exv4w2







 



    HCC INSURANCE HOLDINGS, INC.




    as Issuer




    AND




    U.S. Bank National Associations, as successor trustee




    to Wachovia Bank, National Association as successor
    trustee




    to First Union National Bank




    as Trustee



 




 



    [Form of]




    FOURTH SUPPLEMENTAL INDENTURE




    Dated as of November 16, 2009



 




 



    Supplement to Indenture dated as of August 23, 2001



 













 






 




    Table
    of Contents



 


	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    Page

	 

	
    ARTICLE 1

    Creation of The Notes
    

	

    Section 1.01
    


	
 
	
    Designation of Series
	
 
	 
	
    1
	 

	

    Section 1.02
    


	
 
	
    Form of Note; Denomination
	
 
	 
	
    1
	 

	

    Section 1.03
    


	
 
	
    Limit on Amount of Series
	
 
	 
	
    1
	 

	

    Section 1.04
    


	
 
	
    Interest
	
 
	 
	
    1
	 

	

    Section 1.05
    


	
 
	
    Certificate of Authentication
	
 
	 
	
    2
	 

	

    Section 1.06
    


	
 
	
    No Sinking Fund
	
 
	 
	
    2
	 

	

    Section 1.07
    


	
 
	
    Issuance in Global Form
	
 
	 
	
    2
	 

	

    Section 1.08
    


	
 
	
    Other Terms Of Notes
	
 
	 
	
    2
	 

	

    Section 1.09
    


	
 
	
    Additional Definitions
	
 
	 
	
    2
	 

	
 

	
    ARTICLE 2

    Redemption Of Notes
    

	

    Section 2.01
    


	
 
	
    Optional Redemption by the Company
	
 
	 
	
    3
	 

	

    Section 2.02
    


	
 
	
    Applicability of Article
	
 
	 
	
    4
	 

	
 

	
    ARTICLE 3

    COVENANTS

	

    Section 3.01
    


	
 
	
    Limitation on Liens; Disposition of Voting Stock
	
 
	 
	
    4
	 

	
 

	
    ARTICLE 4

    REPORTS BY THE COMPANY

	

    Section 4.01
    


	
 
	
    Amendment
	
 
	 
	
    5
	 

	
 

	
    ARTICLE 5

    Events Of Default
    

	

    Section 5.01
    


	
 
	
    Additional Events Of Default
	
 
	 
	
    5
	 

	

    Section 5.02
    


	
 
	
    Amendment
	
 
	 
	
    5
	 

	
 

	
    ARTICLE 6

    Amendments, Supplements
    and Waivers
    

	

    Section 6.01
    


	
 
	
    With Consent of Holders
	
 
	 
	
    5
	 

	
 

	
    ARTICLE 7

    Defeasance and Covenant
    Defeasance
    

	

    Section 7.01
    


	
 
	
    Company’s Option to Effect Defeasance or Covenant Defeasance
	
 
	 
	
    6
	 

	

    Section 7.02
    


	
 
	
    Defeasance and Discharge
	
 
	 
	
    6
	 

	

    Section 7.03
    


	
 
	
    Covenant Defeasance
	
 
	 
	
    6
	 

	

    Section 7.04
    


	
 
	
    Conditions to Defeasance or Covenant Defeasance
	
 
	 
	
    6
	 

	

    Section 7.05
    


	
 
	
    Deposited Money and U.S. Government Obligations to Be Held in
    Trust; Miscellaneous Provisions
	
 
	 
	
    8
	 

	

    Section 7.06
    


	
 
	
    Reinstatement
	
 
	 
	
    8
	 

	
 

	
    ARTICLE 8

    Miscellaneous
    

	

    Section 8.01
    


	
 
	
    Application of Fourth Supplemental Indenture
	
 
	 
	
    8
	 

	

    Section 8.02
    


	
 
	
    Effective Date
	
 
	 
	
    8
	 

	

    Section 8.03
    


	
 
	
    Counterparts
	
 
	 
	
    8
	 
















    

    i








 








    [FORM
    OF]

    FOURTH SUPPLEMENTAL INDENTURE



 



    This FOURTH SUPPLEMENTAL INDENTURE, dated as of
    November 16, 2009 is entered into by and between HCC
    INSURANCE HOLDINGS, INC., a Delaware corporation, as issuer (the
    “Company”), and U.S. BANK NATIONAL
    ASSOCIATION, a national banking association duly organized and
    existing under the laws of the United States of America, as
    Trustee under the Indenture (as hereinafter defined) (the
    “Trustee”).



 




    RECITALS



 



    WHEREAS, the Company and the Trustee are parties to that
    certain Indenture dated as of August 23, 2001 (the
    “Indenture,” all capitalized terms used
    and not otherwise defined herein shall have the meanings set
    forth in the Indenture) providing for the issuance by the
    Company of securities from time to time;



 



    WHEREAS, the Company desires to issue a new series of
    Securities under the Indenture, and has duly authorized the
    creation and issuance of such Securities and the execution and
    delivery of this Fourth Supplemental Indenture to modify the
    Indenture and provide certain additional provisions as
    hereinafter described;



 



    WHEREAS, the Company and the Trustee deem it advisable to
    enter into this Fourth Supplemental Indenture for the purposes
    of establishing the terms of such series of Securities;



 



    WHEREAS, the execution and delivery of this Fourth
    Supplemental Indenture has been authorized by a Board Resolution;



 



    WHEREAS, concurrent with the execution hereof, the
    Company has delivered an Officers’ Certificate and has
    caused its counsel to deliver to the Trustee an Opinion of
    Counsel; and



 



    WHEREAS, all things necessary to make this Fourth
    Supplemental Indenture a valid agreement of the Company in
    accordance with its terms have been done, and the execution and
    delivery thereof have been in all respects duly authorized by
    the parties hereto.



 



    NOW, THEREFORE, for and in consideration of the premises
    and the purchase of the Securities by the Holders thereof, it is
    mutually agreed, for the equal and proportionate benefit of all
    Holders of the Notes (as hereinafter defined), as follows:



 




    ARTICLE 1

    



 




    Creation
    Of The Notes



 



    Section 1.01  Designation
    of Series.  Pursuant to the terms hereof and
    Section 301 of the Indenture, the Company
    hereby creates a series of Securities designated as the
    “6.300% Senior Notes due 2019” (the
    “Notes”), which Notes shall be deemed
    “Securities” for all purposes under the
    Indenture.



 



    Section 1.02  Form
    of Note; Denomination.  The Notes shall be
    substantially in the form set forth in Exhibit A
    attached hereto, which is incorporated herein and made
    part hereof. The Stated Maturity of the principal amount of the
    Notes shall be November 15, 2019. The Company will issue
    the Notes in denominations of $2,000 and integral multiples of
    $1,000 in excess thereof.



 



    Section 1.03  Limit
    on Amount of Series.  The Notes shall not
    exceed U.S. $300,000,000 in aggregate principal amount, and
    may, upon the execution and delivery of this Fourth Supplemental
    Indenture or from time to time thereafter, be executed by the
    Company and delivered to the Trustee for authentication, and the
    Trustee shall thereupon authenticate and deliver said Notes upon
    a Company Order and delivery of an Officers’ Certificate
    and Opinion of Counsel as contemplated by Section 303
    of the Indenture.



 



    Section 1.04  Interest.  The
    Company shall pay interest on the aggregate principal amount of
    the Notes at 6.300% per annum until the principal amount of the
    Notes is paid or made available for payment. The















 







    Company shall pay interest, semi-annually in arrears on
    May 15 and November 15, of each year, or if any such
    day is not a Business Day, on the next succeeding Business Day,
    commencing on May 15, 2010 (each an “Interest
    Payment Date”) and such interest shall be paid to
    the Person in whose name the Note is registered at the close of
    business on the Regular Record Date (whether or not a Business
    Day) immediately preceding the Interest Payment Date. Interest
    on the Notes will accrue from the most recent date to which
    interest has been paid or, if no interest has been paid, from
    November 16, 2009. The Company shall pay interest
    (including post-petition interest in any proceeding under any
    Bankruptcy Law) on overdue installments of interest (without
    regard to any applicable grace periods) from time to time on
    demand at the same rate to the extent lawful. Interest will be
    computed on the basis of a
    360-day year
    of twelve
    30-day
    months.



 



    Interest, including interest payable at Stated Maturity, shall
    be payable at the office of the Company maintained by the
    Company for such purposes in the Borough of Manhattan, The City
    of New York, which shall initially be an office or agency of the
    Trustee, and may, as the Company shall specify to the Paying
    Agent in writing by each Regular Record Date, be paid either
    (i) by check mailed or delivered to the Holders of the
    Notes at their respective addresses set forth in the Security
    Register or (ii) by wire transfer of immediately available
    funds to an account previously specified in writing by the
    Holder to the Company and the Trustee; provided, however,
    that payments to the Depositary will be made by wire transfer of
    immediately available funds to the account of the Depositary or
    its nominee.



 



    Maturity or redemption of a Note will cause interest to cease to
    accrue on such Note. The Company can not reissue a Note that has
    matured, redeemed or otherwise cancelled, except for
    registration of transfer, exchange or replacement of such Note.



 



    Section 1.05  Certificate
    of Authentication.  The Trustee’s
    certificate of authentication to be borne on the Notes shall be
    substantially as provided in the Form of Note attached hereto as
    Exhibit A.



 



    Section 1.06  No
    Sinking Fund.  No sinking fund will be
    provided with respect to the Notes.



 



    Section 1.07  Issuance
    in Global Form.  The Notes shall be issued as
    one or more Global Notes, representing the aggregate principal
    amount of the Notes, and shall be deposited with the Trustee as
    custodian for the Depositary. The Notes shall be registered in
    the name of Cede & Co., or other nominee of the
    Depositary.



 



    Section 1.08  Other
    Terms Of Notes.  The other terms of the Notes
    shall be as expressly set forth in Article 1,
    Article 2, Article 4 and
    Article 5 hereof and Exhibit A
    hereto.



 



    The words “herein”, “hereof” and
    “hereunder” and other words of similar import refer to
    this Fourth Supplemental Indenture as a whole and not to any
    particular Article, Section or other subdivision.



 



    Section 1.09  Additional
    Definitions.  For purposes of this Fourth
    Supplemental Indenture, the following terms shall have the
    following definitions:



 



    “Calculation Date” means, with respect to any
    Redemption Date, the third Business Day immediately
    preceding the Redemption Date.



 



    “Comparable Treasury Issue” means the
    U.S. Treasury security selected by the Independent
    Investment Banker as having a maturity comparable to the
    remaining term (“Remaining Life”) of the
    Notes to be redeemed that would be utilized, at the time of
    selection and in accordance with customary financial practice,
    in pricing new issues of corporate debt securities of comparable
    maturity to the Remaining Life.



 



    “Comparable Treasury Price” means, with respect
    to any Redemption Date, (1) the average of five
    Reference Treasury Dealer Quotations for such
    Redemption Date, after excluding the highest and lowest
    Reference Treasury Dealer Quotations, or (2) if the
    Independent Investment Banker obtains fewer than four such
    Reference Treasury Dealer Quotations, the average of all such
    Reference Treasury Dealer Quotations.



 



    “Depositary” means The Depository
    Trust Company, 55 Water Street, New York, New York.



 



    “Global Note” means a Security that evidences
    all or part of the Notes and bears the legend set forth in the
    Form of Note attached hereto as Exhibit A.





    

    2








 







    “Independent Investment Banker” means Banc of
    America Securities LLC, J.P. Morgan Securities Inc. or
    Wells Fargo Securities, LLC, as specified by the Company, or, if
    these firms are unwilling or unable to select the Comparable
    Treasury Issue, an independent investment banking institution of
    national standing appointed by the Company.



 



    “Interest Payment Date” has the meaning set
    forth in Section 1 of the Form of Note attached hereto as
    Exhibit A.



 



    “Reference Treasury Dealer” means (1) Banc
    of America Securities LLC, J.P. Morgan Securities Inc. and
    a Primary Treasury Dealer selected by Wells Fargo Securities,
    LLC and their respective successors, provided, however, that if
    any of the foregoing shall cease to be a primary
    U.S. government securities dealer in New York City (a
    “Primary Treasury Dealer”), the Company
    will substitute therefor another Primary Treasury Dealer and
    (2) any three other Primary Treasury Dealers selected by
    the Company after consultation with the Independent Investment
    Banker.



 



    “Reference Treasury Dealer Quotations” means,
    with respect to each Reference Treasury Dealer and any
    Redemption Date, the average, as determined by the
    Independent Investment Banker, of the bid and asked prices for
    the Comparable Treasury Issue (expressed in each case as a
    percentage of its principal amount) quoted in writing to the
    Independent Investment Banker at 5:00 p.m., New York City
    time, on the third Business Day preceding such
    Redemption Date.



 



    “Regular Record Date” means the close of
    business on each of May 1, and November 1, of each
    year whether or not such day is a Business Day.



 



    “Restricted Subsidiary” means each present or
    future Subsidiary of the Company, the consolidated total assets
    of which constitute at least fifteen percent of the
    Company’s total consolidated assets, together with each
    successor to any such Subsidiary; each such Subsidiary as of the
    date hereof being listed in Schedule 1 to
    this Fourth Supplemental Indenture.



 



    “Treasury Rate” means, with respect to any
    Redemption Date, (i) the yield, under the heading
    which represents the average for the week immediately preceding
    the Calculation Date, appearing in the most recently published
    statistical release designated “H.15(519)” or any
    successor publication which is published weekly by the Board of
    Governors of the Federal Reserve System and which establishes
    yields on actively traded U.S. Treasury securities adjusted
    to constant maturity under the caption “Treasury Constant
    Maturities,” for the maturity corresponding to the
    Comparable Treasury Issue (if no maturity is within three months
    before or after the Remaining Life, yields for the two published
    maturities most closely corresponding to the Comparable Treasury
    Issue will be determined and the Treasury Rate will be
    interpolated or extrapolated from such yields on a straight line
    basis, rounding to the nearest month); or (ii) if such
    release (or any successor release) is not published during the
    week immediately preceding the Calculation Date or does not
    contain such yields, the rate per annum equal to the semiannual
    equivalent yield to maturity of the Comparable Treasury Issue,
    calculated using a price for the Comparable Treasury Issue
    (expressed as a percentage of its principal amount) equal to the
    Comparable Treasury Price for such Redemption Date.



 



    “voting stock” has the meaning as that term is
    defined under the definition of “Subsidiary” under
    Section 101 of the Indenture.



 




    ARTICLE 2

    



 




    Redemption Of
    Notes



 



    Pursuant to Section 301(8) of the Indenture,
    so long as any of the Notes are outstanding, the following
    provisions shall be applicable to the Notes:



 



    Section 2.01  Optional
    Redemption by the Company.



 



    (a) At any time and from time to time, the Notes may be
    redeemed at the option of the Company for cash, in whole or in
    part, upon notice as set forth in Section 1104
    of the Indenture, at a redemption price equal to the
    greater of (a) the principal amount of the Notes or
    (b) the sum of the present values of the






    

    3








 







    remaining scheduled payments of principal and interest on the
    Notes to be redeemed (not including any portion of such payments
    of interest accrued to the date of redemption) discounted to the
    date of redemption on a semiannual basis (assuming a
    360-day year
    consisting of twelve
    30-day
    months) at the applicable Treasury Rate plus 50 basis
    points, plus, in each case (a) and (b), accrued and
    unpaid interest on the principal amount of the Notes being
    redeemed to but excluding the date of redemption (the
    “Redemption Price”). The date of
    any such redemption is known as the
    “Redemption Date”. The Treasury
    Rate will be calculated on the third Business Day immediately
    preceding the Redemption Date.



 



    If the Company redeems fewer than all of the outstanding Notes,
    the Trustee will select the Notes to be redeemed in accordance
    with the provisions of Section 1103 of the
    Indenture.



 



    The Notes will be redeemed in integral multiples of $1,000
    principal amount.



 



    The Company may not give notice of any redemption if the Company
    has defaulted in payment of interest and the default is
    continuing.



 



    (b) At or prior to the time of giving of any notice of
    redemption to the Holders of any Notes to be redeemed, the
    Company shall deliver an Officers’ Certificate to the
    Trustee setting forth the calculation of the
    Redemption Price applicable to such redemption. The Trustee
    shall be under no duty to inquire into, may conclusively presume
    the correctness of, and shall be fully protected in relying
    upon, the Redemption Price as so calculated and set forth
    in such Officers’ Certificate



 



    Section 2.02  Applicability
    of Article.  Redemption of the Notes at the
    election of the Company, as permitted by any provision of the
    Notes or this Fourth Supplemental Indenture, shall be made in
    accordance with such provision, Article XI of
    the Indenture and this Article 2.



 




    ARTICLE 3

    



 




    COVENANTS



 



    Pursuant to Section 901(2) of the Indenture,
    so long as any of the Notes are outstanding, the following
    provisions shall be applicable to the Notes:



 



    Section 3.01  Limitation
    on Liens; Disposition of Voting Stock.



 



    (a) Neither the Company nor any Restricted Subsidiaries may
    use any voting stock of a Restricted Subsidiary as security for
    any debt of the Company or other obligations unless all of the
    Notes are secured to the same extent as and for so long as that
    debt or other obligation is so secured, provided, however that
    such restriction shall not apply to liens existing at the time a
    corporation becomes a Restricted Subsidiary or any renewal or
    extension of any such liens.



 



    (b) Except in a transaction otherwise governed by the
    Indenture, neither the Company nor any Restricted Subsidiary may
    issue, sell, assign, transfer or otherwise dispose of any of the
    voting stock of a Restricted Subsidiary so long as any Note
    remains outstanding. Notwithstanding the foregoing, this
    limitation shall not apply to any of the following:



 



    (i) any issuance, sale, assignment, transfer or other
    disposition made in compliance with the order of a court or
    regulatory authority, unless the order was requested by the
    Company or a Restricted Subsidiary;



 



    (ii) the disposition of any of the voting stock of a
    Restricted Subsidiary owned by the Company or by a Restricted
    Subsidiary for cash or other property having a fair market value
    that is at least equal to the fair market value of the disposed
    stock, as determined in good faith by the Board of Directors of
    the Company; or



 



    (iii) the issuance, sale, assignment, transfer or other
    disposition of the voting stock of a Restricted Subsidiary made
    to the Company or another Restricted Subsidiary.





    

    4








 








    ARTICLE 4

    



 




    REPORTS
    BY THE COMPANY



 



    Section 4.01  Amendment.  Section 704
    of the Indenture is hereby amended solely with respect to the
    series of Securities that consists of the Notes, to read as
    follows:



 



    The Company shall file with the Trustee, within 15 days
    after it files such annual and quarterly reports, information,
    documents and other reports with the SEC, copies of its annual
    and quarterly report and of the information, documents and other
    reports (or copies of such portions of any of the foregoing as
    the SEC may by rules and regulations prescribe) which the
    Company is required to file with the SEC pursuant to
    Section 13 or 15(d) of the Exchange Act. The Company also
    shall comply with the other provisions of TIA
    Section 314(a).



 




    ARTICLE 5

    



 




    Events
    Of Default



 



    Section 5.01  Additional
    Events Of Default.  Pursuant to
    Sections 301(16) and 501(7) of
    the Indenture, so long as any of the Notes are outstanding, the
    following shall be an Event of Default with respect to the
    Notes, in addition to the Events of Default contained in
    Section 501 of the Indenture:



 



    (a) The Company defaults in the payment of the principal
    amount or Redemption Price with respect to any Note when
    such becomes due and payable.



 



    (b) The Company defaults in payment of any accrued and
    unpaid interest which default continues for 30 days.



 



    Section 5.02  Amendment.  Section 501
    of the Indenture is hereby amended solely with respect
    to the series of Securities that consists of the Notes, as
    follows:



 



    (a) By amending paragraph (4) of
    Section 501 by deleting the number
    “90” appearing therein and replacing it with number
    “60” and by adding the words “of that
    series” immediately after the words “Outstanding
    Securities” appearing therein.



 



    (b) By deleting the period at the end of paragraph
    (7) of Section 501 and replacing
    it with “; or”, and adding the following paragraph
    immediately after paragraph (7) in Section 501:



 



    (8) if any event of default, as defined in any mortgage,
    senior indenture or instrument under which there may be issued,
    or by which there may be secured or evidenced, any indebtedness
    of the Company for money borrowed, whether such indebtedness now
    exists or shall hereafter be created, shall happen and shall
    result in such indebtedness in principal amount in excess of
    $35,000,000 becoming or being declared due and payable prior to
    the date on which it would otherwise become due and payable, and
    such acceleration shall not be rescinded or annulled within a
    period of 30 days after there shall have been given, by
    registered or certified mail, to the Company by the Trustee or
    to the Company and the Trustee by the Holders of not less than
    25% in principal amount of the Outstanding Securities of that
    series, a written notice specifying such event of default and
    requiring the Company to cause such acceleration to be rescinded
    or annulled and stating that such notice is a “Notice of
    Default” hereunder.



 




    ARTICLE 6

    



 




    Amendments,
    Supplements and Waivers



 



    Section 6.01  With
    Consent of Holders.  Pursuant to
    Section 902 of the Indenture, so long as any
    of the Notes are outstanding, without the consent of each Holder
    affected, an amendment, supplement or waiver, including a waiver
    pursuant to Section 513 of the Indenture, may
    not (in addition to the events described in paragraphs
    (1) through (3) of
    Section 902 of the Indenture) make any change
    that impairs or adversely affects the right of a Holder to
    institute suit for the enforcement of any payment with respect
    to the Notes.





    

    5








 






 




    ARTICLE 7

    



 




    Defeasance
    and Covenant Defeasance



 



    Section 7.01  Company’s
    Option to Effect Defeasance or Covenant
    Defeasance.  The Company may elect, at its
    option at any time, to have Section 7.02 or
    Section 7.03 applied to the Notes (as a whole and not in
    part) upon compliance with the conditions set forth below in
    this Article. Any such election shall be evidenced by a Board
    Resolution.



 



    Section 7.02  Defeasance
    and Discharge.  Upon the Company’s
    exercise of its option to have this Section applied to the Notes
    (as a whole and not in part), the Company shall be deemed to
    have been discharged from its obligations with respect to the
    Notes as provided in this Section on and after the date the
    conditions set forth in Section 7.04 are satisfied
    (hereinafter called “Defeasance”). For this purpose,
    such Defeasance means that the Company shall be deemed to have
    paid and discharged the entire indebtedness represented by the
    Notes and to have satisfied all its other obligations under the
    Notes, this Fourth Supplemental Indenture and the Indenture
    insofar as the Notes are concerned (and the Trustee, at the
    expense of the Company, shall execute proper instruments
    acknowledging the same), subject to the following which shall
    survive until otherwise terminated or discharged hereunder:
    (1) the rights of Holders of Notes to receive, solely from
    the trust fund described in Section 7.04 and as more fully
    set forth in such Section, payments in respect of the principal
    of, premium, if any, and interest on the Notes when payments are
    due, (2) the Company’s obligations with respect to the
    Notes under Sections 304, 305, 306, 1002 and 1003 of the
    Indenture, (3) the rights, powers, trusts, duties and
    immunities of the Trustee hereunder and (4) this Article.
    Subject to compliance with this Article, the Company may
    exercise its option to have this Section applied to the Notes
    (as a whole and not in part) notwithstanding the prior exercise
    of its option to have Section 7.03 applied to the Notes.



 



    Section 7.03  Covenant
    Defeasance.  Upon the Company’s exercise
    of its option to have this Section applied to the Notes (as a
    whole and not in part), (i) the Company shall be released
    from its obligations under Section 3.01 of this Fourth
    Supplemental Indenture and any covenant provided pursuant to
    Section 901(2) of the Indenture for the benefit of the
    Holders of the Notes and (ii) the occurrence of any event
    specified in Section 501(4) of the Indenture (with respect
    to Section 3.01 of this Fourth Supplemental Indenture and
    any such covenants provided pursuant to Section 901(2) of
    the Indenture for the benefit of the Holders of the Notes) or
    Section 501(8) of the Indenture added by Section 5.02
    of this Fourth Supplemental Indenture, shall be deemed not to be
    or result in an Event of Default, in each case with respect to
    the Notes as provided in this Section on and after the date the
    conditions set forth in Section 7.04 are satisfied
    (hereinafter called “Covenant Defeasance”). For this
    purpose, such Covenant Defeasance means that, with respect to
    the Notes, the Company may omit to comply with and shall have no
    liability in respect of any term, condition or limitation set
    forth in any such specified Section (to the extent so specified
    in the case of Section 501(4) or 501(8) of the Indenture),
    whether directly or indirectly, by reason of any reference
    elsewhere herein to any such Section or by reason of any
    reference in any such Section to any other provision herein or
    in any other document, but the remainder of the Indenture, this
    Fourth Supplemental Indenture and the Notes shall be unaffected
    thereby.



 



    Section 7.04  Conditions
    to Defeasance or Covenant Defeasance.  The
    following shall be the conditions to the application of
    Section 7.02 or Section 7.03 to the Notes:



 



    (a) The Company shall irrevocably have deposited or caused
    to be deposited with the Trustee (or another trustee which
    satisfies the requirements contemplated by Section 609 of
    the Indenture and agrees to comply with the provisions of this
    Article applicable to it) as trust funds in trust for the
    purpose of making the following payments, specifically pledged
    as security for, and dedicated solely to, the benefits of the
    Holders of the Notes, (A) money in an amount, or
    (B) U.S. Government Obligations which through the
    scheduled payment of principal and interest in respect thereof
    in accordance with their terms will provide, not later than one
    day before the due date of any payment, money in an amount, or
    (C) a combination thereof, in each case sufficient, in the
    opinion of a nationally recognized firm of independent public
    accountants expressed in a written certification thereof
    delivered to the Trustee, to pay and discharge, and which shall
    be applied by the Trustee (or any such other qualifying trustee)
    to pay and discharge, the principal of, premium, if any, and any
    installment of interest on the Notes on the respective Stated
    Maturities, in accordance with the terms of the Indenture, this
    Fourth Supplemental Indenture and the Notes. As used herein,
    “U.S. Government Obligation” means (x) any
    security which is (i) a direct obligation of the






    

    6








 







    United States of America for the payment of which the full faith
    and credit of the United States of America is pledged or
    (ii) an obligation of a Person controlled or supervised by
    and acting as an agency or instrumentality of the United States
    of America the payment of which is unconditionally guaranteed as
    a full faith and credit obligation by the United States of
    America, which, in either case (i) or (ii), is not callable
    or redeemable at the option of the issuer thereof, and
    (y) any depositary receipt issued by a bank (as defined in
    Section 3(a) (2) of the Securities Act) as custodian
    with respect to any U.S. Government Obligation which is
    specified in clause (x) above and held by such bank for the
    account of the holder of such depositary receipt, or with
    respect to any specific payment of principal of or interest on
    any U.S. Government Obligation which is so specified and
    held, provided that (except as required by law) such custodian
    is not authorized to make any deduction from the amount payable
    to the holder of such depositary receipt from any amount
    received by the custodian in respect of the U.S. Government
    Obligation or the specific payment of principal or interest
    evidenced by such depositary receipt.



 



    (b) In the event of an election to have Section 7.02
    apply to the Notes, the Company shall have delivered to the
    Trustee an Opinion of Counsel stating that (A) the Company
    has received from, or there has been published by, the Internal
    Revenue Service a ruling or (B) since the date of this
    instrument, there has been a change in the applicable federal
    income tax law, in either case to the effect that, and based
    thereon such opinion shall confirm that, the Holders of the
    Notes will not recognize gain or loss for federal income tax
    purposes as a result of the deposit, Defeasance and discharge to
    be effected with respect to the Notes and will be subject to
    federal income tax on the same amount, in the same manner and at
    the same times as would be the case if such deposit, Defeasance
    and discharge were not to occur.



 



    (c) In the event of an election to have Section 7.03
    apply to the Notes, the Company shall have delivered to the
    Trustee an Opinion of Counsel to the effect that the Holders of
    the Notes will not recognize gain or loss for federal income tax
    purposes as a result of the deposit and Covenant Defeasance to
    be effected with respect to the Notes and will be subject to
    federal income tax on the same amount, in the same manner and at
    the same times as would be the case if such deposit and Covenant
    Defeasance were not to occur.



 



    (d) No event which is, or after notice or lapse of time or
    both would become, an Event of Default with respect to the Notes
    shall have occurred and be continuing at the time of such
    deposit or, with regard to any such event specified in
    Sections 501(5) and (6) of the Indenture, at any time
    on or prior to the 90th day after the date of such deposit
    (it being understood that this condition shall not be deemed
    satisfied until after such 90th day).



 



    (e) Such Defeasance or Covenant Defeasance shall not cause
    the Trustee to have a conflicting interest within the meaning of
    the Trust Indenture Act with respect to any securities of
    the Company.



 



    (f) Such Defeasance or Covenant Defeasance shall not result
    in a breach or violation of, or constitute a default under, any
    other agreement or instrument to which the Company is a party or
    by which it is bound.



 



    (g) The Company shall have delivered to the Trustee an
    Opinion of Counsel (which opinion may be subject to customary
    assumptions and exceptions) to the effect that after the
    91st day following the deposit, the trust funds will not be
    subject to the effect of any applicable bankruptcy, insolvency,
    reorganization or similar laws affecting creditors’ rights
    generally.



 



    (h) The Company shall have delivered to the Trustee an
    Officer’s Certificate stating that the deposit was not made
    by the Company with the intent of preferring the Holders of the
    Notes over the other creditors of the Company with the intent of
    defeating, hindering, delaying or defrauding creditors of the
    Company or others.



 



    (i) No event or condition shall exist that would prevent
    the Company from making payments of the principal of, premium,
    if any, and interest on the Notes on the date of such deposit or
    at any time ending on the 91st day after the date of such
    deposit.



 



    (j) Such Defeasance or Covenant Defeasance shall not result
    in the trust arising from such deposit constituting an
    investment company within the meaning of the Investment Company
    Act of 1940, as amended, unless such trust shall be registered
    under such Act or exempt from registration thereunder.





    

    7








 







    (k) The Company shall have delivered to the Trustee an
    Officer’s Certificate and an Opinion of Counsel, each
    stating that all conditions precedent under this Fourth
    Supplemental Indenture to either Defeasance or Covenant
    Defeasance, as the case may be, have been complied with.



 



    Section 7.05  Deposited
    Money and U.S. Government Obligations to Be Held in Trust;
    Miscellaneous Provisions.  Subject to the
    provisions of the last paragraph of Section 1003 of the
    Indenture, all money and U.S. Government Obligations
    (including the proceeds thereof) deposited with the Trustee or
    other qualifying trustee (solely for purposes of this Section
    and Section 7.06, the Trustee and any such other trustee
    are referred to collectively as the “Trustee”)
    pursuant to Section 7.04 in respect of the Notes shall be
    held in trust and applied by the Trustee, in accordance with the
    provisions of the Notes, this Fourth Supplemental Indenture and
    the Indenture, to the payment, either directly or through any
    such Paying Agent (including the Company acting as its own
    Paying Agent) as the Trustee may determine, to the Holders of
    the Notes, of all sums due and to become due thereon in respect
    of principal and any premium and interest, but money so held in
    trust need not be segregated from other funds except to the
    extent required by law.



 



    The Company shall pay and indemnify the Trustee against any tax,
    fee or other charge imposed on or assessed against the
    U.S. Government Obligations deposited pursuant to
    Section 7.04 or the principal and interest received in
    respect thereof other than any such tax, fee or other charge
    which by law is for the account of the Holders of Notes.



 



    Anything in this Article to the contrary notwithstanding, the
    Trustee shall deliver or pay to the Company from time to time
    upon Company Request any money or U.S. Government
    Obligations held by it as provided in Section 7.04 with
    respect to the Notes which, in the opinion of a nationally
    recognized firm of independent public accountants expressed in a
    written certification thereof delivered to the Trustee, are in
    excess of the amount thereof which would then be required to be
    deposited to effect the Defeasance or Covenant Defeasance, as
    the case may be, with respect to the Notes.



 



    Section 7.06  Reinstatement.  If
    the Trustee or the Paying Agent is unable to apply any money in
    accordance with this Article with respect to any Note by reason
    of any order or judgment of any court or governmental authority
    enjoining, restraining or otherwise prohibiting such
    application, then the obligations under the Indenture, this
    Fourth Supplemental Indenture and the Notes from which the
    Company has been discharged or released pursuant to
    Section 7.02 or 7.03 shall be revived and reinstated as
    though no deposit had occurred pursuant to this Article with
    respect to such Note, until such time as the Trustee or Paying
    Agent is permitted to apply all money held in trust pursuant to
    Section 7.05 with respect to such Note in accordance with
    this Article; provided, however, that if the Company makes any
    payment of principal of or any premium or interest on any such
    Note following such reinstatement of its obligations, the
    Company shall be subrogated to the rights (if any) of the
    Holders of such Note to receive such payment from the money so
    held in trust.



 




    ARTICLE 8

    



 




    Miscellaneous



 



    Section 8.01  Application
    of Fourth Supplemental Indenture.  Each and
    every term and condition contained in this Fourth Supplemental
    Indenture that modifies, amends or supplements the terms and
    conditions of the Indenture shall apply only to the Notes
    created hereby and not to any future series of Securities
    established under the Indenture. Except as specifically amended
    and supplemented by, or to the extent inconsistent with, this
    Fourth Supplemental Indenture, the Indenture shall remain in
    full force and effect and is hereby ratified and confirmed.



 



    Section 8.02  Effective
    Date.  This Fourth Supplemental Indenture
    shall be effective as of the date first above written and upon
    the execution and delivery hereof by each of the parties hereto.



 



    Section 8.03  Counterparts.  This
    Fourth Supplemental Indenture may be executed in any number of
    counterparts, each of which so executed shall be deemed to be an
    original, but all such counterparts shall together constitute
    but one and the same instrument.



 




    [Signature
    page follows]





    

    8








 







    IN WITNESS WHEREOF, the parties hereto have caused this Fourth
    Supplemental Indenture to be duly executed by their respective
    officers hereunto duly authorized, all as of the day and year
    first above written.



 



    HCC INSURANCE HOLDINGS, INC.



 


			
	 	    By: 
	
        









    Name:     

    Title:   



 



    U.S. Bank National Association, as Trustee



 


			
	 	    By: 
	
        









    Name:     

    Title:   





    

    9








 








    SCHEDULE 1



 



    List of Restricted Subsidiaries as of November 16, 2009



 



    Illium, Inc.




    Houston Casualty Company




    US Specialty Insurance Company





    

    10








 








    EXHIBIT A



 




    [Face of
    Security]

    6.300% Senior Notes due 2019



 



    If the registered owner of this security is The Depository
    Trust Company or a nominee thereof, the following legend is
    applicable: THIS SECURITY IS IN GLOBAL FORM WITHIN THE
    MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
    REGISTERED IN THE NAME OF THE DEPOSITARY (AS HEREINAFTER
    DEFINED) OR A NOMINEE OF THE DEPOSITARY OR A SUCCESSOR
    DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
    PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY
    NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
    NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
    THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
    DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
    NOMINEE OF SUCH SUCCESSOR DEPOSITARY.



 



    UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
    REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
    STREET, NEW YORK, NEW YORK) (THE “DEPOSITARY,” OR
    “DTC”) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
    TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
    REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
    NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
    DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
    SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
    REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER
    USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
    WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
    CEDE & CO., HAS AN INTEREST HEREIN.



 


		
	    CUSIP
    No. 404132 AH5
    	    
    $     
    



 



    HCC INSURANCE HOLDINGS, INC., a Delaware corporation, promises
    to pay to Cede & Co. or registered assigns, the
    principal amount
    of          
    MILLION and no/100 Dollars ($     ) on
    November 15, 2019.



 



    Interest Payment Dates:  May 15 and
    November 15, commencing May 15, 2010.



 



    Record Dates:  May 1 and November 1.



 



    Reference is hereby made to the further provisions of this
    Security set forth on the reverse side of this Security, which
    further provisions shall for all purposes have the same effect
    as if set forth at this place.



 



    IN WITNESS WHEREOF, the Company has caused this instrument to be
    duly executed under its corporate seal.



 



    HCC INSURANCE HOLDINGS, INC.



 


			
	 	    By: 
	
        









    Name:     




    Title:



 



    Dated:          ,
    2009





    

    11








 







    TRUSTEE’S CERTIFICATE OF AUTHENTICATION



 



    This is one of the Securities referred to in the
    within-mentioned Indenture:



 



    U.S. Bank National Association, as Trustee



 


			
	    By: 
	
        

	 







    Name:     




    Title:





    

    12








 








    [Back of
    Security]

    6.300% Senior Notes due 2019



 



    Capitalized terms used herein shall have the meanings assigned
    to them in the Indenture referred to below unless otherwise
    indicated.



 



    1. INTEREST.  HCC Insurance Holdings,
    Inc., a Delaware corporation (the
    “Company”) promises to pay interest on
    the principal amount of the Notes at 6.300% per annum until the
    principal amount of the Notes is paid or made available for
    payment. The Company shall pay interest, semi-annually in
    arrears on May 15 and November 15, of each year, or if
    any such day is not a Business Day, on the next succeeding
    Business Day (each an “Interest Payment
    Date”), commencing on May 15, 2010. Interest
    on the Notes will accrue from the most recent date to which
    interest has been paid or, if no interest has been paid, from
    November 16, 2009. The Company shall pay interest (including
    post-petition interest in any proceeding under any Bankruptcy
    Law) on overdue principal from time to time on demand at a rate
    equal to the per annum rate on the Notes then in effect; it
    shall pay interest (including post-petition interest in any
    proceeding under any Bankruptcy Law) on overdue installments of
    interest (without regard to any applicable grace periods) from
    time to time on demand at the same rate to the extent lawful.
    Interest will be computed on the basis of a
    360-day year
    of twelve
    30-day
    months.



 



    2. METHOD OF PAYMENT.  Except as provided
    below, interest will be paid (i) on any Global Notes to DTC
    by wire transfer of immediately available funds to the account
    of DTC or its nominee and (ii) on any definitive Notes
    (A) by check mailed or delivered to the Holders of the
    Notes at their respective addresses set forth in the Security
    Register or (B) by wire transfer of immediately available
    funds to an account previous specified in writing by the Holder
    to the Company and the Trustee.



 



    The Company may pay interest, including interest payable at
    Stated Maturity, on definitive Notes at the Company’s
    office or agency in the Borough of Manhattan, The City of New
    York, which initially will be the Corporate Trust Office of
    the Trustee in The City of New York.



 



    Principal on definitive Notes will be payable, upon Stated
    Maturity or when due, at the office or agency of the Company in
    Borough of Manhattan, The City of New York, maintained for such
    purpose, initially the Corporate Trust Office of the
    Trustee in The City of New York.



 



    Subject to the terms and conditions of the Indenture, the
    Company will make payments in cash in respect of
    Redemption Prices and at Stated Maturity to Holders who
    surrender Notes to a Paying Agent to collect such payments in
    respect of the Notes. The Company will pay cash amounts in money
    of the United States that at the time of payment is legal tender
    for payment of public and private debts.



 



    3. PAYING AGENT AND SECURITY
    REGISTRAR.  Initially, U.S. Bank National
    Association will act as Paying Agent and Security Registrar. The
    Company may appoint and change any Paying Agent, Security
    Registrar or co-registrar without notice, other than notice to
    the Trustee, except that the Company will maintain at least one
    Paying Agent in the State of New York, City of New York, Borough
    of Manhattan, which shall initially be an office or agency of
    the Trustee. The Company or any of its Subsidiaries or any of
    their Affiliates may act as Paying Agent, Conversion Agent,
    Security Registrar or co-registrar.



 



    4. INDENTURE.  The Company issued the
    Notes under an Indenture, dated as of August 23, 2001 (the
    “Base Indenture”), as supplemented by
    the Fourth Supplemental Indenture dated as of November 16,
    2009 (the “Fourth Supplemental
    Indenture” and, together with the Base Indenture,
    the “Indenture”), between the Company
    and U.S. Bank National Association, as trustee (the
    “Trustee”). The terms of the Notes
    include those stated in the Indenture and those made part of the
    Indenture by reference to the Trust Indenture Act. The
    Notes are subject to all such terms, and Holders are referred to
    the Indenture and such Act for a statement of such terms. The
    Notes issued under the Indenture are general unsecured
    obligations of the Company limited to $300,000,000 in aggregate
    principal amount.



 



    5. OPTIONAL REDEMPTION.  At any time and
    from time to time, the Company may redeem in cash any portion of
    the Notes, in whole or in part, at a Redemption Price equal
    to the greater of (a) the principal amount of the Notes or
    (b) the sum of the present values of the remaining
    scheduled payments of principal






    

    13








 







    and interest on the Notes to be redeemed (not including any
    portion of such payments of interest accrued to the date of
    redemption) discounted to the date of redemption on a semiannual
    basis (assuming a
    360-day year
    consisting of twelve
    30-day
    months) at the applicable Treasury Rate plus 50 basis
    points, plus, in each case (a) and (b), accrued and
    unpaid interest on the principal amount of the Notes being
    redeemed to but excluding the date of redemption (the
    “Redemption Price”). The date of
    any such redemption is known as the
    “Redemption Date”. The Treasury
    Rate will be calculated on the third Business Day immediately
    preceding the Redemption Date.



 



    As used in this Note the following terms have the definitions
    set forth herein:



 



    “Calculation Date” means, with respect to any
    Redemption Date, the third Business Day immediately
    preceding the Redemption Date.



 



    “Comparable Treasury Issue” means the
    U.S. Treasury security selected by the Independent
    Investment Banker as having a maturity comparable to the
    remaining term (“Remaining Life”) of the
    Notes to be redeemed that would be utilized, at the time of
    selection and in accordance with customary financial practice,
    in pricing new issues of corporate debt securities of comparable
    maturity to the Remaining Life.



 



    “Comparable Treasury Price” means, with respect
    to any Redemption Date, (1) the average of five
    Reference Treasury Dealer Quotations for such
    Redemption Date, after excluding the highest and lowest
    Reference Treasury Dealer Quotations, or (2) if the
    Independent Investment Banker obtains fewer than four such
    Reference Treasury Dealer Quotations, the average of all such
    Reference Treasury Dealer Quotations.



 



    “Independent Investment Banker” means Banc of
    America Securities LLC, J.P. Morgan Securities Inc. or
    Wells Fargo Securities, LLC, as specified by the Company, or, if
    these firms are unwilling or unable to select the Comparable
    Treasury Issue, an independent investment banking institution of
    national standing appointed by the Company.



 



    “Reference Treasury Dealer” means (1) Banc
    of America Securities LLC, J.P. Morgan Securities Inc. and
    a Primary Treasury Dealer selected by Wells Fargo Securities,
    LLC and their respective successors, provided, however, that if
    any of the foregoing shall cease to be a primary
    U.S. government securities dealer in New York City (a
    “Primary Treasury Dealer”), the Company
    will substitute therefor another Primary Treasury Dealer and
    (2) any three other Primary Treasury Dealers selected by
    the Company after consultation with the Independent Investment
    Banker.



 



    “Reference Treasury Dealer Quotations” means,
    with respect to each Reference Treasury Dealer and any
    Redemption Date, the average, as determined by the
    Independent Investment Banker, of the bid and asked prices for
    the Comparable Treasury Issue (expressed in each case as a
    percentage of its principal amount) quoted in writing to the
    Independent Investment Banker at 5:00 p.m., New York City
    time, on the third Business Day preceding such
    Redemption Date.



 



    “Treasury Rate” means, with respect to any
    Redemption Date, (i) the yield, under the heading
    which represents the average for the week immediately preceding
    the Calculation Date, appearing in the most recently published
    statistical release designated “H.15(519)” or any
    successor publication which is published weekly by the Board of
    Governors of the Federal Reserve System and which establishes
    yields on actively traded U.S. Treasury securities adjusted
    to constant maturity under the caption “Treasury Constant
    Maturities,” for the maturity corresponding to the
    Comparable Treasury Issue (if no maturity is within three months
    before or after the Remaining Life, yields for the two published
    maturities most closely corresponding to the Comparable Treasury
    Issue will be determined and the Treasury Rate will be
    interpolated or extrapolated from such yields on a straight line
    basis, rounding to the nearest month); or (ii) if such
    release (or any successor release) is not published during the
    week immediately preceding the Calculation Date or does not
    contain such yields, the rate per annum equal to the semiannual
    equivalent yield to maturity of the Comparable Treasury Issue,
    calculated using a price for the Comparable Treasury Issue
    (expressed as a percentage of its principal amount) equal to the
    Comparable Treasury Price for such Redemption Date.





    

    14








 







    In the event the Company redeems less than all of the
    outstanding Notes, the Notes to be redeemed shall be selected by
    the Trustee in accordance with Section 1103 of the
    Indenture. The Company may not give notice of any redemption if
    the Company has defaulted in payment of interest and the default
    is continuing.



 



    6. NOTICE OF REDEMPTION.  Notice of
    redemption will be mailed at least 30 days but not more
    than 60 days before the Redemption Date to each Holder
    of the Notes to be redeemed at such Holder’s address of
    record. The Notes in denominations larger than $1,000 may be
    redeemed in part but only in integral multiples of $1,000. On
    and after redemption of a Note pursuant to Section 5
    and 6, interest shall cease to accrue on such Note.



 



    7. NO MANDATORY REDEMPTION.  The Company
    shall not be required to make mandatory redemption payments with
    respect to the Notes. There are no sinking fund payments with
    respect to the Notes.



 



    8. DENOMINATIONS; TRANSFER; EXCHANGE.  The
    Notes are in registered form without coupons in minimum
    denominations of $2,000 and integral multiples of $1,000 in
    excess thereof. The transfer of Notes may be registered and
    Notes may be exchanged as provided in the Indenture. The
    Security Registrar may require a Holder, among other things, to
    furnish appropriate endorsements and transfer documents and to
    pay any taxes and fees required by law or permitted by the
    Indenture.



 



    9. PERSONS DEEMED OWNERS.  The registered
    Holder of this Note may be treated as its owner for all purposes.



 



    10. AMENDMENT, SUPPLEMENT AND
    WAIVER.  Subject to certain exceptions set forth
    in the Indenture, (i) the Fourth Supplemental Indenture or
    the Notes may be amended with the written consent of the Holders
    of a majority in aggregate principal amount of the Notes at the
    time outstanding and (ii) certain defaults under the Fourth
    Supplemental Indenture or the Notes may be waived with the
    written consent of the Holders of a majority in aggregate
    principal amount of the Notes at the time outstanding. Without
    the consent of any Holder of the Notes, the Fourth Supplemental
    Indenture or the Notes may be amended or supplemented, in
    addition to other events more fully described in the Indenture,
    to cure any ambiguity, defect or inconsistency, to establish the
    form or terms of the Securities, to evidence the succession of
    another corporation to the Company and the assumption by any
    such successor of the covenants of the Company contained in the
    Indenture, to secure the Securities, and to make any change that
    does not materially adversely affect the interests of any Holder
    under the Indenture.



 



    11. DEFAULTS AND REMEDIES.  If any Event
    of Default with respect to the Notes shall occur and be
    continuing, the principal of all the Notes may be declared due
    and payable in the manner and with the effect provided in the
    Indenture.



 



    12. TRUSTEE DEALINGS WITH
    COMPANY.  Subject to certain limitations imposed
    by the Trust Indenture Act, the Trustee under the
    Indenture, in its individual or any other capacity, may become
    the owner or pledgee of Notes and may otherwise deal with and
    collect obligations owed to it by the Company or its Affiliates
    and may otherwise deal with the Company or its Affiliates with
    the same rights it would have if it were not Trustee.



 



    13. NO RECOURSE AGAINST OTHERS.  A
    director, officer, employee, incorporator or shareholder of the
    Company, as such, shall not have any liability for any
    obligations of the Company under the Notes or the Indenture or
    for any claim based on, in respect of, or by reason of, such
    obligations or their creation. Each Holder by accepting a Note
    waives and releases all such liability including any rights
    against any such person in its capacity relating to the Company.
    The waiver and release are part of the consideration for the
    issuance of the Notes.



 



    14. AUTHENTICATION.  This Security shall
    not be valid until authenticated by the manual signature of the
    Trustee or an authenticating agent.



 



    15. ABBREVIATIONS.  Customary
    abbreviations may be used in the name of a Holder or an
    assignee, such as: TEN COM (= tenants in common), TEN ENT (=
    tenants by the entireties), JT TEN (= joint tenants with right
    of survivorship and not as tenants in common), CUST (=
    Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).





    

    15








 







    16. CUSIP NUMBERS.  Pursuant to a
    recommendation promulgated by the Committee on Uniform Security
    Identification Procedures, the Company has caused CUSIP numbers
    to be printed on the Notes and the Trustee may use CUSIP numbers
    in notices of redemption as a convenience to Holders. No
    representation is made as to the accuracy of such numbers either
    as printed on the Notes or as contained in any notice of
    redemption and reliance may be placed only on the other
    identification numbers placed thereon.



 



    17. UNCLAIMED MONEY OR SECURITIES.  The
    Trustee and the Paying Agent shall return to the Company upon
    written request any money or securities held by them for the
    payment of any amount with respect to the Notes that remains
    unclaimed for three years, subject to applicable laws. After
    return to the Company, Holders entitled to the money or
    securities must look to the Company for payment as general
    creditors, subject to applicable laws.



 



    18. DEFEASANCE.  Subject to certain
    conditions set forth in the Indenture, the Company at any time
    may terminate some or all of its obligations under the Notes and
    the Fourth Supplemental Indenture if the Company deposits with
    the Trustee money or U.S. Government Obligations for
    payment of principal and interest on the Notes to the Stated
    Maturity.



 



    19. GOVERNING LAW.  THE INDENTURE AND THE
    NOTES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
    WITH, THE LAWS OF THE STATE OF NEW YORK.



 



    The Company shall furnish to any Holder upon written request and
    without charge a copy of the Indenture which has in it the text
    of this Security in larger type. Requests may be made to:



 




    HCC
    Insurance Holdings, Inc.

    13403 Northwest Freeway

    Houston, Texas 77057

    Attn: Randy D. Rinicella, Esq.
    





    

    16








 








    ASSIGNMENT
    FORM
    



 


 




    To assign
    this Security, fill in the form below:
    



 



    I or we assign and transfer this Security to



 





 






    (Insert assignee’s soc. sec. or tax ID no.)



 





 





 






    (Print or type assignee’s name, address and zip code)



 



    and irrevocably
    appoint          

              agent
    to transfer this Security on the books of the Company. The agent
    may substitute another to act for him.



 





 


 



    Date: ­
    ­ Your
    Signature: ­
    ­



 






    (Sign exactly as your name appears on the other side of this
    Security