EX-4.1



 Exhibit 4.1 

THE NAVIGATORS GROUP, INC. 
 AND

 THE BANK OF NEW YORK MELLON, as Trustee 
  

 
 SECOND SUPPLEMENTAL INDENTURE TO

 INDENTURE DATED AS OF APRIL 17, 2006 

SENIOR DEBT SECURITIES 
 Dated as
of October 4, 2013 
  
  

5.75% Senior Notes due October 15, 2023 
  

 







 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
		
	ARTICLE I RELATION TO INDENTURE; DEFINITIONS	  	 	1	  
	 Section 1.1.
	  	 Relation to Indenture
	  	 	1	  
	 Section 1.2.
	  	 Definitions
	  	 	1	  
		
	 ARTICLE II THE SERIES OF SECURITIES
	  	 	5	  
	 Section 2.1.
	  	 Designation
	  	 	5	  
	 Section 2.2.
	  	 Limitation on Aggregate Principal Amount
	  	 	5	  
	 Section 2.3.
	  	 Principal Payment Date
	  	 	5	  
	 Section 2.4.
	  	 Interest and Interest Rates
	  	 	5	  
	 Section 2.5.
	  	 Interest Rate Adjustment
	  	 	5	  
	 Section 2.6.
	  	 Place of Payment
	  	 	6	  
	 Section 2.7.
	  	 Denomination
	  	 	7	  
	 Section 2.8.
	  	 Currency
	  	 	7	  
	 Section 2.9.
	  	 Form of Senior Notes; Global Form
	  	 	7	  
	 Section 2.10.
	  	 Registrar and Paying Agent for the Senior Notes
	  	 	7	  
	 Section 2.11.
	  	 Sinking Fund Obligations
	  	 	7	  
	 Section 2.12.
	  	 Legal Defeasance and Covenant Defeasance
	  	 	8	  
	 Section 2.13.
	  	 Optional Redemption
	  	 	8	  
	 Section 2.14.
	  	 Payment of Taxes
	  	 	8	  
	 Section 2.15.
	  	 Limitation on Liens on Stock of Significant Subsidiaries
	  	 	8	  
	 Section 2.16.
	  	 Limitations on Issue or Disposition of Capital Stock of Significant Subsidiaries
	  	 	9	  
	 Section 2.17.
	  	 Limitation on Incurrence of Indebtedness
	  	 	9	  
	 Section 2.18.
	  	 Events of Default
	  	 	10	  
	 Section 2.19.
	  	 Immediately Available Funds
	  	 	10	  
		
	 ARTICLE III MISCELLANEOUS PROVISIONS
	  	 	10	  
	 Section 3.1.
	  	 Trustee Not Responsible For Recitals
	  	 	10	  
	 Section 3.2.
	  	 Adoption, Ratification and Confirmation
	  	 	10	  
	 Section 3.3.
	  	 Separability
	  	 	10	  
	 Section 3.4.
	  	 Counterparts
	  	 	11	  
	 Section 3.5.
	  	 GOVERNING LAW
	  	 	11	  
	 Section 3.6.
	  	 Damages
	  	 	11	  
	 Section 3.7.
	  	 Force Majeure
	  	 	11	  
	 Section 3.8.
	  	 Waiver of Jury Trial
	  	 	11	  
		
	 EXHIBIT A: Form of 5.75% Senior Note due October 15, 2023
	  			


  
 i 








 THE NAVIGATORS GROUP, INC. 

SECOND SUPPLEMENTAL INDENTURE TO 

INDENTURE DATED AS OF APRIL 17, 2006 

5.75% Senior Notes due October 15, 2023 

SECOND SUPPLEMENTAL INDENTURE, dated as of October 4, 2013 (this “Second Supplemental Indenture”) between THE NAVIGATORS
GROUP, INC., a Delaware corporation (the “Company”), and THE BANK OF NEW YORK MELLON, a New York corporation, (as successor to JPMorgan Chase Bank, N.A.), as Trustee (the “Trustee”) under the Indenture dated as of
April 17, 2006 (the “Indenture”) between the Company and the Trustee. 
 RECITALS 

WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide, among other things, for unsecured debentures, notes or
other evidences of indebtedness to be issued by the Company from time to time in one or more series under the Indenture; 
 WHEREAS,
Section 2.02 of the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture. 

WHEREAS, Section 9.01(g) of the Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the
Indenture to establish the form and terms and conditions of Securities of any series as provided by Sections 2.01 and 2.02 of the Indenture. 

WHEREAS, the Board of Directors of the Company has duly adopted resolutions authorizing the Company to execute and deliver this Second
Supplemental Indenture; 
 WHEREAS, pursuant to the terms of the Indenture, the Company desires to enter into this Second Supplemental
Indenture to provide for the establishment of a new series of its Securities to be known as its 5.75% Senior Notes due October 15, 2023 (the “Senior Notes”); and 

WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture and all things necessary to make
(i) this Second Supplemental Indenture a valid instrument in accordance with its terms, and (ii) the Senior Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been
done. 
 NOW THEREFORE, in consideration of the purchase and acceptance of the Senior Notes by the Holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and terms of the Senior Notes, the Company covenants and agrees with the Trustee as follows: 

ARTICLE I 
 RELATION TO INDENTURE;
DEFINITIONS 
 Section 1.1. Relation to Indenture. This Second Supplemental Indenture constitutes an integral part of the
Indenture. 
 Section 1.2. Definitions. For all purposes of this Second Supplemental Indenture: 

(a) a term defined in the Indenture has the same meaning when used in this Second Supplemental Indenture unless the definition of such term is
amended and supplemented pursuant to this Second Supplemental Indenture; 







 (b) a term defined anywhere in this Second Supplemental Indenture has the same meaning
throughout; 
 (c) the singular includes the plural and vice versa; 

(d) a reference to a Section or Article is to a Section or Article of this Second Supplemental Indenture, unless otherwise indicated; 

(e) headings are for convenience of reference only and do not affect interpretation; 

(f) the terms “herein,” “hereof,” “hereunder” and other words of similar import refer to
this Second Supplemental Indenture; and 
 (g) the following terms have the meanings given to them in this Section 1.2(g): 

“Acquired Indebtedness” means, with respect to the Company or the Company’s Subsidiaries, Indebtedness of any other
Person existing at the time the other Person is merged or consolidated with or into, otherwise combines with, or becomes a Subsidiary of, the Company or any of the Company’s Subsidiaries, including Indebtedness incurred in connection with, or
in contemplation of, the other Person’s merging or consolidating with or into, otherwise combining with, or becoming a Subsidiary of, the Company or any of the Company’s Subsidiaries. 

“Balance Sheet Date” means the last day of any annual or quarterly period for which the Company’s consolidated statement
of financial condition is delivered to the Trustee as required under Section 4.03 of the Indenture. 
 “Capital Lease
Obligations” of any Person means such obligations of the Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet of the person under GAAP (excluding all obligations under operating leases required by the Financial Accounting Standards Board to be classified or accounted for as
capital leases). The amount of such obligations will be the capitalized amount thereof, determined in accordance with GAAP. 

“Comparable Treasury Issue,” means the United States Treasury security selected by an Independent Investment Banker as having
a maturity comparable to the remaining term of the Senior 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 term of such Senior Notes (“Remaining Life”). 
 “Comparable Treasury Price,”
means, with respect to any Redemption Date, (i) the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations. 

“Consolidated Net Worth” means, as of the date of determination, the sum of the consolidated stockholders’ equity of the
Company and its Subsidiaries, as determined in accordance with GAAP less the effect of any unrealized gain or loss reported under Statement of Financial Accounting Standards No. 115. 







 “Consolidated Total Capitalization” means, at any date of determination, the sum
of (i) the principal amount of all outstanding Consolidated Total Debt and (ii) Consolidated Net Worth. 
 “Consolidated
Total Debt” means, at any date of determination, all of the Company’s and the Company’s Subsidiaries’ Indebtedness on a consolidated basis (including any subordinated Indebtedness of the Company’s Subsidiaries).
Indebtedness in respect of letters of credit will not be included in the determination of Consolidated Total Debt to the extent that any letter of credit is undrawn as of the date of determination. 

“Credit Facility,” means the Amended and Restated Funds at Lloyds Letter of Credit Agreement dated as of November 21,
2012, among the Company, ING Bank N.V., London Branch, individually and as Administrative Agent and Letter of Credit Agent, JPMorgan Chase Bank N.A., and Barclays Bank. 

“Depositary,” means The Depository Trust Company, New York, New York, or any successor thereto registered as a clearing
agency pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation. 

“Fair Value,” when used with respect to capital stock, means the fair value thereof as determined in good faith by the Board
of Directors. 
 “GAAP” means generally accepted accounting principles in the United States of America as in effect on the
date hereof. 
 “Indebtedness” of any entity means, without duplication, (a) all obligations of such entity for
borrowed money or with respect to deposits or advances of any kind; (b) all obligations of such entity evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such entity upon which interest charges are
customarily paid or accrued; (d) all obligations of such entity under conditional sale or other title retention agreements relating to property acquired by such entity; (e) all obligations of such entity in respect of deferred purchase
price of property or services (excluding current accounts payable incurred in the ordinary course of business on normal trade terms and not overdue by more than 90 days); (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, conditional or otherwise, to be secured by) any lien on property owned or acquired by such entity, whether or not the Indebtedness secured thereby has been assumed, but limited to the fair market value of
such property, (g) all Capital Lease Obligations and synthetic lease obligations of such entity; (h) all obligations, contingent or otherwise, of such entity for the reimbursement of any obligor in respect of letters of credit, letters of
guaranty, bankers’ acceptances and similar credit transactions; (i) the redemption price of all redeemable preferred stock of such entity (but not accrued dividends on any preferred stock) but only to the extent that such stock is
redeemable at the option of the holder or requires sinking fund or similar payments at any time prior to the Stated Maturity of the Senior Notes; and (j) all guarantees by such entity in respect of the Indebtedness or obligations of others of
the kinds referred to in (a) through (i) above. The Indebtedness of any entity shall include the Indebtedness of any other entity (including any partnership in which such entity is a general partner) to the extent such entity is liable
therefor as a result of such entity’s ownership interest in or other relationships with such entity, except to the extent that the terms of such Indebtedness provide that such entity is not liable therefor. The Indebtedness of an entity shall
exclude reinsurance balances payable, accounts payable and any other similar operating liabilities incurred in the normal course of business. 







 “Independent Investment Banker,” means Goldman, Sachs & Co., or, if
Goldman, Sachs & Co. is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company. 

“Leverage Ratio” means, as of any determination date, the ratio of (a) the Consolidated Total Debt to
(b) Consolidated Total Capitalization. 
 “Redemption Date,” with respect to any Senior Note or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this Second Supplemental Indenture or such Senior Note. 

“Redemption Price,” with respect to any Senior Note or portion thereof to be redeemed, means the price at which it is to be
redeemed as determined by or pursuant to this Second Supplemental Indenture or such Senior Note. 
 “Reference Treasury
Dealer,” means (1) Goldman, Sachs & Co. and its successors, provided, however, that if 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 four 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,” for the
interest payable on the Senior Notes on any Interest Payment Date means the date specified in the Senior Notes as the “record date.” 

“Significant Subsidiary,” means any Subsidiary of the Company that would be a significant subsidiary of the Company pursuant
to Rule 405 of the Securities Act of 1933, as amended. 
 “Special Record Date,” for the payment of any defaulted interest
on the Senior Notes means a special record date fixed by the Company pursuant to Section 2.14 of the Indenture. 
 “Treasury
Rate,” means, with respect to any Redemption Date: (i) the yield, under the heading which represents the average for the immediately preceding week, 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 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. The Treasury Rate will be calculated on the third Business Day preceding the Redemption Date. 







 ARTICLE II 

THE SERIES OF SECURITIES 

Section 2.1. Designation. There shall be a series of Securities designated the “5.75% Senior Notes due October 15,
2023.” 
 Section 2.2. Limitation on Aggregate Principal Amount. The aggregate principal amount of the Senior Notes shall
initially be limited to $265,000,000. The Company may, without the consent of the Holders of the Senior Notes, issue additional Securities having the same interest rate, maturity date and other terms as the Senior Notes initially issued hereunder.
Any such additional Securities, together with the Senior Notes initially issued hereunder, will constitute a single series of Securities under the Indenture. No additional Securities may be issued if an Event of Default under the Indenture has
occurred and is continuing. 
 Section 2.3. Principal Payment Date. The principal amount of the Senior Notes outstanding
(together with any accrued and unpaid interest) shall be payable in a single installment on October 15, 2023, which date shall be the Stated Maturity of the Senior Notes outstanding. 

Section 2.4. Interest and Interest Rates. The rate of interest on each Senior Note shall be 5.75% per annum, subject to
adjustment as set forth in Section 2.5 below, accruing from October 4, 2013, or from the most recent interest payment date to which interest has been paid or duly provided for, payable semiannually in arrears on April 15 and
October 15 of each year commencing April 15, 2014 (each such date, an “Interest Payment Date”) until the principal thereof shall have become due and payable, and until the principal thereof is paid or duly provided for or
made available for payment. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of
the actual number of days elapsed in a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on any Senior Note is not a Business Day, then payment of interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). The interest installment so payable in respect of any Senior Note, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name such Senior Note is registered at the close of business on the April 1 or October 1 (whether or not a Business Day) immediately preceding such Interest Payment Date.
Any such interest installment not so punctually paid or duly provided for in respect of any Senior Note shall forthwith cease to be payable to the Holder on such Regular Record Date and shall be paid to the Person in whose name such Senior Note is
registered at the close of business on a Special Record Date to be fixed by the Company for the payment of such defaulted interest, notice whereof shall be given to the Holders of the Senior Notes not less than 15 days prior to such Special Record
Date. 
 Section 2.5. Interest Rate Adjustment. (a) If the rating on the Senior Notes from any of Standard &
Poor’s Ratings Services (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), or Fitch Ratings (“Fitch”) (each of S&P, Moody’s and Fitch, a “Rating
Agency”), is a rating set forth in the table below, the interest rate payable on the Senior Notes shall increase by the sum of the number of basis points set forth below next to each of the two lowest of such ratings. 

 

									
	Rating Levels	  	Rating Agency	 	 
	  	Moody’s	  	S&P	 	Fitch	 	Percentage
					
	1	  	Ba1	  	BB+	 	BB+	 	25 basis points
	2	  	Ba2	  	BB	 	BB	 	50 basis points
	3	  	Ba3	  	BB–	 	BB–	 	75 basis points
	4	  	B1 or below	  	B+ or below	 	B+ or below	 	100 basis points








 If only two Rating Agencies provide a rating on the Senior Notes, the interest rate shall
increase by the sum of the number of basis points set forth above next to each of such ratings. If only one Rating Agency provides a rating on the Senior Notes, the interest rate on the Senior Notes will be increased by two times the number of basis
points set forth above opposite such rating. If no Rating Agency provides a rating on the Senior Notes, the per annum interest on the Senior Notes will increase to, or remain at, as the case may be, 200 basis points above 5.75%. 

If any Rating Agency changes its rating or initiates a rating with respect to the Senior Notes, the per annum interest rate on the Senior
Notes will be increased or decreased in accordance with the foregoing requirements. 
 Any interest rate increase or decrease set forth in
this Section 2.5 will take effect from the first Business Day of the interest period during which a rating change requires an adjustment in the interest rate. If any Rating Agency changes its rating on the Senior Notes more than once during any
particular interest period, the last such change to occur will control for purposes of the rating provided by such Rating Agency for the applicable interest period. 

The interest rate on the Senior Notes shall permanently cease to be subject to any adjustment described above (notwithstanding any subsequent
decrease in the ratings by any other Rating Agency) if the Senior Notes become rated A, A2 or A or higher by any two of S&P, Moody’s, or Fitch, respectively, with a stable or positive outlook. 

In no event shall (1) the per annum interest rate on the Senior Notes be reduced below 5.75%, and (2) the total increase in the per
annum interest rate on the Senior Notes exceed 200 basis points above 5.75%. Nothing herein shall be construed as a requirement that the Company obtain a rating on the Senior Notes from any Rating Agency or otherwise. 

For purposes of this Section 2.5, the term “interest period” shall mean the period from and including an Interest Payment Date
(or, if prior to the first Interest Payment Date, from and including the date of original issuance of the Senior Notes) to but excluding the next succeeding Interest Payment Date. 

(b) The Company shall give the Trustee prompt written notice of any increase or decrease, pursuant to this Section 2.5, in the interest
rate on the Senior Notes, which notice shall set forth the amount of such increase or decrease, the basis therefor and the date from which such increase or decrease shall take effect. The Trustee shall have no duty to independently determine whether
any such increase or decrease has occurred, the amount of such increase or decrease or the date from which such increase or decrease shall take effect and shall be entitled to conclusively rely as to such matters on the foregoing written notice from
the Company. 
 Section 2.6. Place of Payment. The Place of Payment where the Senior Notes may be presented or surrendered for
payment, where the Senior Notes may be surrendered for registration of transfer or exchange and where notices and demand to or upon the Company in respect of the Senior Notes and the Indenture may be served shall be the Corporate Trust Office of the
Trustee. 







 Section 2.7. Denomination. The Senior Notes shall be issuable in registered form
without coupons in denominations of $2,000 or integral multiples of $1,000 in excess thereof. 
 Section 2.8. Currency.
Principal, premium, if any, and interest on the Senior Notes shall be payable in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts. 

Section 2.9. Form of Senior Notes; Global Form. 

(a) The Senior Notes shall be substantially in the form attached as Exhibit A hereto. The terms and provisions contained in the form of
Senior Notes set forth in Exhibit A shall constitute, and are hereby expressly made, a part of the Indenture as supplemented by this Second Supplemental Indenture. 

Any of the Senior Notes may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes
as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of the Indenture as supplemented by this Second Supplemental Indenture, or as may be
required by the Depositary or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Senior
Notes are subject. 
 (b) So long as any Senior Notes are eligible for book-entry settlement with the Depositary, or unless otherwise
required by law, or otherwise contemplated by Section 2.08 of the Indenture, all of the Senior Notes shall be represented by one or more Securities in global form registered in the name of the Depositary or the nominee of the Depositary (each
and collectively, the “Global Note”). The transfer and exchange of beneficial interests in any such Global Note shall be effected through the Depositary in accordance with the Indenture and the applicable procedures of the
Depositary. Except as provided in Section 2.08 of the Indenture, beneficial owners of a Global Note shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such Global Note. 
 (c) Any Global Note shall represent such of the
outstanding Senior Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Senior Notes from time to time endorsed thereon and that the aggregate amount of outstanding Senior Notes
represented thereby may from time to time be increased or reduced to reflect redemptions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Senior
Notes represented thereby shall be made by the Trustee in such manner and upon instructions given by the Holder of such Senior Notes in accordance with the Indenture. Payment of principal of and interest and premium, if any, on any Global Note shall
be made to the Holder of such Senior Note. 
 Section 2.10. Registrar and Paying Agent for the Senior Notes. The Trustee shall
serve initially as Registrar and Paying Agent for the Senior Notes. 
 Section 2.11. Sinking Fund Obligations. The Company has
no obligation to redeem or purchase any Senior Notes pursuant to any sinking fund or analogous requirement or upon the happening of a specified event or at the option of a Holder thereof. 







 Section 2.12. Legal Defeasance and Covenant Defeasance. The provisions of
Section 8.02 of the Indenture (relating to legal defeasance) and Section 8.03 of the Indenture (relating to covenant defeasance) shall apply to the Senior Notes. 

Section 2.13. Optional Redemption. 

(a) The Company may redeem the Senior Notes, in whole or in part, at any time at a Redemption Price equal to the greater of (i) 100% of
the principal amount of the Senior Notes then outstanding to be redeemed or (ii) an amount, as determined by an Independent Investment Banker, equal to the sum of the present values of the remaining scheduled payments of principal of and
interest on the Senior Notes to be redeemed (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date 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 either of the above cases, accrued and unpaid interest thereon to, but not including, the Redemption Date. 

(b) If less than all of the Senior Notes are to be redeemed, the Trustee will select, by such method as it will deem fair and appropriate,
including pro rata or by lot, the Senior Notes to be redeemed in whole or in part; provided, that no Senior Notes having a principal amount of $2,000 or less shall be redeemed in part; and provided, further, that Senior Notes and portions of Senior
Notes selected for redemption shall be in principal amounts of $2,000 or integral multiples of $1,000 in excess thereof. 
 (c) Unless the
Company defaults in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Senior Notes or portions thereof called for redemption. 

(d) Notwithstanding Section 3.03 of the Indenture, any notice to Holders of the foregoing redemption need not set forth the Redemption
Price but only the manner of calculation thereof. Promptly after the Company calculates the Redemption Price, the Company shall give the Trustee notice thereof and the Trustee shall have no responsibility for calculating the Redemption Price. 

Section 2.14. Payment of Taxes. The following covenant shall be solely for the benefit of the Holders of the Senior Notes. The
Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary of the Company or upon the income, profits
or property of the Company or any Subsidiary of the Company, and lawful claims for labor, materials and supplies, which, if unpaid, might by law become a lien upon the property of the Company or any such Subsidiary; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, governmental charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

 Section 2.15. Limitation on Liens on Stock of Significant Subsidiaries. The following covenant shall be solely for the
benefit of the Holders of the Senior Notes. Except for the lien on the shares of Navigators Insurance Company common stock under the Credit Facility, or any amendment, extension or replacement thereof, including replacements in the form of other
instruments, facilities or structures that are used primarily to support the Company’s participation in the Lloyd’s of London market through Subsidiaries of the Company which are Lloyd’s corporate members, the Company will not, and it
will not permit any Subsidiary of the Company to create, assume, incur or permit to exist any Indebtedness secured by a pledge, lien or other encumbrance (any pledge, lien or other encumbrance being hereinafter in this Section referred to as a
“lien”) on the voting securities of any Significant Subsidiary or any Subsidiary succeeding to any substantial part of the business of the Company now conducted by any Significant Subsidiary, or the voting securities of a Subsidiary
that owns, directly or 







 
indirectly, the voting securities of any of the Significant Subsidiaries or any Subsidiary succeeding to any substantial part of the business of the Company now conducted by any Significant
Subsidiary without making effective provision whereby the Senior Notes then outstanding (and, if the Company so elects, any other Indebtedness of the Company that is not subordinate to the Senior Notes and with respect to which the governing
instruments require, or pursuant to which the Company is otherwise obligated or required, to provide such security) shall be equally and ratably secured with such secured Indebtedness so long as such other Indebtedness shall be secured. For the
purposes of this covenant, “voting securities” means capital stock or other equity interests which ordinarily have voting power for the election of directors, managers or trustees of a Subsidiary, whether at all times or only so long as no
senior class of capital stock or equity interest has such voting power by reason of any contingency. 
 If the Company shall hereafter be
required to secure the Senior Notes equally and ratably with any other Indebtedness pursuant to this Section, (i) the Company will promptly deliver to the Trustee an Officers’ Certificate stating that the foregoing covenant has been
complied with, and an Opinion of Counsel stating that in the opinion of such counsel the foregoing covenant has been complied with and that any instruments executed by the Company or any Subsidiary of the Company in the performance of the foregoing
covenant comply with the requirements of the foregoing covenant and (ii) the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto in form satisfactory to the Trustee in order to provide for such security.

 Section 2.16. Limitations on Issue or Disposition of Capital Stock of Significant Subsidiaries. The following covenant shall
be solely for the benefit of the Holders of the Senior Notes. As long as any of the Senior Notes remain outstanding, the Company will not, and will not permit any Subsidiary of the Company to, issue, sell, assign, transfer or otherwise dispose of,
directly or indirectly, any of the capital stock of any Significant Subsidiary (except to the Company or to one or more Subsidiaries of the Company or for the purpose of qualifying directors); provided, however, that this covenant
shall not apply if (i) the entire capital stock of a Significant Subsidiary then owned by the Company or by its Subsidiaries is disposed of in a single transaction or in a series of related transactions for consideration consisting of cash or
other property which is at least equal to the Fair Value of such capital stock; or (ii) after giving effect to the issuance, sale, assignment, transfer or other disposition, the Company and its Subsidiaries would own directly or indirectly at
least 80% of the issued and outstanding capital stock of such Significant Subsidiary and such issuance, sale, assignment, transfer or other disposition is made for consideration consisting of cash or other property which is at least equal to the
Fair Value of such capital stock. 
 Section 2.17. Limitation on Incurrence of Indebtedness. The following covenants shall be
solely for the benefit of the Holders of the Senior Notes. (a) The Company will not, and will not permit any of its Subsidiaries to create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable for, contingently or
otherwise, any Indebtedness unless (i) no Event of Default with respect to the Senior Notes has occurred and is continuing and (ii) the Leverage Ratio as of the Balance Sheet Date immediately preceding the date on which such additional
Indebtedness is incurred would have been no greater than 0.35 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness and all other Indebtedness incurred since the
immediately preceding Balance Sheet Date had been incurred and the proceeds therefrom applied as of such day. 
 (b) The Leverage Ratio as
of any Balance Sheet Date shall be no greater than 0.40 to 1.00. 







 Section 2.18. Events of Default. In addition to the Events of Default set forth in
Section 6.01 of the Indenture, the occurrence of the following shall be an Event of Default with respect to the Senior Notes: 
 (a)
any event of default as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness of the Company (including an Event of Default under any other series of
Securities), whether such Indebtedness now exists or shall hereafter be created or incurred, shall happen and shall consist of default in the payment of more than $50,000,000 in principal amount of such Indebtedness at the maturity thereof (after
giving effect to any applicable grace period) or shall result in such Indebtedness in principal amount in excess of $50,000,000 becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, and such
default shall not be cured or such acceleration shall not be rescinded or annulled within a period of 30 days after there shall have been received by the Company from the Trustee, or by the Company and the Trustee from the Holders of at least 25% in
aggregate principal amount of the Senior Notes then outstanding, a Notice of Default (as defined in the Indenture) with respect to the foregoing Default; and 

(b) failure by the Company to cause the Leverage Ratio to be no greater than 0.35 to 1.00 for sixty (60) days after the incurrence of
Indebtedness subject to Section 2.17 hereof; provided, that (i) in the event the use of proceeds of such Indebtedness is an acquisition (whether by merger, consolidation, share or asset acquisition or an acquisition of renewal rights or
similar transaction) by the Company or a Subsidiary of the Company’s, or such Indebtedness is Acquired Indebtedness, the period of grace shall be until the eighteen-month anniversary of such incurrence and (2ii) the period of grace shall
be ninety (90) days after the incurrence of Indebtedness, the proceeds of which will be used to redeem the Senior Notes. 

Section 2.19. Immediately Available Funds. All payments of principal, premium, if any, and interest on Global Notes shall be made
in immediately available funds. 
 ARTICLE III 

MISCELLANEOUS PROVISIONS 

Section 3.1. Trustee Not Responsible For Recitals. The recitals herein contained are made by the Company and not by the Trustee,
and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture. 

Section 3.2. Adoption, Ratification and Confirmation. The Indenture, as supplemented and amended by this Second Supplemental
Indenture, is in all respects hereby adopted, ratified and confirmed. 
 Section 3.3. Separability. In case any one or more of
the provisions contained in this Second Supplemental Indenture or in the Senior Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other
provisions of this Second Supplemental Indenture or of the Senior Notes, but this Second Supplemental Indenture and the Senior Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or
therein. 







 Section 3.4. Counterparts. This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. 

Section 3.5. GOVERNING LAW. THIS SECOND SUPPLEMENTAL INDENTURE AND EACH SENIOR NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS MAY OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS OF LAW. 
 Section 3.6.
Damages. In no event shall the Trustee be responsible or liable for special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has
been advised of the likelihood of such loss or damage and regardless of the form of action. 
 Section 3.7. Force Majeure. The
Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Second Supplemental Indenture arising out of or caused, directly or indirectly, by circumstances beyond its control, including,
without limitation, any provision of any law or regulation or any act of any governmental authority, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or
malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action. 

Section 3.8. Waiver of Jury Trial. EACH OF THE COMPANY, THE TRUSTEE AND EACH HOLDER OF A SENIOR NOTE, BY ITS ACCEPTANCE THEREOF,
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECOND SUPPLEMENTAL INDENTURE, THE SENIOR NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY. 







 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly
executed as of the day and year first above written. 
  

					
	THE NAVIGATORS GROUP, INC.
		
	By:	 	 /s/ Ciro M. DeFalco

		 	Name:	 	Ciro M. DeFalco
		 	Title:	 	Senior Vice President and Chief Financial Officer
	
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	 /s/ Thomas Hacker

		 	Name:	 	Thomas Hacker
		 	Title:	 	Vice President









 EXHIBIT A 

(FACE OF NOTE) 
 5.75% Senior Note
due October 15, 2023 
 [Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New
York corporation (“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 in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), 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. 638904 AB8	  	$            
	No.	  	

 THE NAVIGATORS GROUP, INC., promises to pay to [CEDE & CO.]* or registered assigns, the principal sum
of          DOLLARS [or such other principal sum as set forth in the Schedule of Exchanges of Interests in the Global Note attached hereto]* on October 15, 2023. 

 

			
	Interest Payment Dates:	  	April 15 and October 15 of each year commencing April 15, 2014.
		
	Regular Record Dates:	  	the close of business on April 1 or October 1 (whether or not a Business Day).

  

			
	THE NAVIGATORS GROUP, INC.
		
	By:	 	  

		 	Name:
		 	Title:


 This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture. 
 Dated: 
  

			
	THE BANK OF NEW YORK MELLON., as Trustee
		
	By:	 	  

		 	Authorized Signatory


  

	*	Insert in Global Notes. 


  
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 (BACK OF NOTE) 

5.75% Senior Note due October 15, 2023 

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

1. Interest. The Navigators Group, Inc., a Delaware corporation (the “Company”), promises to pay interest on the
principal amount of this Note at the rate of 5.75% per annum from October 4, 2013 until maturity (subject to adjustment of such interest rate as provided in the Second Supplemental Indenture referred to below). The Company will pay interest
semiannually on April 15 and October 15 of each year (each an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or duly provided for or, if no interest
has been paid or duly provided for, from the date of original issuance thereof; provided, that if there is no existing Default in the payment of interest, and if this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be April 15, 2014. 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. The amount
of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of the actual number of days elapsed in a
360-day year of twelve 30-day months. 
 2. Method of Payment. The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered Holders of Notes at the close of business on the April 1 or October 1 (whether or not a Business Day) next preceding the Interest Payment Date, even if such Notes are canceled after such Regular Record
Date and on or before such Interest Payment Date, except as provided in Section 2.14 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the
Company maintained for such purpose within the State of New York; provided, that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to the Company and the Paying Agent at least 15 days prior to the applicable payment date. Such payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts. 
 3. Paying Agent and Registrar. Initially, The Bank of
New York Mellon, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company may act in any such capacity. 

4. Indenture. The Company issued the Notes under a Senior Indenture dated as of April 17, 2006 between the Company and The Bank of New
York Mellon (as successor to JPMorgan Chase Bank, N.A.), as Trustee. The terms of the Notes include those stated in the Indenture and in the Second Supplemental Indenture dated as of October 4, 2013 (collectively herein called the
“Indenture”), and those terms made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). The Notes are subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of such terms. The Notes are general obligations of the Company. “Notes” means this Note and all other Notes of the series of which this Note is a part. The Notes are “Securities” within
the meaning of the Indenture, and references in the Indenture to “Securities” (including terms such as “Global Securities”) include the Notes (and any “Global Notes” as used herein). 

  
 A-2 








 5. Optional Redemption. 

(a) The Company may redeem the Notes, in whole or in part, at any time at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the Notes then outstanding to be redeemed or (ii) an amount, as determined by an Independent Investment Banker, equal to the sum of the present values of the remaining scheduled payments of principal of and interest on the
Notes to be redeemed (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date 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 either of the above cases, accrued and unpaid interest thereon to, but not including, the Redemption Date. 

(b) If less than all of the Notes are to be redeemed, the Trustee will select, by such method as it will deem fair and appropriate, including
pro rata or by lot, the Notes to be redeemed in whole or in part; provided, that no Notes having a principal amount of $2,000 or less shall be redeemed in part; and provided, further, that Notes and portions of Notes selected for redemption shall be
in principal amounts of $2,000 or integral multiples of $1,000 in excess thereof. 
 (c) Unless the Company defaults in payment of the
Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Notes or portions thereof called for redemption. 

6. Mandatory Redemption. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the
Notes. 
 7. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a
notice of redemption by first-class mail, postage prepaid, to each Holder of Notes to be redeemed. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption. 

8. Denomination, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $2,000 or 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 Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not transfer or exchange any Note selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, it need not transfer or exchange any Note for a period of 15 days before the mailing of a notice of redemption. 

9. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes, except as provided in the
Indenture. 
 10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of a majority in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes and such other series as a single class), and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes and such other series as a
single class). Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in


  
 A-3 








 
addition to or in place of certificated Notes, to provide for the assumption of the Company’s obligations to Holders of the Notes in case of a merger, consolidation or certain other events,
to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect in any material respect the interests under the Indenture of any such Holder, or to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture under the TIA. 
 11. Defaults and Remedies. Each of the
following constitutes an Event of Default with respect to the Notes: (i) default by the Company in the payment of interest on the Notes when the same becomes due and payable and default continues for a period of 30 days; (ii) default by
the Company in the payment of the principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption or otherwise; (iii) failure by the Company to comply with Section 5.01 of the Indenture;
(iv) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes which are for the benefit of the Notes; (v) failure by the Company to cure a default under any mortgage,
indenture or other instrument of more than $50,000,000 in principal amount of Indebtedness within 30 days after written notice of default; (vi) failure by the Company to cause the Leverage Ratio to be no greater than 0.35 to 1.00 for sixty
(60) days after the incurrence of Indebtedness, subject to certain exceptions set forth in the Second Supplemental Indenture; and (vii) certain events of bankruptcy or insolvency with respect to the Company. If any Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes and such other series as a single class) may declare all the Notes to be due
and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company, all outstanding Notes will become due and payable without further action
or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes and other series of Securities
affected (treating the Notes and such other series as a single class) may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes and other series of Securities affected
(treating the Notes and such other series as a single class) then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of principal, interest or premium on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 
 12.
Trustee Dealings With The Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee. 
 13. No Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Company shall 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 of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 
 14.
Authentication. This Note shall not be valid until authenticated by the manual signature of an authorized officer of the Trustee or an authenticating agent. 

  
 A-4 








 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). 

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. 
 The Company
will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: 
 The Navigators Group,
Inc. 
 400 Atlantic Avenue 

Stamford CT, 06901 
 Telephone:
(203) 905-6090 
 Attention: Emily Miner, Senior Vice President, General Counsel 

  
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 ASSIGNMENT FORM 

(To assign this Note, fill in the form below) 

(I) or (we) assign and transfer this Note to 
  

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

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

and irrevocably appoint to transfer this Note on the books of the Company. The agent may substitute another to act for him. 

Dated: 
  

	
	  

	Signature
	
	  

	Signature Guaranteed


 NOTICE: The signature to the foregoing Assignment must correspond to the name as written upon the face of this Note in
every particular, without alteration or any change whatsoever. 

  
 A-6 








 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a certificated Note, or exchanges of a
part of another Global Note or certificated Note for an interest in this Global Note, have been made: 
  

									
	 Date of Exchange
	  	Amount of
decrease in
Principal Amount
of this Global
Note	  	Amount of
increase in
Principal Amount
of this Global
Note	  	Principal Amount
of this Global
Note following
such decrease (or
increase)	  	Signature of
authorized
signatory of
Trustee
		  		  		  		  	
		  		  		  		  	
		  		  		  		  	
		  		  		  		  	
		  		  		  		  	


  
 A-7