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. 1)

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

[X]       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:
                  ..............................................................


                                 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
January 28, 1999
    


                                 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 22, 1999, 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
   
January 28, 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.





                                 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 January 28, 1999.
    


                              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.

   
    

                           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



                                      -2-


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.


                                      -3-


                                TABLE OF CONTENTS
   


                                                                                 Page
                                                                                 ----
                                                                              
Available Information...............................................................2
Forward-Looking Statements..........................................................2
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.................9
     Committees of the Board of Directors...........................................9
     Director Compensation.........................................................10
     Executive Compensation........................................................10
     Stock Options.................................................................10
     Employment Agreements.........................................................10
     Transactions with Management..................................................11

               PROPOSAL TWO: APPROVAL OF STOCK PURCHASE AGREEMENT

The Transaction....................................................................12
     Description of the Transaction................................................12
     Old Guard.....................................................................12
     Background to the Transaction.................................................13
     Reasons for the Transaction...................................................15
     Effect of the Transaction on the Company's Shareholders.......................17
     Comparative Per Share Data....................................................17
     Opinion of the Company's Financial Advisor....................................18
     Interests of Certain Persons in the Transaction...............................20
     Regulatory Approvals..........................................................21
     Certain Federal Income Tax Consequences.......................................22
     Accounting Treatment..........................................................22
     Rights of Dissenting Shareholders.............................................22
                                                                  
The Stock Purchase Agreement.......................................................26
     Acquisition and Purchase Price................................................26
     Closing Date..................................................................26
     Representations and Warranties................................................26
     Certain Covenants of the Parties..............................................27
     Conditions to Closing.........................................................27
     Amendment, Waiver and Termination.............................................28
     Indemnification...............................................................29
                                                           
Firstmark Corp.....................................................................30
     General.......................................................................30
     Legal Proceedings.............................................................30
                                                           


                                      -4-


     Management's Discussion and Analysis of Financial Condition and 
       Results of Operations.......................................................31
     Market for Common Equity and Related Shareholder Matters......................33
                                                                        
Pro Forma Financial Information (Unaudited)........................................35
     Pro Forma Balance Sheet.......................................................36
     Pro Forma Statements of Income................................................37
                                                                        
Independent Public Accountants.....................................................39
                                                                        
Proposals for 1999 Annual Meeting..................................................39
                                                                        
Other Matters......................................................................39

                                                                      
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
   
Appendix D:       Interim  Financial  Statements for the period ended  September
                  30, 1998
    

                                      -5-

                                  VOTING RIGHTS

   
         The Board of  Directors  has fixed the close of business on January 22,
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
5,319,876 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 January 28, 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.


                                      -6-

                                  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,  54, has been a director  since  November 1998. 
         Mr.  Morison has served as  President  and Chief  Operating  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



                                      -7-


         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.

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.



                                      -8-


Security Ownership of Management and Certain Beneficial Owners
   
         The  following  table  sets forth  certain  information  regarding  the
beneficial  ownership  of Common Stock as of January 22, 1999 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)
c/o Davenport & Company LLC
P.O. Box 85678
Richmond, Virginia  23285
    
   
H. William Coogan, Jr.                          1,001,389                18.9%
1251 Avenue of the Americas, 51st Floor
New York, New York  10020
    
- ----------
(1) Ms. Coogan is sole trustee of The H. William Coogan Irrevocable Trust.

Committees of the Board of Directors
   
         There  were four  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 currently  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.
    



                                      -9-


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 for the last three  fiscal years in all
capacities in which he served the Company and its subsidiaries.
    
   

                           Summary Compensation Table



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

Name and                                                                                            Other Annual
Principal Position                           Year             Salary ($)          Bonus ($)         Compensation
- ------------------                           ----             ----------          ---------         ------------
                                                                                          
Donald V. Cruickshanks, President             1998             140,000             61,637                (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.  Mr.  Cruickshanks  also serves as  President  and Chief  Executive
       Officer of STIC.
    
(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.

         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
officer  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



                                      -10-


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.



                                      -11-


                                  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 


                                      -12-


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 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
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  


                                      -13-


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.



                                      -14-


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.
   
         In  addition,  on  March  1,  1999,  $485,000  of  the  Company's  9.0%
convertible notes (the  "Convertible  Notes") will become due. While the Company
currently  has an available  line of credit in an amount of up to $500,000,  the
Company has  borrowed  from time to time  against  this line of credit,  and the
available  balance  thereunder  is not likely to be  sufficient  to satisfy  the
payments  that will be required  to be made to the  holders of such  Convertible
Notes.  In addition,  even if the available  balance were  sufficient to satisfy
such payments, the Company would have to obtain written approval from its lender
prior to using any  amounts  to satisfy  term  debt,  which  would  include  the
Convertible  Notes.  There is currently no expectation that the payment terms of
the Convertible Notes can be restructured  prior to the required  payments.  See
"Firstmark Corp. - Management's  Discussion and Analysis of Financial  Condition
and Results of 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  and other costs
estimated to total $565,000),  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 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



                                      -15-


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.

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.  Any delays in obtaining
         such approvals could prevent the timely consummation of the Transaction
         and  result  in  additional   expenditures  by  the  Company.  See  "--
         Regulatory Approvals."
    
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.


                                      -16-


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.

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  contained in the  Company's
Annual  Report on Form 10-KSB for the fiscal year ended  December  31, 1997 (the
"Annual  Report"),  which was filed with the  Commission on April 20, 1998,  and
attached to this Proxy  Statement  as Appendix  D, and the  unaudited  Pro Forma
Financial Information,  including the notes thereto, appearing elsewhere in this
Proxy Statement.  See "Pro Forma Financial  Information  (Unaudited)." A copy of
the  Annual  Report,  including  financial  statements,  is being  mailed to the
Company's  shareholders  with this Proxy  Statement.  The financial  information
contained in the Annual  Report is  incorporated  by  reference  into this Proxy
Statement.
    



                                                              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)."


                                      -17-


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 January 28, 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.
    

         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


                                      -18-


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.

         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.


                                      -19-


         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 September 2, 1997.
FBW will receive a fee of  approximately  $215,000,  which is  conditioned  upon
consummation  of the  Transaction  and is  partly  based on the  achievement  of
certain earn-out  assumptions.  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.
    

         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


                                      -20-


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.

         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 an
agreement  dated  January 2, 1998,  (the  "Coogan  Agreement").  Pursuant to the
Coogan  Agreement,  Mr. Coogan agreed to terminate his employment  contract with
STIC as of December  31, 1997 and forego a lump sum payment of $270,000  payable
upon such  termination in return for STIC's agreement to pay Mr. Coogan $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 Coogan Agreement or provide security for
the payment of the monthly benefits otherwise due to Mr. Coogan under the Coogan
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 14, 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.  Approval by the Bureau was obtained on January 26, 1999.
    




                                      -21-


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
"Internal  Revenue  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 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 Internal Revenue 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 no tax liability  will be incurred  under the Section  338(h)(10)
election after offsetting net operating losses incurred to date.
    
   
         The  discussion  set forth above as to the material  federal income tax
consequences  of the  Transaction  is based upon the  provisions of the Internal
Revenue 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 AND WILL BIND THE SHAREHOLDER TO THE TERMS OF THE TRANSACTION.
    


                                      -22-


         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."

         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


                                      -23-


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").

         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  Kennebec  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


                                      -24-


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  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.


                                      -25-


                          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 in 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
absence  of any  material  adverse  change  thereto  or  other



                                      -26-


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,  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



                                      -27-


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) 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  the  Coogan
Agreement  (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.



                                      -28-


         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.



                                      -29-


   
                                 FIRSTMARK CORP.
    
   
General

         The Company was  incorporated  in Maine in January 1982.  Through STIC,
the Company is principally  engaged in the business of issuing title  insurance.
The Company also 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 and makes control  investments  in  situations  where the
Company's management actually operates the business.  Currently, the Company has
numerous  minority  interest  investments  and one control  investment  in title
insurance.  Until January 24, 1997, the Company,  through  former  subsidiaries,
also actively traded public stocks and bonds and provided  financial  consulting
services to a select number of individuals and institutions.
    
   
         A complete  discussion  of the  Company's  business  and other  related
information  is contained in the Company's  Annual Report on Form 10-KSB for the
fiscal year ended  December  31, 1997.  A copy of the Annual  Report,  including
financial  statements,  is being mailed to the Company's  shareholders with this
Proxy  Statement.  The business and other related  information  contained in the
Annual Report is incorporated by reference into this Proxy Statement.
    
   
Legal Proceedings

         The Company is involved in litigation from time to time in the ordinary
course of business.  Except as noted below, as of December 31, 1998, the Company
was not involved in any litigation outside the ordinary course of business.
    
   
         Lake Anna Litigation.  On August 7, 1996, Lake Anna  Development,  L.C.
("Lake  Anna") filed a Motion for Judgment  against STIC in the Circuit Court of
Louisa County in the  Commonwealth of Virginia.  The Motion for Judgment alleged
that STIC breached a contractual  obligation under a title insurance policy that
contained affirmative  mechanics' lien coverage when STIC denied liability under
the exclusions of the title  insurance  policy.  STIC issued the title insurance
policy at issue to the lender,  a federal  savings bank, in connection  with the
development  of certain real estate.  Lake Anna alleged that it had succeeded to
the position of the lender.  The Motion for Judgment sought relief in the amount
of $1,342,374.38 plus interest from May 6, 1996.
    
   
         On May 22, 1998, a jury  returned a verdict in favor of STIC. On August
5, 1998, following several post-verdict motions by Lake Anna, the court issued a
Final Order entering  judgment on the verdict in favor of STIC.  Lake Anna noted
its appeal  and,  on  November  5, 1998,  filed a Petition  for Appeal  with the
Virginia  Supreme  Court,  which raises the same issues that were raised by Lake
Anna in its post-verdict  motions.  STIC  subsequently  filed a response stating
that  there was no error,  and  counsel  for STIC has  advised  that it is their
opinion that the trial court verdict should be affirmed.
    
   
         Investigation by the Securities and Exchange Commission. As the Company
has  previously  disclosed  in its filings  with the SEC,  the SEC is  currently
investigating  possible  violations of the federal  securities laws by Firstmark
Investment Corp. ("FIC"),  Firstmark Capital Corp. ("FCC") and the Company.  The
private  investigation  focuses on events that have occurred  from, in or before
January  1994 to the  present.  The  Company  transferred  FIC and FCC to Ivy L.
Gilbert,  a former  director,  officer and employee of the  Company,  in January
1997.
    


                                      -30-


   
         The   Company   believes   that  any  events  at  issue  in  the  SEC's
investigation  relate  to the  Company's  prior  management,  all of  whom  have
resigned from all of their positions with the Company. Current management of the
Company does not have specific knowledge of the events at issue and is uncertain
as  to  the  matters  under   investigation  by  the  Commission.   The  private
investigation  remains  in its  initial  stages of  discovery,  and the  Company
continues to cooperate fully with the Commission.
    
   
         The Company's  current  management has also been advised by counsel for
the Company's prior management that the Company may be in the future the subject
of civil litigation claims that have been threatened by certain  individuals who
are or may have been shareholders of the Company or customers of FIC, FCC or the
Company.  The Company  believes that any basis for such actions would arise from
the conduct of prior management,  but it has insufficient  information to assess
whether any such  claims,  if  asserted,  would have any merit.  The Company has
engaged counsel to make an assessment of these  threatened  claims,  but has not
received  the  results  of any  such  assessment  as of the  date of this  Proxy
Statement.  The  Company  will  vigorously  defend any such  claims  that may be
asserted against it.
    
   
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

         The following  discussion  provides certain information about the major
components of the results of operations and financial  condition,  liquidity and
capital resources of the Company. This discussion and analysis should be read in
conjunction with the Company's Interim Financial Statements and Notes to Interim
Financial Statements,  which are attached to this Proxy Statement as Appendix D.
Discussion on  information  relating to the fiscal years ended December 31, 1997
and December 31, 1996 is set forth in the Annual Report.
    
   
         Results of Operations -- Nine Months ended  September 30, 1998 compared
to Nine Months  ended  September  30, 1997.  Total  revenues for the nine months
ended September 30, 1998 increased to approximately $10,105,000,  an increase of
approximately  $1,570,000  or 18%  compared to total  revenues of  approximately
$8,534,000 in the comparable  nine-month  period of the prior year. The increase
is  primarily  attributable  to  increased  title  insurance  revenues  due to a
favorable  interest  rate  environment  and  expansion  in the  Company's  title
insurance operations. Investment gains amounted to approximately $29,000 for the
nine months ended  September  30, 1998  compared to net gains of $361,000 in the
prior year  period.  The net gains in the prior year period were  primarily  the
result of a gain (approximately  $479,000) recognized on the receipt and sale of
shares of Intercel,  Inc.  stock,  which was  partially  offset by losses on the
sales of  certain  investments,  principally  small  cap  stocks.  Interest  and
dividends  revenue  decreased  approximately  $63,000 to  $244,000  for the nine
months  ended  September  30, 1998 as compared  to $307,000  for the  comparable
period of the prior year.  The  decrease is  primarily  the result of a one-time
dividend of approximately $94,000 received in the prior year period.
    
   
         Operating expenses and general and administrative expenses increased by
approximately  $1,036,000  during the current  nine-month period compared to the
comparable  period of the prior year.  This  increase is primarily the result of
(i) higher  personnel  costs related to increasing  volumes and expansion of the
title insurance operations,  (ii) an increase in the provision for policy claims
primarily  attributable  to legal  expenses  relating to a STIC  lawsuit,  which
received a favorable jury verdict in May 1998, and (iii) legal expenses relating
to a Company lawsuit,  which was resolved in June 1998 through mediation with an
immaterial financial impact on the Company, and a private  investigation brought
by the Commission. See "- Legal Proceedings."
    
   
         Results of Operations -- Three Months ended September 30, 1998 compared
to Three Months ended  September 30, 1997.  Total  revenues for the three months
ended September 30, 1998 increased to



                                      -31-


approximately  $3,933,000, an increase of approximately $674,000 or 21% compared
to total revenues of approximately  $3,259,000 in the comparable  quarter of the
prior year. The increase is primarily  attributable to increased title insurance
revenues  due to a favorable  interest  rate  environment  and  expansion in the
Company's title insurance operations. Investment gains amounted to approximately
$5,000 for the quarter  ended  September 30, 1998 compared to a gain of $113,000
in the prior year quarter.  The gain in the prior year quarter was primarily the
result  of a gain  recognized  on the sale of shares of  Intercel,  Inc.  stock.
Interest and dividends revenue increased approximately $1,000 to $86,000 for the
quarter  ended  September  30, 1998 as  compared  to $85,000 for the  comparable
quarter of the prior year.
    
   
         Operating expenses and general and administrative expenses increased by
approximately  $662,000  during the current  quarter  compared to the comparable
quarter of the prior year.  This  increase is primarily the result of (i) higher
personnel  costs  related  to  increasing  volumes  and  expansion  of the title
insurance  operations,  (ii) an increase in the  provision for policy claims and
(iii) legal expenses  relating to a Company lawsuit,  which was resolved in June
1998 through mediation with an immaterial financial impact on the Company, and a
private investigation brought by the SEC.
    
   
         Liquidity  and  Capital   Resources.   The  Company's   cash  and  cash
equivalents were  approximately  $3,022,000 at September 30, 1998 as compared to
$2,293,000 at December 31, 1997.  However a significant  portion of the cash and
cash equivalents  (approximately $2,029,000 at September 30, 1998 and $1,707,000
at December 31, 1997) was held by a subsidiary,  STIC, and is subject to certain
regulatory requirements as to use.
    
   
         During  the first  three  quarters  of 1998,  the  Company  was able to
satisfy its obligations through cash on hand, sales of marketable securities and
other assets and payments received on loans receivable.  The Company's available
and  expected  sources of cash were  sufficient  for the  Company to satisfy its
obligations as they came due. Additionally, the Company has an available line of
credit of $500,000, for which no borrowings were outstanding as of September 30,
1998.
    
   
         On March 1, 1999,  $485,000 of the  Convertible  Notes will become due.
Since September 30, 1998, the Company has borrowed from time to time against its
line of  credit,  and the  available  balance  thereunder  is not  likely  to be
sufficient  to satisfy  the  payments  that will be  required  to be made to the
holders of such Convertible  Notes. In addition,  even if the available  balance
were  sufficient  to satisfy  such  payments,  the Company  would have to obtain
written  approval  from its lender  prior to using any  amounts to satisfy  term
debt,  which  would  include  the  Convertible  Notes.  There  is  currently  no
expectation that the payment terms of the Convertible  Notes can be restructured
prior to the required payments.
    
   
         Year 2000 Issues. Year 2000 issues relate primarily to the inability of
certain  computerized  devices  (hardware,  software and  equipment)  to process
year-dates  properly  after 1999.  Many  existing  computer  programs  have been
written  using only two digits to define an  applicable  year  rather  than four
digits.  Accordingly,  on January  1, 2000,  many  date-sensitive  programs  and
devices  may  recognize a date using the two digits "00" as the year 1900 rather
than the year 2000.  This  situation  could result in  inaccurate  processing of
data, erroneous results or other system failures.
    
   
         The Company  continues to address the Year 2000 issues  relating to its
operations  with the intent that it (i) identify  areas of  potential  exposure,
both internal and external to its organization,  (ii) assess the risks and costs
associated with  eliminating or reducing that exposure,  (iii) develop a plan to
take  necessary  actions  before the year 2000 and (iv)  consider the need for a
contingency plan to handle the most reasonably likely worst case scenarios.
    



                                      -32-


   
         To date, the Company has primarily  focused on the  identification  and
assessment  of its Year 2000  issues.  The  Company  has  completed  an  initial
assessment of its accounting and operational  software and discussed the payroll
and human resources  software with its third party service provider.  Management
believes,  based on discussions  with software  vendors and initial tests of the
accounting and operational  software,  that such software is currently Year 2000
compliant and that the Company's  risks in these areas are minimal.  The payroll
and human resources  software used by the Company's third party service provider
is not currently Year 2000 compliant. However, management has been told that the
next version of that software to be released (currently scheduled for the end of
1998)  will be Year 2000  compliant.  Once the new  version of the  software  is
available,  the Company plans to perform its own tests and  evaluation to assess
any potential problems.
    
   
         Costs  associated with remediation of Year 2000 issues are not expected
to be material to the  Company's  financial  position,  results of operations or
cash flows. To date,  such costs have totaled less than $5,000,  and the Company
expects that future  costs will not exceed  $15,000.  These costs would  include
primarily minimal additional data processing consulting costs,  purchases of new
personal  computers  to replace  computers  that  cannot be  modified  to handle
date-sensitive  data correctly and potentially the costs to purchase upgrades to
certain accounting software programs.
    
   
         No  contingency  plan has been  developed  to date since the  potential
impact of the Year 2000 issues facing the Company is currently  considered to be
minimal. However,  management will continue to assess the need for a contingency
plan if  additional  risks are  identified  in the further  testing of existing,
updated or new hardware and  software or if it becomes  aware of other  concerns
not presently contemplated in the evaluation of the Company's ability to be Year
2000 compliant.
    
   
Market for Common Equity and Related Shareholder Matters

         The shares of Common Stock are currently  listed on the Nasdaq SmallCap
Market under the symbol of "FIRM." Effective  February 1998, the Nasdaq SmallCap
Market's  continued  listing  requirements  require,  among others things,  that
shares  listed on the Nasdaq  SmallCap  Market  maintain a minimum  bid price of
$1.00 per share.  The shares of Common Stock did not  maintain  this minimum bid
price  standard on a consistent  basis in 1998 and, on September  29, 1998,  the
Nasdaq  SmallCap  Market  notified  the Company  that the shares of Common Stock
would  be  subject  to  delisting  proceedings  if the  Company  was  unable  to
demonstrate  compliance  with this  standard.  On December 30, 1998, the Company
requested a hearing to stay a delisting.  In the event that the shares of Common
Stock are delisted,  trading of the shares of Common Stock would be conducted in
the over-the-counter trading markets, such as the OTC Bulletin Board.
    
   
         The Company is currently  awaiting  notification of a hearing date and,
since January 13, 1999, the shares of Common Stock have been in compliance  with
the minimum bid price standard.  The Company expects to take all steps necessary
to  maintain  the listing of the shares of Common  Stock on the Nasdaq  SmallCap
Market.
    


                                      -33-


   
         The following table sets forth the high and low bid information for the
shares of Common Stock on the Nasdaq SmallCap Market for the quarters indicated.

                                                               Bid Information
                                                             High ($)    Low ($)
                                                             --------    -------
Fiscal Year Ended December 31, 1997
         1st quarter..................................         3.50        2.00
         2nd quarter..................................         2.25        1.38
         3rd quarter..................................         1.81        1.50
         4th quarter..................................         1.56        0.75

Fiscal Year Ended December 31, 1998
         1st quarter..................................         0.81        0.25
         2nd quarter..................................         2.75        0.63
         3rd quarter..................................         2.13        0.56
         4th quarter..................................         1.06        0.38

Fiscal Year Ended December 31, 1999
         1st quarter (through January 26, 1999).......         1.38        0.63
    
   
         On December 2, 1998, the day preceding the Company's  announcement that
it had entered into the Stock  Purchase  Agreement,  the high and low bid prices
per share of Common Stock were $0.50 and $0.50. On the Record Date, the high and
low bid prices per share of Common Stock were $1.38 and $1.00.  As of the Record
Date, there were approximately 317 shareholders of Common Stock.
    
   
         The Company has never  declared any cash dividends on the Common Stock,
and any future  payment of dividends is solely in the discretion of the Board of
Directors  and is dependent  upon the earnings  and  financial  condition of the
Company and such other  factors as the Board of Directors  from time to time may
deem relevant.
    



                                      -34-


                         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  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  contained  in the Annual  Report and
attached to this Proxy  Statement  as  Appendix D. A copy of the Annual  Report,
including financial  statements,  is being mailed to the Company's  shareholders
with this Proxy  Statement.  The financial  information  contained in the Annual
Report is incorporated by reference into this Proxy Statement.
    



                                      -35-



                                 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.


                                      -36-




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

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


                                                                            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."


                                      -37-



                                 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."


                                      -38-


                         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, a reasonable time (approximately 120 days) before the
Company begins to print and mail its proxy materials,  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 on June 16, 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 FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1997, INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO
SHAREHOLDERS WITH THIS PROXY STATEMENT.
    


                                      -39-


                                                                      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


                                                                                   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.




   
                                                                      Appendix B

                        [FERRIS, BAKER WATTS LETTERHEAD]


                                                       January 28, 1999

Board of Directors
Firstmark Corp.
P.O. Box 1398
Richmond, Virginia 23218

Gentlemen:

         Firstmark  Corp.  ("Firstmark" or the "Company") has requested a review
of the proposed transaction (the "Transaction") involving the sale of the issued
and outstanding common stock of its subsidiary,  Investors Southern  Corporation
("Investors"),  the owner of 210,320  shares of common  stock of Southern  Title
Insurance Corporation ("Southern"), representing 100% of the outstanding capital
stock of Southern,  to Old Guard Group,  Inc. (the  "Purchaser" or "Old Guard").
Specifically,  you have requested a review as to whether the Transaction is fair
to Firstmark  shareholders  from a financial  point of view. The  Transaction is
described in the proposed  Stock  Purchase  Agreement  (the  "Agreement")  dated
December 2, 1998 between the  Purchaser  and  Firstmark.  The Board of Directors
retained us to initiate the  Transaction  and we commenced  our  engagement  and
investigation on September 2, 1997.

         In connection with the engagement,  which resulted in the  Transaction,
we contacted approximately 100 potential acquirers by phone and formally sent an
executive  summary or a  discussion  memorandum  to 33  potential  acquirers  to
initiate a sale transaction for Southern.  These potential  acquirers included a
mix of national and regional title  insurance  companies,  property and casualty
insurance companies, financial institutions, real estate developers and brokers,
other synergistic  acquirers and financial  buyers.  Our efforts resulted in the
Transaction as set forth in the Agreement.

         Pursuant to the Agreement,  the Purchaser will pay a total sum of $6.75
million in cash plus 25% of  Southern's  net income  before  taxes for the three
fiscal  years  ending  December  31,  2001  to  Firstmark  for the  purchase  of
Investors'  and  Southern's  common stock.  Based on  management's  estimate the
portion of the consideration which is based on the future financial  performance
of Southern is estimated at $1.093 million.



              In  connection  with the opinion,  we have  reviewed,  among other
things,  i) the Agreement  between the  Purchaser and the Company,  ii) selected
audited public and unaudited internal  financial  information of the Company and
Southern, and, iii) management's financial projection for Southern. We have held
discussions  with the members of the  management of Southern  regarding the past
and current  business  operations and financial  condition as well as the future
prospects of Southern. We have reviewed specific data regarding the valuation of
companies in  Southern's  industry  and  utilized  our own  expertise in merger,
acquisition and divestiture transactions and valuations.

         In rendering our opinion,  we have assumed and relied upon the accuracy
and  completeness  of all  financial  and other  information  reviewed by us for
purposes  of this  opinion  whether  publicly  available  or  provided  to us by
Firstmark  and  Southern,  and  we  have  not  assumed  any  responsibility  for
independent  verification of such  information.  We express no opinion as to the
value to be  received  by  holders  of  interests  who may  perfect  dissenters'
statutory fair appraisal remedies.  Based upon the foregoing and based upon such
other matters that we consider  relevant,  it is our opinion that as of the date
hereof the sale of Investors' and Southern's common stock for $6.75 million cash
plus 25% of  Southern's  net  income  before  taxes for the three  years  ending
December  31, 2001 to the  Purchaser is fair to  Firstmark  shareholders  from a
financial point of view.

              Our opinion is necessarily  based upon economic,  market and other
conditions  as in effect  on, and the  information  made  available  to us as of
December 2, 1998. Our opinion is directed to the Board of Directors of Firstmark
and does not constitute a recommendation  as to how shareholders  should vote on
matters  associated  with  the  Agreement.  It  is  understood  that  subsequent
developments  may affect the conclusions  reached in this opinion and that we do
not have any obligation to update, revise or reaffirm this opinion.

                                         Very truly yours,

                                         /s/ FERRIS, BAKER WATTS, INC.

                                         FERRIS, BAKER WATTS, INC.

    


                                                                      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

                                      


                  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:

                                      


                  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;

                                      


                  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

                                      


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.


                                      


   
                                                                      Appendix D

                                FIRSTMARK CORP.


                          INTERIM FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                  --------------------------------------------



                                                                        

                 Condensed Consolidated Balance Sheets
                     September 30, 1998 and December 31, 1997

                 Condensed Consolidated Statements of Operations
                     Nine Months and Three Months Ended
                     September 30, 1998 and 1997

                 Condensed Consolidated Statements of Cash Flows
                     Nine Months Ended September 30, 1998 and 1997

                 Notes to Condensed Consolidated Financial Statements

    


                                      



   
FIRSTMARK CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

===============================================================================

ASSETS




                                                                   September 30, 1998          December 31, 1997*
                                                                   ------------------          ------------------
                                                                         (Unaudited)

                                                                                                     
Cash and cash equivalents                                                 $3,021,607            $    2,293,136
Accounts and notes receivables - trade, net                                1,198,510                 1,287,453
Accounts and notes receivables - related parties                             138,206                   103,338
Income taxes receivable                                                           --                   248,776
Marketable securities:
     Held for sale                                                           252,790                   348,454
     Held to maturity                                                      1,571,239                 1,800,091
Venture capital investments, net                                           1,111,040                 1,283,645
Real estate and other investments                                            817,358                   809,668
Title plant                                                                3,563,008                 3,563,008
Property, plant and equipment, net                                           737,760                   830,533
Excess of cost over fair value                                               926,075                   961,272
Deferred tax asset                                                           934,935                   920,073
Other assets                                                                 198,925                   168,234
                                                                       -------------             -------------

         Total Assets                                                  $  14,471,453             $  14,617,681
                                                                       =============             =============


    
                                       


   
FIRSTMARK CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

===============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY



                                                                   September 30, 1998          December 31, 1997*
                                                                   ------------------          ------------------
                                                                         (Unaudited)
                                                                                                     
Liabilities:
     Accounts payable and other liabilities                         $        530,993           $       575,463
     Borrowed funds                                                          919,412                 1,060,465
     Reserve for title policy claims                                       1,035,534                 1,027,607
     Deferred tax liability                                                  920,073                   920,073
                                                                    ----------------           ---------------
         Total Liabilities                                                 3,406,012                 3,583,608
                                                                    ----------------           ---------------


Stockholders' Equity:
     Preferred  stock,  Series A,  $0.20 par value  authorized  250,000  shares;
       issued 57,000 shares
       (liquidation preference $2,280,000)                                    11,400                    11,400
     Common stock, $0.20 par value - authorized
       30,000,000 shares; issued 5,501,430 shares                          1,100,286                 1,100,286
     Additional paid-in capital - preferred                                2,162,889                 2,162,889
     Additional paid-in capital - common                                  11,498,331                11,498,331
     Retained earnings (deficit)                                         (2,662,579)               (2,725,070)
     Treasury stock, at cost - 201,554 shares                              (818,773)                 (818,773)
     Net unrealized gain (loss) on marketable
       equity securities held for sale, net of taxes                       (226,113)                 (194,990)
                                                                      --------------            --------------
         Total Stockholders' Equity                                       11,065,441                11,034,073
                                                                      --------------            --------------

         Total Liabilities and Stockholders' Equity                   $   14,471,453             $  14,617,681
                                                                      ==============             =============




*Condensed from audited financial statements

The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
    

                                       


   
FIRSTMARK CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

===============================================================================



                                                       Nine Months Ended                  Three Months Ended
                                                         September 30,                       September 30,
                                                         -------------                       -------------
                                                    1998              1997             1998                1997
                                                    ----              ----             ----                ----
                                                                                                     
Revenues
    Title insurance                               $ 9,568,084      $ 7,662,828       $ 3,734,359        $  2,961,204
    Investment gains                                   28,922          361,143             4,916             112,582
    Interest and dividends                            243,971          307,017            86,089              85,062
    Other revenues                                    263,711          203,277           107,777              99,687
                                                  -----------      -----------       -----------        ------------

          Total revenues                           10,104,688        8,534,265         3,933,141           3,258,535
                                                  -----------      -----------       -----------        ------------

Expenses
    Employee compensation and
      benefits                                      3,960,280        3,342,610         1,477,924           1,133,395
    Commissions and fee expense                     2,943,655        2,616,937         1,288,378             980,000
    Write-offs of investments                              --          100,000                --                  --
    General and administrative
      expenses                                      2,683,000        2,591,075           986,337             976,762
    Minority interest                                 352,661          267,149           102,207             141,578
                                                  -----------      -----------       -----------        ------------

          Total expenses                            9,939,596        8,917,771         3,854,846           3,231,735
                                                  -----------      -----------       -----------        ------------

Earnings (losses) before income
  taxes                                               165,092        (383,506)            78,295              26,800

Income tax (benefit) expense                               --        (130,392)                --               9,112
                                                  -----------      -----------       -----------        ------------

Net earnings (loss)                                   165,092        (253,114)            78,295              17,688

Preferred stock dividend                              102,600          229,000            34,200              34,200
                                                  -----------      -----------       -----------        ------------

Net earnings (loss) applicable to
  common shares                                   $    62,492      $ (482,114)       $    44,095         $  (16,512)
                                                  ===========      ===========       ===========         ===========

Earnings (loss) per common
  share - basic and diluted                       $       .01      $     (.23)       $       .01         $     (.01)
                                                  ===========      ===========       ===========         ===========

Weighted - average number of
  shares outstanding                                5,299,876        2,069,590         5,299,876           2,069,590
                                                  ===========      ===========       ===========         ===========


The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
    
                                       


   
FIRSTMARK CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

===============================================================================




                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                       -------------
                                                                                  1998                  1997
                                                                                  ----                  ----
                                                                                                     
Cash flows from Operating Activities
     Net earnings (loss)                                                    $    165,092           $ (253,114)
     Adjustments to reconcile net income
       to net cash provided by operating activities
         Depreciation and amortization                                           173,536               175,751
         Gain on receipt and sale of Intercel shares                                  --             (479,465)
         Write-down of investments                                                    --               100,000
         Collection of income taxes receivable                                   244,902               303,385
         Marketable securities - trading account                                      --              (58,944)
         Changes in assets and liabilities                                       279,662                77,634
                                                                            ------------           -----------

         Net cash provided (used) by operating activities                        863,192             (134,753)
                                                                            ------------           -----------

Cash flows from Investing Activities
     Decrease (increase) in real estate investments                              (9,900)               526,199
     Decrease in notes receivable                                                 41,044               122,984
     Securities held for sale                                                   (18,278)               658,629
     Securities held to maturity                                                (28,528)                95,625
     Decrease in venture capital investments                                     174,814                43,597
     Purchase of property and equipment                                         (50,220)              (34,220)
                                                                            ------------           -----------

         Net cash provided by investing activities                               108,932             1,412,814
                                                                            ------------           -----------

Cash flows from Financing Activities
     Preferred stock dividends                                                 (102,600)             (229,000)
     Proceeds from borrowings                                                         --               150,000
     Repayments of borrowed funds                                              (141,053)             (826,037)
                                                                            ------------           -----------

         Net cash used by financing activities                                 (243,653)             (905,037)
                                                                            ------------           -----------

Net change in cash and cash equivalents                                          728,471               373,024

Cash and cash equivalents, beginning of period                                 2,293,136             1,832,681
                                                                            ------------           -----------

Cash and cash equivalents, end of period                                    $  3,021,607           $ 2,205,705
                                                                            ------------           -----------

Cash payments for interest                                                  $     77,480           $    83,707
                                                                            ============           ===========


The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
    

                                       


   
FIRSTMARK CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

===============================================================================

BASIS OF PRESENTATION

1.       The accompanying  unaudited  consolidated  financial  statements, which
         are for interim periods, do not include all disclosures provided in the
         annual consolidated financial statements.  These unaudited consolidated
         financial   statements   should  be  read  in   conjunction   with  the
         consolidated  financial  statements and the footnotes thereto contained
         in the Annual  Report on Form  10-KSB for the year ended  December  31,
         1997 of Firstmark Corp. (the "Company"),  as amended, as filed with the
         Securities and Exchange Commission. The December 31, 1997 balance sheet
         was derived from the audited  consolidated  financial  statements,  but
         does  not  include  all  disclosures  required  by  generally  accepted
         accounting principles.

2.       In the opinion of the Company, the accompanying  unaudited consolidated
         financial  statements  contain all  adjustments  (which are of a normal
         recurring  nature)  necessary for a fair  presentation of the financial
         statements.  The  results  of  operations  for the  nine  months  ended
         September 30, 1998 are not necessarily  indicative of the results to be
         expected for the full year.

3.       Earnings (Loss) Per Share

         The Company  adopted the  provisions  of SFAS No.  128,  "Earnings  Per
         Share," for the year ended December 31, 1997.  SFAS No. 128 establishes
         new standards for computing and presenting  earnings per share ("EPS").
         The statement  replaces the  presentation of primary EPS with basic EPS
         and the  presentation  of fully diluted EPS with diluted EPS. Basic EPS
         is  computed  by  dividing  net  income,  less  required  dividends  on
         redeemable  preferred  stock, by the weighted  average number of common
         shares  outstanding  during the year. Diluted EPS is computed using the
         weighted average number of common shares  outstanding  during the year,
         including the dilutive effect of all potential common shares.

4.       Reclassifications

         Certain reclassifications have been made in the accompanying statements
         to permit comparison.

    

                                      



                                 Firstmark Corp.
               Proxy Solicited on Behalf of the Board of Directors
   
         The undersigned  hereby appoints Donald V.  Cruickshanks  and Steven P.
Settlage,  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:
    


         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.








         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