the  closing  of the  Transaction  or 10 days  after the  Shareholder
Demand Date (the "Company Offer Date").                                         

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         If the Company and the Dissenting  Shareholder  agree on the fair value
of the  Dissenting  Shareholder's  shares within 20 days after the Company Offer
Date, the Company must pay such fair value to the Dissenting  Shareholder within
90  days  after  the  closing  of  the   Transaction   upon   surrender  of  the
certificate(s) representing the shares(s) of Common Stock.                      

         If during the 20-day  period  following  the Company  Offer  Date,  the
Dissenting  Shareholder  and the Company  fail to agree on the fair value of the
Dissenting  Shareholder's  shares of Common  Stock and the  Company  receives  a
written  demand  for suit from any such  Dissenting  Shareholder  within 60 days
after the closing of the  Transaction,  the  Company  must file an action in the
Superior  Court of  Cumberland  County,  Maine within 30 days of receipt of such
written  demand  for a  determination  of the fair value of the  shares.  In the
absence of such  demand for suit,  the  Company  may on its own accord  bring an
action in such court within 60 days after the closing of the Transaction. If the
Company fails to file an action in such 60-day period, any remaining  Dissenting
Shareholder  may do so in the  Company's  name. No such action may be brought by
either the Company or any Dissenting  Shareholder more than six months after the
closing of the Transaction.                                                     

         The  jurisdiction  of the court in any such  action to  determine  fair
value is plenary and exclusive.  All Dissenting  Shareholders  (other than those
who have agreed  upon the price to be paid for their  shares) are parties to the
proceedings  and must be served  with a copy of the  complaint.  All  Dissenting
Shareholders  who are  parties to the  proceeding  shall be entitled to judgment
against the Company for the fair value of their shares, as fixed by the court.  

         In any such  proceedings,  the court may appoint one or more persons as
appraisers to recommend a decision on the question of fair value. The fair value
of the shares shall be  determined  by the court as of the day prior to the date
of the Special Meeting,  excluding any appreciation or depreciation of shares in
anticipation of the Transaction.  The Maine Supreme Judicial Court, which is the
highest court in the state,  in a previous case  determined  the "fair value" of
shares of the acquired  company by reference to the shares'  stock market price,
net asset value and investment  value as appropriately  weighted.  In that case,
the court held that the "fair value" of shares as  determined  under Section 909
does not include any payment for a tender offer premium nor any consideration of
the psychological injuries that may result from loss of ownership of shares. The
methods  used in that case,  while not  exclusive,  suggest the types of factors
likely to be considered by a Maine court in determining  the "fair value" of the
shares of Common Stock.                                                         

         Fair value,  as determined by the court,  is payable to each Dissenting
Shareholder only upon and concurrently  with the surrender to the Company of the
certificates  representing  such  Dissenting  Shareholder's  shares.  Upon  such
payment, the Dissenting  Shareholder ceases to have any interest in such shares.
The judgment  shall  include an allowance for interest at such rate as the court
may find to be fair and equitable under the circumstances,  from the date of the
Special  Meeting to the date of payment (unless the court finds that the refusal
of the  shareholder  to accept the  Company's  offer for payment was  arbitrary,
vexatious or not in good faith).                                                

         The costs and expenses of any such  proceeding  shall be  determined by
the court and will be assessed against the Company,  but all or any part of such
costs  and  expenses  may be  apportioned  and  assessed  as the  court may deem
equitable  against any or all of the Dissenting  Shareholders who are parties to
the  proceeding  to whom the  Company  shall  have  made an offer to pay for the
shares if the court  finds that the action of such  Dissenting  Shareholders  in
failing to accept the Company's  offer was  arbitrary,  vexatious or not in good
faith.  Such expenses shall include  reasonable  compensation for and reasonable
expenses of the  appraisers,  but shall exclude the fees and expenses of counsel
or experts  employed  by any party  unless the court  otherwise  orders for good
cause.  If,  however,  the fair value of the shares as  determined  by the court

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materially  exceeds the amount which the Company offered to pay therefor,  or if
no offer  was  made,  the court in its  discretion  may award to any  Dissenting
Shareholder who is a party to the proceeding such sum as the court may determine
to be  reasonable  compensation  to  any  expert  employed  by  such  Dissenting
Shareholder and may award such Dissenting  Shareholder all or part of his or her
attorney's fees and expenses.                                                   

         The  foregoing  description  of  Section  909  is not  complete  and is
qualified in its entirety by reference to Appendix C hereto,  which sets forth a
complete copy of its provisions and which is incorporated herein by reference.  

         Pursuant to the Stock Purchase Agreement, the obligation of the Company
to consummate the Transaction is conditioned  upon, among other things,  no more
than 15% of the  outstanding  shares  of  Common  Stock  being  the  subject  of
appraisal  rights  pursuant to Section 909 of the MBCA.  See "The Stock Purchase
Agreement - Conditions to Closing."                                             

         Failure to follow  the steps  required  by Section  909 of the MBCA for
perfecting  appraisal  rights may result in the loss of such rights.  In view of
the complexity of Section 909 of the MBCA,  shareholders  of the Company who are
considering dissenting from the Transaction should consult their legal advisors.

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THE STOCK PURCHASE AGREEMENT

         The  following  is a summary of the  material  provisions  of the Stock
Purchase  Agreement,  a copy of which  is  attached  hereto  as  Appendix  A and
incorporated  herein by  reference.  The  following  summary is qualified in its
entirety by reference to the complete text of the Stock Purchase Agreement.     

Acquisition and Purchase Price                                                  

         Pursuant to the terms of the Stock Purchase  Agreement,  Old Guard will
purchase all of the  outstanding  shares of ISC's  capital stock held by SCAC in
exchange for cash. Upon the consummation of the Transaction,  Old Guard will pay
to SCAC $6.75 million in cash. In addition,  within 90 days following the end of
each of the fiscal years ending December 31, 1999, 2000 and 2001, Old Guard will
pay SCAC a cash amount equal to (i) 25% of the pre-tax net income of ISC and its
subsidiaries,  including STIC, for such fiscal year less (ii) the cumulative net
loss of ISC and its subsidiaries during all such prior fiscal years.            

         In  connection  with this  future  earn-out  obligation,  Old Guard has
agreed to  continue  to operate  ISC and its  subsidiaries  in a manner  that is
consistent with past practice. In addition, when Old Guard makes a determination
of the amount to be paid,  it will not allocate  against the revenues of ISC and
its  subsidiaries any liabilities or expenses that did not arise in the ordinary
course of business. Finally, Old Guard has agreed to neither transfer any of the
business  operations  of ISC and its  subsidiaries  to  itself or one of its own
subsidiaries nor sell, assign or otherwise  transfer the business of ISC and its
subsidiaries  to a third  party,  whether by sale of assets or stock,  merger or
otherwise.                                                                      

Closing Date                                                                    

         Subject to the conditions  set forth in the Stock  Purchase  Agreement,
the  consummation of the Transaction will take place on such date as is mutually
agreed by the parties,  provided that all conditions to the  consummation of the
Transaction have been satisfied or waived. See "- Conditions to Closing."       

         The Company  currently expects that the closing of the Transaction will
be on or about  February __, 1999,  but there can be no assurances as to whether
or when the Transaction will occur.                                             

Representations and Warranties                                                  

         The Stock Purchase  Agreement contains  customary  representations  and
warranties  by each of the  Company  and SCAC as to,  among  other  things,  (a)
organization,   good  standing  and  similar  corporate  matters;  (b)  the  due
authorization,  adoption and enforceability of the Stock Purchase Agreement; (c)
the absence of  litigation  seeking to enjoin the  execution and delivery of the
Stock Purchase  Agreement or the consummation of the  transactions  contemplated
thereby;  and (d)  ownership  of  subsidiaries.  In  addition,  Old Guard  makes
representations  and warranties  regarding (a)  organization,  good standing and
similar   corporate   matters;   (b)  the  due   authorization,   adoption   and
enforceability of the Stock Purchase Agreement;  (c) capital structure;  and (d)
financial condition.                                                            

         The  Stock  Purchase  Agreement  also  contains   representations   and
warranties of the Company and SCAC relating to ISC, STIC and their subsidiaries,
including,  among other  things,  (a)  organization,  good  standing and similar
corporate matters; (b) capital structure and ownership of subsidiaries;  (c) the
accuracy of certain financial  information that has been previously  provided by
the Company to Old Guard; (d) certain tax matters;  (e) business affairs and the

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absence  of any  material  adverse  change  thereto  or  other  information  not
previously  disclosed  to Old Guard;  (f)  material  contracts;  (g)  litigation
proceedings;   (h)  outstanding  loans;  (i)  required  licenses,   filings  and
approvals;  (j) reinsurance policies and agreements;  and (k) certain unresolved
legal claims.                                                                   

Certain Covenants of the Parties                                                

         The Stock Purchase Agreement contains customary covenants applicable to
transactions  like the  Transaction,  including  covenants  relating  to (a) the
confidentiality of information obtained in connection with the Transaction,  (b)
the  preparation  and filing of proxy  materials  relating  to  approval  of the
Transaction  by the  Company's  shareholders,  and (c) the filing of an election
under Section  338(h)(10) of the Internal  Revenue Code of 1986, as amended (the
"Code"),  and any comparable election under state, local or foreign tax law, and
other tax matters.                                                              

         Furthermore, the Company, SCAC, ISC and STIC jointly covenant and agree
that ISC will,  and will cause each  subsidiary of ISC to, carry on its business
in the usual and  ordinary  course  and use its best  efforts  to  preserve  its
business organizations intact and conserve the goodwill and relationships of its
customers and others having business  relations with it. These parties have also
agreed  to:  (a)  refrain  from  declaring  any  dividends  or  make  any  other
distributions  in respect  of the  capital  stock of ISC;  (b) each use its best
efforts to assist in obtaining certain regulatory  approvals and deliver related
documents;  (c)  file all  reports  or  returns  required  to be filed  with any
governmental agency consistent with past practices and promptly pay when due all
taxes,  assessments and governmental  charges,  including interest and penalties
levied or assess,  unless  diligently  contested  in good  faith by  appropriate
proceedings;  (d) cease and  terminate  all  efforts  to offer,  sell or solicit
offers or respond to offers to  purchase  the stock or assets of ISC or STIC and
any related  discussion;  and (e) pay to Old Guard an amount equal to the lesser
of (i) 115% of Old Guard's identifiable  out-of-pocket expenses or (ii) $100,000
in the event that the Stock  Purchase  Agreement is terminated by the Company in
the event  that  holders  of more than 15% of the  outstanding  shares of Common
Stock exercise their dissenter's  rights.  The Company,  SCAC, ISC and STIC have
also  agreed to pay  $400,000  to Old Guard in the event that they enter into an
agreement with any third party with respect to any merger, sale of stock or sale
of all or substantially all of the assets of ISC or STIC.                       

         Old Guard has  covenanted  and agreed that it will, and will cause each
of its  subsidiaries to, carry on its business in the usual and ordinary course,
and use its best  efforts to  preserve  its  business  organizations  intact and
conserve the goodwill  and  relationships  of its  customers  and others  having
business  relations  with it.  In  addition,  Old  Guard  has  agreed  to do the
following:  (a) use its best efforts to assist in obtaining  certain  regulatory
approvals  and  deliver  related  documents;  (b) file all  reports  or  returns
required to be filed with any governmental agency consistent with past practices
and  promptly  pay when due all taxes,  assessments  and  governmental  charges,
including interest and penalties levied or assess,  unless diligently  contested
in good faith by appropriate proceedings;  (c) contribute $750,000 of additional
capital  in the  form of  equity  to STIC  promptly  after  the  closing  of the
Transaction; (d) cause STIC to calculate its after-tax profits without regard to
the  requirements  of a  certain  provision  in  the  Stock  Purchase  Agreement
regarding liabilities incurred but not reported in calculating the bonus payable
to Donald V.  Cruickshanks and Gerald W. Sklar,  STIC's Executive Vice President
and  General  Counsel,  for  calendar  year 1998  pursuant  to their  employment
agreements.                                                                     

Conditions to Closing                                                           

         The  obligation of the Company to close the  Transaction  is subject to
various  conditions  that include the  following:  (a) all  representations  and
warranties  in the Stock  Purchase  Agreement of the Old Guard shall be true and
correct in all material  respects as of the closing of the Transaction;  (b) Old
Guard shall have  complied in all  materials  respects with all covenants in the
Stock Purchase Agreement (c) no pending litigation or administrative  proceeding
that would enjoin or otherwise delay or prevent the Transaction shall exist; (d)

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the Company or SCAC shall have  delivered to Old Guard a wire  transfer of $6.75
million and an opinion from Old Guard's  counsel  reasonably  acceptable  to the
Company;  (e) the Company's  shareholders shall have approved the Stock Purchase
Agreement and the transactions  contemplated  thereby;  (f) holders of more than
15% of the  issued  and  outstanding  shares  of  Common  Stock  shall  not have
exercised dissenters' rights under the MBCA; (g) the Transaction shall have been
approved by the Virginia  Bureau of Insurance and other  regulatory  authorities
whose  approval is required to consummate the  Transaction;  and (h) the Company
shall have received a written opinion from its financial  advisor that the terms
of the  Transaction  are fair from a  financial  point of view to the  Company's
shareholders.                                                                   

         The  obligation  of Old Guard to close the  Transaction  is  subject to
various  conditions  that include the  following:  (a) all  representations  and
warranties  in the Stock  Purchase  Agreement  of the Company  shall be true and
correct in all material  respects as of the closing of the Transaction;  (b) the
Company shall have complied in all materials  respects with all covenants in the
Stock  Purchase  Agreement;  (c) Old Guard shall have received  approvals of, or
grants or confirmations  of exemptions from certain state insurance  departments
with  respect  to the  acquisition  by Old Guard of ISC  capital  stock;  (d) no
threatened or pending litigation or administrative  proceeding that would enjoin
or otherwise  delay or prevent the  Transaction or impair the ability to operate
ISC or STIC shall exist; (e) no material adverse change, as defined in the Stock
Purchase  Agreement,  has occurred with respect to STIC; (f) the Company or SCAC
shall have delivered to Old Guard ISC's capital stock  registered in the name of
Old Guard,  copies of  certificates  of STIC's  good  standing  from  applicable
states,  revisions or  supplements to  information  previously  disclosed to Old
Guard,  interim financial statements for STIC, and an opinion from the Company's
counsel  reasonably  acceptable  to Old Guard;  (g) Donald V.  Cruickshanks  and
Gerald W. Sklar shall have  executed  employment  agreements  with Old Guard and
STIC;  (h) Old Guard shall have  received a opinion from its  financial  advisor
that  the  Transaction  is fair  from a  financial  perspective  to Old  Guard's
shareholders;  (i) the  Company  and SCAC shall have paid in full to ISC or STIC
all debts,  obligations,  liabilities or other  intercompany  balances and shall
provide Old Guard with evidence of such  payment;  (j) the Company or SCAC shall
have  purchased  from STIC all shares of common  stock of Champion  Broadcasting
Corporation owned by STIC at their book value; (k) the Company shall satisfy the
remaining  obligation  of STIC  to H.  William  Coogan,  Jr.  under a  severance
agreement  between  STIC and Mr.  Coogan (see "The  Transaction  - Interests  of
Certain  Persons  in the  Transaction");  (l) STIC  shall  carry a  reserve  for
liabilities  incurred but not reported in an amount as  determined  in the Stock
Purchase  Agreement;  and (m) Old Guard shall have received  certain  assurances
with  respect  to the  termination  of the  liability  of ISC,  STIC  and  their
subsidiaries pursuant to any tax sharing arrangement or agreement.              

         No  assurances  can be provided as to when or if all of the  conditions
precedent  to  the  Transaction  can or  will  be  satisfied  or  waived  by the
appropriate  party. As of the date of this Proxy  Statement,  the Company has no
reason  to  believe  that any of the  conditions  set  forth  above  will not be
satisfied.                                                                      

Amendment, Waiver and Termination                                               

         Amendment and Waiver. The Stock Purchase Agreement may be amended,  and
provisions  of the Stock  Purchase  Agreement  may be  waived,  but only if such
amendment or waiver is in writing and is signed by the party  against which such
amendment or waiver is  asserted.  As of the date of this Proxy  Statement,  the
Company does not  anticipate  any such  amendment or waiver,  whether  before or
after shareholder approval.                                                     

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         Termination.  The Stock Purchase  Agreement may be terminated by either
party by written  notice to the other party if (i) Old Guard has been advised by
any of  certain  insurance  departments  that a  required  approval  will not be
granted,  (ii) any  litigation  not  initiated  or  instigated  on behalf of the
Company,  SCAC or Old Guard seeking to enjoin the  transactions  contemplated by
the Stock  Purchase  Agreement is finally  determined  on appeal in favor of the
individual  or entity  seeking  such  injunction,  or (iii) the  closing  of the
Transaction has not occurred on or before March 31, 1999.                       

         The Stock Purchase  Agreement may be terminated by Old Guard by written
notice to the Company (i) upon the occurrence of a material  adverse change with
respect to ISC; (ii) if the Company's conditions to closing have not been met or
waived by Old Guard;  or (iii) if, on or before  December 31, 1998, Old Guard in
its reasonable discretion is not satisfied with the results of the due diligence
investigation  of ISC  and  its  subsidiaries.  As of the  date  of  this  Proxy
Statement,  the Company is not aware of any reason for  termination of the Stock
Purchase Agreement by Old Guard as described above.                             

         The Stock  Purchase  Agreement  may be  terminated  by the  Company  by
written  notice to Old Guard if (i) Old Guard's  conditions  to closing have not
been  met or  waived  by the  Company;  or  (ii)  prior  to the  closing  of the
Transaction,  Old  Guard  shall  enter  into any  agreement  or letter of intent
providing for the direct or indirect  acquisition  of  substantially  all of the
assets and liabilities or voting stock of Old Guard.                            

Indemnification                                                                 

         Under the Stock Purchase Agreement, the Company and SCAC have agreed to
indemnify,  defend  and hold  harmless  Old  Guard,  and Old Guard has agreed to
indemnify  the Company and SCAC,  against and with respect to any portion of any
claim,  liability,  obligation,  loss  and  other  expenses  arising  out  of or
attributable to any material (i) breach of any representation or warranty,  (ii)
breach of any covenant,  (iii) breach of any agreement of the indemnifying party
contained  in the Stock  Purchase  Agreement  or in the  information  previously
disclosed by the  indemnifying  party to the  indemnified  party and/or (iv) any
other claims  otherwise  directly or indirectly  relating to the Stock  Purchase
Agreement or the transactions contemplated thereby.                             

         Except for losses or claims relating solely to, or arising solely from,
any  taxes or tax  matters  described  or  contemplated  in the  Stock  Purchase
Agreement,  the indemnifying party will not have any obligation to indemnify the
other party or parties with respect to any claim,  proceeding or other matter to
the extent that such claim or claims do not exceed $25,000 in the aggregate.  In
the event that any such claim or claims  exceed  $25,000 in the  aggregate,  the
indemnifying party will be liable for the amount in excess of $25,000. Losses or
claims  relating  solely to, or arising  solely  from,  any taxes or tax matters
described or contemplated in the Stock Purchase Agreement are not subject to any
such minimum amount and are indemnifiable in their entire amount.               

         Under  the  Stock   Purchase   Agreement,   each  party   entitled   to
indemnification  shall notify the  indemnifying  party in a timely manner and in
writing  of  any  matters  as  to  which  such  party  is  entitled  to  receive
indemnification and shall set forth the details regarding the specific facts and
circumstances of which such party is aware.                                     

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 PRO FORMA FINANCIAL INFORMATION

         The Pro Forma Condensed Consolidated Balance Sheet of the Company as of
September 30, 1998  reflects the financial  position of the Company after giving
effect  to the  Transaction  and  assumes  that the  Transaction  took  place on
September  30,  1998.  The  Pro  Forma  Condensed  Consolidated   Statements  of
Operations  for the year  ended  December  31,  1997 and the nine  months  ended
September 30, 1998 assume that the  Transaction  occurred on January 1, 1997 and
reflects the  investment  of the net  proceeds  from the  Transaction  for those
periods and the retirement of certain debt. The pro forma  financial  statements
presented  herein use only the  proceeds of $6.75  million that the Company will
receive  at the  closing of the  Transaction  as the basis for  calculating  the
amount of net proceeds  available for investment at September 30, 1998.  None of
the additional cash payments that are based on the pre-tax net income of ISC and
its subsidiaries for each of the fiscal years ending December 31, 1999, 2000 and
2001 were  considered  as they are  contingent  on  operating  results in future
years.  The  pro  forma  financial  statements  assume  that  transaction  costs
(professional fees and other required or anticipated  payments) will approximate
$565,000.  Such pro forma financial  statements also reflect the assumption that
the 9.0%  convertible  notes  payable  due March 1, 1999 were  retired as of the
assumed dates of the Transaction,  as indicated above, and the net proceeds from
the  Transaction  were  invested  for  the  respective   periods  at  5.5%.  The
statements,  however,  do not reflect the  interest  income that would have been
realized by the Company  assuming that the net proceeds from the Transaction had
been invested since January 1, 1997.                                            

         The unaudited pro forma  condensed  consolidated  financial  statements
have been  prepared by the Company based upon  assumptions  deemed proper by it.
The unaudited pro forma condensed  consolidated  financial  statements presented
herein  are  shown  for  illustrative  purposes  only  and are  not  necessarily
indicative of the future  financial  position or future results of operations of
the  Company,  or of the  financial  position  or results of  operations  of the
Company that would have actually  occurred had the Transaction been in effect as
of the date or for the periods presented.  In addition,  it should be noted that
the Company's  financial  statements will reflect the Transaction  only from the
date of the closing of the Transaction.                                         

         The unaudited pro forma  condensed  consolidated  financial  statements
should be read in  conjunction  with the  historical  financial  statements  and
related  notes of the Company,  which are  incorporated  by reference  into this
Proxy Statement. See "Incorporation of Certain Documents by Reference."         

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                                                        [Enlarge/Download Table]
                                 FIRSTMARK CORP.                                                                        
                             PRO FORMA BALANCE SHEET                                                                    
                            As of September 30, 1998                                                                    
                                   (Unaudited)                                                                          

------------------------------------------------------------------------------------------------------------------------

                                                                            Pro Forma Adjustments                       
                                                                            ---------------------                       
                                                      Historical          ISC (a)             Other           Pro Forma 
                                                      ----------          -------             -----           --------- 
                                                                          (Dollars in thousands)                        
                                                                                                                        
Cash and Cash Equivalents                                 $3,021         $(2,936)                                   $85 
Accounts and Notes Receivable                              1,337          (1,187)                                   150 
Marketable Securities                                      1,824          (1,732)            $5,700   (b)         5,792 
Venture Capital Investments, Net                           1,111              (5)                                 1,106 
Real Estate and Other Investments                            817                                                    817 
Title Plant                                                3,563          (3,563)                                     - 
Property, Plant and Equipment, Net                           738            (725)                                    13 
Excess of Cost over Fair Value                               926                               (926)  (d)             - 
Deferred Tax Asset                                           935            (345)                                   590 
Other Assets                                                 199            (160)                                    39 
                                                             ---            -----                                    -- 

         Total Assets                                    $14,471        $(10,653)            $4,774              $8,592 
                                                         -------        --------             ------              ------ 

Accounts Payable and Other Liabilities                      $531           $(481)                                   $50 
Borrowed Funds                                               919            (400)            $ (485)  (c)            34 
Reserve for Title Policy Claims                            1,036          (1,036)                                     - 
Deferred Tax Liability                                       920            (362)                                   558 
                                                             ---            -----                                   --- 

     Total Liabilities                                     3,406          (2,279)              (485)                642 
                                                           -----          -------             -----                 --- 

     Total Stockholders' Equity                           11,065          (8,374)             5,259               7,950 
                                                          ------          ------              -----               ----- 

     Total Liabilities and Stockholders' Equity                                                                         
                                                         $14,471        $(10,653)            $4,774              $8,592 
                                                         =======        ========             ======              ====== 

---------------                                                                 

(a)    To  eliminate  the assets  and  liabilities  of ISC and its  subsidiaries
included in the balance sheet as of September 30, 1998.           
(b)    To reflect the estimated net proceeds from the Transaction ($6.75 million
       less  approximately  $565,000 in  transaction  and other  costs) less the
retirement of debt in (c) below.                                  
(c)    To reflect the retirement of $485,000 of 9% convertible notes payable due
March  1,  1999.                                                  
(d)    To eliminate  goodwill that resulted from the  acquisition  of SCC by the
Company.                                                          

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                                 FIRSTMARK CORP.                                                                        
                          PRO FORMA STATEMENT OF INCOME                                                                 
                      Nine Months Ended September 30, 1998                                                              
                                   (Unaudited)                                                                          

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                                                                            Pro Forma Adjustments                       
                                                                            ---------------------                       
                                                      Historical          ISC (b)             Other           Pro Forma 
                                                      ----------          -------             -----           --------- 
                                                                          (Dollars in thousands)                        
                                                                                                                        
Revenues:                                                                                                               
      Title Insurance                                     $9,568         $(9,568)                                   $ - 
      Investment Gains                                        29              (7)                                    22 
      Interest and Dividends                                 244            (194)               $ -   (a)            50 
      Other Revenues                                         264            (264)                                       
                                                             ---            ----                                    --- 

         Total Revenues                                   10,105         (10,033)                 -                  72 
                                                          ------         -------               ----                 --- 

Expenses:                                                                                                               
      Employee Compensation and Benefits                   3,960          (3,878)              (64)   (e)            18 
      Commissions and Fee Expense                          2,944          (2,944)                                     - 
      General and Administrative                           2,606          (2,227)              (33)   (d)           346 
      Interest Expense                                        77             (39)              (38)   (c)             - 
      Minority Interest                                      353            (353)                                       
                                                             ---            ----              ----                  --- 

         Total Expenses                                    9,940          (9,441)             (135)                 364 
                                                           -----          ------              ----                  --- 

Earnings before Income Taxes                                 165            (592)              135                 (292)

Income Tax Expense (Benefit)                                                                                            
                                                             ---             ---              ----                 ---- 

         Net Earnings (Loss) (Exclusive of                                                                              
           Preferred Stock Dividend)                        $165           $(592)             $135                 (292)
                                                            ====           =====              ====                 ==== 

         Earnings (Loss) Per Common Share                                                                               
           (Exclusive of Preferred Stock                                                                                
           Dividend) - Basic and Diluted                  $0.03                                                 $(0.06) 
                                                          =====                                                 ======  

         Weighted-average Number of Shares                                                                              
           Outstanding                                    5,300                                                  5,300  
                                                          =====                                                  =====  

----------                                                                      
(a)    Does not reflect  interest income that would have been realized  assuming
       that the net proceeds from the Transaction less the retirement of debt in
(c) below had been invested for the entire period.                
(b)    To eliminate the net earnings of ISC and its subsidiaries included in the
   statement of operations for the nine months ended September 30, 1998.
(c)    To  eliminate  the interest  expense on the $585,000 in 9.0%  convertible
    notes payable due March 1, 1999 assumed retired for the entire period.
(d)    To  eliminate  the  amortization  of  goodwill  that  resulted  from  the
acquisition of SCC by the Company.                                
(e)    To reflect  changes in executive  compensation  upon  consummation of the
       Transaction.  See "The  Transaction - Interests of Certain Persons in the
Transaction."                                                     

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                                                        [Enlarge/Download Table]
                                 FIRSTMARK CORP.                                                                        
                          PRO FORMA STATEMENT OF INCOME                                                                 
                          Year Ended December 31, 1997                                                                  
                                   (Unaudited)                                                                          

------------------------------------------------------------------------------------------------------------------------

                                                                            Pro Forma Adjustments                       
                                                                            ---------------------                       
                                                      Historical          ISC (b)             Other           Pro Forma 
                                                      ----------          -------             -----           --------- 
                                                                          (Dollars in thousands)                        
                                                                                                                        
Revenues:                                                                                                               
      Title Insurance                                    $10,842        $(10,842)                                 $   - 
      Investment Gains                                       641            (380)                                   261 
      Interest and Dividends                                 139                               $  -   (a)           139 
      Other Revenues                                         574            (570)                                     4 
                                                             ---            ----               ----                 --- 

         Total Revenues                                   12,196         (11,792)                 -                 404 
                                                          ------         -------               ----                 --- 

Expenses:                                                                                                               
      Employee Compensation and Benefits                   4,612          (4,325)              (111)  (e)           176 
      Write-offs of Loans and Investments                    655             (39)                                   616 
      Commissions and Fee Expense                          3,972          (3,972)                                     - 
      General and Administrative                           3,599          (2,986)               (56)  (d)           557 
      Interest Expense                                       108             (44)               (63)  (c)             1 
      Minority Interest                                      369            (369)                                       
                                                             ---            ----               ----                ---- 

         Total Expenses                                   13,315         (11,735)              (230)              1,350 
                                                          ------         -------               ----               ----- 

Loss from Continuing Operations before Income                                                                           
   Taxes                                                  (1,119)            (57)               230                (946)

Income Tax Expense (Benefit)                                 113                                                    113 
                                                             ---             ---               ----                 --- 

Net Loss from Continuing Operations (Exclusive of                                                                       
   Preferred Stock Dividend)                            $ (1,232)           $(57)              $230             $(1,059)
                                                        ========            ====               ====             ========

         Net Loss from Continuing Operations Per                                                                        
           Common Share (Exclusive of Preferred                                                                         
           Stock Dividend) - Basic and Diluted          $ (0.26)                                                 $(0.23)
                                                        =======                                                  ====== 

         Weighted-average Number of Shares                                                                              
           Outstanding                                    4,676                                                   4,676 
                                                          =====                                                   ===== 

----------                                                                      
(a)    Does not reflect  interest income that would have been realized  assuming
       that the net proceeds from the Transaction less the retirement of debt in
(c) below had been invested for the entire period.                
(b)    To eliminate the net earnings of ISC and its subsidiaries included in the
statement of operations for the year ended December 31, 1997.     
(c)    To  eliminate  the interest  expense on the $585,000 in 9.0%  convertible
  notes payable due March 1, 1999 assumed retired for the entire year.
(d)    To  eliminate  the  amortization  of  goodwill  that  resulted  from  the
acquisition of SCC by the Company.                                
(e)    To reflect  changes in executive  compensation  upon  consummation of the
       Transaction.  See "The  Transaction - Interests of Certain Persons in the
Transaction."                                                     

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INDEPENDENT PUBLIC ACCOUNTANTS

         The Board of Directors has appointed the firm of Deloitte & Touche, LLP
as independent public accountants to audit the consolidated financial statements
of the Company for the fiscal year ending December 31, 1998.  Representatives of
Deloitte & Touche,  LLP are expected to be present at the Special Meeting,  will
have an  opportunity  to make a statement,  if they desire to do so, and will be
available to respond to appropriate questions.                                  

 PROPOSALS FOR 1999 ANNUAL MEETING

         Under the  regulations of the Securities and Exchange  Commission,  any
shareholder  desiring  to make a proposal  to be acted  upon at the 1999  annual
meeting of shareholders must cause such proposal to be received, in proper form,
at the Company's  principal executive offices at Firstmark Corp., P.O. Box 1398,
Richmond,  Virginia  23218,  no later than  ________ __, 1999,  in order for the
proposal to be considered  for inclusion in the  Company's  Proxy  Statement for
that meeting. The Company presently  anticipates holding the 1999 annual meeting
of shareholders in ________ 1999.                                               

         In addition,  the Company's  Bylaws  prescribe  certain  procedures for
shareholders  who wish to present any business or any nominations of persons for
election to the Board of Directors for consideration at an annual meeting of the
Company's  shareholders.  With respect to shareholder business, such notice must
include a brief  description  of the business  desired to be brought  before the
annual  meeting  and the  reasons  for  conducting  such  business at the annual
meeting. With respect to nominations,  such notice must set forth the name, age,
business address,  residence  address and principal  occupation or employment of
each  person  whom the  shareholder  proposes  to  nominate  for  election  as a
director.  All  notices  must be  delivered  to or mailed  and  received  at the
principal  executive  offices of the  Company not less than 10 days prior to the
date of such annual  meeting as scheduled by the Board of Directors,  regardless
of any  postponements,  deferrals,  or  adjournments  of that meeting to a later
date.                                                                           

 OTHER MATTERS

         A COPY OF THE  COMPANY'S  ANNUAL REPORT ON FORM 10-KSB/A FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1997, INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO
SHAREHOLDERS WITH THIS PROXY STATEMENT.                                         

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                                                                      APPENDIX A

STOCK PURCHASE AGREEMENT

 among

 FIRSTMARK CORPORATION
SOUTHERN CAPITAL ACQUISITION CORPORATION
INVESTORS SOUTHERN CORPORATION
 and
SOUTHERN TITLE INSURANCE CORPORATION

 and

 OLD GUARD GROUP, INC.

Dated December _____, 1998

 TABLE OF CONTENTS

                                                        [Enlarge/Download Table]

                                                                              Page No.
                                                                              --------
                                                                                      
1.  Definitions ..............................................................    1   

2.  Stock Purchase; Closing; Payment of Purchase Price .......................    6   
    2.1.     Transfer of ISC Capital Stock ...................................    6   
    2.2.     Closing .........................................................    6   
    2.3.     Payment of Purchase Price .......................................    6   
    2.4.     Allocation of Consideration .....................................    7   

3.  Conditions to Stock Exchange and Closing .................................    8   
    3.1.     Old Guard's Conditions to Closing ...............................    8   
    3.2.     Firstmark's Conditions to Closing ...............................   10   

4.  Firstmark Representations and Warranties .................................   11   
    4.1.     Representations and Warranties Regarding Firstmark and SCAC .....   11   
    4.2.     Representations and Warranties of Firstmark and SCAC Regarding           
             ISC, ISC Subsidiaries and STIC Subsidiaries .....................   12   
    4.3.     Dates of and Survival of Firstmark and SCAC Representations and          
             Warranties ......................................................   20   

5.  Old Guard Representations and Warranties .................................   20   
    5.1.     Old Guard Representations and Warranties ........................   20   
    5.2.     Dates of and Survival of Old Guard Representations and Warranties   21   

6.  Joint Covenants ..........................................................   22   
    6.1.     Confidentiality .................................................   22   
    6.2.     Proxy Statement and Shareholder Approval ........................   22   
    6.3.     Tax Matters .....................................................   23   

7.  Covenants of Firstmark, SCAC, ISC and STIC Through the Closing Date ......   30   
    7.1.     Conduct of Business .............................................   30   
    7.2.     No Dividends ....................................................   31   
    7.3.     Regulatory Approvals; Delivery of Documents .....................   31   
    7.4.     Reports .........................................................   31   
    7.5.     No Solicitation .................................................   31   
    7.6.     Dissenters Rights ...............................................   31   

8.  Covenants of Old Guard ...................................................   32   
    8.1.     Conduct of Business .............................................   32   
    8.2.     Regulatory Approvals; Delivery of Documents .....................   32   
    8.3.     Reports .........................................................   32   
    8.4.     Post Closing Contribution .......................................   32   
    8.5.     Bonus Payments ..................................................   32   

9.  Indemnification; Arbitration; Injunctive Relief ..........................   32   
    9.1.  Firstmark Indemnification ..........................................   32   
    9.2.  Old Guard Indemnification ..........................................   34   
    9.3.  Tax Indemnification; Apportionment of Taxes ........................   35   

10. Delivery of the Disclosure Packages; Termination .........................   36   
    10.1.  Delivery of the Disclosure Packages ...............................   36   
    10.2.  Termination .......................................................   36   
    10.3.  Agreement Void ....................................................   37   

11. Miscellaneous ............................................................   37   
    11.1.  Brokers ...........................................................   37   
    11.2.  Entire Agreement ..................................................   38   
    11.3.  Binding Agreement .................................................   38   
    11.4.  Announcements .....................................................   38   
    11.5.  Counterparts ......................................................   38   
    11.6.  Costs .............................................................   38   
    11.7.  Notices ...........................................................   38   
    11.8.  Applicable Law ....................................................   39   
    11.9.  Separable Provisions ..............................................   39   

STOCK PURCHASE AGREEMENT

              THIS AGREEMENT, dated as of _____________, 1998, is by and
among FIRSTMARK CORPORATION, a Maine corporation ("Firstmark"), SOUTHERN CAPITAL
ACQUISITION CORPORATION, a Virginia corporation ("SCAC"), INVESTORS SOUTHERN    
CORPORATION, a Virginia corporation, and SOUTHERN TITLE INSURANCE CORPORATION, a
Virginia insurance company ("STIC"), and OLD GUARD GROUP, INC., a Pennsylvania  
corporation ("Old Guard").                                                      

Background

             Firstmark is the owner of five thousand (5,000) shares of
common stock, no par value, of SCAC, representing 100% of the issued and        
outstanding capital stock of SCAC. SCAC is the owner of 499 shares of common    
stock, par value $5.00 per share, of Investors Southern Corporation, a Virginia 
corporation ("ISC"), representing 100% of the outstanding capital stock of ISC. 
ISC is the owner of 210,320 shares of common stock, par value $4.76 per share,  
of Southern Title Insurance Corporation, a Virginia corporation ("STIC"),       
representing 100% of the outstanding capital stock of STIC. Firstmark and SCAC  
have determined to sell to Old Guard and Old Guard has determined to buy from   
Firstmark and SCAC all of ISC's outstanding capital stock in exchange for cash, 
all on the terms and conditions set forth herein.                               

               NOW, THEREFORE, in consideration of the mutual promises set
forth herein, and intending to be legally bound hereby, the parties hereto agree
as follows:                                                                     

               1. Definitions. The following terms shall have the meanings
set forth in this Section 1 when capitalized in this Agreement:                 

                        "Affiliate" means, with respect to any Person, (i)
any Person directly or indirectly controlling, controlled by or under common    
control with such Person, (ii) any Person owning or controlling 10% or more of  
the outstanding voting interests of such Person, (iii) any officer, director, or
general partner of such Person, or (iv) any Person who is an officer, director, 
general partner, trustee, or holder of 10% or more of the voting interests of   
any Person described in clauses (i) through (iii) of this sentence. For purposes
of this definition, the term "controls," "is controlled by" or "is under common 
control with" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person or     
entity, whether through the ownership of voting securities, by contract or      
otherwise.                                                                      

              "Alternative Accountants" shall mean an accounting firm of
recognized national standing, other than an accounting firm that regularly      
audits the annual financial statements of any of the parties to this Agreement, 
or any of its or their Affiliates, which is mutually designated or consented to 
in writing by Old Guard and Firstmark within three (3) business days following  
the receipt by either Old Guard or Firstmark of the written request of the other
party to designate or consent to the designation of an Alterative Accountant;   
or, in default of such mutual designation or consent within the time allowed, an
accounting firm of recognized national standing, other than an accounting firm  
that regularly audits the annual financial statements of any of the parties to  
this Agreement, or any of its or their Affiliates, chosen by Old Guard and      
Firstmark by lot.                                                               

          "Champion" shall mean Champion Broadcasting Company, a
corporation in which STIC owns a minority interest in the corporation's issued  
and outstanding nonvoting shares.                                               

                  "Claims Reserve" shall mean as of any date the amount recorded
as a liability on the consolidated balance sheet of STIC representing the sum   
specifically reserved by STIC to pay incurred and reported claims with respect  
to title insurance policies issued by STIC.                                     

                  "Closing" shall mean the transfer by Firstmark and SCAC to Old
Guard of the ISC Capital Stock in exchange for cash pursuant to Sections 2.2    
hereof.                                                                         

           "Closing Date" shall mean the date on which the Closing
occurs, which shall be on or before January 31, 1999 (unless accelerated or     
deferred pursuant to Section 2.2 hereof).                                       

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

              "Consolidated Group" shall mean the consolidated group for
federal income tax purposes of which Firstmark is the parent.                   

              "Consolidated Returns" shall have the meaning set forth in
Section 6.3(a) hereof.                                                          

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.                                                            

              "Firstmark Disclosure Package" shall mean the schedules of
Firstmark relating to the representations and warranties made under Article 4   
hereof, delivered as a separate document on the date hereof.                    

                 "Firstmark Group Members" shall have the meaning set forth in
Section 6.3(a).                                                                 

            "Form 8023" shall mean Department of Treasury Form 8023,
revised September 1997.                                                         

                 "Generally Accepted Accounting Principles" shall mean, at any
particular time, generally accepted accounting principles, consistently applied 
on a going concern basis without regard to the pendency of the sale contemplated
hereby and using audit scope and materiality standards used in the past and,    
with respect to interim financial statements, subject to normal year-end        
adjustments.                                                                    

             "Governmental Body" shall mean any federal, state, local,
municipal, foreign or other governmental or quasi-governmental entity or        
authority of any nature.                                                        

                "IBNR Reserve" shall mean as of any date the amount recorded
as a liability on the consolidated balance sheet of STIC representing the sum   
reserved by STIC to pay incurred but not reported claims and relating to title  
insurance policies issued by STIC.                                              

                "Interim Period" shall have the meaning set forth in Section
9.3(b).                                                                         

        "ISC Capital Stock" shall mean the ISC Common Stock.

               "ISC Common Stock" shall mean ISC's Common Stock, par value
$5.00 per share, of which 499 shares are authorized, issued and outstanding and 
held by SCAC.                                                                   

                  "ISC Subsidiary" shall mean STIC and any other entity which is
50% or more owned by ISC or STIC.                                               

               "June 30, 1998 Financial Statements" shall have the meaning
set forth in Section 6.3(d)(1)(A).                                              

             "Legal Requirement" - any United States federal, state or
local law, ordinance, principle of common law, regulation or statute as in      
effect on the Closing Date.                                                     

                 "Liabilities" shall mean, collectively, any debt, obligation,
or liability.                                                                   

            "Licenses" shall mean any licenses, permits or approvals
required for any Person for the issuance of title insurance policies in those   
jurisdictions in which such Person issues title insurance policies as of the    
date in question, or which are otherwise material at such time to the lawful    
conduct of the business of such Person.                                         

                  "Material Adverse Change" shall mean, with respect to STIC (i)
STIC's consolidated net worth as set forth on the Balance Sheet delivered at the
Closing pursuant to Section 4.2(e) hereof, is 95% or less than as set forth on  
STIC's consolidated balance sheet as of June 30, 1998 delivered pursuant to     
Section 4.2(e) hereof, or (ii) there shall have been filed against STIC a claim 
or claims under or in connection with a title policy or policies which is not   
disclosed in the Firstmark Disclosure Package and which, in the reasonable      
judgment of Old Guard, is probable of success on the merits and could reasonably
result in a claims payment in excess of $100,000, net of previously established 
reserves in connection therewith and any existing reinsurance or fidelity       
coverage. Notwithstanding the foregoing, the contribution to the IBNR Reserve   
required by Section 3.1(m) shall not constitute a Material Adverse Change.      

                 "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.                                                                        

                 "1933 Act" shall mean the Securities Act of 1933, as amended.

                  "Old Guard Disclosure Package" shall mean the schedules of Old
Guard relating to the representations and warranties made under Article 5       
hereof, delivered as a separate document on the date hereof.                    

           "Old Guard Insurance Subsidiaries" shall mean Old Guard
Insurance Company, Old Guard Fire Insurance Company, First Patriot Insurance    
Company, First Delaware Insurance Company and New Castle Insurance Company.     

                 "Old Guard Licensed States" shall mean those jurisdictions in
which any Old Guard Insurance subsidiary is licensed.                           

          "Old Guard SEC Filings" shall mean all filings made or
required to be made by Old Guard under the 1933 Act or the 1934 Act, including, 
without limitation, registration statements, prospectuses, annual reports to    
shareholders, proxy statements, annual reports on Form 10-K, quarterly reports  
on Form 10-Q, and current reports on Forms 8-K, and all amendments or           
supplements thereto.                                                            

              "Operating Period" shall mean (i) the period commencing on
January 1, 1999 and ending on December 31, 1999, and (ii) each and every fiscal 
year of ISC thereafter through and including the fiscal year ending on December 
31, 2001.                                                                       

       "Person" shall mean an individual, a corporation, a
partnership, a limited liability company, a joint venture, a trust or           
unincorporated organization, a joint stock company or other similar             
organization, a government or any political subdivision thereof, or any other   
legal entity.                                                                   

               "Post-June 30, 1998 Tax Period" shall mean, with respect to
any Tax, (a) any taxable period that begins on or after July 1, 1998, and (b)   
that portion beginning on July 1, 1998 of any taxable period that includes but  
does not end on June 30, 1998.                                                  

                 "Pre-Closing Tax Period" shall mean, with respect to any Tax,
(a) any taxable period ending on or before the Closing Date, and (b) that       
portion ending on the Closing Date of any taxable period that includes but does 
not end on the Closing Date.                                                    

                 "Pre-Tax Net Income" shall mean the pre-tax net income of ISC
and the ISC Subsidiaries determined in accordance with GAAP.                    

                 "SCAC" shall mean Southern Capital Acquisition Corporation, a
Virginia corporation.                                                           

                 "Section 338(h)(10) Election" shall mean a timely election by
Firstmark and Old Guard for the taxable period ending on or as of the end of the
day on the Closing Date, under or pursuant to (a) Section 338(h)(10) of the Code
and Section 1.338(h)(10)-1 of the Treasury Regulations promulgated pursuant to  
the Code, and (b) any corresponding elections that are required under any       
applicable state or local Tax law or regulation.                                

           "Section 338(h)(10) Taxes" shall mean any and all Taxes
attributable to any Section 338(h)(10) Election, computed in any manner         
consistent with the tax accounting methods, principles and tax sharing          
arrangement or agreement used by the taxable entity in its immediately preceding
taxable period to report its or their income to the relevant taxing authority,  
less the amount of any reduction in premium taxes actually realized by ISC or   
any ISC Subsidiary, for any taxable period that includes the Closing Date, as a 
result of a Section 338(h)(10) Election.                                        

                  "Short  Period"  shall  have the  meaning  set  forth  Section
9.3(b).                                                                         

             "STIC" shall mean Southern Title Insurance Corporation, a
Virginia title insurance corporation.                                           

                "STIC Licensed States" shall mean those jurisdictions listed
on Exhibit "A" attached hereto in which STIC is licensed to issue policies of   
title insurance.                                                                

               "STIC Subsidiary" shall mean Southern Title Services, Inc.,
and any other entity which is 50% or more owned by STIC. A STIC Subsidiary may  
also be an ISC Subsidiary.                                                      

              "Tax" shall mean any tax, levy, assessment, tariff or duty
imposed, assessed or collected by or under the authority of any Governmental    
Body.                                                                           

             "Tax Return" shall mean any return, report, form or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,    
assessment, collection, or payment of any Tax, including any amendments thereto.

          2. Stock Purchase; Closing; Payment of Purchase Price.

                        2.1. Transfer of ISC Capital Stock. On the Closing
Date, Firstmark, in reliance upon the representations and warranties of Old     
Guard set forth herein and subject to the terms and conditions hereof, shall    
cause SCAC to transfer the ISC Capital Stock held by SCAC to Old Guard in       
exchange for cash and on the Closing Date, Old Guard, in reliance upon the      
representations and warranties of Firstmark set forth herein and subject to the 
terms and conditions hereof, shall deliver cash to SCAC in exchange for the ISC 
Capital Stock held by SCAC, all as set forth in Section 2.3 below.              

2.2. Closing.             

                          (a) The Closing shall take place on the Closing Date
                at the offices of Stevens & Lee, One Penn Square, Lancaster,
                 Pennsylvania 17608 at 9:00 a.m Eastern Standard Time provided
        that Firstmark and Old Guard by mutual agreement may
                 accelerate or defer the Closing Date to such date as they may
select.                                     

     2.3. Payment of Purchase Price.

                         (a) Provided that all conditions to the Closing set
                forth in Section 3.1 below have been satisfied or waived, at
                the Closing, Old Guard shall pay to SCAC by wire transfer in
              immediately available funds an amount equal to $6,750,000.

                       (b) Within the ninety (90) day period immediately
                following the end of each Operating Period (each such ninety
                (90) day period to be referred to herein as a "Determination
            Period") Old Guard shall deliver to Firstmark and SCAC a
                statement (the "Statement") prepared by Old Guard certifying
            the Pre-Tax Net Income for the previous Operating Period
               together with a check payable to SCAC in an amount equal to
               25% of (i) Pre-Tax Net Income for the most recent Operating
               Period less (ii) the cumulative net loss of ISC and the ISC
                  Subsidiaries during all prior Operating Periods. From the date
             hereof through December 31, 2001, Old Guard covenants and
               agrees (a) that it will continue to operate ISC and the ISC
         Subsidiaries in a manner that is consistent with past
               practice, (b) that in determining the Pre-Tax Net Income it
            will not allocate against the revenues of ISC or the ISC
                Subsidiaries any liabilities or expenses which did not arise
         in the ordinary course of business of ISC and the ISC
                  Subsidiaries, including but not limited to any liabilities and
                  expenses of Old Guard and the Old Guard Subsidiaries, (c) that
                  it will not transfer any of the business operations of ISC and
                 the ISC Subsidiaries to Old Guard or an Old Guard Subsidiary,
               and (d) that it will not sell, assign or otherwise transfer
                  the business of ISC and the ISC Subsidiaries to a third party,
            whether by sale of assets or stock, merger or otherwise.

                           (c) Firstmark, SCAC and their accountants, shall have
               the right, for a period of thirty (30) days following their
              receipt of the Statement, to review such Statement and any
            related work papers to determine whether the Pre-Tax Net
                 Income for such Operating Period was determined in accordance
          with the provisions hereof. If, following such review,
                Firstmark and SCAC determine that the Pre-Tax Net Income was
                 not calculated by Old Guard in accordance with the provisions
               hereof, Firstmark and SCAC shall so notify Old Guard, which
           notice shall contain a detailed statement showing their
                 computation of the Pre-Tax Net Income. For a period of thirty
                 (30) days following the receipt of such notice, Old Guard and
                Firstmark and SCAC shall attempt to resolve any such dispute
                 with respect to the calculation of Pre-Tax Net Income. If, at
                the expiration of such thirty (30) day period, Old Guard and
              Firstmark and SCAC are unable to resolve such dispute, Old
          Guard and Firstmark and SCAC shall promptly submit the
                  disputed financial statements and the statements setting forth
        the determination of Pre-Tax Net Income to a firm of
             independent certified public accountants agreed to by Old
              Guard and Firstmark and SCAC, which firm shall resolve all
           matters in dispute with respect to the determination of
            Pre-Tax Net Income within the forty-five (45) day period
                 immediately following such submission and whose determination
             shall be final, binding and conclusive upon Old Guard and
                  Firstmark and SCAC. The fees of any such independent certified
              public accounting firm shall be borne by the parties whose
               determination of Pre-Tax Net Income is the most inaccurate.

                          2.4. Allocation of Consideration. In connection with
the Section 338(h)(10) Election, Old Guard and Firstmark shall cooperate as     
provided herein in determining the modified aggregate deemed sales price        
("MADSP") (as such term is defined in Treasury Regulations Section              
1.338(h)(10)-1) of the assets and the allocation of the MADSP on a company by   
company basis for purposes of Section 338(a)(1) of the Code in accordance with  
all applicable Treasury Regulations promulgated under Section 338 of the Code.  
Old Guard initially shall determine such MADSP and allocation of the MADSP on a 
company by company basis and shall notify Firstmark in writing of the price and 
allocation so determined ("Old Guard's Deemed Sales Price Notice") within ninety
(90) days after the Closing Date. Firstmark shall be deemed to have accepted    
such determination unless, within forty-five (45) days after receipt of Old     
Guard's Deemed Sales Price Notice, Firstmark notices Old Guard in writing of (i)
the amount that Firstmark proposes as the MADSP (if it differs from that        
proposed by Old Guard), (ii) the allocation of the MADSP proposed by Firstmark  
and (iii) the reasons for Firstmark's allocations. If Firstmark provides such   
notice to Old Guard, the parties shall proceed in good faith to determine       
mutually the matters in dispute and, if they are unable to do so within thirty  
(30) days, the matter shall be referred to the Alternative Accountants, if the  
disagreement relates to the determination of the MADSP, or an appraisal firm    
chosen by and mutually acceptable to both Old Guard and Firstmark (the          
"Appraiser"), if the disagreement relates to the allocation of the MADSP, who   
shall within sixty (60) days decide the matter. The decision of the Alternative 
Accountants or Appraiser shall be final and binding on both parties. The        
Alterative Accountants' or Appraiser's fees shall be shared equally by Old Guard
and Firstmark. Neither Old Guard nor Firstmark shall take, nor shall they permit
any Affiliated corporation to take, any position for Tax purposes relating to   
the Section 338(h)(10) Election that is inconsistent with the MADSP and         
allocation thereof as finally determined hereunder unless such position would be
inconsistent with a final non-appealable (except to the United States Supreme   
Court) judgment which has been rendered in any judicial proceeding governing    
such position; provided, however, that the deemed purchase price of the assets  
shall differ from MADSP to the extent necessary to reflect the inclusion in the 
total deemed purchase price of items (for example, Old Guard's capitalized      
acquisition costs in addition to the consideration paid hereunder) not included 
in the MADSP.                                                                   

                  3. Conditions to Stock Exchange and Closing.

                 3.1. Old Guard's Conditions to Closing. All
obligations of Old Guard to deliver cash to SCAC on the Closing Date in exchange
for ISC Capital Stock are subject to the fulfillment, at or prior to the Closing
Date, of each of the following conditions:                                      

                         (a) All representations and warranties of Firstmark
                  set forth in Article 4 hereof shall be true and correct in all
material respects as of the Closing Date;   

                       (b) Firstmark shall have complied in all material
        respects with all of the covenants set forth herein;

                         (c) Old Guard shall have received the approvals of,
              or grants or confirmations of exemptions from the Virginia
        Bureau of Insurance and, to the extent required, the
               Pennsylvania Department of Insurance and Ohio Department of
                Insurance, each with respect to the acquisition by Old Guard
of the ISC Capital Stock.                   

                 (d) There shall be no threatened or pending
          litigation or any threatened or pending administrative
            proceeding (i) for the purpose of enjoining or otherwise
                  delaying or preventing any of the transactions contemplated by
               this Agreement, or (ii) which in the reasonable judgment of
            Old Guard is probable of success on the merits and would
            fundamentally impair the ability to operate ISC or STIC,
               provided, however, that the existence of such litigation or
                 proceeding shall not be a condition of Old Guard's obligation
             to close if such litigation or proceeding is initiated or
instigated by or on behalf of Old Guard;    

                      (e) No Material Adverse Change has occurred with
respect to STIC;                            

                      (f) Firstmark or SCAC, as applicable, shall have
   delivered to Old Guard the following documents:

                                   (i) The ISC Capital Stock registered in the
name of Old Guard;        

                                 (ii) Copies of good standing certificates
                     and Licenses for STIC from each applicable STIC
Licensed State;           

                                 (iii) Any revisions or supplements to the
                        Firstmark Disclosure Package permitted pursuant to
Section 9.1 hereof;       

                             (iv) The interim financial statements
                        required by the second sentence of Section 4.2(e);
and                       

                             (v) An opinion of Firstmark's counsel
                         reasonably acceptable to Old Guard and its counsel;

                        (g) Donald V. Cruickshanks shall have executed the
        employment agreement attached hereto as Exhibit "B";

                 (h) Gerald W. Sklar shall have executed the
        employment agreement attached hereto as Exhibit "C";

                           (i) Old Guard shall have received an opinion from its
         financial advisor that the transaction is fair from a
    financial perspective to Old Guard shareholders;

                           (j) Firstmark and SCAC shall have paid in full to ISC
         or STIC all debts, obligations, liabilities, or other
                  intercompany balances, whether matured or unmatured, and shall
                 provide Old Guard with satisfactory evidence of such payment;

                          (k) Firstmark or SCAC shall have purchased from STIC
               all Champion Broadcasting Corporation common stock owned by
         STIC at the book value of such asset on the financial
accounting records of STIC; and             

                       (l) Firstmark shall satisfy in full any remaining
                  obligation of STIC to H. William Coogan, Jr., pursuant to that
               certain Severance Agreement dated January 1, 1998, or shall
              have purchased and delivered to Mr. Coogan an annuity in a
               face amount sufficient to pay the monthly amounts otherwise
 due Mr. Coogan under the Severance Agreement.

                          (m) As of the Closing Date, STIC shall carry an IBNR
                Reserve equal to the lesser of (i) $400,000 in excess of the
                minimum of the actuarially determined IBNR Reserve range for
             STIC as of December 31, 1998, or (ii) the maximum of such
           range. At Closing Firstmark will provide Old Guard with
          satisfactory evidence of such additional contribution.
                Notwithstanding the foregoing, if the actuarially determined
              IBNR Reserve range for STIC as of December 31, 1998 is not
            known as of the Closing Date, the parties agree that any
                  additions to the IBNR Reserve that would have been required to
               satisfy this condition as of the Closing Date had such IBNR
           Reserve range been known will be made after Closing and
         reflected on the consolidated financial statements of
            Firstmark at and for the period ended December 31, 1998.

                          (n) Old Guard shall have received such documents and
               written assurances which, in the reasonable judgment of Old
          Guard, confirm or establish that the liability of each
                  Firstmark Group Member pursuant to any tax sharing arrangement
                  or agreement shall terminate on the Closing Date to the extent
provided in Section 6.3(d)(3) hereof.       

              3.2. Firstmark's Conditions to Closing. All obligations of
Firstmark to cause SCAC to transfer the ISC Capital Stock to Old Guard in       
exchange for cash are subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:                                               

                         (a) All representations and warranties of Old Guard
                  set forth in Section 5 hereof shall be true and correct in all
material respects as of the Closing Date;   

                       (b) Old Guard shall have complied in all material
        respects with all of the covenants set forth in this
Agreement;                                  

                 (c) There shall be no pending litigation or
             administrative proceeding for the purpose of enjoining or
            otherwise delaying or preventing any of the transactions
contemplated by this Agreement;             

                        (d) Old Guard shall have delivered to Firstmark or
                 SCAC, as applicable, the following documents or performed the
               following acts (but only to the extent necessary to acquire
 title to the ISC Capital Stock held by SCAC):

                              (i) A wire transfer of $6,750,000; and

                              (ii) An opinion of Old Guard's counsel
                           (which may be in-house counsel) reasonably acceptable
   to Firstmark and its counsel;

                           (e) The shareholders of Firstmark shall have approved
               all matters relating to this Agreement and the transactions
                  contemplated hereby in accordance with Firstmark's articles of
               incorporation and bylaws and applicable provisions of Maine
law;                                        

                           (f) Holders of more than fifteen percent (15%) of the
                 issued and outstanding shares of Firstmark common stock shall
                  not have exercised their right to dissent from the transaction
                contemplated hereby in accordance with the provisions of the
Maine Business Corporation Act.             

                         (g) The transactions contemplated by this Agreement
                  shall have been approved by Virginia's Bureau of Insurance and
                 any other regulatory authority whose approval is required for
             consummation of the transactions contemplated hereby; and

                         (h) Firstmark shall have received a written opinion
                 dated the date the Proxy Materials are mailed to shareholders
          of Firstmark and in form and substance satisfactory to
            Firstmark from Ferris Baker Watts, Firstmark's financial
            advisor, to the effect that the terms of the transaction
                  contemplated hereby are fair from a financial point of view to
             Firstmark shareholders. Firstmark represents and warrants
             that, as of the date the Board of Directors approved this
                  Agreement, it has received a written opinion from Ferris Baker
           Watts that the terms of the transaction are fair from a
      financial point of view to Firstmark shareholders.

4. Firstmark Representations and Warranties.

                   4.1. Representations and Warranties Regarding
Firstmark and SCAC. Firstmark and SCAC hereby represent and warrant to Old Guard
as follows:                                                                     

                    (a) Firstmark is a corporation duly organized,
                 validly existing and in good standing under the laws of Maine
                 and has full power and authority to own its properties and to
          carry on its business as now conducted in its state of
               incorporation and is in good standing and duly qualified to
            conduct business as a foreign corporation in each of the
               jurisdictions in which the conduct of its business requires
such qualification.                         

                       (b) SCAC is a corporation duly organized, validly
                existing and in good standing under the laws of Virginia and
             has full power and authority to own its properties and to
          carry on its business as now conducted in its state of
               incorporation and is in good standing and duly qualified to
            conduct business as a foreign corporation in each of the
               jurisdictions in which the conduct of its business requires
such qualification.                         

              (c) Except for approval by the Firstmark
                shareholders, all corporate actions of Firstmark required to
                  authorize the execution of this Agreement and the transactions
                contemplated hereby have been duly authorized and adopted in
                 accordance with applicable law and its bylaws and articles of
                incorporation and are appropriately reflected in Firstmark's
                  minute books. Upon the approval of the Firstmark shareholders,
            this Agreement shall be a valid obligation of Firstmark,
                  legally binding upon it and enforceable in accordance with its
                 terms, except as enforceability may be limited by bankruptcy,
                  insolvency or other laws of general application relating to or
   affecting the enforcement of creditors' rights.

                       (d) There is no claim, action, suit or proceeding
             (including, without limitation, current investigations by
             governmental agencies known to Firstmark) pending against
                  Firstmark or SCAC nor, to the knowledge of Firstmark and SCAC,
          is there any basis for any such claim, action, suit or
              proceeding seeking to enjoin the execution and delivery of
      this Agreement or consummation of the transactions
contemplated hereby.                        

                          (e) Firstmark owns one hundred percent (100%) of the
            issued and outstanding shares of SCAC. SCAC has good and
               marketable title to the ISC Capital Stock and will transfer
                  the ISC Capital Stock to Old Guard free and clear of all liens
and encumbrances.                           

             4.2. Representations and Warranties of Firstmark and SCAC
Regarding ISC, ISC Subsidiaries and STIC Subsidiaries. Firstmark and SCAC hereby
represent and warrant to Old Guard as follows:                                  

                      (a) ISC is a corporation duly organized, validly
                  existing and in good standing under the laws of Virginia. STIC
                 is a corporation duly organized, validly existing and in good
            standing under the laws of the Commonwealth of Virginia.

                         (b) Except as set forth in the Firstmark Disclosure
                  Package, ISC and STIC each has full power and authority to own
                its properties and to carry on its business as now conducted
               in its state of incorporation. ISC and STIC each is in good
                standing and duly qualified to conduct business as a foreign
        corporation in each STIC Licensed State or any other
              jurisdiction in which the conduct of its business requires
            such qualification. Included in the Firstmark Disclosure
                  Package is a copy of each of the most recent Annual Reports on
                  Form 9, or similar form, as filed by STIC with the appropriate
                  authorities of each STIC Licensed State. STIC has timely filed
             all quarterly and annual reports required by the Virginia
            Bureau of Insurance and such reports are accurate in all
material respects.                          

                        (c) Prior to the Closing, all corporate actions of
             ISC and STIC required in connection with the transactions
                  contemplated hereby will have been duly authorized and adopted
                 in accordance with applicable law and their respective bylaws
and articles of incorporation.              

                           (d) ISC's authorized capitalization consists of 5,000
               shares of common stock, par value $5.00 per share, of which
              499 shares of the common stock are issued, outstanding and
      validly owned by SCAC free and clear of all liens,
             encumbrances and claims. STIC's authorized capitalization
               consists of 250,000 shares of common stock, par value $4.76
                  per share, of which 210,320 shares are issued and outstanding,
         and validly owned by ISC free and clear of all liens,
                 encumbrances and claims and 10,000 shares of preferred stock,
           par value $1.00 per share, of which none are issued and
                outstanding. The Firstmark Disclosure Package lists for each
            ISC Subsidiary its authorized capital stock, outstanding
            capital stock, and par value of such outstanding capital
                stock. All of the outstanding shares of capital stock of the
                  ISC Subsidiaries are directly or indirectly owned of record or
                beneficially by ISC, are duly authorized, validly issued and
                 fully paid and ISC is and at the Closing shall be, the record
                 and beneficial owner of such shares, free and clear of liens,
           encumbrances or claims except as noted in the Firstmark
            Disclosure Package. Except as set forth in the Firstmark
                Disclosure Package, no rights, options, warrants, conversion
               rights, preemptive rights or agreements for the purchase or
              acquisition from, or sale or issuance by, ISC, STIC or any
                  other ISC Subsidiary of any shares of their respective capital
               stock are outstanding and no authorizations therefor are in
          effect nor are there any proxies outstanding or voting
             agreements with respect to any shares of their respective
capital stock.                              

                                   (e)(i) Included in the Firstmark Disclosure
                       Package are true and correct copies of (A) STIC's
                           audited consolidated balance sheet as of December 31,
                 1997, and the related statements of income,
                         shareholders' equity, cash flows and notes for, the
                      twelve months ended December 31, 1997, (B) ISC's
                           internally prepared year end and interim consolidated
                     balance sheets as of, and related statements of
                         income and shareholders' equity for, the year ended
                          December 31, 1997 and the six (6) month period ended
                           June 30, 1998, (C) STIC's internally prepared interim
                    consolidated balance sheets as of, and related
                        statements of income and shareholders' equity for,
                           the six (6) month period ended June 30, 1998, and (D)
                        as to the fiscal year-end information of STIC, the
                           report prepared in connection therewith by Deloitte &
                        Touche. At Closing, Firstmark shall deliver to Old
                     Guard for inclusion in the Firstmark Disclosure
               Package copies of ISC's interim unaudited
                          consolidated balance sheets as of the end of a month
                     no more than 60 days prior to the Closing Date,
                 together with related statements of income,
                 shareholders' equity and cash flows for the
                       then-current fiscal year through the date of such
                        balance sheets (the balance sheets, statements and
                    related notes now or hereafter included in the
                  Firstmark Disclosure Package are referred to
                      collectively as the "Financial Statements"). The
Financial Statements:     

                                             (A) do or will fairly present ISC's
                                    and STIC's respective consolidated financial
                                 position and results of operations of ISC
                                   and STIC as of the respective dates and for
                            the respective periods stated above;

                                           (B) have been or will be prepared
                                    pursuant to and in accordance with Generally
                           Accepted Accounting Principles; and

                                 (ii) Except as set forth in the Firstmark
                       Disclosure Package and except for any obligation,
                        absolute, contingent or otherwise, relating to the
                         issuance of or coverage under any insurance policy,
                      ISC and STIC had, and will have had, no material
                      uninsured liability or obligation required to be
                        reflected or disclosed in the Financial Statements
                          under Generally Accepted Accounting Principles which
                        is not so reflected or disclosed, and ISC and STIC
                    had and will have had no material liability or
                  obligation as of the respective dates of the
                          Financial Statements not required to be reflected or
            disclosed in the Financial Statements.

                                (iii) STIC has heretofore maintained and
                      currently maintains a Claims Reserve and an IBNR
                          Reserve that, in each case, is in an amount which is
                         equal to or greater than the minimum Claims Reserve
                      and IBNR Reserve required to be maintained under
                           Generally Accepted Accounting Principles. Such Claims
                           Reserve and IBNR Reserve are equal to or greater than
                     the minimum amount of reserves suggested by the
                         latest independent actuarial study of STIC's Claims
                           Reserve and IBNR Reserve and neither is discounted to
      reflect the time value of money.

                                   (f)(i) Except as set forth in the Firstmark
                       Disclosure Package, (A) Firstmark, SCAC, ISC, and
                       each ISC Subsidiary and each STIC Subsidiary have
                          filed or caused to be filed all Tax Returns that are
                          or were required to be filed by it, them, or any one
                    or more of them (taking into account any valid
                           extensions of time for filing) pursuant to applicable
                           Legal Requirements, and (B) Firstmark, SCAC, ISC, and
                       each ISC Subsidiary and each STIC Subsidiary have
                         paid, or made provision in the Financial Statements
                        for the payment of, all Taxes that have become due
                          and payable by it, them, or any one or more of them,
                        or by any consolidated, combined, unitary or other
                     group, or any member of any such group of which
                        Firstmark, SCAC, ISC, each ISC Subsidiary and each
                          STIC Subsidiary, or any one or more of them is or at
                          any time has been a member, regardless of whether or
                          not shown on such Tax Returns, except such Taxes, if
                    any, as are listed in the Firstmark Disclosure
Package.                  

                                (ii) All Tax Returns filed by Firstmark,
                  SCAC, ISC, each ISC Subsidiary and each STIC
                         Subsidiary (A) were prepared in good faith and in a
                  manner reasonably believed, by management of
                           Firstmark, SCAC, ISC and STIC, respectively, to be in
                 accordance with tenable interpretations and
                       applications of the Code and any other applicable
                           Legal Requirement and (B) are true and correct in all
material respects.        

                                    (iii) For the period beginning June 8, 1996,
                      through the Closing Date, for federal income Tax
                         purposes, Firstmark, SCAC, ISC, each ISC Subsidiary
                   and each STIC Subsidiary that is taxable as a
                       corporation (A) have been and will continue to be
                          members of an "affiliated group" and a "consolidated
                      group" as defined in Section 1504(a) and Section
                          1.1502-1(h) of the Code and the treasury regulations
                        promulgated thereunder, respectively, and (B) have
                           joined or been included in the filing of consolidated
                     returns in which Firstmark is the parent of the
                           affiliated group. For the period beginning August 11,
                           1992, and ending June 7, 1996, for federal income Tax
                      purposes, ISC, each ISC Subsidiary and each STIC
                       Subsidiary that is taxable as a corporation were,
                          together with Southern Capital Corporation, the sole
                          members of an "affiliated group" and a "consolidated
               group," as defined hereinabove, and filed
                       consolidated income Tax Returns in which Southern
                          Capital Corporation was the parent of the affiliated
                        group. The Firstmark Disclosure Package identifies
                       each state and local jurisdiction or Governmental
                        Body in or with which ISC, each ISC Subsidiary and
                          each STIC Subsidiary, or any one or more of them, is
                    required to file any Tax Returns, whether on a
                       consolidated, combined, unitary or other group or
                         separate return basis, and the Tax Returns that are
                     required to be filed in each such jurisdiction.

                                 (iv) Except as set forth in the Firstmark
                         Disclosure Package, during the five (5) year period
                           immediately preceding the date hereof, there has been
                         no audit commenced or conducted by any Governmental
                    Body against Firstmark, SCAC, Southern Capital
                      Corporation, ISC, any ISC Subsidiary or any STIC
 Subsidiary regarding Taxes.

                             (v) No Tax is required to be withheld
                           pursuant to ss.1445 of the Code as a result of any of
                   the transfers contemplated by this Agreement.

                                    (vi) ISC, STIC, each ISC Subsidiary and each
                      STIC Subsidiary have withheld from its and their
                           employees, policyholders and vendors (and timely paid
                      to the appropriate Governmental Body) proper and
                          accurate amounts for all periods through the Closing
                 Date in compliance with all Tax withholding
                 provisions of applicable Legal Requirements
                    (including, without limitation, income, social
                           security and employment Tax withholding for all types
of compensation).         

                                   (vii) None of ISC, STIC, any ISC Subsidiary
                          or any STIC Subsidiary has waived or extended, or is
                       bound by or subject to any waiver or extension by
                          Firstmark, Southern Capital Corporation or any other
                          Person, of any statute of limitation that applies to
                       any Tax or any Tax Return for any taxable period.

                                  (viii) No payment or series or combination
                       of payments or transactions to or with any Person
               that arise out of any of the transactions
                       contemplated by this Agreement will constitute an
                      "excess parachute payment" as defined in Section
                         280G(b) of the Code, and none of ISC, STIC, any ISC
                      Subsidiary or any STIC Subsidiary will incur any
                      liability or obligation to withhold any Tax with
                     respect to any "excess parachute payment" under
        Sections 3401 or 4999 of the Code.

                                 (ix) Except as set forth in the Firstmark
                       Disclosure Package, none of the limited liability
                         companies in which ISC or any ISC Subsidiary or any
                      STIC Subsidiary has an interest is classified or
                           taxable as a corporation by any Governmental Body for
income tax purposes.      

                         (g) Except as set forth in the Firstmark Disclosure
                 Package, (i) since December 31, 1997, there have not been any
             material adverse changes in the aggregate, in the general
                affairs, condition, business, properties, prospects, assets,
                 financial position, results of operations or net worth of ISC
                 or the ISC Subsidiaries; (ii) the business affairs of ISC and
               the ISC Subsidiaries have since such date been conducted in
                  the usual and ordinary course of business, and (iii) after the
                  close of business on such date, no transaction has taken place
                 or material contract entered into other than in the usual and
        ordinary course of business as heretofore conducted.

                         (h) Except as set forth in the Firstmark Disclosure
             Package, and since December 31, 1997, there has not been:

                                (i) any destruction, physical damage to,
                        physical loss of, or casualty with respect to, the
                        title plant of STIC which materially and adversely
                           affects the financial condition or operations of ISC,
or any ISC Subsidiary;    

                          (ii) any actions by ISC or any ISC
                 Subsidiary pursuant to which ISC or any ISC
                          Subsidiary has issued, sold or otherwise disposed of
                          or agreed to issue, sell or otherwise dispose of any
                           capital stock or any other security of ISC or any ISC
                           Subsidiary, or agreed to grant any option, warrant or
                     other right to subscribe for or to purchase any
                       capital stock or other security of ISC or any ISC
Subsidiary;               

                                  (iii) any payment of, or agreement to pay,
                      any dividends on or any distribution (whether in
                    cash, property or stock) in respect of the ISC
                 Capital Stock nor any issuance, purchase or
                       redemption of, or agreement to issue, purchase or
           redeem, any of the ISC Capital Stock;

                                   (iv) any loans by ISC or any ISC Subsidiary
                           to any person or entity or any guaranty by ISC or any
                        ISC Subsidiary of any loan to any person or entity
                     other than loans to, or guarantees in favor of,
                          agents of ISC or any ISC Subsidiary made in a manner
     consistent with past practices;

                                    (v) any issuance of evidence of indebtedness
                         by ISC or any ISC Subsidiary except in the ordinary
course of business;       

                                    (vi) the incurrence or payment by ISC or any
                    ISC Subsidiary of any obligations for borrowed
                           monies, absolute, contingent or otherwise, or failure
                      to pay or discharge any material liabilities for
                        borrowed monies when due; except the incurrence or
                       payment of liabilities for borrowed monies in the
                    ordinary course of their respective businesses
                           consistent with past practice and which have not been
                     and will not be adverse to the general affairs,
                      business, prospects or the properties, financial
                         position, results of operations or net worth of ISC
or any ISC Subsidiary;    

                                   (vii) any material intercompany transfer by
                   ISC or any ISC Subsidiary of liquid assets to
                        Firstmark, SCAC or another Affiliate of Firstmark;

                                    (viii) any capital expenditures in excess of
$25,000;                  

                               (ix) any agreements by ISC, STIC or any
                  other ISC Subsidiary to do any of the things
                    described in the preceding clauses (i) through
(viii).                   

                         (i) Except as set forth in the Firstmark Disclosure
                 Package, neither ISC nor any ISC Subsidiary is a party to any
           written or oral (i) contract with any labor union, (ii)
                employment or consulting contract or other material contract
                  for services (except legal services and other services related
                 to claims administration and all litigation) where ISC or any
                  ISC subsidiary is obligated to make payments after the Closing
                  Date, (iii) loan agreement or instrument relating to any debt,
              (iv) letter of credit or guarantee, except in the ordinary
               course of business, (v) contract or agreement which has not
             expired restricting the ability of any person from freely
            engaging in any business or competing in the world, (vi)
               contract not made in the ordinary course of business, (vii)
                power of attorney except in the ordinary course of business,
           (viii) operating real property leases, (ix) partnership
     agreements or (x) other material contract, except
           insubstantial contracts which can be terminated without
               liability upon the giving of no more than thirty (30) days'
          notice. Each contract or other agreement listed in the
                Firstmark Disclosure Package is in full force and effect and
         is valid and enforceable by ISC or the applicable ISC
                Subsidiary in accordance with its terms. Neither ISC nor any
         ISC Subsidiary is in default in the observance or the
                  performance of any material term or obligation to be performed
               by it under any contract listed in the Firstmark Disclosure
Package.                                    

                         (j) All of the material transactions of ISC and the
                  ISC Subsidiaries with unrelated Persons have been conducted on
               terms generally available in transactions between unrelated
Persons in freely negotiated transactions.  

                         (k) Except as set forth in the Firstmark Disclosure
         Package, as of the date hereof, (i) no investigation,
               governmental or administrative proceeding or other material
            litigation of any kind or nature to which ISC or any ISC
                Subsidiary may be a party is pending or threatened, and (ii)
           to the knowledge of senior management of ISC or any ISC
            Subsidiary, no material claim which has not ripened into
              litigation or other proceeding has been made or threatened
            against any of them which would materially and adversely
                 affect ISC or any ISC Subsidiary, or the ability of Firstmark
               or SCAC to consummate the transactions contemplated by this
Agreement.                                  

                       (l) The Firstmark Disclosure Package sets forth a
                 list and description of (i) all outstanding loans made by ISC
              or any ISC Subsidiary to any of their Affiliates, (ii) all
               outstanding loans made by any of their Affiliates to ISC or
               any ISC Subsidiary, and (iii) all other transactions either
             between or among ISC, any ISC Subsidiary and any of their
Affiliates.                                 

                       (m) STIC holds all required Licenses for the STIC
                  Licensed States. All the Licenses are in full force and effect
                and no suspension, revocation or non-renewal of any thereof,
               and, to the knowledge of Firstmark, no event which (whether
           with notice or lapse of time or both) might result in a
               suspension, revocation or failure to renew any thereof, has
            occurred except as set forth in the Firstmark Disclosure
Package.                                    

                        (n) STIC has posted all deposits of securities and
               cash required by regulatory authorities having jurisdiction
                  over STIC. The Firstmark Disclosure Package contains a list of
such deposits and the locations thereof.    

                          (o) The Firstmark Disclosure Package contains a true
                 and complete list of all reinsurance policies and agreements,
                and all excess loss and fidelity insurance policies, of STIC
           and shows the limits, the reinsurer or insurer, and any
             pending material claims against such reinsurer or insurer
                  thereunder. Such policies and agreements are in full force and
                 effect, subject to no breach by STIC which shall give rise to
                  a right in the reinsurer or insurer to deny any claim by STIC.
                  STIC has not committed any, nor has it received notice of any,
              breach under reinsurance agreements and policies or excess
                loss and fidelity insurance policies listed in the Firstmark
                Disclosure Package. STIC has notified each such reinsurer or
            insurer of all claims, known to STIC as to which STIC is
              required to provide notice in accordance with the terms of
           such reinsurance and insurance policies and agreements.

                          (p) Set forth in the Firstmark Disclosure Package is
             a list of claims which have been made but not resolved or
                 otherwise settled as of June 30, 1998 in which (i) the amount
                claimed exceeds $250,000 (including legal fees) or (ii) STIC
                reasonably believes will result in payments (including legal
fees) in excess of $10,000.                 

                      4.3. Dates of and Survival of Firstmark and SCAC
Representations and Warranties.                                                 

                           (a) Except as to any representation that specifically
                  relates to an earlier date, the representations and warranties
                set forth in this Agreement shall be deemed to be made again
               by Firstmark and SCAC as of the Closing Date. The Firstmark
               Disclosure Package shall be deemed to be delivered again by
             Firstmark at the Closing, subject to Firstmark's right to
           supplement or amend the Firstmark Disclosure Package as
               provided in Section 9.1(b) at such date; provided, however,
                that no supplement of the Firstmark Disclosure Package shall
             cure any failure of the condition to closing contained in
          paragraph 3.1(a) which would have resulted absent such
supplement.                                 

                    (b) The representations and warranties made by
                Firstmark and SCAC shall survive for a period of twelve (12)
                 months after the Closing Date except that the representations
                 and warranties made by Firstmark (i) in paragraph 4.2(e), and
                  (ii) concerning Tax matters shall survive until the expiration
of the applicable statute of limitations.   

5. Old Guard Representations and Warranties.

                        5.1. Old Guard Representations and Warranties. Old
Guard hereby represents and warrants as follows:                                

                    (a) Old Guard is a corporation duly organized,
               validly existing and in good standing under the laws of the
                 Commonwealth of Pennsylvania and each Old Guard Subsidiary is
                 a corporation duly organized and validly existing and in good
           standing under the laws of the applicable jurisdiction.

                          (b) Old Guard and each Old Guard Subsidiary has full
                 power and authority to own its properties and to carry on its
                  business as now conducted in its state of incorporation and is
                in good standing and duly qualified to conduct business as a
                 foreign corporation in each of the jurisdictions in which the
        conduct of its business requires such qualification.

                        (c) All corporate actions of Old Guard required to
                  authorize the execution of this Agreement and the transactions
                contemplated hereby have been duly authorized and adopted in
                 accordance with applicable law and its bylaws and articles of
                incorporation and are appropriately reflected in Old Guard's
minute books.                               

                      (d) This Agreement constitutes valid and binding
               obligations of Old Guard enforceable in accordance with its
          terms, except as such enforceability may be limited by
               bankruptcy, insolvency or other laws of general application
               relating to or affecting the rights of creditors generally.

                           (e) Old Guard's authorized capitalization consists of
                 15,000,000 shares of Common Stock, no par value per share, of
           which 3,968,785 shares are issued and outstanding as of
                September 30, 1998, and 5,000,000 shares of Preferred Stock,
                  of which no shares are issued and outstanding. All outstanding
                shares of Old Guard's common stock are validly issued, fully
                  paid and nonassessable. There are no options, calls, warrants,
               or any other securities, rights or common share equivalents
                outstanding, which are convertible into, exercisable for, or
                 relate to, any shares of capital stock of Old Guard except as
                  described in Old Guard's proxy statement dated April 15, 1998.

                     (f) Old Guard has filed with the Securities and
              Exchange Commission its annual report on Form 10-K for the
                 fiscal year ended December 31, 1997, and its quarterly report
                  on Form 10-Q for the nine months ended September 30, 1998. All
                financial statements of Old Guard contained in such filings,
              or so delivered to Firstmark, shall be deemed delivered to
              Firstmark as part of the Old Guard Disclosure Package, and
                 shall be referred to collectively as the "Old Guard Financial
    Statements." The Old Guard Financial Statements:

                                 (i) do or will fairly present Old Guard's
                         financial position and results of operations of Old
                    Guard and the Old Guard Subsidiaries as of the
                     respective dates and for the respective periods
stated above; and         

                                   (ii) have been or will be prepared pursuant
                  to and in accordance with Generally Accepted
Accounting Principles.    

                Except as set forth in the Old Guard Disclosure Package, and
                 except for any obligation, absolute, contingent or otherwise,
               relating to the issuance of or coverage under any insurance
                  policy, Old Guard and the Old Guard Subsidiaries had, and will
         have had, as of the respective dates of the Old Guard
            Financial Statements, no material uninsured liability or
               obligation required to be reflected or disclosed in the Old
                  Guard Financial Statements under Generally Accepted Accounting
              Principles which is not so reflected or disclosed, and Old
           Guard had no material liability or obligation as of the
              respective dates of the Old Guard Financial Statements not
          required to be reflected or disclosed in the Old Guard
Financial Statements.                       

             5.2. Dates of and Survival of Old Guard
Representations and Warranties. The representations and warranties made by Old  
Guard set forth in this Agreement shall be deemed to be made again by Old Guard 
as of the Closing Date and shall survive the Closing for a period of twelve (12)
months or, in the case of representations and warranties concerning Tax matters,
until the expiration of the applicable statute of limitations. The Old Guard    
Disclosure Package shall be deemed to be delivered again by Old Guard at the    
Closing Date.                                                                   

6. Joint Covenants.                         

                    6.1. Confidentiality. Between the date of this
Agreement and the Closing Date, Firstmark and Old Guard each will maintain in   
confidence, and cause its directors, officers, employees, agents and advisors to
maintain in confidence, and not use to the detriment of the other party, any    
written, oral or other information obtained in confidence from the other party  
or a third party in connection with this Agreement or the transactions          
contemplated hereby unless such information is already known to such party or   
others not bound by a duty of confidentiality or unless such information becomes
publicly available through no fault of such party, unless use of such           
information is necessary or appropriate in making any filing or obtaining any   
consent or approval required for the consummation of the transactions           
contemplated hereby or unless the furnishing or use of such information is      
required by or necessary or appropriate in connection with legal proceedings. If
the contemplated transaction is not consummated, each party will return or      
destroy as much of such written information as may be reasonably requested.     

                        6.2. Proxy Statement and Shareholder Approval. The
Board of Directors of Firstmark will duly call and will hold a meeting of its   
shareholders as soon as practicable for the purpose of approving the Agreement  
and the transactions contemplated thereby (the "Firstmark Shareholders Meeting")
and shall prepare and file with the Securities Exchange Commission and mail to  
its shareholders appropriate proxy materials (the "Proxy Materials"), including 
a notice of a special meeting of shareholders of Firstmark, a proxy statement   
and a form of proxy that comply as to form, in all material respects with the   
Exchange Act and the rules and regulations promulgated thereunder. In connection
with the Proxy Materials, Firstmark shall recommend to its shareholders that    
this Agreement and all of the transactions contemplated hereby be approved by   
such shareholders unless Firstmark shall have received a written opinion of     
counsel that to do so would constitute a breach of the fiduciary duty of the    
Board of Directors of Firstmark.                                                

6.3. Tax Matters.         

                          (a) For all Pre-Closing Tax Periods, Firstmark shall
                  include ISC, each ISC Subsidiary and each STIC Subsidiary that
               is taxable as a corporation (hereinafter, collectively, the
            "Firstmark Group Members") as an includable corporation,
               component or other group member, as the case may be, in its
         federal consolidated income Tax Returns and any state
                 consolidated, combined or unitary Tax Returns with respect to
               which Firstmark is required to include any such one or more
         Firstmark Group Members as an includible corporation,
              component, unitary or other group member (hereinafter, all
                such Tax Returns are referred to as "Consolidated Returns").
                  Firstmark shall (i) prepare all such Consolidated Returns in a
                 manner that is consistent with the Tax accounting methods and
                principles that Firstmark or any Firstmark Group Member used
                in its immediately preceding Tax year to report its or their
                income or other Tax items to each relevant taxing authority,
                 except as otherwise expressly provided in this Agreement, and
               (ii) allocate or apportion the liability for any Tax on any
                such Consolidated Return in a manner that is consistent with
                 any Tax sharing arrangement or agreement used or in effect by
                  the relevant includible corporation or group members in its or
                 their immediately preceding taxable year, except as otherwise
expressly provided in this Agreement.       

                      (b) To facilitate the filing of the Consolidated
                Returns for the period ending on the Closing Date, Old Guard
                 shall cause each Firstmark Group Member that is includable in
                  any such Consolidated Return to prepare a pro-forma Tax Return
             for each applicable Tax and each taxable period for which
                 Firstmark will file a Consolidated Return, no less than sixty
               (60) days prior to the due date (including any extended due
              date) for the relevant Tax Return, provided: (i) Firstmark
                 provides Old Guard with at least one hundred and twenty (120)
                  days written notice of the due date of the Consolidated Return
                  for which Old Guard is required to prepare a pro-forma return;
                  and (ii) Firstmark complies with any reasonable request by Old
         Guard and provides Old Guard with such information or
                  documentation that is within Firstmark's knowledge, possession
               or control that Old Guard may reasonably request to prepare
             any such pro-forma return. Notwithstanding the foregoing,
                Firstmark agrees to apply for an extension of time to file a
         Consolidated Return if Old Guard is unable to provide
              Firstmark with any pro-forma return requested by Firstmark
               within the time allowed by the next preceding sentence. Old
                  Guard shall prepare all such pro-forma Tax Returns in a manner
          that is consistent with the Tax accounting methods and
                principles that Firstmark or any Firstmark Group Member used
                in its immediately preceding Tax year to report its or their
               income or other Tax items to the relevant taxing authority,
             except as otherwise expressly provided in this Agreement.

                         (c) Old Guard shall prepare or cause to be prepared
           and shall file on or before the due date (including any
      extended due date) all Tax Returns (other than the
                 Consolidated Returns) of the Firstmark Group Members that are
               due (taking into account extensions of due dates) after the
                  Closing. Firstmark shall provide Old Guard with written notice
                  either (i) in the Firstmark Disclosure Package, or (ii) at the
           Closing, of all Tax Returns due after Closing for which
            Firstmark has obtained an extension of the due date, the
              extended due date and the amount of Tax paid in connection
with any extension of any due date.         

                        (d) At or prior to the filing of each Consolidated
                  Return, Firstmark shall remit to the relevant taxing authority
                 the full amount of all Taxes, interest and penalties, if any,
              that are due and payable with respect to such Consolidated
               Return. Firstmark shall allocate or apportion the liability
                 for such Tax (exclusive of interest and penalties, if any) in
                a manner that is consistent with any Tax sharing arrangement
             or agreement used or in effect by the relevant includible
             corporations or group members in its or their immediately
                  preceding taxable year, except as otherwise expressly provided
         herein. With respect to a Consolidated Return for any
Pre-Closing Tax Period:                     

                                  (1) Old Guard shall be liable to reimburse
                          Firstmark for the amount of Tax (but not interest or
                         penalties) properly allocated or apportioned to any
                           Firstmark Group Member, but only to the extent of the
following amounts:        

                                       (A) For any Tax relating to a
                                  taxable period that ends on or before June
                              30, 1998, the lesser of (i) the amount
                                   accrued for such Tax for such period on the
                                   June 30, 1998 Financial Statements included
                           in the Firstmark Disclosure Package
                                  (hereinafter, the "June 30, 1998 Financial
                                 Statements"), and (ii) the amount of such
                         Tax that is properly allocated or
                                   apportioned to the relevant Firstmark Group
Member. 

                                       (B) For any Tax relating to a
                                  taxable period that begins before and ends
                               after June 30, 1998, the sum of (i) the
                                 lesser of (x) the amount accrued for such
                          Tax on the June 30, 1998 Financial
                                  Statements for that portion of such period
                               that ends on June 30, 1998, and (y) the
                           amount of such Tax that is properly
                                   allocated or apportioned to that portion of
                                 such period pursuant to the allocation or
                                apportionment methods and procedures set
                                    forth in the last sentence of Section 9.3(b)
                              hereof, applied as if (I) such taxable
                                    period is an "Interim Period," and (II) June
                               30, 1998 is substituted for the Closing
                                   Date, plus (ii) the amount of such Tax that
                                   is properly allocated or apportioned to the
                               conduct of the business of the relevant
                              Firstmark Group Member in the ordinary
                                  course, as provided in Section 7.1 hereof,
                                   for the period that begins on July 1, 1998,
                                 plus (iii) the amount of such Tax that is
                                   properly attributable to any "extraordinary
                                  transactions" that are attributable to the
                                   relevant Firstmark Group Members during the
                                   taxable period but occur after the Closing.
                        For this purpose, "extraordinary
                            transaction" shall mean any relevant
                               transaction that is not in the ordinary
                                 course of business, but shall not include
                                 (y) the sale of Champion on or before the
                                   Closing Date, or (z) any Section 338(h)(10)
 Election.

                                       (C) For any Tax relating to a
                                   taxable period that begins on or after July
                                   1, 1998, all of such Tax other than (y) any
                                   portion of such Tax that is attributable to
                                  an "extraordinary transaction" that occurs
                               before the Closing, and (z) any Section
                                    338(h)(10) Taxes. For this purpose, the term
                                  "extraordinary transaction" shall have the
                                meaning provided in Section 6.3(d)(1)(B)
                                  above, except that such term shall include
                             the sale of Champion on or before the
     Closing Date.

                                   (2) Firstmark shall be liable for all Taxes
                      with respect to all Consolidated Returns for any
                        Pre-Closing Tax Period that are not payable by Old
                         Guard pursuant to Section 6.3(d)(1)(A), (B) and (C)
                     above, including, without limitation, all Taxes
                           attributable to the sale of Champion on or before the
                        Closing Date and all Section 338(h)(10) Taxes, and
                    all interest and penalties with respect to any
Consolidated Returns.     

                                   (3) Notwithstanding the other provisions of
                           this Agreement, (a) Old Guard's obligation under this
                        Section 6.3(d) to pay (or reimburse Firstmark for)
                           andy Tax pursuant to Section 6.3(d)(1)(A), (B) or (C)
                      above, including (without limitation) any amount
                        accrued on the June 30, 1998 Financial Statements,
                           shall be satisfied and discharged to the extent that,
                          at any time after June 30, 1998, Old Guard, ISC, any
                       ISC Subsidiary or any STIC Subsidiary either pays
                         such Tax or reimburses Firstmark or SCAC, or any of
                       its or their Affiliates (other than any Firstmark
                           Group Member), for such Tax, and (b) the liability of
                     each Firstmark Group Member pursuant to any tax
                         sharing arrangement or agreement shall terminate on
                  the Closing Date to the extent that any such
                        arrangement or agreement would otherwise result in
                           Old Guard, or any of its Affiliates, or any Firstmark
                         Group Member, incurring any loss, liability, damage
                    or expense, including, without limitation, any
                         liability for any Tax, interest or penalty thereon,
                          for any taxable period, except as expressly provided
                 in Section 6.3(d)(1)(A), (B) and (C) above.

                         (e) At or prior to the filing of each Tax Return to
                 be prepared and filed by Old Guard pursuant to Section 6.3(c)
                 above, Old Guard shall remit to the relevant taxing authority
                 the full amount of all Taxes, interest and penalties, if any,
                  that are due and payable with respect to each such Tax Return.
            With respect to any Tax Return other than a Consolidated
Return for any Pre-Closing Tax Period.      

                                  (1) Firstmark shall be liable to reimburse
                         Old Guard for the amount of Tax (but, except as set
                          forth below, not interest or penalties), but only to
          the extent of the following amounts:

                                       (A) For any Tax relating to a
                                  taxable period that ends on June 30, 1998,
                                 the excess of (i) the amount of such Tax,
                                    over (ii) the amount accrued for such Tax on
                                   the June 30, 1998 Financial Statements. For
                                 any Tax relating to a taxable period that
                                  ends before June 30, 1998, all of such Tax
                                 and all associated interest and penalties
                                    thereon, other than any portion of such Tax,
                                 interest and penalties that is accrued on
                               the June 30, 1998 Financial Statements.

                                       (B) For any Tax relating to a
                                  taxable period that begins before and ends
                               after June 30, 1998, the sum of (i) the
                                    excess of (x) the amount of such Tax that is
                                    properly apportioned to that portion of such
                                   period that ends on June 30, 1998, pursuant
                                  to the allocation or apportionment methods
                            and procedures set forth in the last
                                  sentence of Section 9.3(b) hereof, applied
                                    as if (y) such taxable period is an "Interim
                         Period," and (z) June 30, 1998 is
                                  substituted for the Closing Date, over (y)
                                   the amount accrued for such Tax on the June
                              30, 1998 Financial Statements for that
                                    portion of such period that ends on June 30,
                                   1998, plus (ii) the amount of such Tax that
                       is properly attributable to any
                                  "extraordinary transaction" that occurs on
                            or after July 1, 1998 and before the
                                  Closing, plus (iii) all Section 338(h)(10)
                         Taxes. For this purpose, the term
                                  "extraordinary transaction" shall have the
                                meaning provided in Section 6.3(d)(1)(B)
                                  above, except that such term shall include
                             the sale of Champion on or before the
     Closing Date.

                                       (C) For any Tax relating to a
                                   taxable period that begins on or after July
                               1, 1998, the amount of such Tax that is
                                   properly attributable to any "extraordinary
                                    transaction" that occurs on or after July 1,
                                    1998 and before the Closing, and all Section
                                    338(h)(10) Taxes. For this purpose, the term
                                  "extraordinary transaction" shall have the
                                meaning provided in Section 6.3(d)(1)(B)
                                  above, except that such term shall include
                             the sale of Champion on or before the
     Closing Date.

                                   (2) Old Guard shall be liable for all Taxes
                 with respect to all Tax Returns (other than
                          Consolidated Returns) for any Pre-Closing Tax Period
                           that are not payable by Firstmark pursuant to Section
                          6.3(e)(1)(A), (B) and (C) above, excluding all Taxes
                           attributable to the sale of Champion on or before the
                          Closing Date and all Section 338(h)(10) Taxes, which
                   shall be the sole liability and obligation of
Firstmark.                

                                   (3) Notwithstanding the other provisions of
                           this Agreement, (a) Old Guard's obligation under this
                        Section 6.3(e) to pay (or reimburse Firstmark for)
                  any Tax pursuant to Section 6.3(e)(2) above,
                          including (without limitation) any amount accrued on
                      the June 30, 1998 Financial Statements, shall be
                         satisfied and discharged to the extent that, at any
                       time after June 30, 1998, Old Guard, ISC, any ISC
                        Subsidiary or any STIC Subsidiary either pays such
                           Tax or reimburses Firstmark or SCAC, or any of its or
                      their Affiliates (other than any Firstmark Group
                           Member), for such Tax, and (b) Firstmark's obligation
                        under this Section 6.3(e) to pay (or reimburse Old
                          Guard for) any Tax pursuant to Section 6.3(e)(1)(A),
                         (B) or (C) above, shall be satisfied and discharged
                          to the extent that, at any time after June 30, 1998,
                        Firstmark pays an amount in respect of such Tax to
                        (i) Old Guard, ISC, any ISC Subsidiary or any STIC
                          Subsidiary, as appropriate or approved by Old Guard,
            or (ii) the relevant taxing authority.

                           (f) Any Consolidated Tax Return prepared by Firstmark
                pursuant to Section 6.3(a) above for which Firstmark intends
            to seek reimbursement from Old Guard pursuant to Section
         6.3(d) above, or any Tax Return prepared by or at the
               direction of Old Guard pursuant to Section 6.3(c) above for
                which Old Guard intends to seek reimbursement from Firstmark
               pursuant to Section 6.3(e) above, shall be submitted to the
            other party, Firstmark or Old Guard, as the case may be,
                together with a written request setting forth the amount and
          calculation of any reimbursement that is requested, in
                  sufficient time to permit a reasonable review prior to the due
                date (including extensions) of such Tax Return. Old Guard or
                 Firstmark, as the case may be, shall have the right to review
               all work papers and procedures used to prepare any such Tax
                  Return or compute any such reimbursement request. If Old Guard
             or Firstmark, as the case may be, within twenty (20) days
                  after delivery of any such Tax Return notifies the other party
                 in writing that it objects to any items in such Tax Return or
                  reimbursement request and provides a reasonable description of
              the basis for such objection, the parties shall proceed in
                good faith to resolve the dispute and, if they are unable to
             do so within twenty (20) days, the disputed item shall be
                  resolved by the Alternative Accountants in accordance with any
               applicable provisions of this Agreement. Upon resolution of
                  all disputed items, the relevant Tax Returns and reimbursement
                  request shall be adjusted to reflect such resolution and shall
                  be binding upon the parties without further adjustment. If the
                Tax Return with respect to which an adjustment has been made
                 has been filed, the party who filed such Tax Return shall, at
             its own cost and expense, prepare and file an amended Tax
             Return to reflect all such adjustments. The amount of the
                reimbursement requested with respect to any Tax Return shall
             be paid upon the filing of such Tax Return; or, if later,
             within twenty (20) days after the party obligated to make
               reimbursement receives the written request therefor; or, if
                  later, upon the resolution of any disputed item by the parties
                or the Alternative Accountants. The costs, fees and expenses
                of the Alternative Accountants shall be borne equally by Old
Guard and Firstmark.                        

                           (g) Firstmark and Old Guard shall promptly notify the
                  other party in writing upon receipt by Firstmark or Old Guard,
                or by any of their then-current Affiliates, respectively, of
        notice of any pending or threatened Tax audits of or
              assessments against Firstmark or Old Guard, or any of such
                  party's then-current or former Affiliates, as the case may be,
                 for any taxable period with respect to which the other party,
                 or any of its then-current or former Affiliates, may have any
            liability, whether at law or pursuant to this Agreement.
                  Firstmark and Old Guard agree to cooperate, and to cause their
                 respective Affiliates to cooperate, in each case at their own
             expense, in the conduct of any such audit, examination or
               determination by any taxing authority or other Governmental
                  Body, in the preparation and filing of any claim for refund or
                amended return arising out of any such audit, examination or
                 determination, or in any contest of any assessment, notice of
                deficiency or other adjustment or proposed adjustment of any
                  Taxes for any such taxable period. In the event of any dispute
             or disagreement as to any such matters, the parties shall
                 proceed in good faith to resolve the dispute and, if they are
             unable to do so within twenty (20) days of the receipt by
                 either party of written notice from the other of a reasonable
               description of and the basis for such dispute, the disputed
       item or matter shall be resolved by the Alternative
               Accountants in accordance with any applicable provisions of
       this Agreement. The costs, fees and expenses of the
               Alternative Accountants shall be borne equally by Old Guard
and Firstmark.                              

                           (h) Each of Firstmark and Old Guard, upon the request
                of the other party, will, at any time and from time to time,
   upon execution of a mutually acceptable form of
                confidentiality agreement, afford to the other party, or any
               other representatives of the other party, full and complete
               access to such books and records (including all accounting,
                  financial and tax records) as shall be necessary to permit the
               parties hereto to effectuate the provisions of this Section
                  and, in connection therewith, will make available, or cause to
                  be made available, such qualified personnel as the other party
                shall reasonably request to assist in the compilation of the
             information necessary to prepare and file the Tax Returns
                  referred to in this Section 6.3 as well as may be necessary to
                respond to any audit that may be conducted from time to time
              with respect to such Tax Returns or any other relevant Tax
             Returns. Firstmark and Old Guard agree that ISC, each ISC
                  Subsidiary and each STIC Subsidiary shall retain all books and
             records of each such entity as may be material to any Tax
                  matters contemplated by this Agreement, and that Firstmark and
                Old Guard shall each retain such of their books and records,
                and the books and records of their respective Affiliates, as
           may be material to any Tax matters contemplated by this
               Agreement, until the applicable period for assessment under
               applicable law (giving effect to any and all extensions and
                 waivers) has expired, and to abide or cause its Affiliates to
                abide with all record retention agreements entered into with
                  any taxing authority, provided such Affiliate is a party to or
          has in its records a true and correct copy of any such
                agreement. Firstmark and Old Guard may at any time terminate
                 its or their obligations under the next preceding sentence by
                 affording the other party an opportunity, at its own expense,
to copy and retain such books and records.  

                     (i) Firstmark and Old Guard shall make a timely
                 election under ss.338(h)(10) of the Code andss.1.338(h)(10)-1
                 of the Treasury Regulations promulgated pursuant to the Code,
                  and any corresponding elections that may be required under any
               applicable state or local Tax law, for each Firstmark Group
                 Member that is acquired, directly or indirectly, by Old Guard
               at the Closing on the Closing Date. Firstmark and Old Guard
              shall (i) take, and cooperate with each other to take, all
         actions necessary and appropriate (including, without
            limitation, the preparation, completion and timely joint
           filing by Firstmark and Old Guard of Form 8023, and the
                  preparation, completion and timely filing of such other forms,
         returns, elections, schedules and other documents and
  instruments) to effect, perfect and preserve a
                timelyss.338(h)(10) election in accordance withss.338(h)(10)
                of the Code andss.1.338(h)(10)-1 of the Treasury Regulations
                  promulgated pursuant to the Code, and (ii) report the purchase
          and sale of the ISC Capital Stock, consistent with the
                 election pursuant toss.338(h)(10) referred to in this Section
               and shall take no position contrary thereto or inconsistent
                 therewith in any Tax Return, or in any discussion with or any
                proceeding before any taxing authority or other Governmental
Body or otherwise.                          

                         (j) Any Tax refunds received by Firstmark or any of
                  its Affiliates, or by Old Guard or any of its Affiliates, with
                 respect to any taxable period (including, without limitation,
                  any Short, Interim or other period as determined under Section
                 9.3(b) hereof) that ends or is treated as ending on or before
               or as of the Closing Date, shall be apportioned between and
                 paid by Firstmark to Old Guard, or by Old Guard to Firstmark,
                  as the case may be, within thirty (30) days of receipt of such
                Tax Refund by the other party, based upon the portion of the
                 Tax that is refunded that was paid by the parties pursuant to
                 the principles and procedures set forth in this Agreement. In
                 the event of any dispute or disagreement as to the allocation
              or apportionment of any such Tax Refund, the parties shall
                 proceed in good faith to resolve the dispute and, if they are
             unable to do so within twenty (20) days of the receipt by
                 either party of written notice from the other of a reasonable
                description of and basis for such dispute, the disputed item
                 or matter shall be resolved by the Alternative Accountants in
                accordance with any applicable provisions of this Agreement.
               The costs, fees and expenses of the Alternative Accountants
      shall be borne equally by Old Guard and Firstmark.

             7. Covenants of Firstmark, SCAC, ISC and STIC Through the
Closing Date. Firstmark, SCAC, ISC and STIC each jointly covenant and agree that
from the date hereof until the Closing Date or earlier termination of this      
Agreement pursuant to Section 10.2:                                             

                        7.1. Conduct of Business. ISC will, and will cause
each ISC Subsidiary to (a) carry on its business in the usual and ordinary      
course, and (b) use its best efforts to preserve its business organizations     
intact and conserve the goodwill and relationships of its customers and others  
having business relations with it.                                              

                          7.2. No Dividends. No dividend or other distribution
of any nature will be declared, made, set aside or paid on or in respect of any 
of the ISC Capital Stock, nor will ISC directly or indirectly, issue, redeem,   
retire, purchase or otherwise acquire any share of ISC Capital Stock.           

                       7.3. Regulatory Approvals; Delivery of Documents.
Each shall use its best efforts to assist in obtaining those regulatory         
approvals described in Section 3.1(c). On the Closing Date, Firstmark shall     
deliver those documents set forth in Section 3.1(c).                            

                       7.4. Reports. ISC shall, and shall cause each ISC
Subsidiary to duly and timely file all reports or returns required to be filed  
with any governmental agency to which such filings have previously been made in 
the ordinary course of business and promptly pay when due all taxes, assessments
and governmental charges including interest and penalties levied or assessed,   
unless diligently contested in good faith by appropriate proceedings.           

                          7.5. No Solicitation. Firstmark, SCAC, ISC, and STIC
and their agents and representatives shall cease and terminate all efforts to   
offer, sell or solicit offers or respond to offers, to purchase the stock or    
assets of ISC or STIC and any discussions in connection therewith.              
Notwithstanding the foregoing, Firstmark, SCAC, ISC and STIC may respond to an  
unsolicited offer, if they receive a written opinion of counsel that the        
directors of Firstmark, in the exercise of their fiduciary duty, are required to
respond to such offer. In the event that Firstmark, ISC or STIC do respond to   
any such unsolicited offer, they shall immediately notify Old Guard and provide 
Old Guard with a copy of the written opinion of counsel, whereupon Old Guard    
shall have the right to terminate this Agreement. In the event that Firstmark,  
ISC or STIC enter into an agreement with any party other than Old Guard with    
respect to any merger of ISC or STIC, sale of stock of ISC or STIC or sale of   
all or substantially all of the assets of ISC or STIC, then Firstmark, ISC and  
STIC shall be jointly and severally liable to Old Guard in the amount of        
$400,000 and such amount shall be promptly paid to Old Guard within two (2)     
business days of the date of execution of such agreement.                       

                    7.6. Dissenters Rights. In the event that this
Agreement is terminated by Firstmark pursuant to Section 10.2(c)(ii) because of 
failure to satisfy the condition set forth in Section 3.2(f) regarding the      
exercise of dissenters rights, Firstmark shall pay to Old Guard, concurrently   
with such termination, an amount equal to the lesser of (i) 115% of Old Guard's 
identifiable out-of-pocket expenses, or (ii) $100,000.                          

                  8. Covenants of Old Guard. Old Guard covenants and agrees that
(unless the content clearly requires otherwise) from the date hereof until the  
Closing Date or earlier termination of this Agreement pursuant to Section 10.2  
below:                                                                          

                        8.1. Conduct of Business. Old Guard will, and will
cause each Old Guard Subsidiary to (a) carry on its business in the usual and   
ordinary course, and (b) use its best efforts to preserve its business          
organizations intact and conserve the goodwill and relationships of its         
customers and others having business relations with it.                         

                           8.2. Regulatory Approvals; Delivery of Documents. Old
Guard will make application for, and use its best efforts to expeditiously      
obtain, those regulatory approvals set forth in Section 3.1(c), Closing Date,   
Old Guard shall deliver those documents set forth in Section 3.2(c).            

                         8.3. Reports. Old Guard shall, and shall cause each
Old Guard Subsidiary to duly and timely file all reports or returns required to 
be filed with any governmental agency to which such filings have previously been
made in the ordinary course of business and promptly pay when due all taxes,    
assessments and governmental charges including interest and penalties levied or 
assessed, unless diligently contested in good faith by appropriate proceedings. 

                     8.4. Post Closing Contribution. Old Guard shall
contribute $750,000 of additional capital to STIC promptly after Closing. Such  
capital shall be in the form of equity and for the purposes of calculating      
Pre-Tax Net Income or any other reason, there shall be no fee or charge assessed
on or against such additional capital.                                          

                           8.5. Bonus Payments. Old Guard and STIC agree that in
calculating the bonus payable to Donald Cruickshanks and Gerald Sklar for       
calendar year 1998 pursuant to their current employment agreements, STIC shall  
calculate its "after-tax profits" without regard to the requirements of Section 
3.1(m). Instead, such "after-tax profits" shall be determined as if the addition
to the IBNR Reserve for the year ended December 31, 1998 was an amount          
sufficient to make the IBNR Reserve equal to the minimum of the actuarially     
determined IBNR Reserve range as of December 31, 1998.                          

       9. Indemnification; Arbitration; Injunctive Relief.

     9.1. Firstmark Indemnification.

                        (a) Firstmark and SCAC shall indemnify, defend and
            hold harmless Old Guard against and with respect to that
              portion of any claim, liability, obligation, loss, damage,
           assessment, judgment, cost, expense (including, without
                 limitation, reasonable attorney's fees and costs and expenses
              reasonably incurred in investigating, preparing, defending
                 against or prosecuting any litigation or claim, action, suit,
                proceeding or demand), of any kind or character, arising out
                  of or in any manner incident, relating or attributable to (but
          after taking into account any tax benefit to Old Guard
               therefrom but without regard to any benefits resulting from
               the Section 338(h)(10) Election) any material (i) breach of
                 any representation or warranty to the extent specified above,
              (ii) breach of any covenant to the extent specified above,
                  and/or (iii) breach of any agreement of Firstmark contained in
              this Agreement or the Firstmark Disclosure Package, and/or
          (iv) any other claims otherwise directly or indirectly
               relating to this Agreement or the transactions contemplated
               hereby (whether arising under contract, tort or otherwise),
                 subject however, to the following limitations and conditions:

                                (i) Except for losses or claims relating
                         solely to, or arising solely from, any Taxes or Tax
                           Matters described or contemplated in Sections 4.2(f),
                    6.3 or 9.3 hereof, no amount shall be due from
                           Firstmark or SCAC to Old Guard under this Section 9.1
                           or otherwise with respect to any claim, proceeding or
                          other matter to the extent that such claim or claims
                          do not exceed $25,000 in the aggregate. In the event
                         that any such claim or claims exceed $25,000 in the
                       aggregate, Firstmark and SCAC shall be liable for
such excess amount.       

                        (b) Old Guard shall notify Firstmark and SCAC in a
               timely manner and in writing of any matters as to which Old
           Guard is entitled to receive indemnification under this
              Section 9.1, and shall set forth in such notice reasonable
                detail regarding specific facts and circumstances then known
                 by Old Guard that pertain to such matters. To the extent that
                  any such matters may entail litigation with parties other than
                  Firstmark or SCAC, Firstmark and SCAC shall have the right, at
                 its expense, to appoint single counsel to advise Old Guard in
             any contest of a claim with such other parties. Old Guard
          shall have final authority to determine all matters in
                  connection with any such litigation or prospective litigation.
           Old Guard may not act in a manner inconsistent with the
                 written advice of such counsel unless the determination to so
            act by Old Guard is made in good faith and considers the
                 extent to which Old Guard's failure to follow such advice may
                 increase the risk of obtaining, or the liability with respect
           to, an adverse judgment. Notwithstanding the foregoing,
             Firstmark and SCAC may, upon the giving of prompt written
                notice, elect to defend, at its own expense, any matter that
               may entail litigation as described above. Such notice shall
                include an admission of liability by Firstmark and SCAC with
respect to the underlying indemnity claim.  

     9.2. Old Guard Indemnification.

                    (a) Old Guard shall indemnify, defend and hold
                harmless Firstmark and SCAC against and with respect to that
              portion of any claim, liability, obligation, loss, damage,
           assessment, judgment, cost, expense (including, without
                 limitation, reasonable attorney's fees and costs and expenses
              reasonably incurred in investigating, preparing, defending
                 against or prosecuting any litigation or claim, action, suit,
                proceeding or demand), of any kind or character, arising out
                  of or in any manner incident, relating or attributable to (but
                  after taking into account any tax benefit to Firstmark or SCAC
               therefrom but without regard to any benefits resulting from
               the Section 338(h)(10) Election) any material (i) breach of
                any representation or warranty, (ii) breach of any covenant,
                (iii) breach of any agreement of Old Guard contained in this
                 Agreement or the Old Guard Disclosure Package and/or (iv) any
                  other claims otherwise directly or indirectly relating to this
              Agreement or the transactions contemplated hereby (whether
                arising under contract, tort or otherwise), subject however,
             to the following limitations and condition that no amount
               shall be due from Old Guard to Firstmark or SCAC under this
                  Section 9.2 or otherwise with respect to any claim, proceeding
                  or other matter to the extent that such claim or claims do not
               exceed $25,000 in the aggregate. In the event that any such
              claim or claims exceed $25,000 in the aggregate, Old Guard
shall be liable for such excess amount.     

                        (b) Firstmark and SCAC shall notify Old Guard in a
           timely manner and in writing of any matters as to which
             Firstmark and SCAC is entitled to receive indemnification
              under this Section 9.2, and shall set forth in such notice
                reasonable detail regarding specific facts and circumstances
                  then known by Firstmark and SCAC that pertain to such matters.
             To the extent any such matters may entail litigation with
                 parties other than Old Guard, Old Guard shall have the right,
                 at its expense, to appoint single counsel to advise Firstmark
               and SCAC in any contest of a claim with such other parties.
                  Firstmark and SCAC shall have final authority to determine all
                 matters in connection with any such litigation or prospective
          litigation. Firstmark and SCAC may not act in a manner
               inconsistent with the written advice of such counsel unless
                the determination to so act by Firstmark and SCAC is made in
                good faith and considers the extent to which Firstmark's and
                 SCAC's failure to follow such advice may increase the risk of
           obtaining, or the liability with respect to, an adverse
               judgment. Notwithstanding the foregoing, Old Guard may upon
                the giving of prompt written notice, elect to defend, at its
         own expense, any matter that may entail litigation as
              described above. Such notice shall include an admission of
         liability by Old Guard with respect to the underlying
indemnity claim.                            

                       9.3. Tax Indemnification; Apportionment of Taxes.

                    (a)(i) In furtherance and without limiting the
              generality of Section 9.1 hereof, Firstmark and SCAC will,
                  jointly and severally, indemnify, defend and hold harmless Old
                 Guard, ISC, each ISC Subsidiary and each STIC Subsidiary from
              any and all Taxes imposed on Firstmark, SCAC, ISC, any ISC
                Subsidiary or any STIC Subsidiary, or on any other member of
                 any "affiliated group" or "consolidated group" (as defined in
               Section 1504(a) and Section 1.1502-1(h) of the Code and the
                 treasury regulations promulgated thereunder, respectively) of
              which ISC, any ISC Subsidiary or any STIC Subsidiary, were
                  members for any period ending prior to or on the Closing Date,
            in respect of its or their income, business, property or
                 operations or for which Old Guard, ISC, any ISC Subsidiary or
            any STIC Subsidiary, may otherwise be liable (A) for any
                period ending prior to or on the Closing Date, including any
                  Short Period or Interim Period, including, without limitation,
             any Tax arising as a result of any election under Section
              338(h)(10) of the Code (but excluding Taxes to be paid (or
                  reimbursed to Firstmark) by Old Guard, ISC, any ISC Subsidiary
                 or any STIC Subsidiary under Section 6.3 hereof), (B) arising
         out of a breach of the representations and warranties
              contained in Section 4.2(f) hereof, (C) arising out of the
                 breach of any covenant or agreement under Section 6.3 hereof,
               or (D) for any reasonable costs or expenses incurred by Old
               Guard, ISC, any ISC Subsidiary or any STIC Subsidiary, with
          respect to any Taxes for which Old Guard, ISC, any ISC
                  Subsidiary or any STIC Subsidiary, is indemnified by Firstmark
and SCAC pursuant to this Section 9.3(a).   

                  (ii) In furtherance and without limiting the
               generality of Section 9.2 hereof, Old Guard will indemnify,
                defend and hold harmless Firstmark and SCAC from any and all
                  Taxes imposed on Firstmark or SCAC (A) required to be paid (or
               reimbursed to Firstmark or SCAC) by Old Guard, ISC, any ISC
               Subsidiary or any STIC Subsidiary under Section 6.3 hereof,
                  (B) arising out of a breach of any covenant or agreement under
          Section 6.3 hereof, or (C) for any reasonable costs or
              expenses incurred by Firstmark or SCAC with respect to any
               Taxes for which Firstmark is indemnified by Old Guard, ISC,
              any ISC Subsidiary or any STIC Subsidiary pursuant to this
Section 9.3(a).                             

                       (b) In order to appropriately apportion any Taxes
                  relating to any taxable period that includes the Closing Date,
                  the parties hereto will, to the extent permitted by applicable
                  law, elect with the relevant taxing authority to treat for all
                 purposes the Closing Date as the last day of a taxable period
               of ISC, any ISC Subsidiary or any STIC Subsidiary (a "Short
                Period"), and such period shall be treated as a Short Period
           and a period ending prior to or on the Closing Date for
                  purposes of this Agreement. In any case where applicable Legal
                  Requirements do not permit ISC, any ISC Subsidiary or any STIC
              Subsidiary, to treat the Closing Date as the last day of a
                  Short Period, then for purposes of this Agreement, the portion
                  of each Tax that is attributable to the operations of ISC, any
                  ISC Subsidiary or any STIC Subsidiary, for such interim period
                 (the "Interim Period") shall be (i) in the case of a Tax that
               is not based on or related to income, sales gross receipts,
               premiums, wages, capital expenditures or expense, the total
                 amount of such Tax for the period in question multiplied by a
                 fraction, the numerator of which is the number of days in the
             Interim Period, and the denominator of which is the total
                number of days in such period, and (ii) in the case of a Tax
                that is based on or related to income, sales gross receipts,
                  premiums, wages, capital expenditures or expense, the Tax that
           would be due with respect to the Interim Period if such
               Interim Period were a Short Period determined based upon an
                  interim closing of the books of ISC, any ISC Subsidiary or any
STIC Subsidiary, as the case may be.        

         10. Delivery of the Disclosure Packages; Termination.

                10.1. Delivery of the Disclosure Packages.

                           (a) The parties hereto acknowledge and agree that the
             Firstmark Disclosure Package and the Old Guard Disclosure
                Package delivered on the date of execution of this Agreement
            are a part of this Agreement and the representations and
warranties of the parties hereto.           

                        (b) On or before the Closing Date, Firstmark shall
              deliver to Old Guard such supplements or amendments to the
            Firstmark Disclosure Package as are required to make the
                 Firstmark Disclosure Package complete and accurate as of such
date.                                       

10.2. Termination.        

                          (a) This Agreement may be terminated by either party
             by written notice to the other party and the transactions
contemplated hereby abandoned:              

                                (i) if Old Guard has been advised by the
                     Pennsylvania Insurance Department, the Virginia
                   Bureau of Insurance or the Ohio Department of
                        Insurance that an approval required hereunder will
not be granted;           

                               (ii) if any litigation not initiated or
                          instigated by or on behalf of Firstmark, SCAC or Old
                           Guard seeking to enjoin the transactions contemplated
                          by this Agreement is finally determined on appeal in
                    favor of the individual or entity seeking such
injunction; or            

                                   (iii) if the Closing has not occurred on or
before March 31, 1999.    

                          (b) This Agreement may be terminated by Old Guard by
                 written notice to Firstmark and the transactions contemplated
hereby abandoned:                           

                             (i) upon the occurrence of a Material
            Adverse Change with respect to ISC; or

                                   (ii) if the conditions set forth in Section
                      3.1 have not been met or waived by Old Guard; or

                                   (iii) on or before December 31, 1998 if Old
                           Guard, in its reasonable discretion, is not satisfied
                         with the results of the due diligence investigation
      of ISC and the ISC Subsidiaries.

                          (c) This Agreement may be terminated by Firstmark by
                 written notice to Old Guard and the transactions contemplated
               hereby abandoned if (i) the conditions set forth in Section
                  3.2 have not been met or waived by Firstmark, or (ii) prior to
                 the Closing Date, Old Guard shall enter into any agreement or
         letter of intent providing for the direct or indirect
                  acquisition of substantially all of the assets and liabilities
or voting stock of Old Guard.               

                      10.3. Agreement Void. If this Agreement shall be
terminated under Section 10.2 it shall thenceforth be void without any further  
action by the parties hereto, and such termination shall be without liability of
any party or any of its respective shareholders, directors or officers to any   
other party, or its respective shareholders, directors or officers.             

11. Miscellaneous.                          

                         11.1. Brokers. Firstmark represents and warrants to
Old Guard and Old Guard represents and warrants to Firstmark that, except for   
Ferris Baker Watts Incorporated retained by Firstmark, and Legg Mason Wood      
Walker Incorporated retained by Old Guard, the services of a financial advisor, 
broker or finder have not been used in connection with any of the matters       
pertaining to this transaction and that no broker's or finder's fee will become 
payable by reason of the execution of this Agreement or the consummation of the 
transactions contemplated herein. The parties shall pay all amounts due to their
respective financial advisors and shall hold harmless and indemnify the other   
parties from and against any claim for broker's, finder's or financial advisor's
fees, including any cost or expense incurred in connection with the defense of  
any suit claiming such fees, or in any other manner pertaining to claims for    
such fees, which may become payable by reason of the acts or omission of        
Firstmark.                                                                      

                           11.2. Entire Agreement. This Agreement (including the
Exhibits and the Disclosure Packages referred to herein) constitutes the entire 
agreement among the parties pertaining to the subject matter hereof. No         
amendment, supplement, modification, waiver or termination of this Agreement    
shall be implied or be binding (including, without limitation, any alleged      
waiver based on a party's knowledge of any inaccuracy in any representation or  
warranty contained herein) unless in writing and signed by the party against    
which such amendment, supplement, modification, waiver or termination is        
asserted. No waiver of any of the provisions of this Agreement shall be deemed  
or shall constitute a waiver of any other provision hereof (whether or not      
similar), nor shall such waiver constitute a continuing waiver unless otherwise 
expressly therein provided.                                                     

                   11.3. Binding Agreement. All of the terms and
provisions of this Agreement by or for the benefit of the parties shall be      
binding upon and inure to the benefit of their successors, assigns, heirs and   
personal representatives. Except as expressly provided herein nothing herein is 
intended to confer upon any person other than the parties and their successors, 
any rights or remedies under or by reason of this Agreement.                    

                        11.4. Announcements. Firstmark and Old Guard shall
agree with each other as to the time of issuance, form and substance of any     
press release or other public announcement or disclosure related to this        
Agreement and the transactions contemplated hereby; provided that nothing       
contained herein shall prohibit either party, following written notification to 
the other, from making any disclosure which in the opinion of counsel is        
required by law.                                                                

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

                           11.6. Costs. Each party hereto assumes the payment of
its own costs (including any legal and/or accounting fees) resulting from this  
Agreement and the transactions contemplated hereby.                             

                       11.7. Notices. All notices, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have  
been duly given (except as may otherwise be specifically provided herein to the 
contrary) if delivered by hand and receipted for by the party to whom said      
notice or other communication shall have been directed or mailed by certified or
registered mail with postage prepaid:                                           

                       (a) If to Firstmark or SCAC to:

                         Donald V. Cruickshanks, President
             Firstmark Corporation
            901 East Cary Street
  17th Floor
                Richmond, Virginia 23219

       With a copy to:

              R. Brian Ball, Esquire
                           Williams Mullen Christian & Dobbins
                  P.O. Box 1320 (23218-1320)
                         1021 East Cary Street, 16th Floor
                Richmond, Virginia 23219

            (b) If to Old Guard:

                 David E. Hosler, Chairman
             Old Guard Group, Inc.
     P.O. Box 3010
        2929 Lititz Pike
           Lancaster, PA 17604

       With a copy to:

                   Jeffrey P. Waldron, Esquire
           Stevens & Lee, P.C.
                       One Glenhardie Corporate Center
 Suite 202
          1275 Drummers Lane
    P.O. Box 236
                      Wayne, Pennsylvania 19087-0236

                   11.8. Applicable Law. This Agreement shall be
construed and governed under the domestic, internal law (but not the conflicts  
of law) of the Commonwealth of Pennsylvania.                                    

                    11.9. Separable Provisions. Should any clause,
section or part of this Agreement be held or declared to be void or illegal for 
any reason, all other clauses, sections or parts of this Agreement which can be 
effective without such illegal clause, section or part shall, nevertheless,     
remain in full force and effect.                                                

                        IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date and year first above written.                          

                     OLD GUARD GROUP, INC.

                                   By_________________________________
                               David E. Hosler, Chairman

               FIRSTMARK CORP.

                                  By________________________________
                             Donald V. Cruickshanks,
               President

                                        SOUTHERN CAPITAL ACQUISITION CORPORATION

                                  By________________________________
                             Donald V. Cruickshanks,
               President

                              INVESTORS SOUTHERN CORPORATION

                                  By________________________________
                             Donald V. Cruickshanks,
               President

                                    SOUTHERN TITLE INSURANCE CORPORATION

                                  By________________________________
                             Donald V. Cruickshanks,
               President

 Exhibit "A"

District of Columbia
Florida*
Maryland
North Carolina
Ohio
Pennsylvania
Virginia

* STIC is approved for license, but license has not been activated. To activate 
the license, STIC must place a statutory deposit with the State of Florida. 

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                                                                      Appendix B

[Opinion of Ferris, Baker Watts, Incorporated-
TO BE PROVIDED BY AMENDMENT]

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                                                                      Appendix C

Maine Revised Statutes Annotated
Title 13-A. Maine Business Corporation Act
 Chapter 9. Mergers And Consolidations

ss. 909.  Right of dissenting shareholders to payment for shares                

         1. A  shareholder  having a right  under any  provision  of this Act to
dissent to proposed  corporate  action shall, by complying with the procedure in
this section,  be paid the fair value of his shares,  if the corporate action to
which he dissented is effected.  The fair value of shares shall be determined as
of the day  prior to the date on which the vote of the  shareholders,  or of the
directors  in  case a vote of the  shareholders  was not  necessary,  was  taken
approving  the  proposed   corporate  action,   excluding  any  appreciation  or
depreciation of shares in anticipation of such corporate action.                

         2. The  shareholder,  whether or not entitled to vote,  shall file with
the  corporation,  prior to or at the  meeting  of  shareholders  at which  such
proposed  corporate  action is submitted  to a vote, a written  objection to the
proposed  corporate  action.  No such  objection  shall  be  required  from  any
shareholder  to whom the  corporation  failed to send notice of such  meeting in
accordance with this Act.                                                       

         3. If the proposed  corporate  action is approved by the required  vote
and the dissenting  shareholder  did not vote in favor  thereof,  the dissenting
shareholder  shall file a written  demand  for  payment of the fair value of his
shares. Such demand                                                             

                  A.  Shall be filed with the  corporation  or, in the case of a
     merger or consolidation, with the surviving or new corporation; and

                  B. Shall be filed by personally  delivering  it, or by mailing
         it via  certified  or  registered  mail,  to  such  corporation  at its
         registered  office  within  this  State  or to its  principal  place of
         business or to the address given to the Secretary of State  pursuant to
         section  906,  subsection  4,  paragraph B; it shall be so delivered or
         mailed within 15 days after the date on which the vote of  shareholders
         was  taken,  or the  date on  which  notice  of a plan of  merger  of a
         subsidiary into a parent  corporation  without vote of shareholders was
mailed to shareholders of the subsidiary; and                 

           C. Shall specify the shareholder's current address; and

              D. May not be withdrawn without the corporation's consent.

         4. Any shareholder failing either to object as required by subsection 2
or to make demand in the time and manner provided in subsection 3 shall be bound
by the terms of the  proposed  corporate  action.  Any  shareholder  making such
objection  and demand shall  thereafter  be entitled  only to payment as in this
section  provided  and shall not be entitled  to vote or to  exercise  any other
rights of a shareholder.                                                        

         5. The right of a  shareholder  otherwise  entitled  to be paid for the
fair value of his shares shall cease,  and his status as a shareholder  shall be
restored,  without  prejudice to any corporate  proceedings  which may have been
taken during the interim,                                                       

        A. If his demand shall be withdrawn upon consent, or

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                  B. If the  proposed  corporate  action  shall be  abandoned or
         rescinded,  or the  shareholders  shall revoke the  authority to effect
such action, or                                               

                  C. If, in the case of a merger,  on the date of the  filing of
         the articles of merger the  surviving  corporation  is the owner of all
         the outstanding shares of the other corporations, domestic and foreign,
that are parties to the merger, or                            

                  D. If no action for the determination of fair value by a court
    shall have been filed within the time provided in this section, or

                  E. If a court of competent  jurisdiction  shall determine that
         such  shareholder  is not  entitled  to the  relief  provided  by  this
section.                                                      

         6. At the time of filing his  demand for  payment  for his  shares,  or
within 20 days thereafter,  each shareholder  demanding payment shall submit the
certificate or  certificates  representing  his shares to the corporation or its
transfer  agent for  notation  thereon  that such  demand  has been  made;  such
certificates shall promptly be returned after entry thereon of such notation.  A
shareholder's  failure  to do so  shall,  at  the  option  of  the  corporation,
terminate  his  rights  under  this   section,   unless  a  court  of  competent
jurisdiction,  for good and sufficient cause shown,  shall otherwise  direct. If
shares  represented by a certificate on which notation has been so made shall be
transferred, each new certificate issued therefor shall bear a similar notation,
together with the name of the original  dissenting holder of such shares,  and a
transferee  of such  shares  shall  acquire  by such  transfer  no rights in the
corporation other than those which the original dissenting shareholder had after
making demand for payment of the fair value thereof.                            

         7. Within the time prescribed by this subsection, the corporation,  or,
in the case of a merger or  consolidation,  the  surviving  or new  corporation,
domestic or foreign,  shall give written notice to each  dissenting  shareholder
who has made objection and demand as herein  provided that the corporate  action
dissented  to has been  effected,  and shall  make a written  offer to each such
dissenting  shareholder  to pay for such shares at a specified  price  deemed by
such  corporation to be the fair value thereof.  Such offer shall be made at the
same  price per share to all  dissenting  shareholders  of the same  class.  The
notice and offer shall be accompanied by a balance sheet of the  corporation the
shares of which the dissenting  shareholder  holds,  as of the latest  available
date and not more than 12 months prior to the making of such offer, and a profit
and loss  statement of such  corporation  for the 12 months' period ended on the
date of such balance sheet.  The offer shall be made within the later of 10 days
after the  expiration of the period  provided in subsection 3,  paragraph B, for
making  demand,  or 10 days after the  corporate  action is effected;  corporate
action  shall  be  deemed  effected  on a  sale  of  assets  when  the  sale  is
consummated,  and in a merger or  consolidation  when the  articles of merger or
consolidation  are filed or upon which later  effective  date as is specified in
the articles of merger or consolidation as permitted by this Act.               

         8. If  within  20 days  after  the date by  which  the  corporation  is
required,  by the  terms  of  subsection  7, to  make a  written  offer  to each
dissenting  shareholder to pay for his shares,  the fair value of such shares is
agreed upon between any  dissenting  shareholder  and the  corporation,  payment
therefor  shall be made  within 90 days after the date on which  such  corporate
action  was  effected,   upon  surrender  of  the  certificate  or  certificates
representing  such  shares.  Upon  payment  of the agreed  value the  dissenting
shareholder shall cease to have any interest in such shares.                    

         9. If within the additional  20-day period  prescribed by subsection 8,
one or more dissenting  shareholders and the corporation have failed to agree as
to the fair value of the shares:                                                

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                  A. Then the corporation may, or shall, if it receives a demand
         as provided in subparagraph  (1), bring an action in the Superior Court
         in the  county  in  this  State  where  the  registered  office  of the
         corporation  is located  praying  that the fair value of such shares be
         found and determined. If, in the case of a merger or consolidation, the
         surviving  or  new  corporation  is a  foreign  corporation  without  a
         registered  office in this State,  such action  shall be brought in the
         county  where  the  registered  office  of the  participating  domestic
corporation was last located. Such action:                    

                           (1)  Shall  be  brought  by  the  corporation,  if it
                  receives  a  written  demand  for  suit  from  any  dissenting
                  shareholder,  which  demand is made  within 60 days  after the
                  date on which the  corporate  action was  effected;  and if it
                  receives such demand for suit, the corporation shall bring the
                  action within 30 days after receipt of the written demand; or,

                           (2) In the  absence of a demand for suit,  may at the
                  corporation's  election be brought by the  corporation  at any
                  time  from the  expiration  of the  additional  20-day  period
                  prescribed  by  subsection 8 until the  expiration  of 60 days
              after the date on which the corporate action was effected;

                  B. If the corporation fails to institute the action within the
         period  specified  in  paragraph  A,  any  dissenting  shareholder  may
 thereafter bring such an action in the name of the corporation;

                  C. No such action may be brought, either by the corporation or
         by a dissenting shareholder, more than 6 months after the date on which
the corporate action was effected;                            

                  D. In any such action, whether initiated by the corporation or
         by a dissenting  shareholder,  all  dissenting  shareholders,  wherever
         residing,  except those who have agreed with the  corporation  upon the
         price  to be paid  for  their  shares,  shall  be made  parties  to the
         proceeding  as an action  against  their shares quasi in rem. A copy of
         the complaint shall be served on each  dissenting  shareholder who is a
         resident of this State as in other civil  actions,  and shall be served
         by registered or certified  mail,  or by personal  service  without the
         State,  on  each  dissenting  shareholder  who  is a  nonresident.  The
jurisdiction of the court shall be plenary and exclusive;     

                  E.  The  court  shall   determine   whether  each   dissenting
         shareholder, as to whom the corporation requests the court to make such
         determination,  has satisfied the  requirements  of this section and is
         entitled  to  receive  payment  for his  shares;  as to any  dissenting
         shareholder with respect to whom the corporation  makes such a request,
         the  burden  is on the  shareholder  to prove  that he is  entitled  to
         receive payment.  The court shall then proceed to fix the fair value of
         the shares. The court may, if it so elects, appoint one or more persons
         as  appraisers  to receive  evidence  and  recommend  a decision on the
         question  of fair  value.  The  appraisers  shall  have such  power and
         authority as shall be specified in the order of their appointment or an
amendment thereof;                                            

                  F. All shareholders who are parties to the proceeding shall be
         entitled to judgment against the corporation for the amount of the fair
         value of their shares,  except for any shareholder whom the court shall
         have  determined not to be entitled to receive  payment for his shares.
         The  judgment  shall be  payable  only upon and  concurrently  with the
         surrender  to  the  corporation  of  the  certificate  or  certificates
         representing such shares. Upon payment of the judgment,  the dissenting
shareholder shall cease to have any interest in such shares;  

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                  G. The judgment  shall  include an  allowance  for interest at
         such  rate as the court  may find to be fair and  equitable  in all the
         circumstances,  from  the  date on  which  the  vote  was  taken on the
         proposed  corporate  action to the date of payment.  If the court finds
         that the refusal of any  shareholder  to accept the corporate  offer of
         payment for his shares was  arbitrary,  vexatious or not in good faith,
it may in its discretion refuse to allow interest to him;     

                  H. The  costs and  expenses  of any such  proceeding  shall be
         determined by the court and shall be assessed  against the corporation,
         but all or any part of such costs and expenses may be  apportioned  and
         assessed  as the court  may deem  equitable  against  any or all of the
         dissenting  shareholders  who are parties to the proceeding to whom the
         corporation  shall  have  made an offer to pay for the  shares,  if the
         court  shall  find that the action of such  shareholders  in failing to
         accept such offer was arbitrary or vexatious or not in good faith. Such
         expenses  shall  include  reasonable  compensation  for and  reasonable
         expenses of the appraisers,  but shall exclude the fees and expenses of
         counsel  for any party  and  shall  exclude  the fees and  expenses  of
         experts  employed by any party,  unless the court otherwise  orders for
         good cause.  If the fair value of the shares as  determined  materially
         exceeds the amount which the corporation offered to pay therefor, or if
         no offer  was  made,  the  court  in its  discretion  may  award to any
         shareholder  who is a party to the proceeding such sum as the court may
         determine  to be  reasonable  compensation  to any  expert  or  experts
         employed  by  the  shareholder  in  the  proceeding,  and  may,  in its
         discretion, award to any shareholder all or part of his attorney's fees
and expenses; and                                             

                  I. At all times  during the  pendency of any such  proceeding,
         the court may make any and all orders which may be necessary to protect
         the corporation or the dissenting shareholders,  or which are otherwise
         just and  equitable.  Such  orders  may  include,  without  limitation,
orders:                                                       

                           (1) Requiring the  corporation to pay into court,  or
                  post security for, the amount of the judgment or its estimated
           amount, either before final judgment or pending appeal;

                           (2)   Requiring   the  deposit   with  the  court  of
                  certificates   representing  shares  held  by  the  dissenting
shareholders;                               

                           (3)   Imposing  a  lien  on  the   property   of  the
                  corporation to secure the payment of the judgment,  which lien
                  may be given priority over liens and  incumbrances  contracted
                  after the vote authorizing the corporate action from which the
shareholders dissent;                       

                           (4) Staying the action pending the  determination  of
                  any   similar   action   pending  in  another   court   having
jurisdiction.                               

         10. Shares acquired by a corporation  pursuant to payment of the agreed
value  therefor  or to  payment of the  judgment  entered  therefor,  as in this
section provided, may be held and disposed of by such corporation as in the case
of other treasury shares, except that, in the case of a merger or consolidation,
they may be held and  disposed  of as the plan of  merger or  consolidation  may
otherwise provide.                                                              

         11. The objection  required by subsection 2 and the demand  required by
subsection  3 may,  in the case of a  shareholder  who is a minor  or  otherwise
legally incapacitated,  be made either by such shareholder,  notwithstanding his

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legal  incapacity,  or by his guardian,  or by any person acting for him as next
friend.  Such  shareholder  shall be bound by the time  limitations set forth in
this section, notwithstanding his legal incapacity.                             

         12.  Appeals  shall lie from  judgments in actions  brought  under this
section as in other civil actions in which equitable relief is sought.          

         13. No action by a shareholder  in the right of the  corporation  shall
abate or be  barred  by the fact that the  shareholder  has  filed a demand  for
payment of the fair value of his shares pursuant to this section.               

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 Firstmark Corp.
 Proxy Solicited on Behalf of the Board of Directors

         The   undersigned   hereby   appoints   Donald  V.   Cruickshanks   and
____________________,  jointly and severally, as proxies, with full power to act
alone, and with full power of substitution,  to represent the undersigned and to
vote, as  designated  below and upon any and all other matters that may properly
be brought before such meeting,  all shares of Common Stock that the undersigned
would be entitled to vote at the Annual Meeting of the Shareholders of Firstmark
Corp.,  a Maine  corporation  (the  "Company"),  to be held  at the  offices  of
Southern Title Insurance  Corporation,  One James Center,  901 East Cary Street,
17th Floor, Richmond,  Virginia, on Wednesday,  February 17, 1999, commencing at
9:00 a.m., local time, or any adjournments thereof, for the following purposes: 

                                                        [Enlarge/Download Table]

1. To elect as directors the four persons listed as nominees below.                               
                                                                                                   
   [    ]  FOR nominees listed below                    [    ]  WITHHOLD AUTHORITY to             
           (except as written on the line below)                vote for all nominees listed below

                Donald V. Cruickshanks
               George H. Morison
                Steven P. Settlage

                           (INSTRUCTION:  To withhold  authority to vote for any
                  individual  nominee listed above, write that nominee's name on
the space provided below.)                  

                  --------------------------------------------------------------

                  2. To approve the Stock  Purchase  Agreement  by and among the
                  Company, Southern Capital Acquisition Corporation,  a Virginia
                  corporation  ("SCAC"),   Investors  Southern  Corporation,   a
                  Virginia  corporation  ("ISC"),  and Southern Title  Insurance
                  Corporation,  a  Virginia  insurance  company,  and Old  Guard
                  Group, Inc., a Pennsylvania  corporation ("Old Guard"),  dated
                  as of  December  2, 1998  (the  "Stock  Purchase  Agreement"),
                  pursuant to which the Company and SCAC will sell to Old Guard,
                  and Old Guard will buy from the Company and SCAC, all of ISC's
                  outstanding  capital  stock in exchange  for cash,  all on the
                  terms  and   conditions   set  forth  in  the  Stock  Purchase
                  Agreement.  The Stock Purchase  Agreement is enclosed with the
accompanying Proxy Statement as Appendix A. 

                 [    ]  FOR      [    ]  AGAINST      [    ]  ABSTAIN

                  3. In their  discretion,  the proxies are  authorized  to vote
                  upon any other  business  that may  properly  come  before the
meeting, or any adjournment thereof.        

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         THIS  PROXY,  WHEN  PROPERLY  EXECUTED,  WILL BE  VOTED  IN THE  MANNER
DIRECTED HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.                         

--------------------------------         ---------------------------------------
Printed Name                                    Signature     

                                         ---------------------------------------
                                           Signature

                     Dated:   ___/___/99

                                         (If signing as Attorney, Administrator,
                                         Executor,  Guardian or Trustee,  please
                          add your title as such.)

 PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY

Dates Referenced Herein   and   Documents Incorporated by Reference

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