<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1997
REGISTRATION NUMBER 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
ORION CAPITAL CORPORATION ORION CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS
SPECIFIED IN ITS CHARTER) SPECIFIED IN ITS CHARTER)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION (STATE OR OTHER JURISDICTION
OF INCORPORATION OR ORGANIZATION) OF INCORPORATION OR ORGANIZATION)
6749 6719
(PRIMARY STANDARD INDUSTRIAL (PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER) CLASSIFICATION CODE NUMBER)
95-6069054 APPLIED FOR
(I.R.S. EMPLOYER (I.R.S. EMPLOYER
IDENTIFICATION NUMBER) IDENTIFICATION NUMBER)
------------------------
MICHAEL P. MALONEY, ESQ. MICHAEL P. MALONEY, ESQ.
SENIOR VICE PRESIDENT, ADMINISTRATIVE TRUSTEE
GENERAL COUNSEL AND SECRETARY 600 FIFTH AVENUE
600 FIFTH AVENUE NEW YORK, NEW YORK 10020-2302
NEW YORK, NEW YORK 10020-2302 (212) 332-8080
(212) 332-8080 (NAME, ADDRESS, INCLUDING
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE ZIP CODE, AND TELEPHONE NUMBER,
NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE) INCLUDING AREA CODE, OF AGENT FOR SERVICE),
</TABLE>
------------------------
Copies to:
JOHN J. MCCANN, ESQ.
DONOVAN LEISURE NEWTON & IRVINE
30 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10112
(212) 632-3345
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box [ ].
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(2)(3)
<S> <C> <C> <C> <C>
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Exchange Capital Securities, Liquidation Amount
$1,000 per Exchange Capital Security of Orion
Capital Trust I.............................. $125,000,000 100% $125,000,000 $37,878.79
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Exchange Junior Subordinated Deferrable
Interest Debentures of Orion Capital
Corporation(2)...............................
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Exchange Guarantee by Orion Capital Corporation
with respect to the Exchange Capital
Securities(3)................................
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Total................................. $125,000,000(4) 100% $125,000,000(5) $37,878.79
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</TABLE>
(1) Estimated for the sole purpose of computing the registration fee. Pursuant
to Rule 457(n) under the Securities Act, no separate fee is payable with
respect to the Exchange Capital Securities Guarantee (the "Exchange
Guarantee").
(2) No separate consideration will be received for the Exchange Junior
Subordinated Deferrable Interest Debentures (the "Exchange Junior
Subordinated Debentures") distributed upon any liquidation of Orion Capital
Trust I.
(3) No separate consideration will be received for the Orion Capital Corporation
Exchange Guarantee.
(4) This Registration Statement (as the same may be amended from time to time
(the "Registration Statement")) is deemed to cover rights of holders of
Exchange Capital Securities of Orion Capital Trust I under the Amended and
Restated Declaration of Trust (the "Trust Agreement"), the rights of holders
of Exchange Junior Subordinated Debentures under the Indenture, the rights
of the holders of such Exchange Capital Securities under the Exchange
Guarantee and certain backup undertakings as described herein.
(5) Such amount represents the liquidation amount of the Orion Capital Trust I
Exchange Capital Securities to be exchanged hereunder and the principal
amount of Exchange Junior Subordinated Debentures that may be distributed to
holders of such Exchange Capital Securities upon any liquidation of Orion
Capital Trust I.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL, PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
PROSPECTUS
ORION CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.73% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
FOR ANY AND ALL OF ITS OUTSTANDING
8.73% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
ORION CAPITAL CORPORATION
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON MARCH , 1997 UNLESS EXTENDED.
------------------------
Orion Capital Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby offers, upon the terms and subject
to the conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying Letter
of Transmittal (which together constitute the "Exchange Offer"), to exchange up
to $125,000,000 aggregate liquidation amount determined on the basis of $1,000
per Capital Security ("Liquidation Amount") of its 8.73% Exchange Capital
Securities (the "Exchange Capital Securities") which have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which this Prospectus constitutes a part, for a like
Liquidation Amount of its outstanding 8.73% Capital Securities (the "Old Capital
Securities") of which $125,000,000 aggregate Liquidation Amount is outstanding.
Pursuant to the Exchange Offer, Orion Capital Corporation, a Delaware
Corporation ("Orion" or the "Corporation"), is also offering to exchange (i) its
guarantee of payments of cash distributions and payments on liquidation of the
Trust or redemption of the Old Capital Securities, to the extent the Trust has
funds legally available therefor, (the "Old Guarantee") for a like guarantee in
respect of the Exchange Capital Securities (the "Exchange Guarantee") and (ii)
all of its 8.73% Junior Subordinated Interest Deferrable Debentures due January
1, 2037 (the "Old Junior Subordinated Debentures") for a like aggregate
principal amount of its 8.73% Exchange Junior Subordinated Deferrable Interest
Debentures due January 1, 2037 (the "Exchange Junior Subordinated Debentures"),
which Exchange Guarantee and Exchange Junior Subordinated Debentures also have
been registered under the Securities Act. The Old Capital Securities, the Old
Guarantee and the Old Junior Subordinated Debentures are collectively referred
to herein as the "Old Securities" and the Exchange Capital Securities, the
Exchange Guarantee and the Exchange Junior Subordinated Debentures are
collectively referred to herein as the "Exchange Securities."
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Old Securities, except that (i) the Exchange
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the Exchange Capital Securities will not contain the $100,000 minimum
Liquidation Amount transfer restrictions, (iii) the Exchange Securities will not
provide for the increase in the Distribution (as defined below) rate thereon
which is payable on the Old Capital Securities if the Corporation and the Trust
do not or cannot fulfill certain obligations under a Registration Rights
Agreement dated as of January 13, 1997 (the "Registration Rights Agreement")
among the Corporation, the Trust and the Initial Purchasers (as defined in
"Summary -- The Exchange Securities -- Absence of Market for the Exchange
Capital Securities" (which obligations are satisfied upon the effectiveness of
the Registration Statement of which this Prospectus is a part), (iv) the
Exchange Junior Subordinated Debentures will be issued in denominations of
$1,000 but will not contain the $100,000 minimum principal amount transfer
restriction and (v) the Exchange Junior Subordinated Debentures will not provide
for any increase in the interest rate thereon which is payable on the Old Junior
Subordinated Debentures if the Corporation and the Trust do not or cannot
fulfill certain obligations under the Registration Rights Agreement (which
obligations are satisfied upon the effectiveness of the Registration Statement
of which this Prospectus is a part). See "Description of Exchange Securities"
and "Description of Old Securities." The Exchange Capital Securities are being
offered for exchange in order to satisfy certain obligations of the Corporation
and the Trust under the Registration Rights Agreement. In the event that the
Exchange Offer is consummated, any Old Securities which remain outstanding after
consummation of the Exchange Offer and the corresponding Exchange Securities
issued in the Exchange Offer will vote together as a single class for purposes
of determining whether holders of the requisite percentage thereof have taken
certain actions or exercised certain rights under the Trust Agreement.
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Old Capital Securities on February , 1997.
SEE "RISK FACTORS" COMMENCING ON PAGE 18 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is February , 1997.
<PAGE> 3
The Exchange Capital Securities and the Old Capital Securities
(collectively, the "Capital Securities") will represent preferred beneficial
interests in the Trust. The Corporation is the owner of all of the beneficial
interests represented by common securities of the Trust (the "Common
Securities"). The Common Securities and the Capital Securities, are together
referred to herein as the "Trust Securities". The Bank of New York is the
Property Trustee of the Trust. The Trust exists for the sole purpose of issuing
the Trust Securities, investing the proceeds thereof in the Old Junior
Subordinated Debentures and the Exchange Junior Subordinated Debentures for
which they may be exchanged (together, the "Junior Subordinated Debentures") and
making Distributions. The Junior Subordinated Debentures are scheduled to mature
on January 1, 2037 (the "Stated Maturity"). The Capital Securities may be
redeemed, at the option of the Trust, at any time after January 1, 2007 and the
Stated Maturity may under certain circumstances be shortened in the event of a
Tax Event or an Investment Company Event. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption." The Capital Securities will have
a preference over the Common Securities under certain circumstances with respect
to cash distributions and amounts payable on liquidation, redemption or
otherwise. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Indenture, dated as of
January 13, 1997, as amended and supplemented from time to time, between the
Corporation and The Bank of New York as trustee (the "Debenture Trustee"),
relating to the Junior Subordinated Debentures, (ii) the "Trust Agreement" means
the Amended and Restated Declaration of Trust relating to the Trust among the
Corporation as Sponsor, The Bank of New York as Property Trustee (the "Property
Trustee"), Delaware Trust Capital Management, Inc. as Delaware Trustee (the
"Delaware Trustee"), and the Administrative Trustees named therein
(collectively, with the Property Trustee and Delaware Trustee, the "Issuer
Trustees"), and (iii) the "Common Guarantee" means the Common Securities
Guarantee Agreement executed and delivered by the Corporation for the benefit of
the holders of the Common Securities. In addition, as the context may require,
(i) "Capital Securities" and "Trust Securities" include the Old Capital
Securities and the Exchange Capital Securities, (ii) "Trust Securities" includes
the Capital Securities and the Common Securities, (iii) "Junior Subordinated
Debentures" includes the Old Junior Subordinated Debentures and the Exchange
Junior Subordinated Debentures, and (iv) "Guarantee" includes the Old Guarantee
and the Exchange Guarantee.
Except as provided below, the Capital Securities will be represented by
global Capital Securities in fully registered form, deposited with a custodian
for and registered in the name of a nominee of DTC. Beneficial interests in such
Capital Securities will trade in DTC's Same-Day Funds Settlement System and
secondary market trading activity in such interests will therefore settle in
immediately available funds.
Holders of the Exchange Capital Securities will be entitled to receive
preferential cumulative cash distributions arising from the payment of interest
on the Junior Subordinated Debentures, accruing from January 13, 1997 and
payable semi-annually in arrears on January 1 and July 1 of each year,
commencing July 1, 1997, at the annual rate of 8.73% of the Liquidation Amount
of $1,000 per Trust Security ("Distributions"). So long as no Debenture Event of
Default (as defined in "Description of the Exchange Securities -- Description of
Junior Subordinated Debentures -- Debenture Events of Default") has occurred and
is continuing, the Corporation will have the right to defer payments of interest
on the Junior Subordinated Debentures at any time and from time to time for a
period not exceeding 10 consecutive semi-annual periods with respect to each
deferral period (each, an "Extension Period"), provided that no Extension Period
may extend beyond the Stated Maturity. Upon the termination of any Extension
Period and the payment of all amounts then due, the Corporation may elect to
begin a new Extension Period, subject to the requirements set forth herein. If
and for so long as interest payments on the Junior Subordinated Debentures are
so deferred, Distributions on the Capital Securities will also be deferred and
the Corporation and its subsidiaries will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to the Corporation's capital stock (which includes common and preferred
stock) or to make any payment with respect to debt securities of the Corporation
that rank pari passu with or junior to the Junior Subordinated Debentures. None
of the Corporation's subsidiaries will be prohibited from declaring and paying
cash distributions with respect to its capital stock or from making payments
with respect to its debt securities.
2
<PAGE> 4
During an Extension Period, interest on the Junior Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of Capital
Securities are entitled will continue to accumulate) at the rate of 8.73% per
annum, compounded semi-annually. From and after the commencement of any such
Extension Period, holders of Capital Securities will be required to include the
accruals of interest in gross income for United States federal income tax
purposes (as original issue discount) prior to the receipt of cash attributable
to such interest. See "Description of Exchange Securities -- Description of
Exchange Junior Subordinated Debentures -- Option to Extend Interest Payment
Date" and "Certain Federal Income Tax Consequences -- Interest Income and OID."
The Corporation will, through the Guarantee, the Common Guarantee, the
Trust Agreement, the Junior Subordinated Debentures and the Indenture (each as
defined below), taken together, fully, irrevocably and unconditionally guarantee
all of the Trust's obligations under the Trust Securities. See "Description of
Exchange Securities -- Relationship Among the Exchange Capital Securities, the
Exchange Junior Subordinated Debentures and the Exchange Guarantee -- Full and
Unconditional Guarantee." The Guarantee and the Common Guarantee will guarantee
payments of Distributions and payments on liquidation or redemption of the Trust
Securities, but in each case only to the extent that the Trust holds funds on
hand legally available therefor and has failed to make such payments, as
described herein. See "Description of Exchange Securities -- Description of
Exchange Guarantee." If the Corporation fails to make a required payment on the
Junior Subordinated Debentures, the Trust will not have sufficient funds to make
the related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee will not cover any such payment when the
Trust does not have sufficient funds on hand legally available therefor. In such
event, a holder of Capital Securities may institute a legal proceeding directly
against the Corporation to enforce its rights in respect of such payment. See
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Exchange
Capital Securities." The Junior Subordinated Debentures will be subordinate and
junior in right of payment to all Senior Indebtedness (as defined in
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Subordination"). The obligations of the Corporation
under the Guarantee and the Common Guarantee will be (i) subordinate and junior
in right of payment to all other liabilities of the Corporation; (ii) pari passu
with (A) the most senior preferred or preference stock now or hereafter issued
by the Corporation, and (B) any guarantee now or hereafter entered into by the
Corporation in respect of any capital securities or common securities of any
other trust similar to the Trust, or of a trustee of such trust, or of a
partnership or other entity affiliated with the Corporation that is a financing
vehicle of the Corporation (collectively, "Other Trusts"); and (iii) senior to
the Corporation's common stock.
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined in "Description of the Exchange Securities -- Description of
Exchange Capital Securities -- Redemption"), (i) in whole but not in part, on
the Stated Maturity upon repayment of the Junior Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued and unpaid
interest on, the Junior Subordinated Debentures (the "Maturity Redemption
Price"), (ii) in whole but not in part, at any time, contemporaneously with the
optional prepayment of the Junior Subordinated Debentures, upon the occurrence
and continuation of a Special Event (as defined in "Description of the Exchange
Securities -- Description of Junior Subordinated Debentures -- Conditional Right
to Shorten Maturity and Special Event Prepayment") at a redemption price equal
to the Special Event Prepayment Price of the Junior Subordinated Debentures (as
defined below in this paragraph) (the "Special Event Redemption Price"), and
(iii) in whole or in part, on or after January 1, 2007, contemporaneously with
the optional prepayment by the Corporation of the Junior Subordinated
Debentures, at a redemption price equal to the Optional Prepayment Price of the
Junior Subordinated Debentures (as defined below in this paragraph) (the
"Optional Redemption Price"). Any of the Maturity Redemption Price, the Special
Event Redemption Price and the Optional Redemption Price may be referred to
herein as the "Redemption Price." See "Description of Exchange Securities --
Description of Capital Securities -- Redemption." The Junior Subordinated
Debentures will be prepayable prior to the Stated Maturity at the option of the
Corporation (i) on or after January 1, 2007, in whole or in part, at a
prepayment price (the "Optional Prepayment Price") equal to the principal amount
thereof outstanding, plus accrued and unpaid interest thereon to the date of
prepayment, or (ii) at any time, in whole but not in part, upon the occurrence
and continuation of a Special Event, at a prepayment price (the "Special
3
<PAGE> 5
Event Prepayment Price") equal to the greater of (a) 100% of the principal
amount thereof or (b) the sum, as determined by a Quotation Agent (as defined in
"Descriptions of the Exchange Securities -- Description of Junior Subordinated
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment"), of the present values of the remaining scheduled payments of
principal and the interest thereon to January 1, 2007, the first date on which
the Junior Subordinated Debentures are subject to optional prepayment,
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined in "Descriptions of the Exchange Securities -- Description of Junior
Subordinated Debentures -- Conditional Right to Shorten Maturity and Special
Event Prepayment") plus, in either case, accrued and unpaid interest thereon to
the date of prepayment. Either of the Optional Prepayment Price or the Special
Event Prepayment Price may be referred to herein as the "Prepayment Price." See
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Optional Prepayment" and "-- Conditional Right to
Shorten Maturity and Special Event Prepayment."
The Corporation, as the holder of all of the outstanding Common Securities,
will have the right at any time to terminate the Trust and cause a Like Amount
of the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities in liquidation of the Trust, subject to the Corporation's
having received an opinion of counsel to the effect that such distribution will
not be a taxable event for United States federal income tax purposes to holders
of Capital Securities. Unless the Junior Subordinated Debentures are distributed
to the holders of the Trust Securities, in the event of a liquidation of the
Trust as described herein, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Capital Securities
generally will be entitled to receive a Liquidation Amount of $1,000 per Capital
Security plus accumulated and unpaid Distributions thereon to the date of
payment. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Liquidation of the Trust and Distribution of Exchange
Junior Subordinated Debentures."
------------------------
The Trust is making the Exchange Offer of the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that the Exchange
Capital Securities issued pursuant to this Exchange Offer in Exchange for Old
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act), of
such Exchange Capital Securities. However, any holder of Old Capital Securities
who is an "affiliate" of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing Exchange
Capital Securities, or any broker-dealer who purchased Old Capital Securities
from the Trust to resell pursuant to Rule 144A under the Securities Act ("Rule
144A") or any other available exemption under the Securities Act, (a) will not
be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer holds Old Capital Securities acquired
for its own account as a result of market-making or other trading activities and
exchanges such Old Capital Securities for Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such Exchange Capital
Securities.
4
<PAGE> 6
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) such holder is not an "affiliate" of the
Corporation or the Trust, (ii) any Exchange Capital Securities to be received by
such holder are being acquired in the ordinary course of its business, (iii)
such holder has no arrangement or understanding with any person to participate
in a distribution (within the meaning of the Securities Act) of such Exchange
Capital Securities, and (iv) if such holder is not a broker-dealer, such holder
is not engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. In addition,
the Corporation and the Trust may require such holder, as condition to such
holder's eligibility to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing information as to the
number of "beneficial owners" (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) on behalf of
whom such holder holds the Old Capital Securities to be exchanged pursuant to
the Exchange Offer. Each broker-dealer that receives Exchange Capital Securities
for its own account pursuant to the Exchange Offer must acknowledge that the Old
Capital Securities tendered by it for exchange were acquired for its own account
as the result of market-making activities or other trading activities and must
agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Capital
Securities. The Letter of Transmittal acknowledges that by so stating and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Corporation and the Trust believe that broker-dealers who own Old Capital
Securities acquired for their own accounts as a result of market-making
activities or other trading activities ("Participating Broker-Dealers"), may
fulfill their prospectus delivery requirements with respect to the Exchange
Capital Securities received upon exchange of such Old Capital Securities (other
than Old Capital Securities which represent an unsold allotment from the
original sale of the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the Prospectus prepared for
this Exchange Offer so long as it contains a description of the plan of
distribution with respect to the resale of such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer during the period referred to below
in connection with resales of Exchange Capital Securities received in exchange
for Old Capital Securities where such Old Capital Securities were acquired by
such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for the period ending 90-days after the
Expiration Date (as defined below) (subject to extension under certain limited
circumstances described below) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating Broker-Dealer. See "Plan
of Distribution." However, a Participating Broker-Dealer who intends to use this
Prospectus in connection with the resale of Exchange Capital Securities received
in exchange for Old Capital Securities pursuant to the Exchange Offer must
notify the Corporation or the Trust, or cause the Corporation or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "The Exchange Offer -- Exchange Agent." Any
Participating Broker-Dealer who is an "affiliate" of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer -- Resales of
Exchange Capital Securities."
Each Participating Broker-Dealer who surrenders Old Capital Securities
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
5
<PAGE> 7
incorporated by reference herein, in light of the circumstances under which they
were made, not misleading or of the occurrence of certain other events specified
in the Registration Rights Agreement, such Participating Broker-Dealer will
suspend the sale of Exchange Capital Securities (or the Exchange Guarantee or
the Exchange Junior Subordinated Debentures, as applicable) pursuant to this
Prospectus until the Corporation or the Trust has amended or supplemented this
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Participating Broker-Dealer or
the Corporation or the Trust has given notice that the sale of the Exchange
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) may be resumed, as the case may be. If
the Corporation or the Trust gives such notice to suspend the sale of the
Exchange Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable), it shall extend the 90-day period
referred to above during which Participating Broker-Dealers are entitled to use
this Prospectus in connection with the resale of Exchange Capital Securities by
the number of days during the period from and including the date of the giving
of such notice to and including the date when Participating Broker-Dealers shall
have received copies of the amended or supplemented Prospectus necessary to
permit resales of the Exchange Capital Securities or to and including the date
on which the Corporation or the Trust has given notice that the sale of Exchange
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Although the Initial Purchasers have orally informed the Corporation and
the Trust that each of them currently intends to make a market in the Exchange
Capital Securities, they are not obligated to do so, and any such market making
may be discontinued by any or all of them at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the Exchange Capital Securities. The Corporation and the Trust
currently do not intend to apply for listing of the Exchange Capital Securities
on any securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").
The Corporation and the Trust have agreed to keep the Registration
Statement, of which this Prospectus is a part, effective for a period of 30
calendar days (or longer if required by applicable law or in order to allow
Participating Broker-Dealers to satisfy their prospectus delivery requirements)
after notice of the Exchange Offer is mailed to holders of the Old Securities.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Trust Agreement
(except for those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the holders of Old Capital
Securities will continue to be subject to all of the existing restrictions upon
transfer thereof and neither the Corporation nor the Trust will have any further
obligation to such holders (other than under certain limited circumstances) to
provide for registration under the Securities Act of the Old Capital Securities
held by them. To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. See "Risk Factors --
Consequences of Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on March , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Corporation or the Trust (in which case the term "Expiration Date" shall
mean the latest date and time to which the Exchange Offer is extended). Tenders
of Old Capital Securities may be withdrawn at any time on or prior to the
Expiration Date. The Exchange Offer is not conditioned upon
6
<PAGE> 8
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the terms
and provisions of the Registration Rights Agreement. Old Capital Securities may
be tendered in any integral multiple of $1,000 Liquidation Amount (one Old
Capital Security). The Corporation has agreed to pay all expenses of the
Exchange Offer. See "The Exchange Offer -- Fees and Expense." Holders of the Old
Capital Securities whose Old Capital Securities are accepted for exchange will
not receive Distributions on such Old Capital Securities and will be deemed to
have waived the right to receive any Distributions on such Old Capital
Securities accumulated from and after January 13, 1997. See "The Exchange
Offer -- Distributions on Exchange Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use Of
Proceeds" and "Plan of Distribution."
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
7
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................................. 9
Incorporation of Certain Documents By Reference....................................... 9
Summary............................................................................... 11
Risk Factors.......................................................................... 18
Use of Proceeds....................................................................... 24
Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends............ 24
Accounting Treatment.................................................................. 25
Capitalization........................................................................ 26
Summary Financial Data................................................................ 27
Orion Capital Corporation............................................................. 29
Orion Capital Trust I................................................................. 29
The Exchange Offer.................................................................... 30
Description of the Exchange Securities................................................ 39
Description of the Old Securities..................................................... 60
Relationship Among the Exchange Capital Securities, the Exchange Junior Subordinated
Debentures and the Exchange Guarantee............................................... 60
Certain Federal Income Tax Consequences............................................... 62
ERISA Considerations.................................................................. 66
Plan of Distribution.................................................................. 66
Validity of Exchange Securities....................................................... 67
Experts............................................................................... 67
</TABLE>
8
<PAGE> 10
AVAILABLE INFORMATION
Orion is subject to the informational requirements of the Exchange Act, and
in accordance therewith files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information filed
by Orion with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission in New York (Seven World Trade Center, Suite 1300, New York, New York
10048) and Chicago (500 West Madison Street, Suite 1400, Chicago, Illinois
60661). Copies of such materials also may be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material may also be inspected at the offices of
the New York Stock Exchange, Inc. (20 Broad Street, New York, New York 10005).
Orion is an electronic filer, and the Commission maintains a Web site that
contains certain reports, proxy and information statements and other information
regarding registrants (including Orion) that file electronically with the
Commission. The address of the Commission's Web site is: http://www.sec.gov.
Orion and the Trust have filed with the Commission a Registration Statement
on Form S-4 (of which this Prospectus is a part) under the Securities Act with
respect to the Exchange Securities being offered hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements made in this Prospectus as to the
contents of any contract, agreement, instrument or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement, instrument or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Exchange Capital Securities because the
Trust is a newly formed special purpose entity, has no significant operating
history or independent operations and is not engaged in and does not propose to
engage in any activity other than holding as trust assets the Old Junior
Subordinated Debentures and the Exchange Junior Subordinated Debentures and
issuing the Trust Securities. See "Orion Capital Trust I" and "Description of
the Exchange Securities."
The Trust is not currently subject to the information reporting
requirements of the Exchange Act. The Trust will become subject to such
requirements upon the effectiveness of the Registration Statement, although it
intends to seek and expects to receive exemptions therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Orion (File No.
1-7801) are incorporated herein by reference and made a part hereof:
1. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996; and
3. The Corporation's Current Report on Form 8-K filed on July 16,
1996, as amended by Amendment No. 1 filed on September 13, 1996, the
Corporation's Current Report on Form 8-K filed on September 25, 1996 and
the Corporation's Current Report on Form 8-K filed on January 8, 1997.
All documents filed by Orion pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Exchange Securities being offered hereby
shall be deemed to be incorporated by reference in this Prospectus and made a
part hereof from the date of filing of such documents.
Incorporated by reference into the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995 are the financial statements for the year
ended December 31, 1995 of Guaranty National Corporation ("Guaranty National")
and the information set forth under the caption "Reserves" (on pages 13
9
<PAGE> 11
through 17) included in Guaranty National's Annual Report on Form 10-K for the
year ended December 31, 1995.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other document subsequently filed with the Commission which also is or
is deemed to be incorporated by reference herein or in any Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or to the
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or to the document. Orion hereby undertakes to
provide without charge to each person to whom a copy of this Prospectus is
delivered, upon written or oral request of any such person, a copy of any and
all documents that have been incorporated by reference in this Prospectus, other
than exhibits to any such documents unless such exhibits themselves are
specifically incorporated by reference in such document. Such requests should be
directed to the Secretary of Orion Capital Corporation, 600 Fifth Avenue, New
York, New York 10020-2302, telephone number (212) 332-8080.
10
<PAGE> 12
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
ORION CAPITAL CORPORATION
Orion Capital Corporation is a property and casualty insurance holding
company. The Corporation's insurance subsidiaries and affiliates are authorized
to underwrite and sell most types of property and casualty insurance. The
Corporation's insurance businesses are concentrated in niche insurance markets,
particularly workers' compensation, professional liability, nonstandard
automobile insurance and underwriting ocean marine, inland marine and property
insurance through underwriting pools. For the five-year period ended December
31, 1995, the Corporation's return on equity from operating earnings (earnings
after taxes, excluding the effects of the adoption of new accounting principles,
extraordinary items and after-tax realized investment gains) averaged 15.7% per
year. The combined ratio for the Corporation's insurance operations, computed on
the basis of generally accepted accounting principles, has steadily improved
from 109.4% in 1991 to 100.3% in 1995. These trends continued for the first nine
months of 1996, as the annualized return on equity from operating earnings was
14.1%, and the combined ratio declined further to 99.9%. Orion's principal
executive offices are located at 600 Fifth Avenue, New York, New York 10020-2302
and its telephone number is (212) 332-8080.
ORION CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration of Trust executed by the Corporation as Sponsor and
Delaware Trust Capital Management, Inc. as Delaware Trustee, and (ii) the filing
of a certificate of trust with the Delaware Secretary of State on January 3,
1997. The Trust's business and affairs are conducted by the Property Trustee and
the three individual Administrative Trustees who are employees or officers of or
affiliated with the Corporation. The Trust exists for the exclusive purposes of
(i) issuing and selling the Trust Securities, (ii) using the proceeds from the
sale of the Trust Securities to acquire the Junior Subordinated Debentures
issued by the Corporation, (iii) making Distributions to holders of the Trust
Securities as provided in the Trust Agreement and (iv) engaging in only those
other activities necessary, advisable or incidental thereto (such as registering
the transfer of the Trust Securities). Accordingly, the Junior Subordinated
Debentures will be the sole assets of the Trust, and payments under the Junior
Subordinated Debentures will be the sole revenue of the Trust. All of the Common
Securities will be owned by the Corporation. Orion Capital Trust I's principal
executive offices are located at 600 Fifth Avenue, New York, New York 10020-2302
and its telephone number is (212) 332-8080.
THE EXCHANGE OFFER
The Exchange Offer......... Up to $125,000,000 aggregate Liquidation Amount of
Exchange Capital Securities are being offered in
exchange for a like aggregate Liquidation Amount
of Old Capital Securities. Old Capital Securities
may be tendered for exchange in whole or in part
in any integral multiple of $1,000 (one Old
Capital Security). The Corporation and the Trust
are making the Exchange Offer in order to satisfy
their obligations under the Registration Rights
Agreement relating to the Old Capital Securities.
For a description of the procedures for tendering
Old Capital Securities, see "The Exchange
Offer -- Procedures for Tendering Old Capital
Securities."
Expiration Date............ 5:00 p.m., New York City time, on March , 1997,
unless the Exchange offer is extended by the
Corporation or the Trust (in which case the
Expiration Date will be the latest date and time
to which the
11
<PAGE> 13
Exchange Offer is extended). See "The Exchange
Offer -- terms of the Exchange Offer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
conditions, which may be waived by the
Corporation and the Trust in their sole
discretion. The Exchange Offer is not conditioned
upon any minimum Liquidation Amount of Old
Capital Securities being tendered. See "The
Exchange Offer -- Conditions to the Exchange
Offer."
Offer...................... The Corporation and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old
Capital Securities for exchange, (ii) to
terminate the Exchange Offer if certain specified
conditions have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer
and retain all Old Capital Securities tendered
pursuant to the Exchange Offer, subject, however,
to the right of holders of Old Capital Securities
to withdraw their tendered Old Capital
Securities, or (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer
in any respect. See "The Exchange Offer -- Terms
of the Exchange Offer."
Withdrawal Rights.......... Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange
Offer -- Withdrawal Rights."
Procedures for Tendering
Old Capital Securities... Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained
therein and forward the same by mail, facsimile
or hand delivery, together with any other
required documents, to the Exchange Agent, either
with the Old Capital Securities to be tendered or
in compliance with the specified procedures for
guaranteed delivery of Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer. Holders of Old
Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See
"The Exchange Offer -- Procedures for Tendering
Old Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities should not be
sent to the Corporation or the Trust. Such
documents should only be sent to the Exchange
Agent.
Resales of Exchange Capital
Securities............... The Corporation and the Trust are making the
Exchange Offer in reliance on the position of the
Division of Corporation Finance of the Commission
as set forth in certain interpretive letters
addressed to third parties in other transactions.
However, neither the Corporation nor the Trust
has sought its own interpretive letter and there
can be no assurance that the staff of the
Division of Corporation Finance of the Commission
would make a similar determination with respect
to the
12
<PAGE> 14
Exchange Offer as it has in such interpretive
letters to third parties. Based on these
interpretations by the staff of the Division of
Corporation Finance of the Commission, and
subject to the two immediately following
sentences, the Corporation and the Trust believe
that Exchange Capital Securities issued pursuant
to this Exchange Offer in exchange for Old
Capital Securities may be offered for resale,
resold and otherwise transferred by a holder
thereof (other than a holder who is a
broker-dealer) without further compliance with
the registration and prospectus delivery
requirements of the Securities Act provided that
such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and
that such holder is not participating, and has no
arrangement or understanding with any person to
participate, in a distribution (within the
meaning of the Securities Act) of such Exchange
Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the
Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose
of distributing the Exchange Capital Securities,
or any broker-dealer who purchased the Old
Capital Securities from the Trust to resell
pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not
be able to rely on the interpretation of the
staff of the Division of Corporation Finance of
the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted
or entitled to tender such Old Capital Securities
in the Exchange Offer and (c) must comply with
the registration and prospectus delivery
requirements of the Securities Act in connection
with any sale or other transfer of such Old
Capital Securities unless such sale is made
pursuant to an exemption from such requirements.
In addition, as described below, if any
broker-dealer holds Old Capital Securities
acquired for its own account as a result of
market-making or other trading activities and
exchanges such Old Capital Securities for
Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in
connection with any resales of such Exchange
Capital Securities.
Each holder of Old Capital Securities who wishes to
exchange Old Capital Securities for Exchange
Capital Securities in the Exchange Offer will be
required to represent that (i) such holder is not
an "affiliate" of the Corporation or the Trust,
(ii) any Exchange Capital Securities to be
received by such holder are being acquired in the
ordinary course of its business, (iii) such
holder has no arrangement or understanding with
any person to participate in a distribution
(within the meaning of the Securities Act) of
such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder
is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the
Securities Act) of such Exchange Capital
Securities. Each broker-dealer that receives
Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge
that the Old Capital Securities tendered by it
for exchange were acquired for its own account as
the result of market-making activities or other
trading activities and must agree that it will
deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale
of such Exchange Capital Securities. The Letter
of Transmittal acknowledges that, by so stating
and by delivering a prospectus, a
13
<PAGE> 15
broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act.
Based on the position taken by the staff of the
Division of Corporation Finance of the Commission
in the interpretive letters referred to above,
the Corporation and the Trust believe that
Participating Broker-Dealers who acquire Old
Capital Securities for their own accounts as a
result of market-making activities or other
trading activities may fulfill their prospectus
delivery requirements with respect to the
Exchange Capital Securities received upon
exchange of such Old Capital Securities (other
than Old Capital Securities which represent an
unsold allotment from the original sale of the
Old Capital Securities) with a prospectus meeting
the requirements of the Securities Act, which may
be the Prospectus prepared for this Exchange
Offer so long as it contains a description of the
plan of distribution with respect to the resale
of such Exchange Capital Securities.
Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by
a Participating Broker-Dealer in connection with
resales of Exchange Capital Securities received
in exchange for Old Capital Securities where such
Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account
as a result of market-making or other trading
activities. Subject to certain provisions set
forth in the Registration Rights Agreement and to
the limitations described below under "The
Exchange Offer -- Resales of Exchange Capital
Securities," the Corporation and the Trust have
agreed that this Prospectus, as it may be amended
or supplemented from time to time, may be used by
a Participating Broker-Dealer in connection with
resales of such Exchange Capital Securities for a
period of 90 days after the Expiration Date
(subject to extension under certain limited
circumstances) or, if earlier, when all such
Exchange Capital Securities have been disposed of
by such Participating Broker-Dealer. See "Plan of
Distribution." Any Participating Broker-Dealer
who is an "affiliate" of the Corporation or the
Trust may not rely on such interpretive letters
and must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction. See " The Exchange Offer -- Resales
of Exchange Capital Securities."
Effect of Not Accepting the
Exchange Offer........... Old Capital Securities which are not tendered in
the Exchange Offer will continue to have all the
rights presently accruing to them except the
right to an increased Distribution rate on the
Old Capital Securities in certain events if the
Corporation and the Trust do not or cannot
fulfill certain obligations under the
Registration Rights Agreement (which obligations
are satisfied upon the effectiveness of the
Registration Statement of which this Prospectus
is a part and consummation of the Exchange
Offer). See "Risk Factors -- Consequences of a
Failure to exchange Old Capital Securities." The
Old Capital Securities will vote as a single
class with Exchange Capital Securities. However,
the Old Capital Securities will continue to be
subject to restrictions on transfer and, except
for limited exceptions for certain
broker-dealers, will have no registration rights.
To the extent that Old Capital Securities are not
tendered and accepted in the Exchange Offer, a
holder's ability to
14
<PAGE> 16
freely sell untendered Old Capital Securities
could be adversely affected.
Exchange Agent............. The exchange agent with respect to the Exchange
Offer is The Bank of New York (the "Exchange
Agent"). The addresses, and telephone and
facsimile numbers, of the Exchange Agent are set
forth in "The Exchange Offer -- Exchange Agent"
and in the Letter of Transmittal.
Use of Proceeds............ Neither the Corporation nor the Trust will receive
any cash proceeds from the issuance of the
Exchange Capital Securities offered hereby. See
"Use Of Proceeds."
Certain Federal Income Tax
Consequences; ERISA
Considerations........... Holders of Old Capital Securities should review the
information set forth under "Certain Federal
Income Tax Consequences" and "ERISA
Considerations" prior to tendering Old Capital
Securities in the Exchange Offer.
THE EXCHANGE SECURITIES
Securities Offered......... Up to 125,000 of the Trust's Exchange Capital
Securities (Liquidation Amount $1,000 per
Exchange Capital Security) which have been
registered under the Securities Act. The Exchange
Capital Securities will be issued and the Old
Capital Securities were issued under the Trust
Agreement. The Exchange Capital Securities and
any Old Capital Securities which remain
outstanding after consummation of the Exchange
Offer will vote together as a single class for
purposes of determining whether holders of the
requisite percentage in outstanding Liquidation
Amount thereof have taken certain actions or
exercised certain rights under the Trust
Agreement. See "Description of Exchange
Securities -- Description of Exchange Capital
Securities -- Voting Rights; Amendment of the
Trust Agreement." The terms of the Exchange
Capital Securities are identical in all material
respects to the terms of the Old Capital
Securities, except that the Exchange Capital
Securities have been registered under the
Securities Act and will not be subject to the
$100,000 minimum Liquidation Amount transfer
restriction and certain other restrictions on
transfer applicable to the Old Capital Securities
and will not provide for any increase in the
Distribution rate thereon which is payable on the
Old Capital Securities if the Corporation and the
Trust do not or cannot fulfill certain
obligations under the Registration Rights
Agreement (which obligations are satisfied upon
the effectiveness of the Registration Statement
of which this Prospectus is a part and
consummation of the Exchange Offer) See "The
Exchange Offer -- Purpose of the Exchange Offer,"
"Description of Exchange Securities" and
"Description of Old Securities."
Distribution Dates......... January 1 and July 1 of each year, commencing July
1, 1997.
Extension Periods.......... So long as no Debenture Event of Default has
occurred and is continuing, Distributions on the
Exchange Capital Securities may be deferred for
the duration of any Extension Period elected by
the Corporation with respect to the payment of
interest on the Exchange Junior Subordinated
Debentures. No Extension Period will exceed 10
con-
15
<PAGE> 17
secutive semi-annual periods or extend beyond the
Stated Maturity. The Corporation has no current
intention to exercise its right to defer payment
of interest on the Exchange Junior Subordinated
Debentures. See "Description of Exchange
Securities -- Description of Exchange Junior
Subordinated Debentures -- Option to Extend
Interest Payment Date" and "Certain Federal
Income Tax Consequences -- Interest Income and
Original Issue Discount."
Ranking.................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro
rata, with the Old Capital Securities and Common
Securities except as described under "Description
of Exchange Securities -- Description of Exchange
Capital Securities -- Subordination of Common
Securities." The Exchange Junior Subordinated
Debentures will rank pari passu with the Old
Junior Subordinated Debentures and all other
junior subordinated debentures to be issued by
the Corporation (collectively, with the Old
Junior Subordinated Debentures, the "Other
Debentures"), which may be issued and sold (if at
all) to Other Trusts, and will be unsecured and
subordinate and junior in right of payment to all
Senior Indebtedness to the extent and in the
manner set forth in the Indenture. See
"Description of Exchange
Securities -- Description of Exchange Junior
Subordinated Debentures." The Exchange Guarantee
will rank pari passu with the Old Guarantee and
all other guarantees issued by the Corporation
with respect to capital securities issued or to
be issued by Other Trusts (the "Other
Guarantees"). The Guarantee and the Common
Guarantee will be (i) subordinate and junior in
right of payment to all other liabilities of the
Corporation; (ii) pari passu with (A) the most
senior preferred or preference stock now or
hereafter issued by the Corporation, and (B) any
guarantee now or hereafter entered into by the
Corporation in respect of any capital securities
or common securities of any Other Trusts; and
(iii) senior to the Corporation's common stock.
See "Description of Exchange
Securities -- Description of Exchange
Guarantee -- Status of the Guarantee."
Redemption................. The Trust Securities will be subject to mandatory
redemption in a Like Amount, (i) in whole but not
in part, on the Stated Maturity upon repayment of
the Junior Subordinated Debentures, (ii) in whole
but not in part, at any time contemporaneously
with the optional prepayment of the Junior
Subordinated Debentures by the Corporation upon
the occurrence and continuation of a Special
Event and (iii) in whole or in part, on or after
January 1, 2007 contemporaneously with the
optional prepayment by the Corporation of the
Junior Subordinated Debentures, at the applicable
Redemption Price. See "Description of Exchange
Securities -- Description of Exchange Capital
Securities -- Redemption."
Ratings.................... The Old Capital Securities are rated "BBB" by
Standard & Poor's Ratings Services, "BBB" by Duff
& Phelps Credit Rating Co., and "baa3" by Moody's
Investors Service. In connection with the rating
of the Old Capital Securities, Moody's revised
its rating outlook for the Corporation from
stable to negative in light of Moody's concern
about the Corporation's "increased leverage
appetite." The Corporation has no present plans
to incur additional indebtedness for money
borrowed.
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<PAGE> 18
The Exchange Capital Securities are expected to
have the same ratings as the Old Capital
Securities.
Absence of Market for the
Exchange Capital
Securities............... The Exchange Capital Securities will be a new issue
of securities for which there currently is no
market. Although each of Donaldson Lufkin &
Jenrette Securities Corporation, Lehman Brothers
Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Initial Purchasers") has
orally informed the Trust and the Corporation
that it currently intends to make a market in the
Exchange Capital Securities, the Initial
Purchasers are not obligated to do so, and any
such market making may be discontinued at any
time by any or all of them without notice.
Accordingly, there can be no assurance as to the
development or liquidity of any market for the
Exchange Capital Securities. The Trust and the
Corporation do not intend to apply for listing of
the Capital Securities on any securities exchange
or for quotation through NASDAQ. See "Plan of
Distribution."
17
<PAGE> 19
RISK FACTORS
Prospective investors should carefully review the information contained
elsewhere in this Prospectus and should particularly consider the following
matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES
The obligations of the Corporation under the Junior Subordinated Debentures
will be unsecured and rank subordinate and junior in right of payment to all
Senior Indebtedness (as defined in "Description of Exchange
Securities -- Description of Exchange Junior Subordinated
Debentures -- Subordination"). At September 30, 1996, the aggregate principal
amount of outstanding Senior Indebtedness was approximately $210 million.
Because the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Capital Securities to benefit indirectly from such distribution)
is subject to the prior claims of creditors of that subsidiary, except to the
extent that the Corporation may itself be recognized as a creditor of that
subsidiary. Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Junior Subordinated Debentures should look only to
the assets of the Corporation for payments on the Junior Subordinated
Debentures. The Guarantee and the Common Guarantee will be (i) subordinate and
junior in right of payment to all other liabilities of the Corporation; (ii)
pari passu with (A) the most senior preferred or preference stock now or
hereafter issued by the Corporation, and (B) any guarantee now or hereafter
entered into by the Corporation in respect of the capital securities or common
securities of any Other Trusts; and (iii) senior to the Corporation's common
stock. At September 30, 1996, the Corporation's subsidiaries had total
liabilities of $2.5 billion. In addition, since the Corporation's insurance
subsidiaries are subject to regulatory control by various state insurance
departments, the ability of such subsidiaries to pay dividends to the
Corporation without prior regulatory approval is limited by applicable laws and
regulations. None of the Indenture, the Guarantee or the Trust Agreement places
any limitation on the amount of secured or unsecured debt, including Senior
Indebtedness, that may be incurred by the Corporation. See "Description of
Exchange Securities -- Description of Exchange Junior Subordinated
Debentures -- Subordination" and "Description of Exchange
Securities -- Description of Exchange Guarantee -- Status of the Exchange
Guarantee."
The ability of the Trust to pay amounts due on the Capital Securities is
solely dependent upon the Corporation making payments on the Junior Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity. As a consequence of any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will be deferred (and the
amount of Distributions to which holders of the Capital Securities are entitled
will accumulate additional Distributions thereon at the rate of 8.73% per annum,
compounded semi-annually, but not exceeding the interest rate then accruing on
the Junior Subordinated Debentures) from the relevant payment date for such
Distributions during any Extension Period.
Prior to the termination of any Extension Period, the Corporation may
further extend an Extension Period, provided that such extension does not cause
such Extension Period to exceed 10 consecutive semi-annual periods or to extend
beyond the Stated Maturity. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid on the Junior Subordinated
Debentures (together with interest thereon at the annual rate of 8.73%,
compounded semi-annually, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that the Corporation
may elect to begin an Extension Period. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Distributions" and
18
<PAGE> 20
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Option to Extend Interest Payment Date."
The Corporation has no current intention to exercise its right to defer
payments of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise this right, each holder of Trust Securities will be
required to accrue income (as original issue discount ("OID")) in respect of the
deferred stated interest allocable to its Trust Securities for United States
federal income tax purposes. As a result, each such holder of Capital Securities
will be required to include such income in gross income for United States
federal income tax purposes in advance of the receipt of cash and will not
receive the cash related to such income from the Trust if the holder disposes of
the Capital Securities prior to the record date for the payment of Distributions
thereafter. See "Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount" and "-- Sales of Capital Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Capital Securities is likely to be affected. A holder that disposes of
its Capital Securities during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its Capital
Securities. In addition, merely as a result of the existence of the
Corporation's right to defer payments of interest on the Junior Subordinated
Debentures, the market price of the Capital Securities may be more volatile than
the market prices of other securities on which OID accrues and that are not
subject to such deferrals.
CONDITIONAL RIGHT TO SHORTEN MATURITY AND SPECIAL EVENT PREPAYMENT
If a Tax Event (as defined below) occurs, then the Corporation will have
the right, prior to the termination of the Trust, either (i) to shorten the
Stated Maturity of the Junior Subordinated Debentures to the minimum extent
required, but not less than 20 years from the date of original issuance thereof,
such that in the written opinion of counsel experienced in such matters
delivered to the Corporation, after shortening the maturity, interest paid on
the Junior Subordinated Debentures will be deductible for federal income tax
purposes (the action referred to above being referred to herein as a "Tax Event
Maturity Shortening") or (ii) to prepay the Junior Subordinated Debentures, as
described below. Prospective investors should be aware that the Corporation's
exercise of its right to shorten the maturity of the Junior Subordinated
Debentures will be a taxable event to holders of Capital Securities if the
Junior Subordinated Debentures are treated as equity for purposes of United
States federal income taxation before the maturity is shortened. See
"Description of Exchange Securities -- Description of Exchange Capital
Securities -- Conditional Right to Shorten Maturity and Special Event
Redemption" and "Description of Exchange Securities -- Description of Exchange
Junior Subordinated Debentures -- Conditional Right to Shorten Maturity and
Special Event Prepayment."
If a Tax Event or an Investment Company Event (as defined below) occurs,
then the Corporation will have the right, within 90 days following the
occurrence of such Tax Event or Investment Company Event, as the case may be, to
prepay the Junior Subordinated Debentures in whole (but not in part) in the
manner set forth under "Description of Exchange Securities -- Description of
Exchange Junior Subordinated Debentures -- Conditional Right to Shorten Maturity
and Special Event Prepayment," and therefore to cause a mandatory redemption of
the Capital Securities prior to the Stated Maturity (the circumstances under
which the Corporation has the right so to prepay the Junior Subordinated
Debentures in connection with a Tax Event being referred to herein as a
"Conditional Tax Redemption Event"). Each of a Conditional Tax Redemption Event
or an Investment Company Event are sometimes referred to herein as a "Special
Event."
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel to the Corporation experienced in such matters to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein or as
a result of any administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Old Capital Securities under the Trust Agreement, or as a result of a final
determination, as evidenced by the execution of a Form 870 AD (or successor
forms), arising from an audit or examination by the Internal
19
<PAGE> 21
Revenue Service, there is more than an insubstantial risk that (i) the Trust is,
or within 90 days of the date of such opinion will be, subject to United States
federal income tax with respect to income received or accrued on the Junior
Subordinated Debentures, (ii) interest payable by the Corporation on the Junior
Subordinated Debentures is not, or within 90 days of such opinion, will not be,
deductible by the Corporation, in whole or in part, for United States federal
income tax purposes or (iii) the Trust is, or will be within 90 days of the date
of such opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges (each of the circumstances referred to in clauses
(i), (ii) and (iii) being referred to herein as an "Adverse Tax Consequence").
An "Investment Company Event" means that the Corporation shall have
received an opinion of an independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), to
the effect that, as a result of the occurrence of a change in law or regulation
or a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in Investment Company Act Law"), there is more than insubstantial risk that the
Trust is or will be considered an "investment company" which is required to be
registered under the Investment Company Act, which Change in Investment Company
Act Law becomes effective on or after the date of this Prospectus.
EXCHANGE OF CAPITAL SECURITIES FOR JUNIOR SUBORDINATED DEBENTURES
The Corporation, as the holder of all of the outstanding Common Securities,
will have the right at any time to terminate the Trust and cause a Like Amount
of the Junior Subordinated Debentures to be distributed to the holders of the
Trust Securities in liquidation of the Trust, subject to the Corporation's
having received an opinion by independent tax counsel experienced in such
matters to the effect that the holders will not recognize any gain or loss for
United States federal income tax purposes as a result of the dissolution of the
Trust and such distribution to holders of Capital Securities. See "Description
of Exchange Securities -- Description of Capital Securities -- Liquidation of
the Trust and Distribution of Exchange Junior Subordinated Debentures."
POSSIBLE TAX LAWS AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") which would, among other things, generally deny corporate issuers
a deduction for interest in respect of certain debt obligations, such as the
Junior Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of 20 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. On March 29,
1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and
Means Committee Chairman Bill Archer issued a joint statement (the "Joint
Statement") indicating their intent that the Proposed Legislation, if adopted by
either of the tax-writing committees of Congress, would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to the Treasury Department (the "Democrat Letters"), which concurred
with the view expressed in the Joint Statement. If the principles contained in
the Joint Statement and the Democrat Letters were followed and if the Proposed
Legislation were enacted, such legislation would not apply to the Junior
Subordinated Debentures. There can be no assurance, however, that the effective
date guidance contained in the Joint Statement and the Democrat Letters will be
incorporated into the Proposed Legislation, if enacted, or that other
legislation enacted after the date hereof will not otherwise adversely affect
the ability of the Corporation to deduct the interest payable on the Junior
Subordinated Debentures. Such a change could give rise to a Tax Event, which may
permit the Corporation to cause a redemption of the Trust Securities at the
Special Event Redemption Price by electing to prepay the Junior Subordinated
Debentures at the Special Event Prepayment Price or to shorten the maturity of
the Junior Subordinated Debentures. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption" and "Description of Exchange
Junior Subordinated
20
<PAGE> 22
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment." See also "Certain Federal Income Tax Consequences -- Proposed Tax
Legislation."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital Securities or
Junior Subordinated Debentures distributed to the holders of Capital Securities
if a termination of the Trust were to occur. Accordingly, the Capital Securities
or the Junior Subordinated Debentures may trade at a discount from the price
that the investor paid to purchase the Capital Securities offered hereby.
RIGHTS UNDER THE JUNIOR SUBORDINATED DEBENTURES
Because holders of Capital Securities may receive Junior Subordinated
Debentures in liquidation of the Trust and because Distributions are otherwise
limited to payments on the Junior Subordinated Debentures, prospective
purchasers of Capital Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures contained herein. See
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures."
RIGHTS UNDER THE GUARANTEE
The Bank of New York will act as Guarantee Trustee and will hold the
Guarantee for the benefit of the holders of the Capital Securities. The Bank of
New York will also act as Property Trustee under the Trust Agreement and as
Debenture Trustee under the Indenture. Delaware Trust Capital Management, Inc.
will act as Delaware Trustee under the Trust Agreement. The Old Guarantee and
the Exchange Guarantee each will guarantee to the holders of the Capital
Securities the following payments, to the extent not paid by the Trust: (i) any
accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to any
Capital Securities called for redemption, to the extent that the Trust has funds
on hand legally available therefor at such time, and (iii) upon a voluntary or
involuntary termination and liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Capital Securities),
the lesser of (a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent that the Trust
has funds on hand legally available therefor at such time or (b) the amount of
assets of the Trust remaining available for distribution to holders of the
Capital Securities upon a termination and liquidation of the Trust.
The holders of a majority in Liquidation Amount of the Capital Securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee. Any holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. If the Corporation defaults on
its obligation to pay amounts payable under the Junior Subordinated Debentures,
the Trust will not have sufficient funds for the payment of Distributions or
amounts payable on redemption of the Capital Securities or otherwise, and, in
such event, holders of the Capital Securities will not be able to rely upon the
Guarantee for payment of such amounts. Instead, in the event a Debenture Event
of Default shall have occurred and be continuing and such event is attributable
to the failure of the Corporation to pay principal of (or premium, if any) or
interest on the Junior Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Capital Securities may institute a
legal proceeding directly against the Corporation for enforcement of payment to
such holder of the principal of (or premium, if any) or unpaid interest on such
Junior Subordinated Debentures having a principal amount equal to the
Liquidation Amount of the Capital Securities of such holder (a "Direct Action").
Notwithstanding any payments made to a holder of Capital Securities by the
Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of (and premium, if any) and interest on the
Junior Subordinated Debentures, and the Corporation shall be subrogated to the
rights of the holder of such Capital Securities with respect to payments
21
<PAGE> 23
on the Capital Securities to the extent of any payments made by the Corporation
to such holder in any Direct Action. Except as described herein, holders of
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Junior Subordinated Debentures or to assert
directly any other rights in respect of the Junior Subordinated Debentures. See
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Capital
Securities," "Description of Exchange Securities -- Description of Exchange
Junior Subordinated Debentures -- Debenture Events of Default" and "Description
of Exchange Securities -- Description of Exchange Guarantee." The Trust
Agreement provides that each holder of Capital Securities by acceptance thereof
agrees to the provisions of the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities will generally have limited voting rights
relating only to the modification of the Capital Securities, the dissolution,
termination or liquidation of the Trust, and the exercise of the Trust's rights
as holder of Junior Subordinated Debentures. Holders of Capital Securities will
not be entitled to vote to appoint, remove or replace the Property Trustee or
the Delaware Trustee, and such voting rights are vested exclusively in the
holder of the Common Securities except upon the occurrence of certain events
described herein. The Property Trustee, the Administrative Trustees and the
Corporation, as the holder of all of the outstanding Common Securities, may
amend the Trust Agreement without the consent of holders of Capital Securities
to ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust unless such action materially adversely affects the
interests of such holders. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Voting Rights;
Amendment of the Trust Agreement" and "-- Removal of Issuer Trustees."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions for certain broker-dealers). The Corporation and the Trust do
not intend to register under the Securities Act any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer (subject to such
limited exceptions, if applicable). To the extent that Old Capital Securities
are not tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Capital Securities could be adversely affected.
The Exchange Securities and any Old Securities which remain outstanding
after consummation of the Exchange Offer will vote together as a single class
for purposes of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions or exercised
certain rights under the Trust Agreement. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Voting Rights;
Amendment of the Trust Agreement."
The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by June
12, 1997 or declared effective by July 12, 1997, additional Distributions will
thereupon accrue on the Old Capital Securities commencing on June 13, 1997 or
July 13, 1997 as the case may be, at a rate of 0.25% per annum of the
Liquidation Amount of such Old Capital Securities until the Exchange Offer is
consummated. Upon the effectiveness of the Registration Statement of which this
Prospectus is a part and the consummation of the Exchange Offer, the Trust and
the Corporation will have satisfied their obligations in this regard and holders
of Old Capital Securities will not be entitled to any such additional
Distributions or any further registration rights under the Registration Rights
Agreement, except under limited circumstances with respect to certain
broker-dealers. See "Description of Old Capital Securities."
22
<PAGE> 24
ABSENCE OF PUBLIC MARKET
The Old Capital Securities were issued to, and the Corporation believes
such securities are currently owned by, a relatively small number of beneficial
owners. The Old Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability if they are not
exchanged for the Exchange Capital Securities. Although the Exchange Capital
Securities may be resold or otherwise transferred by holders who are not
affiliates of the Corporation or the Trust without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market. Old Capital Securities
may be transferred by the holders thereof only in blocks having a Liquidation
Amount of not less than $100,000 (100 Old Capital Securities). Exchange Capital
Securities may be transferred by the holders thereof in blocks having a
Liquidation Amount of $1,000 (one Exchange Capital Security) or integral
multiples thereof. The Corporation and the Trust have been orally advised by the
Initial Purchasers that each of the Initial Purchasers presently intends to make
a market in the Exchange Capital Securities. However, the Initial Purchasers are
not obligated to do so and any market-making activity with respect to the
Exchange Capital Securities may be discontinued by any or all of them at any
time without notice. In addition, such market-making activity will be subject to
the limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an active
public or other market will develop for the Exchange Capital Securities or the
Old Capital Securities or as to the liquidity of or the trading market for the
Exchange Capital Securities or the Old Capital Securities. If an active public
market does not develop, the market price and liquidity of the Exchange Capital
Securities may be adversely affected.
If a public trading market develops for the Exchange Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, applicable income tax treatments, the
Corporation's results and the market for similar securities. Depending on
prevailing interest rates, the market for similar securities and other factors,
including the financial condition of the Corporation, the Exchange Capital
Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Corporation or the Trust may publicly offer for sale or
resell the Exchange Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Old Capital Securities, where such Old Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal and all other required documents. Therefore,
holders of the Old Capital Securities desiring to tender such Old Capital
Securities in exchange for Exchange Capital Securities should allow sufficient
time to ensure timely delivery. Neither the Corporation nor the Trust is under
any duty to give notification of defects or irregularities with respect to the
tenders of Old Capital Securities for exchange.
FLUCTUATION AND UNCERTAINTY OF PROPERTY AND CASUALTY INSURANCE INDUSTRY RESULTS
The results of companies in the property and casualty insurance industry
historically have been subject to significant fluctuations and uncertainties.
The industry's profitability can be affected significantly by volatile and
unpredictable developments (including catastrophes); changes in reserves
resulting from the general claims and legal environments as different types of
claims arise and judicial interpretations relating to the scope of insurers'
liability develop; fluctuations in interest rates and other changes in the
investment environment which affect returns on invested capital; and
inflationary pressures that affect the size of losses.
23
<PAGE> 25
The demand for property and casualty insurance can also vary significantly,
generally rising as the overall level of economic activity increases and falling
as such activity decreases. The property and casualty insurance industry
historically has been cyclical, and the industry as a whole has been in a soft
market since the late 1980s primarily due to premium rate competition, which has
resulted in lower underwriting profitability. The Corporation's results of
operations may be adversely affected by these fluctuations and uncertainties.
UNCERTAINTY REGARDING ADEQUACY OF LOSS RESERVES
The Corporation maintains loss reserves to cover its estimated ultimate
liability for losses and loss adjustment expenses with respect to reported and
unreported claims incurred as of the end of each accounting period. Reserves do
not represent an exact calculation of liability, but instead represent
estimates, generally involving actuarial projections at a given time, of what
the Corporation expects the ultimate settlement and administration of claims
will cost based on its assessment of facts and circumstances then known,
estimates of future trends in claims severity, frequency, judicial theories of
liability and other factors. These variables are affected by both internal and
external events, such as changes in claims handling procedures, economic
inflation, judicial trends and legislative changes. Many of these items are not
directly quantifiable, particularly on a prospective basis. Additionally, there
may be significant reporting lags between the occurrence of the insured event
and the time it is actually reported to the insurer. Reserve estimates are
continually refined in a regular ongoing process as experience develops and
further claims are reported and settled. Adjustments to reserves are reflected
in the results of the periods in which such estimates are changed. Because
establishment of reserves is an inherently uncertain process involving estimates
of future losses, there can be no certainty that currently established reserves
will prove adequate in light of subsequent actual experience. The inherent
uncertainties of estimating loss reserves are generally greater for casualty
coverages than for property coverages, due primarily to the longer period of
time that typically elapses before a definitive determination of ultimate loss
can be made, changing theories of legal liability involving certain types of
claims and changing political climates.
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. In consideration
for issuing the Exchange Capital Securities in exchange for Old Capital
Securities as described in this Prospectus, the Trust will receive Old Capital
Securities in the same Liquidation Amount. The Old Capital Securities
surrendered in exchange for the Exchange Capital Securities will be retired and
cancelled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Corporation) from the offering of the Old Capital
Securities were $125,000,000. All of the proceeds from the sale of Old Capital
Securities were invested by the Trust in the Junior Subordinated Debentures. The
Corporation intends that the net proceeds from the sale of the Old Junior
Subordinated Debentures will be used for general corporate purposes, which may
include investments in and advances to subsidiaries, the financing of growth and
expansion, the financing of future acquisitions and the financing of other
business opportunities.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the historical ratios of earnings to
combined fixed charges and preferred stock dividends of the Corporation for the
periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ---------------------------------------- NINE MONTHS ENDED
1991 1992 1993 1994 1995 SEPTEMBER 30, 1996
- ---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
2.6 2.7 4.7 4.6 5.0 4.9
</TABLE>
The ratios of earnings to combined fixed charges and preferred stock
dividends represent the number of times fixed charges (interest, debt expense
and preferred stock dividends and one-third of all rent and related costs,
considered to represent an appropriate interest factor, charged to income) are
covered by income before
24
<PAGE> 26
income taxes, minority interest expense, cumulative effect of changes in
accounting principles, extraordinary items and fixed charges.
ACCOUNTING TREATMENT
The financial statements of the Trust will be reflected in the
Corporation's consolidated financial statements with the Capital Securities
shown as "Company-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely Junior Subordinated Debentures of Orion".
Disclosures about the Capital Securities, the Guarantee and the Junior
Subordinated Debentures will be included in the notes to the consolidated
financial statements. The Corporation will record Distributions payable on the
Capital Securities as an expense in its consolidated statement of earnings.
25
<PAGE> 27
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of September 30, 1996 and as adjusted to give effect to the
consummation of the offering of the Capital Securities and the application of
the proceeds thereof. The following data should be read in conjunction with the
financial information included in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995, and Quarterly Report on Form 10-Q for the
period ended September 30, 1996, which are incorporated herein by reference. See
"Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1996
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Borrowings under bank loan and credit facility agreement........... $100,000 $ 100,000
6 1/2% Term loan................................................... 1,875 1,875
9 1/8% Senior notes due 2002....................................... 109,902 109,902
7 1/4% Senior notes due 2005....................................... 99,296 99,296
-------- ----------
Total debt................................................. 311,073 311,073
-------- ----------
Minority interest.................................................... 43,058 43,058
-------- ----------
Company-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely Junior Subordinated Debentures of
Orion(1)........................................................... -- 125,000
-------- ----------
Stockholders' equity:
Common stock....................................................... 15,338 15,338
Capital surplus.................................................... 146,408 146,408
Net unrealized investment gains.................................... 57,825 57,825
Net unrealized foreign exchange translation losses................. (3,710) (3,710)
Retained earnings.................................................. 350,837 350,837
Treasury stock at cost............................................. (35,329) (35,329)
Deferred compensation on restricted stock.......................... (1,479) (1,479)
-------- ----------
Total stockholders' equity................................. 529,890 529,890
-------- ----------
Total capitalization....................................... $884,021 $ 1,009,021
======== ==========
</TABLE>
- ---------------
(1) The proceeds from the sale of the Old Capital Securities of the Trust, for
which Exchange Capital Securities are hereby being offered, were used to
purchase $125,000,000 aggregate principal amount of Junior Subordinated
Debentures issued by the Corporation.
26
<PAGE> 28
SUMMARY FINANCIAL DATA
The summary below should be read in connection with the financial
information included in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1995 and Quarterly Report on Form 10-Q for the period
ended September 30, 1996. Interim unaudited data for the nine months ended
September 30, 1996 and 1995 reflect, in the opinion of management of the
Corporation, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of such data. Results for the nine months
ended September 30, 1996 are not necessarily indicative of results which may be
expected for any other interim period or for the year as a whole.
In November 1991, the Corporation reduced its ownership of Guaranty
National from 100% to 49.3%. The Corporation owned slightly less than 50% of
Guaranty National from November 1991 until the Corporation increased its
ownership to 81% in July 1996. For the nine months ended September 30, 1996 and
the period from January 1, 1991 through November 20, 1991, the results of
operations of Guaranty National are included in the financial statements of the
Corporation on a consolidated basis. For all other periods presented, the
Corporation's investment in Guaranty National is accounted for using the equity
method.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------ ------------------------
1991 1992 1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Gross premiums
written.............. $ 868,107 $ 690,742 $ 780,128 $ 812,344 $ 926,729 $ 699,024 $1,213,875
Premiums earned........ 701,386 560,205 617,404 691,223 749,003 545,669 954,447
Net investment
income............... 100,206 82,483 91,803 84,915 99,040 73,860 106,821
Realized investment
gains (losses)....... (1,009) 3,667 9,478 3,437 11,885 9,171 16,606
Total
revenues...... 837,294 647,718 720,155 780,947 874,280 636,129 1,095,347
Earnings before federal
income taxes,
minority interest
expense, cumulative
effect of accounting
changes and
extraordinary item... 46,069 46,714 72,505 71,546 88,035 65,927 91,252
Earnings before
cumulative effect of
accounting changes
and extraordinary
item................. 44,668 45,792 56,988 55,245 67,622 50,368 62,821
Net earnings........... 44,668 42,872 68,813 55,245 67,622 50,368 62,821
Operating
earnings(a).......... 46,472 42,679 51,100 52,818 59,914 44,421 54,028
Net earnings per share:
Primary.............. 3.75 3.35 4.69 3.85 4.77 3.55 4.52
Fully diluted........ 3.05 2.85 4.67 3.85 4.76 3.55 4.52
Operating earnings per
share(a):
Primary.............. 3.93 3.33 3.47 3.68 4.22 3.13 3.89
Fully diluted........ 3.18 2.84 3.46 3.68 4.22 3.13 3.89
RATIOS:
GAAP combined ratios:
Loss................. 76.8% 75.7% 74.4% 72.1% 68.4% 68.9% 68.6%
Expense.............. 30.2 27.3 26.8 27.0 29.0 28.9 29.6
Policyholders'
dividends......... 2.4 2.4 2.0 2.1 2.9 2.5 1.7
-------- -------- -------- -------- -------- -------- ----------
Combined.......... 109.4% 105.4% 103.2% 101.2% 100.3% 100.3% 99.9%
======== ======== ======== ======== ======== ======== ==========
</TABLE>
27
<PAGE> 29
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Statutory combined
ratios:
Loss................. 78.6% 77.0% 74.4% 71.5% 67.7% 68.3% 67.7%
Expense.............. 29.9 25.8 25.6 27.4 29.2 28.9 30.7
Policyholders'
dividends......... 3.1 2.1 2.1 2.2 2.0 1.7 1.5
-------- -------- -------- -------- -------- -------- ----------
Combined.......... 111.6% 104.9% 102.1% 101.1% 98.9% 98.9% 99.9%
======== ======== ======== ======== ======== ======== ==========
Industry statutory
combined ratios(b)... 108.8% 115.8% 106.9% 108.5% 106.4% (c) (c)
======== ======== ======== ======== ======== ======== ==========
Ratio of statutory net
premiums written to
policyholders'
surplus.............. 1.9 1.5 1.4 1.6 1.5 1.4(d) 2.1(d)
======== ======== ======== ======== ======== ======== ==========
BALANCE SHEET DATA (AT
END OF PERIOD):
Total cash and
investments.......... $1,087,454 $1,169,379 $1,328,969 $1,325,241 $1,606,445 $1,553,775 $2,254,392
Total assets........... 1,827,069 1,937,408 2,117,454 2,112,761 2,473,588 2,388,471 3,354,324
Total policy
liabilities.......... 1,228,951 1,326,872 1,412,285 1,450,835 1,596,033 1,550,539 2,240,021
Notes payable and
debentures........... 142,311 129,863 160,372 152,382 209,148 209,131 311,073
Adjustable rate
preferred stock...... 19,125 18,705 -- -- -- -- --
Minority interest...... -- -- -- -- -- -- 43,058
Stockholders' equity... 249,829 311,287 394,195 365,088 490,903 463,839 529,890
Book value per common
share................ 19.00 21.48 27.43 26.00 35.18 32.97 38.52
Statutory
policyholders'
surplus.............. 300,097 385,803 460,986 458,676 521,510 520,709 617,599
</TABLE>
- ---------------
(a) Earnings after taxes, excluding the effects of the adoption of new
accounting principles, extraordinary items and after-tax realized investment
gains.
(b) Source: A.M. Best Company
(c) Nine month data not available.
(d) Annualized based on net premiums written during the period.
28
<PAGE> 30
ORION CAPITAL CORPORATION
The Corporation is a property and casualty insurance holding company. The
Corporation's insurance subsidiaries and affiliates are authorized to underwrite
and sell most types of property and casualty insurance. The Corporation's
insurance businesses are concentrated in niche insurance markets, particularly
workers compensation, professional liability, nonstandard automobile insurance
and underwriting ocean marine, inland marine and property insurance through
underwriting pools. The Corporation provides workers compensation insurance
products through the EBI Companies. The Corporation sells its professional
liability insurance through the DPIC Companies and writes other specialty
property and casualty insurance, principally through Connecticut Specialty. The
Corporation provides underwriting management and related services principally in
ocean marine, inland marine and property insurance coverages through Wm. H.
McGee & Co., Inc. The Corporation also participates in the nonstandard
commercial and personal automobile insurance business through its 81% interest
in Guaranty National and owns approximately 24.8% of the outstanding common
stock of Intercargo Corporation, an insurance holding company whose subsidiaries
specialize in international trade and transportation coverages. The principal
executive office of the Corporation is 600 Fifth Avenue, 24th Floor, New York,
New York 10020-2302 and its telephone number is (212) 332-8080.
The Corporation's insurance, brokerage and management subsidiaries are
licensed to transact business throughout the United States and in all Canadian
provinces. They obtain substantially all of their business from independent
insurance agents and brokers. The Corporation and its majority-owned
subsidiaries have approximately 3,100 employees, substantially all of whom are
employed in insurance-related operations.
For the five-year period ended December 31, 1995, the Corporation's return
on equity from operating earnings (earnings after taxes, excluding the effects
of the adoption of new accounting principles, extraordinary items and after-tax
realized investment gains) averaged 15.7% per year. The combined ratio for the
Corporation's insurance operations, computed on the basis of generally accepted
accounting principles, has steadily improved from 109.4% in 1991 to 100.3% in
1995. These trends continued for the first nine months of 1996, as the
annualized return on equity from operating earnings was 14.1%, and the combined
ratio declined further to 99.9%.
ORION CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration of Trust executed by the Corporation as Sponsor and
Delaware Trust Capital Management, Inc. as Delaware Trustee, and (ii) the filing
of a certificate of trust with the Delaware Secretary of State on January 3,
1997. The Trust has a term of 45 years, but may terminate earlier as provided in
the Trust Agreement. The Trust exists for the exclusive purposes of (i) issuing
and selling the Trust Securities, (ii) using the proceeds from the sale of Trust
Securities to acquire the Junior Subordinated Debentures, (iii) making
Distributions to holders of the Trust Securities as provided in the Trust
Agreement and (iv) engaging in only those other activities necessary, advisable
or incidental thereto (such as registering the transfer of the Trust
Securities). Accordingly, the Junior Subordinated Debentures will be the sole
assets of the Trust, and payments under the Junior Subordinated Debentures will
be the sole revenues of the Trust.
All of the Common Securities are owned by the Corporation. The Common
Securities will rank pari passu, and payments will be made thereon pro rata with
the Capital Securities, except that upon the occurrence and continuance of an
event of default under the Trust Agreement resulting from a Debenture Event of
Default, the rights of the Corporation as holder of the Common Securities to
payments in respect of Distributions and payments upon liquidation, redemption
or otherwise will be subordinated to the rights of the holders of the Capital
Securities. See "Description of Exchange Securities -- Description of Exchange
Capital Securities -- Subordination of Common Securities." The Corporation has
acquired Common Securities in a Liquidation Amount equal to $4,000,000.
The Trust's business and affairs are conducted by the Property Trustee and
its Administrative Trustees, each appointed by the Corporation as holder of the
Common Securities. The trustees for the Trust will be The Bank of New York as
the Property Trustee, Delaware Trust Capital Management, Inc. as the Delaware
29
<PAGE> 31
Trustee, and three individual trustees as the Administrative Trustees who are
employees or officers of or affiliated with the Corporation (collectively, the
"Issuer Trustees"). The Bank of New York, as Property Trustee, will act as sole
indenture trustee under the Trust Agreement. The Bank of New York will also act
as indenture trustee under the Guarantee and the Indenture. See "Description of
Exchange Securities -- Description of Exchange Guarantee" and "Description of
Exchange Securities -- Description of Exchange Junior Subordinated Debentures."
The holder of the Common Securities of the Trust or, if an Event of Default
under the Trust Agreement has occurred and is continuing, the holders of a
majority in Liquidation Amount of the Capital Securities will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights will
be vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Trust Agreement. The
Corporation will pay all fees, expenses, debts and obligations (other than with
respect to the Trust Securities) related to the Trust and the offering of the
Capital Securities and will pay, directly or indirectly, all ongoing costs,
expenses and liabilities of the Trust. The principal executive office of the
Trust is 600 Fifth Avenue, 24th Floor, New York, New York 10020-2302 and its
telephone number is (212) 332-8080.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Trust entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Corporation and the Trust agreed to file and
to use their reasonable efforts to cause to become effective with the Commission
a registration statement with respect to the exchange of the Old Capital
Securities for other capital securities with terms identical in all material
respects to the terms of the Old Capital Securities. A copy of the Registration
Rights Agreement has been filed as an Exhibit to the Registration Statement of
which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Trust under the Registration Rights Agreement. The form
and terms of the Exchange Capital Securities are the same as the form and terms
of the Old Capital Securities except that the Exchange Capital Securities have
been registered under the Securities Act and will not be subject to the $100,000
minimum Liquidation Amount transfer restriction and certain other restrictions
on transfer applicable to the Old Capital Securities. The Exchange Capital
Securities will not provide as do the Old Capital Securities that if a
registration statement relating to the Exchange Offer has not been filed by June
12, 1997 or has not been declared effective by July 12, 1997, then additional
Distributions will accrue on the Old Capital Securities commencing on June 13,
1997 or July 13, 1997, as the case may be, at a rate of 0.25% per annum of the
Liquidation Amount of such Old Capital Securities until such events have
occurred. Upon the effectiveness of the Registration Statement of which this
Prospectus is a part and consummation of the Exchange Offer, the Corporation and
the Trust will have satisfied their obligations under the Registration Rights
Agreement and holders of Old Capital Securities will not be entitled to any such
additional Distributions or any further registration rights under the
Registration Rights Agreement, except under limited circumstances with respect
to certain broker-dealers. See "Risk Factors -- Consequences of a Failure to
Exchange Old Capital Securities" and "Description of Old Capital Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Old Capital Securities in any jurisdiction in
which the Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by The Depository Trust Company
("DTC") who desires to deliver such Old Capital Securities by book-entry
transfer at DTC.
30
<PAGE> 32
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Old Guarantee for the Exchange Guarantee
and the Old Debentures, in an amount corresponding to the Old Capital Securities
accepted for exchange, for a like aggregate principal amount of the Exchange
Debentures. The Exchange Guarantee and Exchange Debentures have been registered
under the Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $125,000,000 aggregate Liquidation Amount of Exchange Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$125,000,000 of Exchange Capital Securities in exchange for a like principal
amount of outstanding Old Capital Securities tendered and accepted in connection
with the Exchange Offer. Holders may tender their Old Capital Securities in any
integral multiple of $1,000 Liquidation Amount (one Old Capital Security).
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$125,000,000 aggregate Liquidation Amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters
rights in connection with the Exchange Offer.
Old Capital Securities which are not tendered for or are tendered but not
accepted in connection with the Exchange Offer will remain outstanding and be
entitled to the benefits of the Trust Agreement, but will not be entitled to any
further registration rights under the Registration Rights Agreement, except
under limited circumstances with respect to certain broker-dealers. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Corporation will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY
ISSUER TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL
SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION
OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO
ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDER'S OWN FINANCIAL POSITION AND REQUIREMENTS.
The term "Expiration Date" means 5:00 p.m., New York City time, on March
, 1997 unless the Exchange Offer is extended by the Corporation or the Trust
(in which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended).
31
<PAGE> 33
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Old Capital Securities for exchange,
(ii) to terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) if the Trust determines, in its
sole and absolute discretion, that any of the events or conditions referred to
under "-- Conditions to the Exchange Offer" have occurred or exist or have not
been satisfied, (iii) to extend the Expiration Date of the Exchange Offer and
retain all Old Capital Securities tendered pursuant to the Exchange Offer,
subject, however, to the right of holders of Old Capital Securities to withdraw
their tendered Old Capital Securities as described under "-- Withdrawal Rights"
and (iv) to waive any condition or otherwise amend the terms of the Exchange
Offer in any respect. If the Exchange Offer is amended in a manner determined by
the Corporation and the Trust to constitute a material change, or if the
Corporation and the Trust waive a material condition of the Exchange Offer, the
Corporation and the Trust will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the holders of the Old Capital
Securities, and the Corporation and the Trust will extend the Exchange Offer to
the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
In all cases, delivery of Exchange Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and (iii) any other documents required by the
Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation satisfactory
to the Exchange Agent and the Trust of a book-entry transfer of Old Capital
Securities into the Exchange Agent's account at DTC.
Subject to the terms and conditions of the Exchange Offer, the Trust will
be deemed to have accepted for exchange, and thereby exchanged, Old Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Old Capital Securities for exchange pursuant to the Exchange offer. The Exchange
Agent will act as agent for the Trust for the purpose of receiving tenders of
Old Capital Securities, Letters of Transmittal and related documents, and as
agent for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents and transmitting Exchange Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
offer is delayed (whether before or after the Trust's acceptance for exchange of
Old Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange, or exchange, Old Capital Securities tendered pursuant to
the Exchange offer, then, without prejudice to the Trust's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Trust and subject
to Rule 14e-l(c) under the Exchange Act, retain tendered Old Capital Securities
and such Old Capital Securities may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described under
"-- Withdrawal Rights."
32
<PAGE> 34
Pursuant to the Letter of Transmittal, a holder of Old Capital Securities
will warrant and agree in the Letter of Transmittal that it has full power and
authority to tender, exchange, sell, assign and transfer Old Capital Securities,
that the Trust will acquire good, marketable and unencumbered title to the
tendered Old Capital Securities, free and clear of all liens, restrictions,
charges and encumbrances, and that the Old Capital Securities tendered for
exchange are not subject to any adverse claims or proxies. The holder also will
warrant and agree that it will, upon request, execute and deliver any additional
documents deemed by the Trust or the Exchange Agent to be necessary or desirable
to complete the exchange, sale, assignment, and transfer of the Old Capital
Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents, must be
received by the Exchange Agent at one of its addresses set forth under
"-- Exchange Agent," and either (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below and
a book-entry confirmation must be received by the Exchange Agent, in each case
on or prior to the Expiration Date, or (iii) the guaranteed delivery procedures
set forth below must be complied with.
If less than all of a holder's Old Capital Securities are tendered, the
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal. The entire amount
of Old Capital Securities delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
no later than two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfers. However, although delivery of
Old Capital Securities may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duty executed, with any required signature
guarantees and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "-- Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (a)
or (b) above, such certificates for Old Capital Securities must be duly endorsed
or accompanied by a properly executed bond power, with the endorsement or
signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer;
33
<PAGE> 35
(iii) a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or prior to the Expiration Date, or the
procedure for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the Letter of Transmittal. Accordingly, the delivery of
Exchange Capital Securities might not be made to all tendering holders at the
same time, and will depend upon when Old Capital Securities, book-entry
confirmations with respect to Old Capital Securities and other required
documents are received by the Exchange Agent.
The Trust's acceptance for exchange of Old Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Trust, in their sole discretion, which determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange Offer
as set forth under "-- Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders.
The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Corporation,
the Trust, any affiliates or assigns of the Corporation or the Trust, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
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If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing and, unless waived by the
Corporation and the Trust, proper evidence satisfactory in their sole discretion
to the Corporation and the Trust of such person's authority to so act must be
submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that Exchange Capital Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a holder who is a
broker-dealer) without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such Exchange Capital
Securities are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities. However, any holder of Old
Capital Securities who is an "affiliate" of the Corporation or the Trust or who
intends to participate in the Exchange Offer for the purpose of distributing
Exchange Capital Securities, or any broker-dealer who purchased Old Capital
Securities from the Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Capital Securities in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Capital Securities unless such sale is made pursuant to an exemption
from such requirements. In addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for Exchange Capital Securities, then such broker-dealer must deliver
a prospectus meeting the requirements of the Securities Act in connection with
any resales of such Exchange Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for Exchange Capital Securities in the Exchange offer will be
required to represent that (i) such holder is not an "affiliate" of the
Corporation or the Trust, (ii) any Exchange Capital Securities to be received by
such holder are being acquired in the ordinary course of such holder's business,
(iii) such holder has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the Securities Act) of such
Exchange Capital Securities, and (iv) if such holder is not a broker-dealer,
such holder is not engaged in, and does not intend to engage in, a distribution
(within the meaning of the Securities Act) of such Exchange Capital Securities.
In addition, the Corporation and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer, to
furnish to the Corporation and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Exchange Act) on behalf of whom such holder holds the Old
Capital Securities to be exchanged pursuant to the Exchange Offer. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that the Old Capital Securities
tendered by it for exchange were acquired for its own account as the result of
market-making activities or other trading activities and must agree that it will
deliver a prospectus meeting the requirements of the Securities Act in
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connection with any resale of such Exchange Capital Securities. The Letter of
Transmittal acknowledges that by so stating and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to above, the
Corporation and the Trust believe that Participating Broker-Dealers who own Old
Capital Securities acquired for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the Exchange Capital Securities received upon
exchange of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the Prospectus prepared for this Exchange Offer so long as it
contains a description of the plan of distribution with respect to the resale of
such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer during the period referred to below
in connection with resales of Exchange Capital Securities received in exchange
for Old Capital Securities where such Old Capital Securities were acquired by
such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Corporation and the Trust have
agreed that this Prospectus, as it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for the period ending 90 days after the
Expiration Date (subject to extension under certain limited circumstances
described below) or, if earlier, when all such Exchange Capital Securities have
been disposed of by such Participating Broker-Dealer. See "Plan of
Distribution." A Participating Broker-Dealer who intends to use this Prospectus
in connection with the resale of Exchange Capital Securities received in
exchange for Old Capital Securities pursuant to the Exchange Offer must notify
the Corporation or the Trust, or cause the Corporation or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating Broker-
Dealer. Such notice may be given in the space provided for that purpose in the
Letter of Transmittal or may be delivered to the Exchange Agent at one of the
addresses set forth herein under "-- Exchange Agent." Any Participating
Broker-Dealer who is an "affiliate" of the Corporation or the Trust may not rely
on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
Each Participating Broker-Dealer who surrenders Old Capital Securities
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which they
were made, not misleading or of the occurrence of certain other events specified
in the Registration Rights Agreement, such Participating Broker-Dealer will
suspend the sale of Exchange Capital Securities (or the Exchange Guarantee or
the Exchange Debentures, as applicable) pursuant to this Prospectus until the
Corporation or the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Participating Broker-Dealer or the Corporation
or the Trust has given notice that the sale of the Exchange Capital Securities
(or the Exchange Guarantee or the Exchange Debentures, as applicable) may be
resumed, as the case may be. If the Corporation or the Trust gives such notice
to suspend the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Debentures, as applicable), it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use this Prospectus in connection with the resale of Exchange Capital
Securities by the number of days during the period from and including the date
of the giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the Exchange Capital Securities or to
and including the date on which the Corporation or the Trust has given notice
that the sale of Exchange Capital Securities
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(or the Exchange Guarantee or the Exchange Debentures, as applicable) may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Old Capital Securities to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Old Capital Securities tendered for the account of an Eligible
Institution. If Old Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "-- Procedures for Tendering Old
Capital Securities," the notice of withdrawal must specify the name and number
of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be tendered again at any subsequent time
on or prior to the Expiration Date by following any of the procedures described
above under "-- Procedures for Tendering Old Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Corporation, the Trust, any affiliates or assigns of the Corporation
or the Trust, the Exchange Agent nor any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive Distributions on such Old Capital Securities and
will be deemed to have waived the right to receive any Distributions on such Old
Capital Securities accumulated from and after January 13, 1997. Accordingly,
holders of Exchange Capital Securities as of the record date for the payment of
Distributions on July 1, 1997 will be entitled to receive Distributions
accumulated from and after January 13, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any Exchange Capital Securities, and, as described below, may terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions has occurred or exists or has not been
satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the Exchange Capital Securities
issued pursuant to the Exchange Offer in exchange for Old Capital
Securities to be offered for resale, resold and otherwise transferred by
the holder thereof (other
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than broker-dealers and any such holder which is an "affiliate" of the
Corporation or the Trust within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that such Exchange
Capital Securities are acquired in the ordinary course of such holder's
business and such holder has no arrangement or understanding with any
person to participate in the distribution of such Exchange Capital
Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Trust, threatened for that purpose any governmental
approval has not been obtained, which approval the Corporation or the Trust
shall, in its sole discretion, deem necessary for the consummation of the
Exchange Offer as contemplated hereby.
If the Corporation or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, it may, subject to applicable law, terminate the
Exchange Offer (whether or not any Old Capital Securities have theretofore been
accepted for exchange) or may waive any such condition or otherwise amend the
terms of the Exchange offer in any respect. If such waiver or amendment
constitutes a material change to the Exchange Offer, the Corporation or the
Trust will promptly disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old Capital
Securities and will extend the Exchange Offer to the extent required by Rule
14e-1 under the Exchange Act.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
Prospectus or of the Letter of Transmittal should be directed to the Exchange
Agent as follows:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: Facsimile Transmission Number: By Hand/Overnight Delivery:
101 Barclay Street, 7E (212) 571-3080 101 Barclay Street
New York, New York 10286 Corporation Trust Services Window
(212) 815-6333 (For Eligible Institutions Only) Ground Level
Attn: Reorganization Section, Confirm by Telephone New York, New York 10286
Arwen Gibbons (212) 815-6333 Attn: Reorganization Section
Arwen Gibbons
For Information Call:
(212) 815-6333
</TABLE>
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Old Capital
Securities tendered, or if
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a transfer tax is imposed for any reason other than the exchange of Old Capital
Securities in connection with the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
Neither the Corporation nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE EXCHANGE SECURITIES
DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
Pursuant to the terms of the Trust Agreement, the Trust has issued the Old
Capital Securities and the Common Securities and will issue the Exchange Capital
Securities. The Exchange Capital Securities will represent preferred beneficial
interests in the Trust and the holders thereof will be entitled to a preference
over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "-- Subordination of Common Securities." The Trust
Agreement has been qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). This summary of certain provisions of the Exchange
Capital Securities, the Common Securities and the Trust Agreement does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Exchange Capital Securities, the Common
Securities and the Trust Agreement, including the definitions therein of certain
terms.
General
The Capital Securities (including the Old Capital Securities and the
Exchange Capital Securities) are limited to $125,000,000 aggregate Liquidation
Amount at any one time outstanding. The Capital Securities will rank pari passu,
and payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities." Legal title to the
Junior Subordinated Debentures will be held by the Property Trustee in trust on
behalf of the Trust for the benefit of the holders of the Capital Securities and
Common Securities. The Exchange Guarantee will not guarantee payment of
Distributions or amounts payable on redemption of the Exchange Capital
Securities or liquidation of the Trust when the Trust does not have funds on
hand legally available for such payments. See "Description of Exchange
Guarantee."
Distributions
Distributions on the Exchange Capital Securities will be cumulative, will
accumulate from January 13, 1997 and will be payable semi-annually in arrears on
January 1 and July 1 of each year, commencing on July 1, 1997, at the annual
rate of 8.73% of the Liquidation Amount to the holders of the Exchange Capital
Securities on the relevant record dates. The record date for each Distribution
will be the fifteenth day preceding the relevant Distribution Date (as defined
below). The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and for any period less than
6 months, the actual months elapsed and the actual days elapsed in a partial
month in a period. In the event that any date on which Distributions are payable
on the Exchange Capital Securities is not a Business Day (as defined below),
then payment of the Distribution 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), in each case with the same force and effect as if
made on such date (each date on which Distributions are payable in accordance
with the foregoing, a "Distribution Date"). A "Business Day" shall mean any day
other than a Saturday or a Sunday, or a day on which banking institutions in The
City of New York, New York are authorized or required by law or executive order
to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Corporation will have the right under the Indenture to defer the
payment of interest on the Exchange Junior Subordinated
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Debentures at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity. Semi-annual
Distributions on the Exchange Capital Securities will be deferred by the Trust
during any Extension Period. Distributions to which holders of the Exchange
Capital Securities are entitled during any Extension Period will accumulate
additional Distributions thereon at the rate per annum of 8.73% thereof,
compounded semi-annually from the relevant Distribution Date, on the basis of a
360-day year of twelve 30-day months and for any period less than 6 months, the
actual months elapsed and the actual days elapsed in a partial month in a
period, but not exceeding the interest rate then accruing on the Exchange Junior
Subordinated Debentures. The term "Distributions," as used herein, shall include
any such additional Distributions.
Prior to the termination of any Extension Period, the Corporation may
further extend it provided that no Extension Period may exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity. Upon the termination
of any Extension Period and the payment of all amounts then due, and subject to
the foregoing limitations, the Corporation may elect to begin a new Extension
Period. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any Extension
Period at least five Business Days prior to the earlier of (i) the date the
Distributions on the Capital Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of such Exchange Capital Securities of the record date or the date
such Distributions are payable but in any event not less than five Business Days
prior to such record date. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See "Description of
Exchange Junior Subordinated Debentures -- Option to Extend Interest Payment
Period" and "Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount."
During any Extension Period, the Corporation may not, and may not permit
any subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any, or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Exchange Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in connection with
the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) as a direct
result of, and only to the extent necessary to avoid the issuance of fractional
shares of the Corporation's capital stock following, a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Corporation's benefit plans for its directors, officers
or employees or any of the Corporation's dividend reinvestment plans). None of
the Corporation's subsidiaries will be prohibited from declaring and paying cash
distributions with respect to its capital stock or from making payments with
respect to its debt securities.
Although the Corporation may in the future exercise its right to defer
payments of interest on the Exchange Junior Subordinated Debentures, the
Corporation has no such current intention.
The revenue of the Trust available for distribution to holders of the
Exchange Capital Securities will be limited to payments under the Exchange
Junior Subordinated Debentures in which the Trust has invested the proceeds from
the issuance and sale of the Trust Securities. See "-- Description of Exchange
Junior Subordinated Debentures -- General." If the Corporation does not make
interest payments on the Exchange Junior Subordinated Debentures, the Property
Trustee will not have funds available to pay Distributions on
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the Exchange Capital Securities. The payment of Distributions (if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions) will be guaranteed by the Corporation on a limited basis as set
forth herein under "-- Description of Exchange Guarantee."
Conditional Right to Shorten Maturity and Special Event Redemption
If a Tax Event occurs, then the Corporation will have the right, prior to
the termination of the Trust, either (i) to shorten the Stated Maturity of the
Exchange Junior Subordinated Debentures to the minimum extent required, but not
less than 20 years from the date of original issuance thereof, such that, in the
written opinion of counsel experienced in such matters delivered to the
Corporation, after shortening the maturity, interest paid on the Exchange Junior
Subordinated Debentures will be deductible for federal income tax purposes (the
action referred to above being referred to herein as a "Tax Event Maturity
Shortening") or (ii) to prepay the Exchange Junior Subordinated Debentures, as
described below.
If a Tax Event or an Investment Company Event occurs, then the Corporation
shall have the right, within 90 days following the occurrence of such Tax Event
or Investment Company Event, as the case may be, to prepay the Exchange Junior
Subordinated Debentures in whole (but not in part) in the manner and at the
price determined as set forth under "-- Description of Exchange Junior
Subordinated Debentures -- Conditional Right to Shorten Maturity and Special
Event Prepayment," and therefore to cause a mandatory redemption of the Exchange
Capital Securities prior to the Stated Maturity (the circumstances under which
the Corporation has the right so to prepay the Exchange Junior Subordinated
Debentures in connection with a Tax Event being referred to herein as a
"Conditional Tax Redemption Event"). Each of a Conditional Tax Redemption Event
or an Investment Company Event are sometimes referred to herein as a "Special
Event".
Redemption
Upon the repayment on the Stated Maturity or prepayment prior to the Stated
Maturity of the Exchange Junior Subordinated Debentures, the proceeds from such
repayment or prepayment shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of the date of redemption (the "Redemption Date"),
at the applicable Redemption Price, which shall be equal to (i) in the case of
the repayment of the Exchange Junior Subordinated Debentures on the Stated
Maturity, the Maturity Redemption Price of the Capital Securities (equal to the
principal of, and accrued and unpaid interest on, the Exchange Junior
Subordinated Debentures), (ii) in the case of the optional prepayment of the
Exchange Junior Subordinated Debentures upon the occurrence and continuation of
a Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price of the Capital Securities in respect of the Exchange Junior
Subordinated Debentures) and (iii) in the case of the optional prepayment of the
Exchange Junior Subordinated Debentures other than as contemplated in clause
(ii) above, the Optional Redemption Price of the Capital Securities (equal to
the Optional Prepayment Price in respect of the Junior Subordinated Debentures).
See "-- Description of Exchange Junior Subordinated Debentures -- Optional
Prepayment" and "-- Conditional Right to Shorten Maturity and Special Event
Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Exchange Junior Subordinated Debentures to be paid in accordance with
their terms and (ii) with respect to a distribution of Exchange Junior
Subordinated Debentures upon the liquidation of the Trust, Exchange Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Exchange Junior
Subordinated Debentures are distributed.
The Corporation will have the option to prepay the Exchange Junior
Subordinated Debentures, (i) in whole or in part, on or after January 1, 2007,
at the applicable Optional Prepayment Price and (ii) in whole but not in part,
at any time, upon the occurrence of a Special Event, at the Special Event
Prepayment Price.
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Liquidation of the Trust and Distribution of Exchange Junior Subordinated
Debentures
The Corporation, as the holder of all of the outstanding Common Securities,
will have the right at any time to dissolve the Trust and cause a Like Amount of
the Exchange Junior Subordinated Debentures to be distributed to the holders of
the Trust Securities in liquidation of the Trust, subject to the Corporation's
having received an opinion from independent tax counsel experienced in such
matters to the effect that the holders will not recognize any gain or loss for
United States federal income tax purposes as a result of the dissolution of the
Trust and such distribution to holders of Exchange Capital Securities.
The Trust shall automatically dissolve upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Exchange Junior Subordinated
Debentures to the holders of the Trust Securities if the Corporation, as
Sponsor, has given a written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as the holder of all of the outstanding
Common Securities); (iii) redemption of all of the Trust Securities as described
under "-- Redemption"; (iv) expiration of the term of the Trust; and (v) the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv) or (v)
above, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of the Trust Securities a Like Amount
of the Exchange Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive out of the assets of the Trust legally
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets on hand legally available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Capital Securities and the Common Securities shall be paid
on a pro rata basis, except that if a Debenture Event of Default has occurred
and is continuing, the Capital Securities shall have a priority over the Common
Securities. See "-- Subordination of Common Securities." If an early dissolution
occurs as described in clause (v) above, the Exchange Junior Subordinated
Debentures will be subject to optional prepayment, in whole but not in part, on
or after January 1, 2007.
If the Corporation elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Exchange Junior Subordinated
Debentures to holders of the Trust Securities, the Trust Securities will remain
outstanding until the repayment of the Junior Subordinated Debentures on the
Stated Maturity.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate, if any, representing Trust Securities and held by DTC or its
nominee will receive a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Trust Securities not held
by DTC or its nominee will be deemed to represent Exchange Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporation will issue to such holder, and the
Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debentures. See "-- Form, Denomination, Book-Entry Procedures and
Transfer."
There can be no assurance as to the market prices for the Exchange Capital
Securities or the Exchange Junior Subordinated Debentures that may be
distributed in exchange for the Trust Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Exchange Capital
Securities that an investor may purchase, or the Exchange Junior Subordinated
Debentures that the investor may receive on dissolution and
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liquidation of the Trust, may trade at a discount to the price that the investor
paid to purchase the Exchange Capital Securities offered hereby.
Redemption Procedures
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Exchange Junior Subordinated Debentures. Any redemption of
Trust Securities shall be made and the applicable Redemption Price shall be
payable on the Redemption Date only to the extent that the Trust has funds
legally available for the payment of such applicable Redemption Price. See also
"-- Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Exchange
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are legally available, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price with respect to the Exchange Capital Securities held by DTC or its
nominees. See "-- Form, Denomination, Book-Entry Procedures and Transfer." With
respect to the Exchange Capital Securities held in certificated form, the
Property Trustee, to the extent funds are legally available, will irrevocably
deposit with the paying agent for the Exchange Capital Securities funds
sufficient to pay the applicable Redemption Price and will give such paying
agent irrevocable instructions and authority to pay the applicable Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Exchange Capital Securities. See "-- Payment and Paying Agency." Notwithstanding
the foregoing, Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such Exchange Capital Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of the Exchange Capital Securities will
cease, except the right of the holders of the Exchange Capital Securities to
receive the applicable Redemption Price, but without interest on such Redemption
Price, and the Exchange Capital Securities will cease to be outstanding. In the
event that any Redemption Date of Exchange Capital Securities is not a Business
Day, then the applicable Redemption Price payable on such date will be paid on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the applicable Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Corporation pursuant to the Exchange Guarantee as described under
"Description of Exchange Guarantee," (i) Distributions on Exchange Capital
Securities will continue to accumulate at the then applicable rate, from the
Redemption Date originally established by the Trust to the date such applicable
Redemption Price is actually paid, and (ii) the actual payment date will be the
Redemption Date for purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Exchange Capital Securities by tender, in
the open market or by private agreement.
If less than all of the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Trust Securities to be redeemed shall generally be allocated pro rata among the
Capital Securities and Common Securities based upon the relative Liquidation
Amounts of such classes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Corporation defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Junior Subordinated Debentures,
on and after the Redemption Date Distributions will cease to accrue on the Trust
Securities called for redemption.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amount of the Capital Securities
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and Common Securities outstanding; provided, however, that if on any
Distribution Date or Redemption Date a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution on, or applicable
Redemption Price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of the Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the applicable Redemption Price the full amount of such Redemption Price,
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Capital Securities then due and
payable.
In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect to
such Event of Default until the effect of such Event of Default shall have been
cured, waived or otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the holders of the Capital Securities and not on behalf of the
Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.
Events of Default; Notice
The occurrence of a Debenture Event of Default (see "Description of
Exchange Junior Subordinated Debentures -- Debenture Events of Default")
constitutes an "Event of Default" under the Trust Agreement.
Within ninety days after the occurrence of any Event of Default actually
known to the Property Trustee, the Property Trustee shall transmit notice of
such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"-- Liquidation of the Trust and Distribution of Exchange Junior Subordinated
Debentures" and "-- Subordination of Common Securities."
Removal of Issuer Trustees
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.
Merger or Consolidation of Issuer Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Issuer Trustee shall
be a party, or any corporation succeeding to all or substantially all the
corporate trust business of such Issuer Trustee, shall be the successor of such
Issuer Trustee under the Trust Agreement, provided such corporation shall be
otherwise qualified and eligible.
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Mergers, Consolidations, Amalgamation or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other person,
except as described below. The Trust may, at the request of the Corporation as
the holder of all of the outstanding Common Securities, with the consent of the
Administrative Trustees but without the consent of the Property Trustee, the
Delaware Trustee or the holders of the Capital Securities, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Capital Securities or (b) substitutes for the Capital Securities
other securities having substantially the same terms as the Capital Securities
(the "Successor Securities") so long as the Successor Securities rank in
priority the same as the Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee with respect to the Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Capital Securities are
then listed or quoted, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any two nationally
recognized statistical rating organizations, (v) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material respect (other
than any dilution of such holders' interests in the new entity), (vi) such
successor entity has a purpose identical to that of the Trust, (vii) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Corporation has received an opinion from independent counsel to the
Trust experienced in such matters to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect
(other than any dilution of such holders' interests in the new entity), and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor such successor entity will be required
to register as an investment company under the Investment Company Act, (viii)
the Corporation or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee and (ix) the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States federal income tax
purposes.
Voting Rights; Amendment of the Trust Agreement
Except as described below and under "-- Removal of Issuer Trustees,"
"-- Mergers, Consolidations, Amalgamation or Replacements of the Trust" and
"Description of Exchange Guarantee -- Amendments and Assignment" and as
otherwise required by law and the terms of the Trust Securities and the Trust
Agreement, the holders of the Exchange Capital Securities will have no voting
rights.
The Trust Agreement may be amended from time to time by the Corporation as
the holder of all of the outstanding Common Securities, the Property Trustee and
the Administrative Trustees without the consent of the holders of the Trust
Securities or the Delaware Trustee (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement, (ii) to modify, eliminate or
add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be
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classified for United States federal income tax purposes as a grantor trust at
all times that any Trust Securities are outstanding or to ensure that the Trust
will not be required to register as an "investment company" under the Investment
Company Act, or (iii) to qualify or maintain qualification of the Trust
Agreement under the Trust Indenture Act; provided, however, that in each case,
such action shall not adversely affect in any material respect the interests of
the holders of the Trust Securities. Any amendments of the Trust Agreement
pursuant to the foregoing shall become effective when notice thereof is sent to
the holders of the Trust Securities. The Trust Agreement may be amended by the
Property Trustee, the Administrative Trustees and the Corporation as the holder
of all of the outstanding Common Securities with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding Trust
Securities and upon receipt by the Property Trustee and the Administrative
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Property Trustee and the Administrative
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act, provided that, without the consent of each holder of Trust Securities, the
Trust Agreement may not be amended (i) to change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) to restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee for the benefit of the holders of the Trust Securities, the Property
Trustee and the Administrative Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or execute any trust or power conferred on such Debenture Trustee with
respect to the Junior Subordinated Debentures, (ii) waive certain past defaults
under the Indenture, (iii) exercise any right to rescind or annul a declaration
of acceleration of the maturity of the Junior Subordinated Debentures or (iv)
consent to any amendment, modification or termination of the Indenture or the
Junior Subordinated Debentures, where such consent shall be required, without in
each case obtaining the prior approval of the holders of a majority in
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior approval of each holder of
the Capital Securities. The Issuer Trustees shall not revoke any action
previously authorized or approved by a vote of the holders of the Capital
Securities except by subsequent vote of such holders. The Property Trustee shall
notify each holder of Capital Securities of any notice of default with respect
to the Junior Subordinated Debentures. In addition to obtaining the foregoing
approvals of such holders of the Capital Securities, prior to taking any of the
foregoing actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that there is no more than an
insubstantial risk that the Trust would not be classified for United States
federal income tax purposes as a grantor trust on account of such action.
Any required approval of holders of Exchange Capital Securities may be
given at a meeting of such holders convened for such purpose or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which holders of Exchange Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Exchange Capital Securities in the manner
set forth in the Trust Agreement.
No vote or consent of the holders of Exchange Capital Securities will be
required for the Trust to redeem and cancel the Exchange Capital Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint,
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remove or replace the Administrative Trustees, which voting rights are vested
exclusively in the Corporation as the holder of all the outstanding Common
Securities.
Form, Denomination, Book-Entry Procedures and Transfer
The Exchange Capital Securities initially will be represented by one or
more Exchange Capital Securities certificates in registered, global form
(collectively, the "Global Capital Securities"). The Global Capital Securities
will be deposited upon issuance with the Property Trustee as custodian for DTC,
in New York, New York, and registered in the name of DTC or its nominee, in each
case for credit to an account of a direct or indirect participant in DTC as
described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Capital
Securities may not be exchanged for Capital Securities in certificated form
except in the limited circumstances described below. See "-- Exchange of
Book-Entry Capital Securities for Certificated Capital Securities."
Depositary Procedures
DTC has advised the Trust and the Corporation that DTC is a limited-purpose
trust company created to hold securities for its participating organizations
(collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants designated by the Initial
Purchasers with portions of the Liquidation Amount of the Global Capital
Securities and (ii) ownership of such interests in the Global Capital Securities
will be shown on, and the transfer of ownership thereof will be effected only
through, records maintained by DTC (with respect to the Participants) or by the
Participants and the Indirect Participants (with respect to other owners of
beneficial interests in the Global Capital Securities).
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Capital Securities, are registered
as the owners thereof for the purpose of receiving such payments and for any and
all other purposes whatsoever. Consequently, neither the Property Trustee nor
any agent thereof has or will have any responsibility or liability for (i) any
aspect of DTC's records or any Participant's or Indirect Participant's records
relating to or payments made on account of beneficial ownership interests in the
Global Capital Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's records relating to
the beneficial ownership interests in the Global Capital Securities or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of
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the relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date. Payments by
the Participants and the Indirect Participants to the beneficial owners of
Capital Securities will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of DTC, the Property Trustee,
the Trust or the Corporation. Neither the Trust nor the Corporation nor the
Property Trustee will be liable for any delay by DTC or any of its Participants
in identifying the beneficial owners of the Capital Securities, and the Trust,
the Corporation and the Property Trustee may conclusively rely on and will be
protected in relying on instructions from DTC or its nominee for all purposes.
Beneficial interests in the Global Capital Securities will trade in DTC's
Same-Day Funds Settlement System and secondary market trading activity in such
interests will therefore settle in immediately available funds, subject in all
cases to the rules and procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any action
permitted to be taken by a holder of Exchange Capital Securities only at the
direction of one or more Participants to whose account with DTC interests in the
Global Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Trust Agreement, DTC reserves the right to exchange the Global
Capital Securities for Exchange Capital Securities in certificated form and to
distribute such Exchange Capital Securities to its Participants.
The information in this section concerning DTC, and its book-entry systems,
has been obtained from sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Exchange Capital Securities
in registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) the Corporation in its sole discretion elects to cause the issuance of the
Exchange Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or any event which after notice
or lapse of time or both would be an Event of Default under the Trust Agreement.
In addition, beneficial interests in a Global Capital Security may be exchanged
for certificated Exchange Capital Securities upon request but only upon at least
20 days prior written notice given to the Property Trustee by or on behalf of
DTC in accordance with its customary procedures as in effect at that time. In
all cases, certificated Exchange Capital Securities delivered in exchange for
any Global Capital Security or beneficial interests therein will be registered
in the names, and issued in any approved denominations, requested by or on
behalf of DTC (in accordance with its customary procedures).
Payment and Paying Agency
The clearing agency for the Exchange Capital Securities (the "Clearing
Agency") shall initially be DTC. Payments in respect of the Exchange Capital
Securities held in global form shall be made to the Clearing Agency, which shall
credit the relevant accounts at the Clearing Agency on the applicable
Distribution Dates or, in respect of the Exchange Capital Securities that are
not held by the Clearing Agency, such payments shall be made by check mailed to
the address of the holder entitled thereto as such address shall appear on the
register. The paying agent for the Exchange Capital Securities (the "Paying
Agent") shall initially be the Property Trustee. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Property
Trustee and the Corporation. In the event that the Property Trustee shall no
longer be the
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Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and the
Corporation) to act as Paying Agent.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the
Exchange Capital Securities.
Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, subject to payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Trust Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is continuing
and the Property Trustee is required to decide between alternative causes of
action, construe ambiguous provisions in the Trust Agreement or is unsure of the
application of any provision of the Trust Agreement, and the matter is not one
on which holders of the Capital Securities or the Common Securities are entitled
under the Trust Agreement to vote, then the Property Trustee shall take such
action as is directed by the Corporation and, if not so directed, shall take
such action as it deems advisable and in the best interests of the holders of
the Trust Securities and will have no liability except for its own bad faith,
negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust (i) will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act, (ii) will continue to be classified for United States
federal income tax purposes as a grantor trust, and (iii) will cooperate with
the Corporation to ensure that the Junior Subordinated Debentures will be
treated as indebtedness of the Corporation for United States federal income tax
purposes. In this connection, the Corporation and the Administrative Trustees
are authorized to take any action, not inconsistent with applicable law, the
certificate of trust of the Trust or the Trust Agreement, that the Corporation
and the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Old Junior Subordinated Debentures were issued and the Exchange Junior
Subordinated Debentures will be issued under the Indenture between the
Corporation and the Debenture Trustee. The Indenture has been qualified under
the Trust Indenture Act. This summary of certain terms and provisions of the
Junior Subordinated Debentures and the Indenture does not purport to be
complete, and where reference is made to particular provisions of the Indenture,
such provisions, including the definitions of certain terms, some of which are
not otherwise defined herein, are qualified in their entirety by reference to
all of the provisions of the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act.
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General
Concurrently with the issuance of the Trust Securities, the Trust invested
the proceeds thereof, together with the consideration paid by the Corporation
for the Common Securities, in Junior Subordinated Debentures issued by the
Corporation. Pursuant to the Exchange Offer, the Corporation will exchange
Exchange Junior Subordinated Debentures, in an amount corresponding to the Old
Capital Securities accepted for exchange, for a like aggregate principal amount
of the Old Junior Subordinated Debentures as soon as practicable after the date
hereof.
The Exchange Junior Subordinated Debentures will bear interest from January
13, 1997 at the annual rate of 8.73% of the principal amount thereof, payable
semi-annually in arrears on January 1 and July 1 of each year (each, an
"Interest Payment Date"), commencing July 1, 1997, to the person in whose name
each Exchange Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the fifteenth day preceding the relevant
payment date. It is anticipated that, until the liquidation, if any, of the
Trust, each Exchange Junior Subordinated Debenture will be held in the name of
the Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and for any period less than
6 months, the actual months elapsed and the actual days elapsed in a partial
month in a period. In the event that any date on which interest is payable on
the Exchange Junior Subordinated Debentures is not a Business Day, then payment
of the 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) with the same force and effect as if made on the date such
payment was originally payable. Accrued interest that is not paid on the
applicable Interest Payment Date will bear additional interest on the amount
thereof (to the extent permitted by law) at the rate per annum of 8.73% thereof,
compounded semi-annually. The term "interest", as used herein, shall include
semi-annual interest payments, interest on semi-annual interest payments not
paid on the applicable Interest Payment Date and Additional Sums (as defined
below), as applicable.
The Exchange Junior Subordinated Debentures will be issued in denominations
of $1,000 and integral multiples thereof. The Exchange Junior Subordinated
Debentures will mature on January 1, 2037.
The Exchange Junior Subordinated Debentures will rank pari passu with the
Old Junior Subordinated Debentures and with all Other Debentures and will be
unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Indenture to all Senior Indebtedness. See
"-- Subordination." Because the Corporation is a non-operating holding company,
the right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Exchange Capital Securities to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary, except to the extent that the Corporation may itself be
recognized as a creditor of that subsidiary. Accordingly, the Exchange Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Exchange
Junior Subordinated Debentures should look only to the assets of the Corporation
for payments on the Exchange Junior Subordinated Debentures. In addition, since
many of the Corporation's subsidiaries are insurance companies subject to
regulatory control by various state insurance departments, the ability of such
subsidiaries to pay dividends to the Corporation without prior regulatory
approval is limited by applicable laws and regulations. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Indebtedness. See "-- Subordination."
Form, Registration and Transfer
If the Exchange Junior Subordinated Debentures are distributed to the
holders of the Trust Securities, the Exchange Junior Subordinated Debentures may
be represented by one or more global certificates registered in the name of Cede
& Co. as the nominee of DTC. The depositary arrangements for such Exchange
Junior Subordinated Debentures are expected to be substantially similar to those
in effect for the Exchange Capital Securities. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "Description of
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Exchange Securities -- Description of Exchange Capital Securities -- Form,
Denomination, Book-Entry Procedures and Transfer."
Payment and Paying Agents
Payment of principal of and any interest on Exchange Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in The City of
New York or at the office of such Paying Agent or Paying Agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made (i) by check mailed to the
address of the person entitled thereto as such address shall appear in the
register for Exchange Junior Subordinated Debentures or (ii) by transfer to an
account maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Exchange Junior Subordinated
Debenture will be made to the person in whose name such Exchange Junior
Subordinated Debenture is registered at the close of business on the Record Date
for such interest, except in the case of defaulted interest. The Corporation may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of or
interest on any Exchange Junior Subordinated Debenture and remaining unclaimed
for two years after such principal or interest has become due and payable shall,
at the request of the Corporation, be repaid to the Corporation and the holder
of such Exchange Junior Subordinated Debenture shall thereafter look, as a
general unsecured creditor, only to the Corporation for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation will have the right under the Indenture at any time during the
term of the Exchange Junior Subordinated Debentures to defer the payment of
interest at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity. At the end of an
Extension Period, the Corporation must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of 8.73%, compounded
semi-annually, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Exchange Junior
Subordinated Debentures (and holders of Exchange Capital Securities while
Exchange Capital Securities are outstanding) will be required to include the
accruals of such interest in gross income for United States federal income tax
purposes (as original issue discount) prior to the receipt of cash attributable
to such interest. See "Certain Federal Income Tax Consequences -- Interest
Income and OID."
During any Extension Period, the Corporation may not, and may not permit
any subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Exchange Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in connection with
the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the Guarantee, (d) as a direct
result of, and only to the extent necessary to avoid the issuance of fractional
shares of the Corporation's capital stock following, a reclassification of the
Corporation's capital stock or the exchange or conversion of one class or series
of the Corporation's capital stock for another class or series of the
Corporation's capital stock, (e) the purchase of fractional interests in shares
of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged
and (f) purchases of common stock related to the issuance of common stock or
rights under any of
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the Corporation's benefit plans for its directors, officers or employees or any
of the Corporation's dividend reinvestment plans). None of the Corporation's
subsidiaries will be prohibited from declaring and paying cash distributions
with respect to its capital stock or from making payments with respect to its
debt securities.
Prior to the termination of any Extension Period, the Corporation may
further extend it, provided that no Extension Period may exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity. Upon the termination
of any Extension Period and the payment of all amounts then due on any Interest
Payment Date, the Corporation may elect to begin a new Extension Period, subject
to the above requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof. The Corporation must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of any Extension Period (or an extension thereof) at least five
Business Days prior to the earlier of (i) the date the Distributions on the
Trust Securities would have been payable except for the election to begin or
extend such Extension Period or (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to holders of Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than five Business Days prior to such record date. The
Property Trustee shall give notice of the Corporation's election to begin or
extend a new Extension Period to the holders of the Capital Securities. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period.
Optional Prepayment
The Exchange Junior Subordinated Debentures will be prepayable, in whole or
in part, at the option of the Corporation on or after January 1, 2007, at a
prepayment price equal to the outstanding principal amount of the Exchange
Junior Subordinated Debentures to be prepaid, plus accrued and unpaid interest
thereon to the date of prepayment and any Additional Sums (as defined in
"Description of the Exchange Securities -- Description of Junior Subordinated
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment").
Conditional Right to Shorten Maturity and Special Event Prepayment
If a Tax Event occurs, then the Corporation will have the right, prior to
the termination of the Trust, either (i) to shorten the Stated Maturity of the
Junior Subordinated Debentures to the minimum extent required, but not less than
20 years from the date of original issuance thereof, such that in the written
opinion of counsel experienced in such matters delivered to the Corporation,
after shortening the maturity, interest paid on the Junior Subordinated
Debentures will be deductible for federal income tax purposes or (ii) to prepay
the Junior Subordinated Debentures as described below.
If a Special Event (as defined below) shall occur and be continuing, the
Corporation may, at its option, prepay the Junior Subordinated Debentures in
whole (but not in part) at any time within 90 days of the occurrence of such
Special Event, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of (i) 100% of the principal amount of such Junior
Subordinated Debentures or (ii) the sum, as determined by a Quotation Agent, of
the present values of the remaining scheduled payments of principal and interest
thereon to January 1, 2007, the first date on which the Junior Subordinated
Debentures are subject to optional prepayment, in each case discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
and unpaid interest thereon to the date of prepayment and any Additional Sums
(as defined below).
A "Special Event" means a Conditional Tax Redemption Event (as defined
under "Description of the Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption") or an Investment Company Event,
as the case may be.
"Adjusted Treasury Rate" means, with respect to any prepayment date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 1.25% if such prepayment date
occurs on or prior to January 1, 1998 and (ii) 0.50% in all other cases.
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"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term to the Stated Maturity of the Junior Subordinated Debentures to be prepaid
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Junior Subordinated
Debentures.
"Quotation Agent" means: (i) Donaldson, Lufkin & Jenrette Securities
Corporation 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 Corporation shall substitute therefor another
Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by
the Debenture Trustee after consultation with the Corporation.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted to
the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such prepayment date.
"Additional Sums" as hereinafter used means the additional amounts as may
be necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Capital Securities and Common Securities shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Exchange Junior
Subordinated Debentures to be prepaid at its registered address. Unless the
Corporation defaults in payment of the prepayment price, on and after the
prepayment date, interest ceases to accrue on such Exchange Junior Subordinated
Debentures called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Exchange Junior Subordinated Debentures the Additional
Sums.
Restrictions on Certain Payments; Covenants as to the Trust
The Corporation will covenant that if, at any time, (1) there shall have
occurred any event of which the Corporation has actual knowledge that (x) is, or
with the giving of notice or the lapse of time, or both, would be, a Debenture
Event of Default and (y) in respect of which the Corporation shall not have
taken reasonable steps to cure, (2) the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee and the Junior
Subordinated Debentures are held by the Trust or (3) the Corporation shall have
given notice of its election of an Extension Period as provided in the Indenture
and shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced, then the Corporation will not, and will
not permit any subsidiary to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Corporation's capital stock (which includes common and preferred
stock), (ii) make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem any debt securities of the Corporation (including
Other Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures or
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(iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
(including under Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Junior Subordinated Debentures (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) as a direct result of, and only to the extent
necessary to avoid the issuance of fractional shares of the Corporation's
capital stock following, a reclassification of the Corporation's capital stock
or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the Corporation's
benefit plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans).
The Corporation's covenants will not prevent its subsidiaries from
declaring and paying cash distributions with respect to capital stock of the
subsidiaries or from making payments with respect to debt securities of the
subsidiaries.
The Corporation has covenanted in the Indenture that, for so long as the
Exchange Junior Subordinated Debentures are issued to the Trust or a trustee of
the Trust, the Corporation will (i) directly or indirectly maintain ownership of
all of the outstanding Common Securities of the Trust, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Corporation's ownership of the Common Securities, and (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with a distribution of Capital Securities, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations each as permitted
by the Trust Agreement, and (b) consistent with the terms and provisions of the
Trust Agreement, to continue to be classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes and (iii) use its reasonable efforts to cause each Holder to be treated
as owning an individual beneficial interest in the Capital Securities.
Modification of Indenture
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of Junior
Subordinated Debentures) and qualifying, or maintaining the qualification of,
the Indenture under the Trust Indenture Act. The Indenture contains provisions
permitting the Corporation and the Debenture Trustee, with the consent of the
holders of a majority in principal amount of Junior Subordinated Debentures, to
modify the Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided, that no such modification may, without the
consent of the holders of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated Maturity, or reduce the principal amount of the
Junior Subordinated Debentures, or reduce the rate or extend the time of payment
of interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body): (i)
failure for 30 days to pay any interest on the Exchange Junior Subordinated
Debentures or any Other Debentures, when due (subject to the deferral of any due
date in the case of an Extension Period); or (ii) failure to pay any principal
of or premium, if any, on the Exchange Junior
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Subordinated Debentures or any Other Debentures when due whether at maturity,
upon redemption, by declaration of acceleration of maturity or otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to the
Corporation from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the nonpayment of the principal of the Junior Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal or interest (unless such default has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Junior Subordinated Debenture.
Enforcement of Certain Rights by Holders of Capital Securities
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Corporation to pay principal of or
premium, if any, or interest on the Junior Subordinated Debentures on the due
date, a holder of Capital Securities may institute a Direct Action. The
Corporation may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Capital Securities. If the right to bring a Direct Action is removed following
the Exchange Offer, the Trust may become subject to the reporting obligations
under the Exchange Act. Notwithstanding any payments made to a holder of
Exchange Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of or
premium, if any, or interest on the Exchange Junior Subordinated Debentures, and
the Corporation shall be subrogated to the rights of the holder of such Exchange
Capital Securities with respect to payments on the Exchange Capital Securities
to the extent of any payments made by the Corporation to such holder in any
Direct Action.
The holders of the Exchange Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Exchange Junior Subordinated Debentures unless
there shall have been an Event of Default under the Trust Agreement. See
"Description of Exchange Capital Securities -- Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shall not consolidate with or
merge into any other person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any person, and no
person shall consolidate with or merge into the Corporation or convey, transfer
or lease its properties and assets as an entirety or substantially as an
entirety to the Corporation, unless: (i) in case the Corporation consolidates
with or merges into another person or conveys or transfers its properties and
assets substantially as an entirety to any person, the successor person is
organized under the laws of the United States or any State or the District of
Columbia, and such successor person expressly assumes the Corporation's
obligations on the Junior Subordinated Debentures; (ii) immediately after giving
effect thereto, no Debenture Event of Default,
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and no event which, after notice or lapse of time or both, would become a
Debenture Event of Default, shall have occurred and be continuing; and (iii)
certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Exchange Junior Subordinated Debentures.
Satisfaction and Discharge
The Indenture provides that when, among other things, all Exchange Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity within one year, and the Corporation deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the Exchange
Junior Subordinated Debentures not previously delivered to the Debenture Trustee
for cancellation, for the principal and premium, if any, and interest to the
date of the deposit or to the Stated Maturity, as the case may be, then the
Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
Subordination
In the Indenture, the Corporation has covenanted and agreed that any
Exchange Junior Subordinated Debentures issued thereunder will be subordinate
and junior in right of payment to all Senior Indebtedness to the extent provided
in the Indenture. Upon any payment or distribution of assets to creditors upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Indebtedness
will first be entitled to receive payment in full before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full before the
holders of Junior Subordinated Debentures will be entitled to receive or retain
any payment in respect of the Junior Subordinated Debentures.
No payments on account of principal or premium, if any, or interest in
respect of the Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
"Senior Indebtedness" shall mean, with respect to the Corporation, (i) the
principal, premium, if any, and interest in respect of (A) Indebtedness for
Money Borrowed and (B) indebtedness evidenced by securities, notes, debentures,
bonds or other similar instruments issued by the Corporation, (ii) all capital
lease obligations of the Corporation, (iii) all obligations of the Corporation
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Corporation and all obligations of the Corporation under
any conditional sale or title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations,
contingent or otherwise of the Corporation in respect of any letter of credit,
banker's acceptance, security purchase facilities or similar credit transaction,
(v) all obligations in respect of interest rate swap, cap or other agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements, (vi) all obligations of
the type referred to in clauses (i) through (v) above of other persons for the
payment of which the Corporation is responsible or liable as obligor, guarantor
or otherwise and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other persons secured by any lien on any property or asset
of the Corporation (whether or not such obligation is assumed by the
Corporation), except for (1) any such
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indebtedness that is by its terms subordinated to or pari passu with the Junior
Subordinated Debentures and (2) any indebtedness between or among the
Corporation or its affiliates, including all other debt securities and
guarantees in respect of those debt securities issued to (a) any other Orion
Capital Trust or a trustee of such trust and (b) any other trust, or a trustee
of such trust, partnership or other entity affiliated with the Corporation that
is a financing vehicle of the Corporation (a "financing entity") in connection
with the issuance by such a financing entity of preferred securities or other
securities that rank pari passu with, or junior to, the Capital Securities. Such
Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to
the benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments.
By reason of such subordination, in the event of an insolvency, creditors
of the Corporation who are holders of Senior Indebtedness, as well as certain
general creditors of the Corporation, may recover more, ratably, than the
holders of the Junior Subordinated Debentures. Additionally, the Corporation
currently conducts substantially all of its operations through subsidiaries, and
the holders of Junior Subordinated Debentures will be structurally subordinated
to the creditors of the Corporation's subsidiaries. The Corporation relies
primarily on dividends from such subsidiaries to meet its obligations for
payment of its corporate expenses and principal and interest on its outstanding
debt obligations. See "Risk Factors -- Ranking of Subordinated Obligations Under
the Exchange Guarantee and the Exchange Junior Subordinated Debentures."
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
Governing Law
The Indenture and the Exchange Junior Subordinated Debentures will be
governed by and construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Exchange Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Debenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
DESCRIPTION OF EXCHANGE GUARANTEE
The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities. As
soon as practicable after the date hereof, the Exchange Guarantee will be
exchanged by the Corporation for the Old Guarantee for the benefit of the
holders from time to time of the Exchange Capital Securities. To the extent that
Old Capital Securities are not tendered and accepted pursuant to the Exchange
Offer for Exchange Capital Securities, the Corporation will continue to provide
such holders of Old Capital Securities with the guarantees set forth under the
Old Guarantee. The Bank of New York will act as trustee ("Guarantee Trustee")
under the Guarantee. The Guarantee has been qualified under the Trust Indenture
Act. This summary of certain provisions of the Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the Guarantee, including the
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definitions therein of certain terms, and the Trust Indenture Act. The Guarantee
Trustee will hold the Guarantee for the benefit of the holders of the Capital
Securities.
General
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent summarized herein, the Guarantee Payments (as defined
below) to the holders of the Exchange Capital Securities, as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert other than the defense of payment. The following payments with
respect to the Exchange Capital Securities, to the extent not paid by or on
behalf of the Trust (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accumulated and unpaid Distributions required to be paid on
Exchange Capital Securities, to the extent that the Trust has funds on hand
legally available therefor at such time, (ii) the applicable Redemption Price
with respect to Exchange Capital Securities called for redemption, to the extent
that the Trust has funds on hand legally available therefor at such time, or
(iii) upon a voluntary or involuntary termination and liquidation of the Trust,
the lesser of (a) the Liquidation Distribution and (b) the amount of assets of
the Trust remaining available for distribution to holders of Exchange Capital
Securities. The Corporation's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Corporation to the
holders of the Exchange Capital Securities or by causing the Trust to pay such
amounts to such holders.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Corporation's obligations under the Exchange Guarantee will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and claimants should look only to the assets of the Corporation
for payments thereunder. See "Description of Exchange Securities -- Description
of the Exchange Junior Subordinated Debentures -- General." The Exchange
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Corporation, including Senior Indebtedness, whether under
the Indenture, any other indenture that the Corporation has entered into or may
enter into in the future or otherwise.
The Corporation will, through the Exchange Guarantee, the Trust Agreement,
the Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guarantee all of the Trust's obligations
under the Exchange Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Exchange Capital Securities. See "Relationship
Among the Exchange Capital Securities, the Exchange Junior Subordinated
Debentures and the Exchange Guarantee."
Status of the Guarantee
The Exchange Guarantee will constitute an unsecured obligation of the
Corporation. The Exchange Guarantee and the Common Guarantee will be (i)
subordinate and junior in right of payment to all other liabilities of the
Corporation; (ii) pari passu with (A) the most senior preferred or preference
stock now or hereafter issued by the Corporation, and (B) any guarantee now or
hereafter entered into by the Corporation, in respect of any capital securities
or common securities of any Other Trusts; and (iii) senior to the Corporation's
common stock.
The Exchange Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The Exchange
Guarantee will be held for the benefit of the holders of the Capital Securities.
The Exchange Guarantee will not be discharged except by payment of the Guarantee
Payments in full to the extent not paid by the Trust or upon distribution to the
holders of the Exchange Capital Securities of the Exchange Junior Subordinated
Debentures. The Exchange Guarantee does not place a limitation on the amount of
additional Senior
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Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Exchange Capital Securities (in which case no vote
will be required), the Exchange Guarantee may not be amended without the prior
approval of the holders of a majority of the Liquidation Amount of such
outstanding Exchange Capital Securities. The manner of obtaining any such
approval will be as set forth under "Description of Exchange
Securities -- Description of the Exchange Capital Securities -- Voting Rights;
Amendment of the Trust Agreement." All guarantees and agreements contained in
the Guarantee Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Corporation and shall inure to the benefit of the
holders of the Exchange Capital Securities then outstanding.
Events of Default
An event of default under the Exchange Guarantee will occur upon the
failure of the Corporation to perform any of its payment or other obligations
thereunder. The holders of a majority in Liquidation Amount of the Exchange
Capital Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Exchange Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Exchange Guarantee.
Any holder of the Exchange Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Exchange Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Exchange Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the continuance of a default by
the Corporation in performance of the Exchange Guarantee, will undertake to
perform only such duties as are specifically set forth in the Exchange Guarantee
and, during the continuance of such a default, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee will be
under no obligation to exercise any of the powers vested in it by the Exchange
Guarantee at the request of any holder of the Exchange Capital Securities unless
it is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby.
Termination of the Guarantee
The Exchange Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of the Exchange Capital
Securities, upon full payment of the Liquidation Amount payable upon liquidation
of the Trust or upon distribution of Exchange Junior Subordinated Debentures to
the holders of the Capital Securities. The Exchange Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the Exchange Capital Securities must restore payment of any sums paid
under the Exchange Capital Securities or the Exchange Guarantee.
Governing Law
The Exchange Guarantee will be governed by and construed in accordance with
the laws of the State of New York.
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DESCRIPTION OF OLD SECURITIES
The information contained in this section is relevant to holders of Old
Securities whose Old Securities are not tendered and accepted for exchange by
the Expiration Date of the Exchange Offer. See "Risk Factors -- Certain
Consequences of a Failure to Exchange Old Capital Securities."
The terms of the Old Securities are identical in all material respects to
the Exchange Securities, except that (i) the Old Securities have not been
registered under the Securities Act, are subject to certain restrictions on
transfer and are entitled to certain rights under the applicable Registration
Rights Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances with respect to certain
broker-dealers), (ii) the Old Capital Securities contain a $100,000 minimum
Liquidation Amount transfer restriction and certain other restrictions on
transfer, (iii) the Old Capital Securities provide for additional Distributions
which will terminate as set forth below, (iv) the Old Junior Subordinated
Debentures contain a $100,000 minimum principal amount transfer restriction and
(v) the Old Junior Subordinated Debentures provide for additional interest which
will terminate as set forth below. The Old Securities provide that, in the event
that a registration statement relating to the Exchange Offer has not been filed
by June 12, 1997 or has not been declared effective by July 12, 1997 or, in
certain limited circumstances, in the event a shelf registration statement (the
"Shelf Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective by July 12, 1997, then additional interest
will accrue (in addition to the stated interest rate on the Old Junior
Subordinated Debentures) at the rate of 0.25% per annum on the principal amount
of the Old Junior Subordinated Debentures and additional Distributions will
accrue (in addition to the stated Distribution rate on the Old Capital
Securities) at the rate of 0.25% per annum on the Liquidation Amount of the Old
Capital Securities, for the period from June 13, or July 13, as the case may be,
until such time as such events have occurred. Upon the effectiveness of the
Registration Statement of which this Prospectus is a part and upon consummation
of the Exchange Offer, the Trust and the Corporation will have satisfied their
obligations in this regard and the Old Securities will not be, entitled to any
such additional interest or additional Distributions. Accordingly, holders of
Old Capital Securities should review the information set forth under "Risk
Factors -- Certain Consequences of a Failure to Exchange Old Capital Securities"
and "Description of Exchange Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL
SECURITIES, THE EXCHANGE JUNIOR SUBORDINATED
DEBENTURES AND THE EXCHANGE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Exchange Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of Exchange
Securities -- Description of Exchange Guarantee." Taken together, the
Corporation's obligations under the Exchange Junior Subordinated Debentures, the
Indenture, the Trust Agreement and the Exchange Guarantee will provide, in the
aggregate, a full, irrevocable and unconditional guarantee of payment of
Distributions and other amounts due on the Exchange Capital Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Exchange Capital Securities. If and to the extent that the Corporation does not
make the required payments on the Exchange Junior Subordinated Debentures, the
Trust will not have sufficient funds to make the related payments, including
Distributions, on the Exchange Capital Securities. The Exchange Guarantee will
not cover any such payment when the Trust does not have sufficient funds on hand
legally available therefor. In such event, the remedy of a holder of Exchange
Capital Securities is to institute a Direct Action. The obligations of the
Corporation under the Exchange Guarantee and the Common Guarantee will be
subordinate and junior in right of payment to all Senior Indebtedness and all
other liabilities of the Corporation.
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SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Exchange Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Exchange Capital Securities,
primarily because: (i) the aggregate principal amount or Prepayment Price of the
Exchange Junior Subordinated Debentures will be equal to the sum of the
Liquidation Amount or Redemption Price, as applicable, of the Exchange Capital
Securities and Common Securities; (ii) the interest rate and interest and other
payment dates on the Exchange Junior Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Trust
Securities; (iii) the Corporation shall pay for all and any costs, expenses and
liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Trust Agreement will
provide that the Trust is not authorized to engage in any activity that is not
consistent with the limited purposes thereof.
ENFORCEMENT RIGHTS OF HOLDERS OF EXCHANGE CAPITAL SECURITIES
A holder of any Exchange Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However, in
the event of payment defaults under or acceleration of Senior Indebtedness, the
subordination provisions of the Indenture will provide that no payments may be
made in respect of the Exchange Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Exchange Junior
Subordinated Debentures would constitute an Event of Default under the Trust
Agreement.
LIMITED PURPOSE OF THE TRUST
The Exchange Capital Securities will represent preferred beneficial
interests in the Trust, and the Trust exists for the sole purpose of issuing and
selling the Trust Securities, using the proceeds from the sale of the Trust
Securities to acquire the Junior Subordinated Debentures and engaging in only
those other activities necessary, advisable or incidental thereto. A principal
difference between the rights of a holder of an Exchange Capital Security and a
holder of an Exchange Junior Subordinated Debenture is that a holder of an
Exchange Junior Subordinated Debenture will be entitled to receive from the
Corporation the principal of and premium, if any, and interest on Exchange
Junior Subordinated Debentures held, while a holder of Exchange Capital
Securities is entitled to receive Distributions from the Trust (or, in certain
circumstances, from the Corporation under the Exchange Guarantee) if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions.
RIGHTS UPON DISSOLUTION
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary dissolution and liquidation
of the Trust, the holders of the Trust Securities will be entitled to receive
out of assets held by the Trust, after satisfaction of any liabilities to
creditors, the Liquidation Distribution in cash. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Liquidation of the
Trust and Distribution of Exchange Junior Subordinated Debentures." Upon any
voluntary or involuntary liquidation or bankruptcy of the Corporation, the
Property Trustee, as holder of the Exchange Junior Subordinated Debentures,
would be a subordinated creditor of the Corporation, subordinated in right of
payment to all Senior Indebtedness as set forth in the Indenture, but entitled
to receive payment in full of principal, premium, if any, and interest, before
any stockholders of the Corporation receive payments or distributions. Since the
Corporation will be the guarantor under the Exchange Guarantee and will agree to
pay for all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to the holders of its Trust Securities), the positions of a holder
of Exchange Capital Securities and a holder of Exchange Junior Subordinated
Debentures relative to other creditors and to stockholders of the Corporation in
the event of liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Donovan Leisure Newton & Irvine, special tax counsel to
the Corporation and the Trust ("Tax Counsel"), the following is a summary of
certain of the material United States federal income tax consequences of the
purchase, ownership and disposition of Capital Securities held as capital assets
(generally, assets held for investment) by a holder who purchases Old Capital
Securities upon original issuance. It does not deal with special classes of
holders such as banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, or persons that will hold the Capital Securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," as part
of a "conversion transaction" or other integrated investment, or as other than a
capital asset, or, except to the extent described below, foreign taxpayers. This
summary also does not address the tax consequences to persons that have a
functional currency other than the U.S. dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of Capital Securities.
Further, it does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Capital Securities. This summary is
based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations thereunder, the administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis. Each investor is urged to consult his tax advisor as to the
particular tax consequences of purchasing, owning, and disposing of the Capital
Securities, including the application and effect of United States federal,
state, local, foreign and other tax laws.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Old Capital Securities for Exchange Capital Securities will
not be a taxable event to holders for United States federal income tax purposes.
Accordingly a holder will have the same adjusted basis and holding period in the
Exchange Capital Securities as the holder had in the Old Capital Securities
immediately before the exchange.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In connection with the issuance of the Old Junior Subordinated Debentures,
Tax Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture and
certain other documents, and based on certain facts and assumptions contained in
such opinion, the Old Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the Corporation. An
opinion of Tax Counsel, however, is not binding on the Internal Revenue Service
(the "IRS") or the courts. Prospective investors should note that no rulings
have been or are expected to be sought from the IRS with respect to any of these
issues and no assurance can be given that the IRS will not take contrary
positions. Moreover, no assurance can be given that any of the opinions
expressed herein will not be challenged by the IRS or, if challenged, that such
a challenge would not be successful.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Old Capital Securities, Tax Counsel
has rendered its opinion generally to the effect that, under then current law
and assuming full compliance with the terms of the Trust Agreement and the
Indenture and certain other documents, and based on certain facts and
assumptions
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contained in such opinion, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Capital Securities will generally be considered the owner of an
undivided interest in the Junior Subordinated Debentures, and each holder will
be required to include in its gross income as ordinary income any interest
income (or original issue discount ("OID")) paid or accrued with respect to its
allocable share of those Junior Subordinated Debentures.
INTEREST INCOME AND OID
Under recently issued Treasury regulations (the "Regulations"), a "remote"
contingency, within the meaning of the Regulations, that stated interest will
not be timely paid will be ignored in determining whether a debt instrument is
issued with OID. The Corporation believes that the likelihood of its exercising
its option to defer payments of interest is "remote" since exercising that
option would prevent the Corporation from declaring dividends on any class of
its equity securities. Accordingly, the Corporation intends to take the
position, based on the advice of Tax Counsel, that the Junior Subordinated
Debentures will not be considered to be issued with OID and, accordingly, stated
interest on the Junior Subordinated Debentures generally will be taxable to a
holder as ordinary income at the time it is paid or accrued in accordance with
such holder's method of accounting.
Under the Regulations, if the Corporation were to exercise its option to
defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remain outstanding. In such event, all of a holder's
taxable interest income with respect to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basis regardless of such
holder's method of tax accounting, and actual distributions of stated interest
would not be reported as taxable income. Consequently, a holder of Capital
Securities would be required to include in gross income OID even though the
Corporation would not make actual cash payments during an Extension Period.
Moreover, under the Regulations, if the option to defer the payment of interest
was determined not to be "remote", the Junior Subordinated Debentures would be
treated as having been originally issued with OID. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for on an economic accrual basis regardless of
such holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.
Because income on the Capital Securities will constitute interest or OID,
corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
The Corporation will have the right at any time to dissolve the Trust and
cause a Like Amount of the Junior Subordinated Debentures to be distributed to
the holders of the Trust Securities in liquidation of the Trust. Under current
law, such a distribution, for United States federal income tax purposes, would
be treated as a nontaxable event to each holder, and each holder would receive
an aggregate tax basis in the Junior Subordinated Debentures equal to such
holder's aggregate tax basis in its Capital Securities. A holder's holding
period in the Junior Subordinated Debentures so received in liquidation of the
Trust would include the period during which the Capital Securities were held by
such holder. If, however, the Trust is characterized for United States federal
income tax purposes as an association taxable as a corporation at the time of
its dissolution, the distribution of the Junior Subordinated Debentures may
constitute a taxable event to holders of Capital Securities and a holder's
holding period in Junior Subordinated Debentures would begin on the date such
Junior Subordinated Debentures were received.
Under certain circumstances described herein (see "Description of Exchange
Securities -- Description of Exchange Capital Securities"), the Junior
Subordinated Debentures may be prepaid in cash and the proceeds of such
prepayment distributed to holders in redemption of their Capital Securities.
Under current
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law, such a prepayment would, for United States federal income tax purposes,
constitute a taxable disposition of the redeemed Capital Securities, and a
holder could recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "-- Sales of Capital Securities."
SALES OF CAPITAL SECURITIES
A holder that sells Capital Securities (including a holder whose Capital
Securities are redeemed either upon the Stated Maturity or upon an optional
prepayment of the Junior Subordinated Debentures by the Corporation) will
recognize gain or loss equal to the difference between its adjusted tax basis in
the Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest which has not
yet been included in income, which will be treated as ordinary income). A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includable in such
holder's gross income to the date of disposition and decreased by payments (if
any) received on the Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year.
Capital Securities may trade at a price that does not accurately reflect
the value of accrued but unpaid interest (or OID if the Junior Subordinated
Debentures are treated as having been issued, or reissued, with OID) with
respect to the underlying Junior Subordinated Debentures. A holder who uses the
accrual method of accounting for tax purposes (and a cash method holder, if the
Junior Subordinated Debenture are deemed to have been issued, or reissued, with
OID) who disposes of his Capital Securities will be required to include in
ordinary income (i) any portion of the amount realized that is attributable to
accrued but unpaid interest or (ii) any OID on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income, and to
add such amount to his adjusted tax basis in his pro rata share of the
underlying Junior Subordinated Debentures deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include
all accrued but unpaid interest) a holder will recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
CONDITIONAL RIGHT TO SHORTEN MATURITY
Prospective investors should be aware that the Corporation's exercise of
its right to shorten the maturity of the Junior Subordinated Debentures will be
a taxable event to holders of Capital Securities if the Junior Subordinated
Debentures are treated as equity for purposes of United States federal income
taxation before the maturity is shortened. See "Description of Exchange
Securities -- Description of Exchange Capital Securities -- Conditional Right to
Shorten Maturity and Special Event Redemption" and "Description of Exchange
Securities -- Description of Exchange Junior Subordinated
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment."
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed Legislation,
which would, among other things, generally deny corporate issuers a deduction
for interest in respect of certain debt obligations, such as the Junior
Subordinated Debentures, issued on or after December 7, 1995 if such debt
obligations have a maximum term in excess of 20 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. On March 29,
1996, Senate Finance Committee Chairman William V. Roth, Jr. and House Ways and
Means Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that the Proposed Legislation, if adopted by either of the tax-writing
committees of Congress, would have an effective date that is no earlier than the
date of "appropriate Congressional action." In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote the Democrat Letters,
which concurred with the view expressed in the Joint Statement. If the
principles contained in the Joint Statement and the Democrat Letters were
followed and if the Proposed Legislation were enacted, such legislation would
not apply to the Junior Subordinated Debentures. There can be no assurance,
however, that the effective date guidance contained in the Joint
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Statement and the Democrat Letters will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of the Corporation to deduct the
interest payable on the Junior Subordinated Debentures. Accordingly, there can
be no assurance that a Tax Event will not occur. The occurrence of a Tax Event
may result in the prepayment of the Junior Subordinated Debentures for cash, in
which event the holders of the Capital Securities would receive cash in
redemption of their Capital Securities. See "Description of Exchange
Securities -- Description of the Exchange Capital Securities -- Redemption" and
"Description of Exchange Securities -- Description of Exchange Junior
Subordinated Debentures -- Special Event Prepayment."
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a citizen
or individual resident (or is treated as a citizen or individual resident) of
the United States for federal income tax purposes, a corporation or partnership
created or organized (or treated as created or organized for federal income tax
purposes) in or under the laws of the United States or any political subdivision
thereof, or a trust or estate the income of which is includable in its gross
income for federal income tax purposes without regard to its source. A trust is
a U.S. Holder for federal income tax purposes if, and only if, (i) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States trustees have the
authority to control all substantial decisions of the trust.
Under present United States federal income tax laws: (i) payments by the
Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Corporation entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to the
Trust or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to the
Trust or its agent, under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a Financial Institution between
it and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (ii) a United States Alien Holder of a Capital Security will not be
subject to United States federal withholding tax on any gain realized upon the
sale or other disposition of a Capital Security.
INFORMATION REPORTING TO HOLDERS
Generally, income on the Capital Securities will be reported to holders on
Forms 1099, which forms should be mailed to holders of Capital Securities by
January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital Securities may
be subject to a "backup" withholding tax of 31 percent unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
CAPITAL SECURITIES, INCLUDING
65
<PAGE> 67
THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE
POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the Exchange Junior
Subordinated Debentures held by the Trust, and its affiliates and the Property
Trustee may be considered a "party in interest" (within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA. Any
purchaser proposing to acquire Exchange Capital Securities with assets of any
Plan should consult with its counsel. The purchase and/or holding of Exchange
Capital Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975 of
the Code (including individual retirement arrangements and other plans described
in Section 4975(e)(1) of the Code) and with respect to which the Corporation,
the Property Trustee or any affiliate is a service provider (or otherwise is a
party in interest or a disqualified person) may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
Capital Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment funds), PTCE 90-1 (an exemption for certain
transactions involving insurance company pooled separate accounts), PTCE 95-60
(an exemption for transactions involving certain insurance company general
accounts) or PTCE 96-23 (an exemption for certain transactions determined by an
in-house asset manager). The acquisition of Exchange Capital Securities by any
person who is, or who in acquiring such Exchange Capital Securities is using the
assets of, an ERISA Plan shall be deemed to constitute a representation by such
person to the Trust that such person is eligible for exemptive relief available
pursuant to either one of PTE 90-1, PTE 91-38, PTE 84-14, PTE 96-23, PTE 95-60
or another applicable exemption with respect to the acquisition and holding of
such Exchange Capital Securities. In addition, a Plan fiduciary considering the
purchase of Exchange Capital Securities should be aware that the assets of the
Trust may be considered "plan assets" for ERISA purposes. In this case, any
person exercising discretion with respect to the Exchange Junior Subordinated
Debentures would be a fiduciary and a party in interest with respect to the
investing Plans. To avoid certain prohibited transactions under ERISA and the
Code that could thereby result, each investing Plan, by purchasing the Exchange
Capital Securities, will be deemed to have directed the Trust to invest in the
Exchange Junior Subordinated Debentures and to have appointed the Trustees.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of Exchange Capital Securities received in
exchange for Old Capital Securities if such Old Capital Securities were acquired
by such Participating Broker-Dealers for their own accounts as result of
market-making activities or other trading activities. The Corporation and the
Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer in connection
with resales of such Exchange Capital Securities for a period ending 90 days
after the Expiration Date (subject to extension under certain limited
circumstances described herein) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating Broker-Dealer. However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of Exchange Capital Securities received in exchange for Old
Capital Securities pursuant to the Exchange Offer must notify the Corporation or
the Trust, or cause the Corporation or the Trust to be notified, on or prior to
the Expiration Date, that it is a Participating Broker-Dealer. Such notice may
be given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
66
<PAGE> 68
under "The Exchange Offer -- Exchange Agent." See "The Exchange Offer -- Resales
of Exchange Capital Securities."
Neither the Corporation nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. Exchange Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities.
Any broker-dealer that resells Exchange Capital Securities that were
received by it for its own account in connection with the Exchange Offer and any
broker or dealer that participates in a distribution of such Exchange Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such sale of Exchange Capital Securities
and any commissions or concessions received by any such person may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
VALIDITY OF EXCHANGE SECURITIES
Certain matters relating to the validity of the Exchange Capital
Securities, the Exchange Guarantee and the Exchange Junior Subordinated
Debentures will be passed upon for the Corporation by Donovan Leisure Newton &
Irvine, New York, New York. Certain matters relating to the validity of the
Exchange Capital Securities under Delaware law will be passed on by Potter
Anderson & Corroon, Wilmington, Delaware. Certain matters relating to United
States federal income tax considerations will be passed upon for the Corporation
by Donovan Leisure Newton & Irvine, New York, New York.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this Prospectus by reference from Orion's Annual
Report on Form 10-K for the year ended December 31, 1995 and the financial
statements of Guaranty National incorporated therein have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
With respect to the unaudited interim financial information of Orion which
is incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in Orion's Quarterly
Reports on Form 10-Q and incorporated by reference herein, they did not audit
and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Securities Act.
67
<PAGE> 69
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE TRUST
OR BY THE INITIAL PURCHASERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR
THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 9
Incorporation of Certain Documents By
Reference........................... 9
Summary............................... 11
Risk Factors.......................... 18
Use of Proceeds....................... 24
Ratios of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends........................ 24
Accounting Treatment.................. 25
Capitalization........................ 26
Summary Financial Data................ 27
Orion Capital Corporation............. 29
Orion Capital Trust I................. 29
The Exchange Offer.................... 30
Description of the Exchange
Securities.......................... 39
Description of the Old Securities..... 60
Relationship Among the Exchange
Capital Securities, the Exchange
Junior Subordinated Debentures and
the Exchange Guarantee.............. 60
Certain Federal Income Tax
Consequences........................ 62
ERISA Considerations.................. 66
Plan of Distribution.................. 66
Validity of Exchange Securities....... 67
Experts............................... 67
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$125,000,000
ORION CAPITAL TRUST I
8.73% EXCHANGE CAPITAL
SECURITIES
FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED
HEREIN, BY
ORION CAPITAL
CORPORATION
------------------------
PROSPECTUS
------------------------
March , 1997
------------------------------------------------------
------------------------------------------------------
<PAGE> 70
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Orion is a Delaware corporation. Reference is made to Section 145 of the
Delaware General Corporation Law as to indemnification by Orion of its officers
and directors. The general effect of such law is to empower a corporation to
indemnify any of its officers and directors against certain expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person to be indemnified in connection with certain
actions, suits or proceedings (threatened, pending or completed) if the person
to be indemnified acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
Article VII of Orion's Restated Certificate of Incorporation, as amended
and Article IX of Orion's By-Laws, as amended, provide for the indemnification
of Orion's officers and directors in accordance with the Delaware General
Corporation Law, and include, as permitted by the Delaware General Corporation
Law, certain limitations on the potential personal liability of members of
Orion's Board of Directors for monetary damages as a result of actions taken in
their capacity as Board members.
Orion has entered into indemnification agreements (approved by its
stockholders) with each of its directors and senior officers which, among other
things, contractually confirm the indemnity provided under Orion's Restated
Certificate of Incorporation, its By-Laws and the Delaware General Corporation
Law.
The directors and officers of Orion are covered by insurance policies
indemnifying them against certain liabilities arising under the Securities Act
which might be incurred by them in such capacities.
The Trust Agreement limits the liability to the Trust and certain other
persons, and provides for indemnification by the Trust or Orion, of Trustees,
their officers, directors and employees and certain other persons.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The documents listed hereunder are filed as exhibits hereto.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
4.1 Indenture between Orion Capital Corporation and The Bank of New York
4.2 Form of Exchange Debenture Certificate
4.3 Certificate of Trust of Orion Capital Trust I
4.4 Declaration of Trust of Orion Capital Trust I
4.5 Amended and Restated Declaration of Trust for Orion Capital Trust I
4.6 Form of Exchange Capital Security Certificate
4.7 Form of Exchange Guarantee relating to the Exchange Capital Securities
4.8 Registration Rights Agreement
5.1 Opinion of Donovan Leisure Newton & Irvine as to the legality of the Exchange
Junior Subordinated Debentures and the Exchange Guarantee to be issued by Orion
Capital Corporation*
5.2 Opinion of Potter Anderson & Corroon as to the legality of the Exchange Capital
Securities to be issued by Orion Capital Trust I*
8.1 Tax Opinion of Donovan Leisure Newton & Irvine*
12.1 Computation of Ratio of Earnings to Fixed Charges
15.1 Letter in Lieu of Consent of Deloitte and Touche LLP re Unaudited Interim Financial
Information
23.1 Consents of Deloitte & Touche LLP
</TABLE>
II-1
<PAGE> 71
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------
<C> <S>
23.2 Consent of Donovan Leisure Newton & Irvine (included in Exhibit 5.1)*
23.3 Consent of Potter Anderson & Corroon (included in Exhibit 5.2)*
24.1 Powers of Attorney for Orion Capital Corporation
24.2 Powers of Attorney for Orion Capital Trust I
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Debenture Trustee under the Indenture
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Property Trustee under the Amended and
Restated Declaration of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Guarantee Trustee under the Exchange Guarantee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
- ---------------
* To be filed by amendment.
The following fiscal statement schedules are filed as part of this
Registration Statement:
None.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of Orion's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934), that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such
request, and to send the incorporated documents by first-class mail or equally
prompt means. This includes information contained in documents filed subsequent
to the effective date of the Registration Statement through the date responding
to the request.
The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-2
<PAGE> 72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the 5th day of
February, 1997.
ORION CAPITAL CORPORATION
By: /s/ W. MARSTON BECKER*
--------------------------------------
W. Marston Becker
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: February 5, 1997 By: /s/ W. MARSTON BECKER*
---------------------------------------------
W. Marston Becker
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: February 5, 1997 By: /s/ DANIEL L. BARRY*
---------------------------------------------
Daniel L. Barry
Senior Vice President and Chief Financial
Officer (Principal Financial and Accounting
Officer)
Date: February 5, 1997 By: /s/ BERTRAM J. COHN*
---------------------------------------------
Bertram J. Cohn
Director
*By: /s/ MICHAEL P. MALONEY
- ---------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-3
<PAGE> 73
<TABLE>
<S> <C>
Date: February 5, 1997 By: /s/ GORDON F. CHEESBROUGH*
---------------------------------------------
Gordon F. Cheesbrough
Director
Date: February 5, 1997 By: /s/ JOHN C. COLMAN*
---------------------------------------------
John C. Colman
Director
Date: February 5, 1997 By: /s/ VICTORIA R. FASH*
---------------------------------------------
Victoria R. Fash
Director
Date: February 5, 1997 By: /s/ ALAN R. GRUBER*
---------------------------------------------
Alan R. Gruber
Director
Date: February 5, 1997 By: /s/ ROBERT H. JEFFREY*
---------------------------------------------
Robert H. Jeffrey
Director
Date: February 5, 1997 By: /s/ WARREN R. LYONS*
---------------------------------------------
Warren R. Lyons
Director
Date: February 5, 1997 By: /s/ JAMES K. MCWILLIAMS*
---------------------------------------------
James K. McWilliams
Director
Date: February 5, 1997 By: /s/ RONALD W. MOORE*
---------------------------------------------
Ronald W. Moore
Director
Date: February 5, 1997 By: /s/ ROBERT B. SANBORN*
---------------------------------------------
Robert B. Sanborn
Director
*By: /s/ MICHAEL P. MALONEY
- ---------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-4
<PAGE> 74
<TABLE>
<S> <C>
Date: February 5, 1997 By: /s/ WILLIAM J. SHEPHERD*
---------------------------------------------
William J. Shepherd
Director
Date: February 5, 1997 By: /s/ JOHN R. THORNE*
---------------------------------------------
John R. Thorne
Director
Date: February 5, 1997 By: /s/ ROGER B. WARE*
---------------------------------------------
Roger B. Ware
Director
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the day of February,
1997.
ORION CAPITAL TRUST I
<TABLE>
<S> <C>
Date: February 5, 1997 By: /s/ W. MARSTON BECKER
---------------------------------------------
W. Marston Becker
Administrative Trustee
Date: February 5, 1997 By: /s/ DANIEL L. BARRY
---------------------------------------------
Daniel L. Barry
Administrative Trustee
Date: February 5, 1997 By: /s/ MICHAEL P. MALONEY
---------------------------------------------
Michael P. Maloney
Administrative Trustee
*By: /s/ MICHAEL P. MALONEY
- ---------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-5
<PAGE> 75
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------
<C> <S> <C>
4.1 Indenture between Orion Capital Corporation and The Bank of New York
4.2 Form of Exchange Debenture Certificate
4.3 Certificate of Trust of Orion Capital Trust I
4.4 Declaration of Trust of Orion Capital Trust I
4.5 Amended and Restated Declaration of Trust for Orion Capital Trust I
4.6 Form of Exchange Capital Security Certificate
4.7 Form of Exchange Guarantee relating to the Exchange Capital Securities
4.8 Registration Rights Agreement
5.1 Opinion of Donovan Leisure Newton & Irvine as to the legality of the
Exchange Junior Subordinated Debentures and the Exchange Guarantee to be
issued by Orion Capital Corporation*
5.2 Opinion of Potter Anderson & Corroon as to legality of the Exchange
Capital Securities to be issued by Orion Capital Trust I*
8.1 Tax Opinion of Donovan Leisure Newton & Irvine*
12.1 Computation of Ratio of Earnings to Fixed Charges
15.1 Letter in Lieu of Consent of Deloitte and Touche LLP re Unaudited
Interim Financial Information
23.1 Consents of Deloitte & Touche LLP
23.2 Consent of Donovan Leisure Newton & Irvine (included in Exhibit 5.1)*
23.3 Consent of Potter Anderson & Corroon (included in Exhibit 5.2)*
24.1 Powers of Attorney for Orion Capital Corporation
24.2 Powers of Attorney for Orion Capital Trust I
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Debenture Trustee under the
Indenture
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Property Trustee under the
Amended and Restated Declaration of Trust
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Guarantee Trustee under the
Exchange Guarantee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
________________________________________________________________________________
________________________________________________________________________________
ORION CAPITAL CORPORATION
__________________
INDENTURE
Dated as of January 13, 1997
__________________
THE BANK OF NEW YORK
as Trustee
__________________
$129,000,000
8.73% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
________________________________________________________________________________
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . 15
SECTION 2.03. Form and Payment . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.04. Legends . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.05. Global Security . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.06. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.07. Transfer and Exchange . . . . . . . . . . . . . . . . . . 19
SECTION 2.08. Replacement Securities . . . . . . . . . . . . . . . . . . 21
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . 22
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium
and Interest . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.02. Offices for Notices and Payments, etc. . . . . . . . . . . 25
SECTION 3.03. Appointments to Fill Vacancies in
Trustee's Office . . . . . . . . . . . . . . . . . . . 26
SECTION 3.04. Provision as to Paying Agent . . . . . . . . . . . . . . . 26
SECTION 3.05. Certificate to Trustee . . . . . . . . . . . . . . . . . . 27
SECTION 3.06. Compliance with Consolidation
Provisions . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.07. Limitation on Dividends . . . . . . . . . . . . . . . . . 28
SECTION 3.08. Covenants as to Orion
Capital Trust I . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.09. Payment of Expenses . . . . . . . . . . . . . . . . . . . 29
SECTION 3.10. Payment Upon Resignation or Removal . . . . . . . . . . . 30
</TABLE>
-i-
<PAGE> 3
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 4.01. Securityholders' Lists . . . . . . . . . . . . . . . . . . 30
SECTION 4.02. Preservation and Disclosure
of Lists . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.03. Reports of the Company . . . . . . . . . . . . . . . . . . 33
SECTION 4.04. Reports by the Trustee . . . . . . . . . . . . . . . . . . 34
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.02. Payment of Securities on
Default; Suit Therefor . . . . . . . . . . . . . . . . . 37
SECTION 5.03. Application of Moneys
Collected by Trustee . . . . . . . . . . . . . . . . . . 40
SECTION 5.04. Proceedings by Securityholders . . . . . . . . . . . . . . 40
SECTION 5.05. Proceedings by Trustee . . . . . . . . . . . . . . . . . . 42
SECTION 5.06. Remedies Cumulative and Continuing . . . . . . . . . . . . 42
SECTION 5.07. Direction of Proceedings and
Waiver of Defaults by Majority
of Securityholders . . . . . . . . . . . . . . . . . . . 42
SECTION 5.08. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.09. Undertaking to Pay Costs . . . . . . . . . . . . . . . . . 44
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities
of Trustee . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.02. Reliance on Documents, Opinions, etc. . . . . . . . . . . 46
SECTION 6.03. No Responsibility for Recitals, etc. . . . . . . . . . . . 48
SECTION 6.04. Trustee, Authenticating Agent,
Paying Agents, Transfer Agents
or Registrar May Own Securities . . . . . . . . . . . . 48
SECTION 6.05. Moneys to be Held in Trust . . . . . . . . . . . . . . . . 48
SECTION 6.06. Compensation and Expenses of Trustee . . . . . . . . . . . 49
SECTION 6.07. Officers' Certificate as Evidence . . . . . . . . . . . . 50
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 6.08. Conflicting Interest of Trustee . . . . . . . . . . . . . 50
SECTION 6.09. Eligibility of Trustee . . . . . . . . . . . . . . . . . . 50
SECTION 6.10. Resignation or Removal of Trustee . . . . . . . . . . . . 50
SECTION 6.11. Acceptance by Successor Trustee . . . . . . . . . . . . . 52
SECTION 6.12. Succession by Merger, etc . . . . . . . . . . . . . . . . 53
SECTION 6.13. Limitation on Rights of Trustee
as a Creditor . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.14. Authenticating Agents . . . . . . . . . . . . . . . . . . 54
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders . . . . . . . . . . . . . . . . 56
SECTION 7.02. Proof of Execution by Securityholders . . . . . . . . . . 57
SECTION 7.03. Who Are Deemed Absolute Owners . . . . . . . . . . . . . . 57
SECTION 7.04. Securities Owned by Company
Deemed Not Outstanding . . . . . . . . . . . . . . . . . 57
SECTION 7.05. Revocation of Consents; Future
Holders Bound . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purpose of Meetings . . . . . . . . . . . . . . . . . . . 59
SECTION 8.02. Call of Meetings by Trustee . . . . . . . . . . . . . . . 59
SECTION 8.03. Call of Meetings by Company
or Securityholders . . . . . . . . . . . . . . . . . . . 60
SECTION 8.04. Qualifications for Voting . . . . . . . . . . . . . . . . 60
SECTION 8.05. Regulations . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.06. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders . . . . . . . . . . . . 63
SECTION 9.02. With Consent of Securityholders . . . . . . . . . . . . . 65
SECTION 9.03. Compliance with Trust Indenture
Act; Effect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . 66
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 9.04. Notation on Securities . . . . . . . . . . . . . . . . . . 66
SECTION 9.05. Evidence of Compliance of
Supplemental Indenture to be
Furnished Trustee . . . . . . . . . . . . . . . . . . . 67
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc.,
on Certain Terms . . . . . . . . . . . . . . . . . . . 67
SECTION 10.02. Successor Corporation to be
Substituted for Company . . . . . . . . . . . . . . . . 68
SECTION 10.03. Opinion of Counsel to be Given Trustee . . . . . . . . . 69
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture . . . . . . . . . . . . . . . . . 69
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to be Held in Trust by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.03. Paying Agent to Repay Moneys Held . . . . . . . . . . . . 70
SECTION 11.04. Return of Unclaimed Moneys . . . . . . . . . . . . . . . 71
SECTION 11.05. Defeasance Upon Deposit of Moneys or
U.S. Government Obligations . . . . . . . . . . . . . . 71
SECTION 11.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities
Solely Corporate Obligations . . . . . . . . . . . . . 73
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 13.02. Official Acts by Successor Corporation . . . . . . . . . 74
SECTION 13.03. Surrender of Company Powers . . . . . . . . . . . . . . . 74
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 13.04. Address for Notices, etc. . . . . . . . . . . . . . . . . 74
SECTION 13.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.06. Evidence of Compliance with
Conditions Precedent . . . . . . . . . . . . . . . . . 75
SECTION 13.07. Business Days . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.08. Trust Indenture Act to Control . . . . . . . . . . . . . 76
SECTION 13.09. Table of Contents, Headings, etc. . . . . . . . . . . . . 76
SECTION 13.10. Execution in Counterparts . . . . . . . . . . . . . . . . 76
SECTION 13.11. Separability . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 13.12. Assignment . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 13.13. Acknowledgment of Rights . . . . . . . . . . . . . . . . 77
ARTICLE XIV
CONDITIONAL RIGHT TO SHORTEN MATURITY;
PREPAYMENT OF SECURITIES -- NO SINKING FUND
SECTION 14.01. Special Event Prepayment . . . . . . . . . . . . . . . . 77
SECTION 14.02. Optional Prepayment by Company . . . . . . . . . . . . . 78
SECTION 14.03. No Sinking Fund. . . . . . . . . . . . . . . . . . . . . 78
SECTION 14.04. Notice of Prepayment; Selection of
Securities . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 14.05. Payment of Securities Called for
Prepayment . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 14.06. Conditional Right to Shorten
Maturity . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate . . . . . . . . . . . . . . . . 81
SECTION 15.02. Default on Senior Indebtedness . . . . . . . . . . . . . 81
SECTION 15.03. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . 82
SECTION 15.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 15.05. Trustee to Effectuate Subordination . . . . . . . . . . . 85
SECTION 15.06. Notice by the Company . . . . . . . . . . . . . . . . . . 85
SECTION 15.07. Rights of the Trustee; Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . 87
SECTION 15.08. Subordination May Not Be Impaired . . . . . . . . . . . . 87
</TABLE>
-v-
<PAGE> 7
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 16.01. Extension of Interest Payment Period . . . . . . . . . . 88
SECTION 16.02. Notice of Extension . . . . . . . . . . . . . . . . . . . 90
EXHIBIT A Form of Security; Trustee's
Certificate of Authentication . . . . . . . . . . . . . . A-1
</TABLE>
-vi-
<PAGE> 8
CROSS-REFERENCE TABLE*
of provisions of Trust Indenture Act of 1939 with Indenture
dated as of January 13, 1997 between Orion Capital Corporation and The Bank of
New York, as Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . 6.09
(a)(2) . . . . . . . . . . . . . . . . . . 6.09
310(a)(3) . . . . . . . . . . . . . . . . . . N/A
(a)(4) . . . . . . . . . . . . . . . . . . N/A
310(a)(5) . . . . . . . . . . . . . . . . . . N/A
310(b) . . . . . . . . . . . . . . . . . . 6.10, 6.11
310(c) . . . . . . . . . . . . . . . . . . N/A
311(a) and (b) . . . . . . . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . . . . . . . N/A
312(a) . . . . . . . . . . . . . . . . . . 4.01, 4.02(a)
312(b) and (c) . . . . . . . . . . . . . . . . . . 4.02
313(a) . . . . . . . . . . . . . . . . . . 4.04
313(b)(1) . . . . . . . . . . . . . . . . . . 4.04
313(b)(2) . . . . . . . . . . . . . . . . . . 4.04
313(c) . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . 4.04
314(a) . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . N/A
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . 6.07
314(c)(3) . . . . . . . . . . . . . . . . . . N/A
314(d) . . . . . . . . . . . . . . . . . . N/A
314(e) . . . . . . . . . . . . . . . . . . 6.07
314(f) . . . . . . . . . . . . . . . . . . N/A
315(a)(c) and (d) . . . . . . . . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . 5.08
315(e) . . . . . . . . . . . . . . . . . . 5.09
316(a)(1) . . . . . . . . . . . . . . . . . . 5.07
316(a)(2) . . . . . . . . . . . . . . . . . . N/A
316(a) last sentence . . . . . . . . . . . . . . . . . . 2.09
316(b) . . . . . . . . . . . . . . . . . . 9.02
317(a) . . . . . . . . . . . . . . . . . . 5.05
317(b) . . . . . . . . . . . . . . . . . . 6.05
318(a) . . . . . . . . . . . . . . . . . . 13.08
</TABLE>
__________________
* This Cross-Reference Table does not constitute part of the Indenture as
executed and shall not affect the interpretation of any of its terms or
provisions.
-vi-
<PAGE> 9
THIS INDENTURE, dated as of January 13, 1997, between Orion Capital
Corporation, a Delaware corporation (hereinafter sometimes called the
"Company"), and The Bank of New York, a New York banking corporation, as
trustee (hereinafter sometimes called the "Trustee").
W I T N E S S E T H :
In consideration of the premises, and the purchase of the
Securities by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), or which
are by reference therein defined in the Securities Act, shall (except as herein
otherwise expressly provided or unless the context otherwise requires) have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally
executed. The following terms have the meanings given to them in the
Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Depository; (iv)
Capital Security Certificate; (v) Property Trustee; (vi) Administrative
Trustees; (vii) Direct Action; and (viii) Purchase Agreement. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles and the
term "generally accepted accounting principles" means such accounting
principles as are generally accepted at the time of any computation. The words
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision. Headings are used for
<PAGE> 10
convenience of reference only and do not affect interpretation. The singular
includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Additional Sums" shall have the meaning set forth in Section
2.06(c).
"Adjusted Treasury Rate" shall mean, with respect to any
prepayment date pursuant to Section 14.01, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such
prepayment date plus (i) 1.25% if such prepayment date occurs on or prior to
January 1, 1998 and (ii) 0.50% in all other cases.
"Adverse Tax Consequence" shall have the meaning set forth in
the definition of Tax Event.
"Affiliate" shall mean, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or holding the power
to vote 20% or more of the outstanding voting securities or other ownership
interests of the specified Person, (b) any Person 20% or more of whose
outstanding voting securities or other ownership interests are directly or
indirectly owned, controlled or held with power to vote by the specified
Person, (c) any Person directly or indirectly controlling, controlled by, or
under common control with the specified Person, and (d) a partnership in which
the specified Person is a general partner; provided, however, that Intercargo
Corporation shall not be deemed to be an Affiliate of the Company or Orion
Capital Trust I.
"Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors
of the Company or any duly authorized committee of the Board of Directors.
-2-
<PAGE> 11
"Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of
Securities, any day other than a Saturday or a Sunday or a day on which banking
institutions in The City of New York, New York are authorized or required by
law or executive order to close.
"Capital Securities" shall mean undivided beneficial interests
in the assets of Orion Capital Trust I which rank pari passu with the Common
Securities issued by Orion Capital Trust I; provided, however, that if an Event
of Default has occurred and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, prepayment or otherwise with
respect to, the Common Securities shall be made until the holders of the
Capital Securities shall be paid in full the Distributions and the liquidation,
prepayment and other payments to which they are entitled. References to
"Capital Securities" shall include collectively any Initial Capital Securities
and Exchange Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that
the Company may enter into with Orion Capital Trust I or other Persons that
operates directly or indirectly for the benefit of holders of Capital
Securities of Orion Capital Trust I and shall include an Initial Capital
Securities Guarantee and an Exchange Capital Securities Guarantee with respect
to the Initial Capital Securities and the Exchange Capital Securities,
respectively.
"Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests
in the assets of Orion Capital Trust I which rank pari passu with Capital
Securities issued by Orion Capital Trust I; provided, however, that if an Event
of Default has occurred and is continuing, no payments in respect of
-3-
<PAGE> 12
Distributions on, or payments upon liquidation, prepayment or otherwise with
respect to, the Common Securities shall be made until the holders of the
Capital Securities shall be paid in full the Distributions and the liquidation,
prepayment and other payments to which they are entitled.
"Common Securities Guarantee" shall mean any guarantee that
the Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities.
"Common Stock" shall mean the Common Stock, par value $1.00
per share, of the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Orion Capital Corporation, a Delaware
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
"Company Request" or "Company Order" shall mean a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the Chief Executive Officer, the President, a Vice President (however
designated), the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Comparable Treasury Issue" shall mean the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life 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" shall mean, with respect to any
prepayment date pursuant to Section 14.01, (i) the average of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day preceding such
prepayment date, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or
(ii) if such release (or any successor release) is not published or does not
contain such prices on such Business Day, (A) the average
-4-
<PAGE> 13
of the Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in
Section 16.01.
"Conditional Tax Redemption Event" shall have the meaning set
forth in Section 14.06.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Declaration" shall mean the Amended and Restated Declaration
of Trust of Orion Capital Trust I, dated as of January 13, 1997.
"Default" shall mean any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in
Section 16.01.
"Definitive Securities" shall mean those Securities issued in
fully registered certificated form but not Securities issued in global form.
"Depositary" shall mean, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Exchange Act or other applicable statute or regulation, which, in each
case, shall be designated by the Company pursuant to Section 2.05(d).
"Dissolution Event" shall mean the liquidation of the Trust
pursuant to the Declaration, and the distribution of the Securities held by the
Property Trustee to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.
"Event of Default" shall mean any event specified in Section
5.01, continued for the period of time, if any,
-5-
<PAGE> 14
and after the giving of the notice, if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Capital Securities" shall mean 8.73% Capital
Securities (liquidation amount $1,000 per security) of Orion Capital Trust I,
issued pursuant to an Exchange Offer.
"Exchange Capital Securities Guarantee" shall mean the Capital
Securities Guarantee Agreement, issued pursuant to an Exchange Offer.
"Exchange Offer" shall mean the offer that may be made
pursuant to the Registration Rights Agreement (i) by the Company to exchange
Exchange Securities for Initial Securities and to exchange an Exchange Capital
Securities Guarantee for an Initial Capital Securities Guarantee and (ii) by
Orion Capital Trust I to exchange Exchange Capital Securities for Initial
Capital Securities.
"Exchange Securities" shall mean the Company's 8.73% Junior
Subordinated Deferrable Interest Debentures due January 1, 2037, issued
pursuant to an Exchange Offer, as authenticated and issued under this
Indenture.
"Extension Period" shall have the meaning set forth in Section
16.01.
"Global Securities" shall mean those Securities issued in
global form, and "Global Security" shall mean the Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with the Indenture, which shall be
registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean any obligation
of, or any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments.
"Indenture" shall mean this instrument as originally executed
or, if amended as herein provided, as so amended.
-6-
<PAGE> 15
"Initial Capital Securities" shall mean 8.73% Capital
Securities (liquidation amount $1,000 per security) of Orion Capital Trust I.
"Initial Capital Securities Guarantee" shall mean the Capital
Securities Guarantee Agreement, dated January 13, 1997, between the Company and
The Bank of New York, as guarantee trustee.
"Initial Securities" shall mean the Company's 8.73% Junior
Subordinated Deferrable Interest Debentures due 2037, as authenticated and
issued under this Indenture.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Investment Company Event" shall mean that the Company shall
have received an opinion of an independent counsel experienced in practice
under the Investment Company Act, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in Investment Company Act Law"),
there is more than an insubstantial risk that Orion Capital Trust I is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after January 13, 1997.
"Interest Payment Date" shall have the meaning set forth in
Section 2.06.
"Non Book-Entry Capital Securities" shall have the meaning set
forth in Section 2.05.
"Officers" shall mean any of the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President (however
designated), the Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Company, and who shall be acceptable to the
Trustee.
-7-
<PAGE> 16
"Optional Prepayment Price" shall have the meaning set forth
in Section 14.02.
"Orion Capital Trust I" or "Trust" shall mean Orion Capital
Trust I, a Delaware business trust created for the purpose of issuing its
undivided beneficial interests in connection with the issuance of Securities
under this Indenture.
"Other Debentures" shall mean only those junior subordinated
debentures issued by the Company from time to time and sold to trusts to be
established by the Company (if any), which are in each case similar to Orion
Capital Trust I.
"Other Guarantees" shall mean all guarantees to be issued by
the Company with respect to capital securities (if any) and issued to other
trusts, or to any trustee of such trusts or other entities affiliated with the
Company that are financing vehicles of the Company.
The term "outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.04, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or
the Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
prepayment of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent);
provided that, if such Securities, or portions thereof, are to be
prepaid prior to maturity thereof, notice of such prepayment shall
have been given as in Article XIV provided or provision satisfactory
to the Trustee shall have been made for giving such notice; and
(c) Securities in lieu of or in substitution for which
other Securities shall have been authenticated and delivered pursuant
to the terms of Section 2.08 unless proof satisfactory to the Company
and the Trustee is
-8-
<PAGE> 17
presented that any such Securities are held by bona fide holders in
due course.
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security shall mean
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.08 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Prepayment Price" shall mean the Optional Prepayment Price or
the Special Event Prepayment Price, as the context requires.
The term "principal office of the Trustee", or other similar
term, shall mean the principal office of the Trustee, at which at any
particular time its corporate trust business shall be administered.
"Property Trustee" shall have the same meaning as set forth in
the Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated
January 8, 1997 among the Company, Orion Capital Trust I and the Initial
Purchasers as defined therein.
"Quotation Agent" shall mean the Reference Treasury Dealer.
"Reference Treasury Dealer" shall mean (i) Donaldson, Lufkin &
Jenrette Securities Corporation 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 shall substitute
therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury
Dealer selected by the Trustee after consultation with the Company.
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"Reference Treasury Dealer Quotations" shall mean, with
respect to each Reference Treasury Dealer and any prepayment date pursuant to
Section 14.01, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. New York City time, on the third Business Day
preceding such prepayment date.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of January 13, 1997, by and among the Company, Orion
Capital Trust I and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Regular Record Date" with respect to the payment of interest
installments on the Securities, shall mean the fifteenth day preceding the
relevant Interest Payment Date. If a Regular Record Date is not a Business
Day, such Regular Record Date shall be deemed to be the next preceding Business
Day.
"Remaining Life" shall mean the period from the prepayment
date pursuant to Section 14.01 to the Stated Maturity.
"Responsible Officer," when used with respect to the Trustee,
shall mean the chairman or any vice chairman of the board of directors, the
chairman or any vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the cashier, any assistant cashier,
the secretary, any assistant secretary, the treasurer, any assistant treasurer,
any trust officer or assistant trust officer, the controller or any assistant
controller or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Security" shall mean Securities that bear or are
required to bear the legends set forth in Exhibit A hereto.
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"Rule 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or under any similar rule or
regulation hereafter adopted by the Commission.
"Securities" shall mean, collectively, the Initial Securities
and the Exchange Securities.
"Securities Act" shall mean the Securities Act of 1933 as
amended.
"Securityholder", "holder of Securities", or other similar
terms, shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution
Event, the list of holders kept by a Securities registrar or provided to the
Trustee pursuant to Section 4.01, as the case may be and (ii) following a
Dissolution Event, any security register maintained by a security registrar for
the securities appointed by the Company following the execution of a
supplemental indenture providing for transfer procedures as provided for in
Section 2.07(a).
"Senior Indebtedness" shall mean with respect to the Company,
(i) the principal, premium, if any, and interest in respect of (A) Indebtedness
for Money Borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by the Company, (ii) all
capital lease obligations of the Company, (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company under any
conditional sale or title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business), (iv) all obligations,
contingent or otherwise of the Company in respect of any letter of credit,
banker's acceptance, security purchase facilities or similar credit
transaction, (v) all obligations in respect of interest rate swap, cap or other
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements, (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise and (vii) all obligations of the type referred
to
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in clauses (i) through (vi) above of other persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Junior Subordinated Debentures and (2)
any indebtedness between or among the Company or its affiliates, including all
other debt securities and guarantees in respect of those debt securities issued
to (a) any other Orion Capital Trust or a trustee of such trust and (b) any
other trust, or of a trustee of such trust, or of a partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"financing entity") in connection with the issuance by such a financing entity
of preferred securities or other securities that rank pari passu with, or junior
to, the Capital Securities. Such Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.
"Special Event" shall mean either an Investment Company Event
or a Conditional Tax Redemption Event, as the case may be.
"Special Event Prepayment Price" shall mean, with respect to
any prepayment of the Securities pursuant to Section 14.01 hereof, an amount in
cash equal to the greater of (i) 100% of the principal amount to be prepaid or
(ii) the sum, as determined by a Quotation Agent, of the present values of the
remaining scheduled payments of principal and interest thereon to January 1,
2007, the first day on which any Security is subject to optional prepayment,
discounted to the prepayment date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months and, for any period less than 6 months,
the actual months elapsed and the actual days elapsed in a partial month in
such period) at the Adjusted Treasury Rate plus, in each case, accrued and
unpaid interest thereon, including Compounded Interest, Additional Interest and
Additional Sums, if any, to the date of such prepayment.
"Stated Maturity" shall mean January 1, 2037, or such other
date to which the maturity of the Securities is changed pursuant to the right
of the Company to shorten the stated maturity pursuant to the provisions of
Section 14.06.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of the outstanding
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voting stock of which is owned, directly or indirectly, by such Person or by
one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries, (ii) any general partnership, joint venture or similar entity, at
least a majority of whose outstanding partnership or similar interests shall at
the time be owned by such Person, or by one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general
partner. For the purposes of this definition, "voting stock" means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.
"Tax Event" shall mean the receipt by Orion Capital Trust I
and the Company of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
January 13, 1997, or, as a result of a final determination, as evidenced by the
execution of a Form 870 AD, arising from an audit or examination by the
Internal Revenue Service, there is more than an insubstantial risk that (i)
Orion Capital Trust I is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with respect to income
received or accrued on the Securities, (ii) interest payable by the Company on
the Securities is not, or within 90 days of the date of such opinion, will not
be, deductible by the Company, in whole or in part, for United States Federal
income tax purposes, or (iii) Orion Capital Trust I is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges (each of the circumstances
referred to in clauses (i), (ii) and (iii) being referred to herein as an
"Adverse Tax Consequence").
"Tax Event Maturity Shortening" shall have the meaning
specified in Section 14.06.
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"Trustee" shall mean the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article VI hereof,
shall also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.03.
"Trust Securities" shall mean the Capital Securities and the
Common Securities, collectively.
"U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case under clauses (i) or (ii) are not callable or prepayable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibit A, the terms of which
are incorporated in and made
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a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Security shall be dated the date of its
authentication. The Securities shall be issued in denominations of $1,000 and
integral multiples thereof.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature. If an Officer whose signature is on a Security
no longer holds that office at the time the Security is authenticated, the
Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Security has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Securities shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for
original issue up to, and the aggregate principal amount of Securities
outstanding at any time may not exceed $129,000,000 aggregate principal amount
of the Securities; except as provided in Sections 2.07, 2.08, 2.10 and 14.05.
The series of Securities to be initially issued hereunder shall be the Initial
Securities.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be
issued in fully registered certificated form without interest coupons.
Principal of and premium, if any, and interest on the Securities issued in
certificated form will be payable, the transfer of such Securities will be
registrable and such Securities will be exchangeable for Securities bearing
identical terms and provisions at the office or agency of the Company
maintained for such purpose under Section 3.02; provided, however, that payment
of interest with respect to Securities may be made at the option of the Company
(i) by check mailed to the holder at such address as shall appear in the
Security Register or (ii) by transfer to an account maintained by the Person
entitled thereto, provided that proper transfer instructions have been received
in writing by the relevant record date.
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Notwithstanding the foregoing, so long as the holder of any Securities is the
Property Trustee, the payment of the principal of and premium, if any, and
interest (including Compounded Interest and Additional Sums, if any) on such
Securities held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
SECTION 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section
2.04 or as otherwise determined by the Company in accordance with applicable
law, each Security shall bear the applicable legends relating to restrictions
on transfer pursuant to the securities laws in substantially the form set forth
on Exhibit A hereto.
(b) The Company shall issue and the Trustee shall
authenticate Exchange Securities in exchange for Initial Securities accepted
for exchange in the Exchange Offer, which Exchange Securities shall not bear
the legends required by subsection (a) above, in each case unless the holder of
such Initial Securities is either (A) a broker-dealer who purchased such
Initial Securities directly from the Company for resale pursuant to Rule 144A
or any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Initial Securities or (C) a Person who
is an affiliate (as defined in Rule 144 under the Securities Act) of the
Company.
SECTION 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry
form, the related Definitive Securities shall be presented to the
Trustee (if an arrangement with the Depositary has been maintained) by
the Property Trustee in exchange for one or more Global Securities (as
may be required pursuant to Section 2.07) in an aggregate principal
amount equal to the aggregate principal amount of all such outstanding
Securities, to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to the Depositary for crediting
to the accounts of its participants pursuant to the instructions of
the Administrative Trustees; the Company upon any such presentation
shall execute one or more Global Securities in such aggregate
principal amount and
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deliver the same to the Trustee for authentication and delivery in
accordance with this Indenture; and payments on the Securities issued
as a Global Security will be made to the Depositary; and
(ii) if any Capital Securities are held in
certificated form, the related Definitive Securities may be presented
to the Trustee by the Property Trustee and any Capital Security
certificate which represents Capital Securities other than Capital
Securities in book-entry form ("Non Book-Entry Capital Securities")
will be deemed to represent beneficial interests in Securities
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Capital Securities until such Capital Security certificates
are presented to the Security registrar for transfer or reissuance, at
which time such Capital Security certificates will be cancelled and a
Security, registered in the name of the holder of the Capital Security
certificate, with an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Security certificate cancelled, will
be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with this Indenture. Upon
the issuance of such Securities, Securities with an equivalent
aggregate principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been cancelled.
(b) The Global Securities shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon; provided,
that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and prepayments. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee, in accordance with applicable procedures
established by the Depositary.
(c) The Global Securities may be transferred, in whole
but not in part, only to another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such
successor Depositary.
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(d) If at any time the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary or the Depositary has
ceased to be a clearing agency registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, as the case
may be, the Company will execute, and the Trustee, upon written notice from the
Company, will authenticate and make available for delivery Definitive
Securities, in authorized denominations and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such
Global Security. If there is an Event of Default, the Depositary shall have
the right to exchange the Global Securities for Definitive Securities. In
addition, the Company may at any time determine that the Securities shall no
longer be represented by a Global Security. In the event of such an Event of
Default or such a determination, the Company shall execute, and subject to
Section 2.07, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenticate and make available for
delivery Definitive Securities, in authorized denominations and in an aggregate
principal amount equal to the principal amount of the Global Security in
exchange for such Global Security. Upon the exchange of the Global Security
for such Definitive Securities, in authorized denominations, the Global
Security shall be cancelled by the Trustee. Such Definitive Securities issued
in exchange for the Global Security shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Definitive Securities to the Depositary for
delivery to the Persons in whose names such Definitive Securities are so
registered.
SECTION 2.06. Interest.
(a) Each Security will bear interest at the rate of 8.73%
per annum (the "Coupon Rate") from the most recent date to which interest has
been paid or, if no interest has been paid, from January 13, 1997, until the
principal thereof becomes due and payable, and on any overdue principal and
premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded semi-annually, payable (subject to the provisions of
Article XVI)
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semi-annually in arrears on January 1 and July 1 of each year (each, an
"Interest Payment Date") commencing on July 1, 1997, to the Person in whose
name such Security or any predecessor Security is registered on the books of
the Company, at the close of business on the Regular Record Date for such
interest installment.
(b) Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less than six
months, the actual months elapsed and the actual days elapsed in a partial
month in such period. In the event that any Interest Payment Date falls on a
day that is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), with the same
force and effect as if made on such date.
(c) During such time as the Property Trustee is the
holder of any Securities, the Company shall pay any additional amounts on the
Securities as may be necessary in order that the amount of Distributions then
due and payable by Orion Capital Trust I on the outstanding Trust Securities
shall not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Trust has become subject as a result of a Tax
Event ("Additional Sums").
SECTION 2.07. Transfer and Exchange.
(a) Transfer Restrictions. The Initial Securities, and
those Exchange Securities with respect to which any Person described in Section
2.04(b)(A), (B) or (C) is the beneficial owner, may not be transferred except
in compliance with any legend contained in Exhibit A unless otherwise
determined by the Company in accordance with applicable law. Upon any
distribution of the Securities following a Dissolution Event, the Company and
the Trustee shall enter into a supplemental indenture pursuant to Section 9.01
to provide for the transfer restrictions and procedures with respect to the
Securities substantially similar to those contained in the Declaration to the
extent applicable in the circumstances existing at such time.
(b) General Provisions Relating to Transfers and
Exchanges. To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at
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the Trustee's request. All Definitive Securities and Global Securities issued
upon any registration of transfer or exchange of Definitive Securities or
Global Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Definitive Securities or Global Securities surrendered upon such registration
of transfer or exchange.
No service charge shall be made to a holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
The Company shall not be required to (i) issue, register the
transfer of or exchange Securities during a period beginning at the opening of
business 30 days before the day of mailing of a notice of prepayment or any
notice of selection of Securities for prepayment under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register
the transfer of or exchange any Security so selected for prepayment in whole or
in part, except the unprepaid portion of any Security being prepaid in part.
Prior to due presentment for the registration of a transfer of
any Security, the Trustee, any agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and interest on such Securities, and neither the Trustee, any agent nor
the Company shall be affected by notice to the contrary.
(c) Exchange of Initial Securities for Exchange
Securities. The Initial Securities may be exchanged for Exchange Securities
pursuant to the terms of the Exchange Offer. The Trustee shall make the
exchange as follows:
The Company shall present the Trustee with an Officers' Certificate certifying
the following:
(i) upon issuance of the Exchange Securities, the
transactions contemplated by the Exchange Offer have been consummated;
and
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(ii) the principal amount of Initial Securities
properly tendered in the Exchange Offer that are represented by a
Global Security and the principal amount of Initial Securities
properly tendered in the Exchange Offer that are represented by
Definitive Securities, the name of each holder of such Definitive
Securities, the principal amount at maturity properly tendered in the
Exchange Offer by each such holder and the name and address to which
Definitive Securities for Exchange Securities shall be registered and
sent for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Exchange Securities have
been registered under Section 5 of the Securities Act and the Indenture has
been qualified under the Trust Indenture Act and (y) with respect to the
matters set forth in Section 3(p) of the Registration Rights Agreement and
(iii) a Company Order, shall authenticate (A) a Global Security for Exchange
Securities in aggregate principal amount equal to the aggregate principal
amount of Initial Securities represented by a Global Security indicated in such
Officers' Certificate as having been properly tendered and (B) Definitive
Securities representing Exchange Securities registered in the names of, and in
the principal amounts indicated in, such Officers' Certificate.
If the principal amount at Stated Maturity of the Global
Security for the Exchange Securities is less than the principal amount at
Stated Maturity of the Global Security for the Initial Securities, the Trustee
shall make an endorsement on such Global Security for the Initial Securities
indicating a reduction in the principal amount at maturity represented thereby.
The Trustee shall deliver such Definitive Securities for
Exchange Securities to the holders thereof as indicated in such Officers'
Certificate.
SECTION 2.08. Replacement Securities.
(a) If any mutilated Security is surrendered to the
Trustee or the Company, or the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. An indemnity bond must be supplied by
the Securityholder that is
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sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent or any authenticating agent from any loss that
any of them may suffer if a Security is replaced. The Company or the Trustee
may charge for its expenses in replacing a Security.
(b) Every replacement Security is an obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Securities duly issued hereunder.
(c) The provisions of this Section 2.08 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement of mutilated, destroyed, lost or stolen Securities.
SECTION 2.09. Treasury Securities.
In determining whether the holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any Affiliate of the Company shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that the Trustee actually knows to be so owned
shall be so considered.
SECTION 2.10. Temporary Securities.
Pending the preparation of Definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause
Definitive Securities to be prepared without unreasonable delay. The
Definitive Securities shall be printed, lithographed or engraved, or provided
by any combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
Officers executing such Definitive
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Securities. After the preparation of Definitive Securities, the temporary
Securities shall be exchangeable for Definitive Securities upon surrender of
the temporary Securities at the office or agency maintained by the Company for
such purpose pursuant to Section 3.02 hereof, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, in exchange therefor the same aggregate principal amount of
Definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall return the cancelled Securities to the Company in
accordance with its normal practices (subject to the record retention
requirement of the Exchange Act) unless the Company directs them to be returned
to it. The Company may not issue new Securities to replace Securities that
have been prepaid or paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. Defaulted Interest.
Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the holder
on the relevant Regular Record Date by virtue of having been such holder; and
such Defaulted Interest shall be paid by the Company, at its election, as
provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted
Interest on Securities to the Persons in whose names such Securities
(or their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner: the
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time the Company shall deposit with
the
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Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix
a special record date for the payment of such Defaulted Interest which
shall not be more than 30 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security
Register, not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names such
Securities (or their respective Predecessor Securities) are registered
on such special record date and shall be no longer payable pursuant to
the following clause (b).
(b) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of prepayment as a convenience to Securityholders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a prepayment and that reliance may be placed only on the other
identification
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numbers printed on the Securities, and any such prepayment shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of
the Securityholders that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on the Securities at the
place, at the respective times and in the manner provided herein. Except as
provided in Section 2.03, each installment of interest on the Securities may be
paid by mailing checks for such interest payable to the order of the
Securityholder entitled thereto, as it may appear in the Securities register.
The Company further covenants to pay any and all amounts including, without
limitation, Additional Interest, if any, on the dates and in the manner
required under the Registration Rights Agreement.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remains outstanding,
the Company will maintain in The City of New York, New York, an office or
agency where the Securities may be presented for payment, an office or agency
where the Securities may be presented for registration of transfer and for
exchange as in this Indenture provided and an office or agency where notices
and demands to or upon the Company in respect of the Securities or of this
Indenture may be served. The Company will give to the Trustee written notice
of the location of any such office or agency and of any change of location
thereof. Until otherwise designated from time to time by the Company in a
notice to the Trustee, any such office or agency for all of the above purposes
shall be the office or agency of The Bank of New York, 101 Barclay Street,
Floor 21W, New York, New York 10286, Attention: Corporate Trust Administration.
In case the Company shall fail to maintain any such office or agency in The
City of New York, New York, or shall fail to give such notice of the location
or of any change in the location thereof, presentations and
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demands may be made and notices may be served at the principal corporate trust
office of the Trustee.
In addition to any such office or agency, the Company
may from time to time designate one or more offices or agencies outside The City
of New York, New York where the Securities may be presented for registration of
transfer and for exchange in the manner provided in this Indenture, and the
Company may from time to time rescind such designation, as the Company may deem
desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
any such office or agency in the City of New York, New York, for the purposes
above mentioned. The Company will give to the Trustee prompt written notice of
any such designation or rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in
Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent
other than the Trustee with respect to the Securities, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provision of this Section
3.04,
(i) that it will hold all sums held by it as
such agent for the payment of the principal of and premium, if
any, or interest on the Securities (whether such sums have
been paid to it by the Company or by any other obligor on the
Securities) in trust for the benefit of the holders of the
Securities;
(ii) that it will give the Trustee notice of
any failure by the Company (or by any other obligor on the
Securities) to make any payment of the principal of and
premium or interest on the Securities when the same shall be
due and payable; and
(iii) that it will at any time during the
continuance of any such failure, upon the written
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request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying
agent, it will, on or before each due date of the principal of and premium, if
any, or interest on the Securities, set aside, segregate and hold in trust for
the benefit of the holders of the Securities a sum sufficient to pay such
principal, premium or interest so becoming due and will notify the Trustee of
any failure to take such action and of any failure by the Company (or by any
other obligor under the Securities) to make any payment of the principal of and
premium, if any, or interest on the Securities when the same shall become due
and payable.
(c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Securities hereunder, or for any
other reason, pay or cause to be paid to the Trustee all sums held in trust for
any such Securities by the Trustee or any paying agent hereunder, as required
by this Section 3.04, such sums to be held by the Trustee upon the trusts
herein contained.
(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this
Section 3.04 is subject to Sections 11.03 and 11.04.
SECTION 3.05 Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days
after the end of each fiscal year in each year, commencing with the first fiscal
year ending after the date hereof, so long as Securities are outstanding
hereunder, an Officers' Certificate, one of the signers of which shall be the
principal executive, principal financial or principal accounting officer of the
Company, stating that in the course of the performance by the signers of their
duties as officers of the Company they would normally have knowledge of any
Default by the Company in the performance of any covenants contained herein,
stating whether or not they have knowledge of any such Default and, if so,
specifying each such Default of which the signers have knowledge and the nature
thereof.
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SECTION 3.06. Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remains
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article X hereof are complied with.
SECTION 3.07 Limitation on Dividends.
If at any time (i) there shall have occurred any event of which
the Company has actual knowledge that (a) is or with the giving of notice or the
lapse of time, or both, would constitute an Event of Default and (b) which the
Company shall not have taken reasonable steps to cure, (ii) Securities are held
by the Property Trustee and the Company shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee, or (iii) the
Company shall have given notice of its election of the exercise of its right to
extend the interest payment period pursuant to Section 16.01 and any such
extension shall be continuing, then the Company will not, and will not permit
any Subsidiary to,
(i) declare or pay any dividends or distributions on,
or prepay, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which
includes common and preferred stock);
(ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or prepay any debt
securities of the Company (including any Other Debentures)
that rank pari passu with or junior in right of payment to the
Securities; or
(iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any
Subsidiary of the Company (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment
to the Securities
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto,
(c) payments under the
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Capital Securities Guarantee, (d) as a direct result of, and only to the extent
necessary to avoid the issuance of fractional shares of the Company's capital
stock following, a reclassification of the Company's capital stock or the
exchange or the conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (e) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees or any of the Company's
dividend reinvestment plans.
SECTION 3.08. Covenants as to Orion Capital Trust I.
In the event Securities are issued to Orion Capital Trust I or
a trustee of such trust in connection with the issuance of Trust Securities by
Orion Capital Trust I, for so long as any of such Trust Securities remains
outstanding, the Company will (i) directly or indirectly maintain 100% ownership
of the Common Securities of Orion Capital Trust I; provided, however, that any
successor of the Company, permitted pursuant to Article X, may succeed to the
Company's ownership of such Common Securities, (ii) use its reasonable efforts
to cause Orion Capital Trust I (a) to remain a business trust, except in
connection with a distribution of Securities, the redemption of all of the Trust
Securities of Orion Capital Trust I or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, and (b) to continue to be
treated as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes, and (iii) use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
individual beneficial interest in the Securities.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the
Securities to Orion Capital Trust I and in connection with the sale of the Trust
Securities by Orion Capital Trust I, the Company, in its capacity as borrower
with respect to the Securities, shall:
(a) pay all costs and expenses relating to the
offering, sale and issuance of the Securities, including
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commissions to the Initial Purchasers payable pursuant to the
Purchase Agreement, fees and expenses in connection with the
Exchange Offer or other action to be taken pursuant to the
Registration Rights Agreement and compensation of the Trustee
in accordance with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to
the organization of Orion Capital Trust I, the offering, sale
and issuance of the Trust Securities (including commissions to
the initial purchasers in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust;
(c) be primarily and fully liable for any
indemnification obligations arising with respect to the
Declaration;
(d) pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its
assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust; and
(e) pay all other fees, expenses, debts and
obligations (other than payments of principal of, and premium,
if any, or interest on the Trust Securities) related to Orion
Capital Trust I.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or
resignation of the Trustee, unless otherwise stated, the Company shall pay to
the Trustee all amounts accrued and owing to the date of such termination,
removal or resignation. Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may
be, pursuant to Section 5.7 of the Declaration, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.
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ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee:
(a) on a semi-annual basis on each Regular Record Date
for the Securities, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Securityholders as of such
record date;
(b) at such other times as the Trustee may request in
writing, within 30 Business Days after the receipt by the Company of
any such request, a list of similar form and content as of a date not
more than 15 Business Days prior to the time such list is furnished,
except that, no such lists need be furnished so long as the Trustee is
in possession thereof by reason of its acting as Security registrar;
and
(c) the Company hereby appoints the Trustee as Securities
registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Securities
registrar (if so acting) hereunder. The Trustee may destroy any list furnished
to it as provided in Section 4.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities or with holders of all Securities
with respect to their rights under this Indenture and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
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transmit, then the Trustee shall within 5 Business Days after the receipt of
such application, at its election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.02; or
(ii) inform such applicants as to the approximate
number of holders of all Securities whose names and addresses appear
in the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.02, and as to
the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02 a copy of the form of proxy
or other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within 5 Business Days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Securities or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
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(c) Each and every holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the holders of Securities in accordance with the provisions of subsection
(b) of this Section 4.02, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
SECTION 4.03. Reports of the Company.
(a) The Company covenants and agrees to file with the
Trustee, within 15 Business Days after the date on which the Company files the
same with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required from
time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail
to all holders of Securities, as the names and addresses of such holders appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to
be filed by the Company pursuant to subsections
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(a) and (b) of this Section 4.03 as may be required by rules and regulations
prescribed from time to time by the Commission.
(d) Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the
Securities to qualify for an exemption under Rule 144A under the Securities
Act, the Company shall, upon request, provide the information required by
clause (d)(4) thereunder to each Holder and to each beneficial owner and
prospective purchaser of Securities identified by any holder of Restricted
Securities, unless such information is furnished to the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
SECTION 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall on or before each January 10 following the
date of this Indenture, commencing January 10, 1998, deliver to Securityholders
a brief report which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission and
with the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.
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ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default.
One or more of the following events of default shall
constitute an Event of Default hereunder (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon
any Security or any Other Debentures when it becomes due and
payable, and continuance of such default for a period of 30
days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms
hereof or, in the case of any Other Debenture, the indenture
related thereto, shall not constitute a default in the payment
of interest for this purpose; or
(b) default in the payment of all or any part of
the principal of (or premium, if any, on) any Security or any
Other Debentures as and when the same shall become due and
payable either at maturity, upon prepayment, by declaration of
acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period
of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in
principal amount of the outstanding Securities a written
notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(d) a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of
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the Company in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the
Company or all or substantially all of its property, or
ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(e) the Company shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, shall consent to the entry of
an order for relief in an involuntary case under any such law,
or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or all
or substantially all of its property, or shall make any
general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or
the holders of not less than 25% in principal amount of the Securities at the
time outstanding may declare the principal amount of all Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the holders of the outstanding Securities), and upon any
such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Securities shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay (A) all matured installments of interest upon all the
Securities and the principal of and premium, if any, on any and all Securities
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest, at the same rate as the rate of interest specified in the Securities
to the date of such payment or deposit) and (B) such amount as shall be
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sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and (ii) any
and all Events of Default under the Indenture shall have been cured, waived or
otherwise remedied as provided herein, then, in every such case, the holders of
a majority in principal amount of the Securities at the time outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Company, the Trustee and the holders of the Securities shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit
Therefor.
The Company covenants that (a) in case default shall be made
in the payment of any installment of interest upon any of the Securities as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Securities as and
when the same shall have become due and payable, whether at maturity of the
Securities or upon prepayment or by declaration of acceleration of maturity or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities, the whole amount
that then shall have become due and payable on all such Securities for
principal and premium, if any, or interest, or both, as the case may be, with
interest upon the overdue principal and premium, if any, and (to the extent
that payment of such interest is enforceable under applicable law and, if the
Securities are held by Orion Capital Trust I or a trustee of such trust,
without
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duplication of any other amounts paid by Orion Capital Trust I or a trustee in
respect thereof) upon the overdue installments of interest at the rate borne by
the Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other
obligor on the Securities and collect in the manner provided by law out of the
property of the Company or any other obligor on the Securities wherever
situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Securities
under Title 11, United States Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
or such other obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Securities
and, in case of any judicial proceedings, to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee, except as a
result
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of negligence or bad faith) and of the Securityholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Securities, or
to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Securities in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings,
and to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of its
charges and expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make such
payments to the Trustee, and, in the event that the Trustee shall consent to
the making of such payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof in
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Securities, and it shall not be necessary to make any
holders of the Securities parties to any such proceedings.
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SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially paid,
and upon surrender thereof if fully paid:
First: To the payment of all amounts due to the Trustee under
Section 6.06, including the costs and expenses of collection applicable to the
Securities and reasonable compensation to the Trustee, its agents, attorneys
and counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its negligence or bad
faith;
Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XV;
Third: In case the principal of the outstanding Securities in
respect of which moneys have been collected shall not have become due and be
unpaid, to the payment of the amounts then due and unpaid upon Securities for
principal of (and premium, if any) and interest on the Securities, in respect
of which or for the benefit of which money has been collected, ratably, without
preference of priority of any kind, according to the amounts due on such
Securities for principal (and premium, if any) and interest, respectively; and
Fourth: To the Company.
SECTION 5.04. Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default, as hereinbefore
provided, and unless also the holders of not less than 25% in principal amount
of the Securities at the time outstanding shall have
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made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding, and during such 60
days the holders of a majority in principal amount of the Securities at the
time outstanding do not give a direction to the Trustee inconsistent with the
request, it being understood and intended, and being expressly covenanted by
the taker and holder of every Security with every other taker and holder and
the Trustee, that no one or more holders of Securities shall have any right in
any manner whatever by virtue of or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of (premium, if any) and interest on such Security, on or after the
same shall have become due and payable, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder and by accepting a Security hereunder it is expressly
understood, intended and covenanted by the taker and holder of every Security
with every other such taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatsoever by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other Securities, or to obtain or
seek to obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of Securities.
For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital
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Securities are entitled, in the circumstances and subject to the limitations
set forth therein, to commence a Direct Action with respect to any Event of
Default under this Indenture and the Securities.
SECTION 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities
and is continuing, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding
in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as provided in the last paragraph of Section 2.08, all
powers and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no delay
or omission of the Trustee or of any holder of any of the Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders.
The holders of a majority in principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any
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proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that (subject to the
provisions of Section 6.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall determine that the action so
directed would be unjustly prejudicial to the holders not taking part in such
direction or if the Trustee being advised by counsel determines that the action
or proceeding so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors or trustees, executive committee, or a trust
committee of directors or trustees and/or Responsible Officers, shall determine
that the action or proceedings so directed would involve the Trustee in
personal liability. Prior to any declaration accelerating the Stated Maturity
of the Securities, the holders of a majority in principal amount of the
Securities at the time outstanding may on behalf of the holders of all of the
Securities waive any past Default or Event of Default and its consequences
except a Default (a) in the payment of principal of or premium, if any, or
interest on any of the Securities or (b) in respect of covenants or provisions
hereof which cannot be modified or amended without the consent of the holder of
each Security affected; provided, however, that if the Securities are held by
the Property Trustee, such waiver or modification to such waiver shall not be
effective until the holders of a majority in aggregate liquidation amount of
Trust Securities shall have consented to such waiver or modification to such
waiver; provided, further, that if the consent of the holder of each
outstanding Security is required, such waiver shall not be effective until each
holder of the Trust Securities shall have consented to such waiver. Upon any
such waiver, the Default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon. Whenever any Default or Event
of Default hereunder shall have been waived as permitted by this Section 5.07,
said Default or Event of Default shall for all purposes of the Securities and
this Indenture be deemed to have been cured and to be not continuing.
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SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a
Default with respect to the Securities mail to all Securityholders, as the
names and addresses of such holders appear upon the Security register, notice
of all Defaults known to the Trustee, unless such Defaults shall have been
cured before the giving of such notice (the term "Defaults" for the purpose of
this Section 5.08 being hereby defined to be the events specified in clauses
(a), (b), (c), (d) and (e) of Section 5.01, not including periods of grace, if
any, provided for therein, and irrespective of the giving of written notice
specified in clause (c) of Section 5.01); and provided that, except in the case
of Default in the payment of the principal of or premium, if any, or interest
on any of the Securities, the Trustee shall be protected in withholding such
notice if and so long as the board of directors of the Trustee, the executive
committee thereof, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders; and provided further, that
in the case of any Default of the character specified in Section 5.01(c), no
such notice to Securityholders shall be given until at least 60 days after the
occurrence thereof but shall be given within 90 days after such occurrence.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.09 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders holding in the aggregate more than 10% in principal
amount of the Securities outstanding at the time outstanding, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest
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on any Security against the Company on or after the same shall have become due
and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has
not been cured or waived) the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine
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the same to determine whether or not they conform to the requirements
of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing
that the repayment of such funds or liability is not reasonably assured to it
under the terms of this Indenture or adequate indemnity against such risk is
not reasonably assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
note, debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the
Company mentioned herein may be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
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(c) the Trustee may consult with counsel of its selection
and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders, pursuant to
the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(that has not been cured or waived), to exercise such of the rights
and powers vested in it by this Indenture, and to use the same degree
of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, coupon or other paper or
document, unless requested in writing to do so by the holders of a
majority in principal amount of the Securities at the time
outstanding; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either
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directly or by or through agents (including any Authenticating Agent)
or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney
appointed by it with due care.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in
the certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or
application by the Company of any Securities or the proceeds of any Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar
May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or
any transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys
received by the Trustee or any paying agent shall, until used or applied as
herein provided, be held in trust for the purpose for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee and any paying agent shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing
with the Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time to
time upon the written order of the Company, signed by the Chairman of the Board
of Directors, the
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President or a Vice President or the Treasurer or an Assistant Treasurer of
the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company, as borrower, covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as shall be agreed to in writing between the Company and the
Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith. The Company also covenants to
indemnify each of the Trustee or any predecessor Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any and
all loss, damage, claim, liability or expense including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad faith on
the part of the Trustee and arising out of or in connection with the acceptance
or administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 6.06 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property
and funds held or collected by the Trustee in its capacity as such, except
funds held in trust for the benefit of the holders of particular Securities.
Without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services of the Trustee as provided for
herein are intended to constitute expenses of administration under any
applicable federal or state bankruptcy, insolvency or other similar law.
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The provisions of this Section shall survive the termination of
this Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter (unless other
evidence in respect thereof is herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.08. Conflicting Interest of Trustee.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee
and the Company shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia or a corporation
or other Person permitted to act as trustee by the Commission authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000) and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 6.09
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
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The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of such resignation
to the Company and by mailing notice thereof to the holders of the Securities
at their addresses as they shall appear on the Security register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed
and have accepted appointment within 60 days after the mailing of such notice
of resignation to the affected Securityholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide holder of a Security
for at least six months may, subject to the provisions of Section 5.09, on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months, or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and shall fail to
resign after written request therefor by the Company or by any such
Securityholder, or
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(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.09, any
Securityholder who has been a bona fide holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as
in subsection (a) of this Section 6.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 6.10 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11.
SECTION 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become
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effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of Section 6.06,
execute and deliver an instrument transferring to such successor trustee all
the rights and powers of the trustee so ceasing to act and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring trustee thereunder. Upon request of any such successor trustee,
the Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such trustee to secure any amounts
then due it pursuant to the provisions of Section 6.06.
No successor trustee shall accept appointment as provided in
this Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as
provided in this Section 6.11, the Company shall mail notice of the succession
of such trustee hereunder to the holders of Securities at their addresses as
they shall appear on the Security register. If the Company fails to mail such
notice within 10 Business Days after the acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Company.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
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In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor trustee; and in all such cases such certificates
shall have the full force which the Securities or this Indenture elsewhere
provides that the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Securities in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13. Limitation on Rights of Trustee as a Creditor.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b)
of the Trust Indenture Act. A Trustee who has resigned or been removed shall
be subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by
the Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities
issued upon exchange or registration of transfer thereof as fully to all
intents and purposes as though any such Authenticating Agent had been expressly
authorized to authenticate and deliver Securities; provided, that the Trustee
shall have no liability to the Company for any acts or omissions of the
Authenticating Agent with respect to the authentication and delivery of
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any
state or territory thereof or of the District of Columbia authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
at least $50,000,000 and being subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If
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such corporation publishes reports of condition at least annually pursuant to
law or the requirements of such authority, then for the purposes of this
Section 6.14 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect herein specified in
this Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 6.14 without the execution or filing of any paper
or any further act on the part of the parties hereto or such Authenticating
Agent.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time terminate the agency of any Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time any Authenticating Agent shall cease to be eligible under this
Section 6.14, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
6.14, shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all Securityholders as the names and
addresses of such holders appear on the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein.
The Company, as borrower, agrees to pay to any Authenticating
Agent from time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability for any action
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taken by it as such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of
a specified percentage in principal amount of the Securities at the time
outstanding may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action)
the fact that at the time of taking any such action the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by such Securityholders
in person or by agent or proxy appointed in writing, or (b) by the record of
such holders of Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article VIII, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for the determination of
Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions
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of this Indenture not later than six months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his agent or
proxy shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by
the Security Register or by a certificate of the Security registrar. The
Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in
the manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any
Security, the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Security registrar may deem the person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him as, the absolute owner of such Security (whether or not such Security
shall be overdue) for the purpose of receiving payment of or on account of the
principal of and premium, if any, and, subject to Section 2.06, interest on
such Security and for all other purposes; and neither the Company nor the
Trustee nor any Authenticating Agent nor any paying agent nor any transfer
agent nor any Security registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being or upon
his order shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Security.
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite principal
amount of Securities at the time outstanding have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Company or any other obligor on the Securities or by any person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Securities shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Securities and that the pledgee is not the Company or any such other
obligor or person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor.
In the case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the
holders of the percentage in principal amount of the Securities at the time
outstanding specified in this Indenture in connection with such action, any
holder of a Security (or any Security issued in whole or in part in exchange or
substitution therefor) the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such
action may, by filing written notice with the Trustee at the principal office
of the Trustee and upon proof of holding as provided in Section 7.02, revoke
such action so far as concerns such Security (or so far as concerns the
principal amount represented by any exchanged or substituted Security). Except
as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange or substitution therefor.
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ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purpose of Meetings.
A meeting of Securityholders may be called at any time and
from time to time pursuant to the provisions of this Article VIII for any of
the following purposes:
(a) to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to consent to the waiving
of any Default hereunder and its consequences, or to take any other
action authorized to be taken by Securityholders pursuant to any of
the provisions of Article V;
(b) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
9.02; or
(d) to take any other action authorized to be taken by or
on behalf of the holders of any specified principal amount of such
Securities at the time outstanding under any other provision of this
Indenture or under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 8.01, to be held at such time and at
such place in the Borough of Manhattan, The City of New York, as the Trustee
shall determine. Notice of every meeting of the Securityholders, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall
be mailed not less than 20 nor more than 180 days prior to the date fixed for
the meeting.
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SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of
the Board of Directors, or the holders of at least 10% in principal amount of
the Securities at the time outstanding, shall have requested the Trustee to
call a meeting of Securityholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in the Borough of Manhattan, The City of New York for
such meeting and may call such meeting to take any action authorized in Section
8.01, by mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a
Person shall (a) be a holder of one or more Securities or (b) a Person
appointed by an instrument in writing as proxy by a holder of one or more
Securities. The only Persons who shall be entitled to be present or to speak
at any meeting of Securityholders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 8.05. Regulations.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Securityholders, in regard to proof of the holding of Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case
the Company or the Securityholders calling the meeting, as the case may be,
shall in like manner appoint a temporary
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chairman. A permanent chairman and a permanent secretary of the meeting shall
be elected by majority vote of the meeting.
(c) Subject to the provisions of Section 8.04, at any meeting
each holder of Securities or proxy therefor shall be entitled to one vote for
each $1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not outstanding and ruled by the chairman
of the meeting to be not outstanding. The chairman of the meeting shall have
no right to vote other than by virtue of Securities held by him or instruments
in writing as aforesaid duly designating him as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
(d) The Persons entitled to vote a majority in principal
amount of the outstanding Securities shall constitute a quorum for a meeting of
holders of Securities; provided, however, that if any action is to be taken at
such meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding
Securities, the Persons holding or representing such specified percentage in
principal amount of the outstanding Securities will constitute a quorum. In
the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of holders of
Securities, be dissolved. In any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any
such adjourned meeting, such adjourned meeting may be further adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior the adjournment of such adjourned meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 8.02, except that
such notice need be given only once not less than five days prior the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above,
of the principal amount of the outstanding Securities which shall constitute a
quorum.
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(e) Except as limited by the first proviso to the first
paragraph of Section 9.02, any resolution presented to a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid may be
adopted by the affirmative vote of the holders of a majority in principal
amount of the outstanding Securities; provided, however, that, except as
limited by the first proviso to the first paragraph of Section 9.02, any
resolution with respect to any consent, waiver, request, demand, notice,
authorization, direction or other action which this Indenture expressly
provides may be given by the holders of not less than a specified percentage in
principal amount of the outstanding Securities may be adopted at a meeting or
an adjourned meeting duly reconvened and at which a quorum is present as
aforesaid only by the affirmative vote of the holders of not less than such
specified percentage in principal amount of the outstanding Securities.
(f) Any resolution passed or decision taken at any meeting of
holders of Securities duly held in accordance with this Section shall be
binding on all the holders of Securities whether or not present or represented
at the meeting.
SECTION 8.06. Voting.
The vote upon any resolution submitted to any meeting of
holders of Securities shall be by written ballots on which shall be subscribed
the signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 8.02. The record shall show the serial numbers
of the Securities voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent chairman and
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secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting. The holders of the
Initial Securities and the Exchange Securities shall vote for all purposes as a
single class.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any
time amend this Indenture, without the consent of the Securityholders, for one
or more of the following purposes:
(a) to evidence the succession of another corporation to
the Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article X hereof;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the
Securityholders as the Board of Directors and the Trustee shall
consider to be for the protection of the Securityholders, and to make
the occurrence, or the occurrence and continuance, of a Default in any
of such additional covenants, restrictions or conditions a Default or
an Event of Default permitting the enforcement of all or any of the
remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction
or condition, such amendment may provide for a particular period of
grace after Default (which period may be shorter or longer than that
allowed in the case of other Defaults) or may provide for an immediate
enforcement upon such Default or may limit the remedies available to
the Trustee upon such Default;
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(c) to provide for the issuance under this Indenture of
Securities in coupon form if allowed by law (including Securities
registrable as to principal only) and to provide for exchangeability
of such Securities with the Securities issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture; provided
that any such action shall not materially adversely affect the
interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities;
(f) to make provision for transfer procedures,
certification, book-entry provisions, the form of restricted
securities legends, if any, to be placed on Securities, and all other
matters required pursuant to Section 2.07 or otherwise necessary,
desirable or appropriate in connection with the issuance of Securities
to holders of Capital Securities in the event of a distribution of
Securities by Orion Capital Trust I following a Dissolution Event;
(g) to qualify or maintain qualification of this
Indenture under the Trust Indenture Act; or
(h) to make any change that does not adversely affect the
rights of any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture to effect such amendment, to make
any further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own
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rights, duties or immunities under this Indenture or otherwise.
Any amendment to this Indenture authorized by the provisions
of this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. With Consent of Securityholders.
(a) With the consent (evidenced as provided in Section 7.01)
of the holders of a majority in principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time amend this Indenture for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the holders of the Securities; provided, however, that no such
amendment shall without the consent of the holders of each Security then
outstanding and affected hereby (i) extend the Stated Maturity of any Security,
or reduce the rate or extend the time of payment of interest thereon (except as
contemplated by Article XVI), or reduce the principal amount thereof, or reduce
any amount payable on prepayment thereof, or make the principal thereof or any
interest or premium thereon payable in any coin or currency other than that
provided in the Securities, or impair or affect the right of any Securityholder
to institute suit for payment thereof, or (ii) reduce the aforesaid percentage
of Securities the holders of which are required to consent to any such
amendment to this Indenture; provided, however, that if the Securities are held
by Orion Capital Trust I, such amendment shall not be effective until the
holders of a majority in liquidation amount of Trust Securities shall have
consented to such amendment; provided, further, that if the consent of the
holder of each outstanding Security is required, such amendment shall not be
effective until each holder of the Trust Securities shall have consented to
such amendment.
(b) Upon the request of the Company accompanied by a copy of
a resolution of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture affecting
such amendment, and upon the filing with the Trustee of evidence of the consent
of Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such
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supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
(c) Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, prepared by the Company, setting forth in general terms the substance
of such supplemental indenture, to the Securityholders as their names and
addresses appear upon the Security Register. Any failure of the Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
(d) It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect
of Supplemental Indentures.
Any supplemental indenture executed pursuant to the provisions
of this Article IX shall comply with the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article IX, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined, exercised
and enforced hereunder, subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of
any supplemental indenture affecting such series pursuant to the provisions of
this Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company
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or the Trustee shall so determine, new Securities so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee or the Authenticating
Agent and delivered in exchange for the Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee.
(a) The Trustee, subject to the provisions of Sections 6.01
and 6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.
(b) The Trustee may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article is authorized or permitted by, and conforms to, the terms of this
Article and that it is proper for the Trustee under the provisions of this
Article to join in the execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or
into any other Person (whether or not affiliated with the Company, as the case
may be), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company or its successor
or successors as an entirety, or substantially as an entirety, to any other
Person (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided, that (a) the
Company is the surviving Person or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which such
sale, conveyance, transfer or lease of property is made is a Person organized
and existing under the
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laws of the United States or any State thereof or the District of Columbia, and
(b) upon any such consolidation, merger, sale, conveyance, transfer or lease,
the due and punctual payment of the principal of (and premium, if any) and
interest on the Securities according to their tenor and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture to be kept or performed by the Company shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the Person formed by such consolidation, or
into which the Company shall have been merged, or by the Person which shall
have acquired such property, and (c) after giving effect to such consolidation,
merger, sale, conveyance, transfer or lease, no Default or Event of Default
shall have occurred and be continuing.
SECTION 10.02. Successor Corporation to be Substituted for
Company.
In case of any such consolidation, merger, conveyance or
transfer and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the Trustee, of the due and punctual payment of the principal of (and premium,
if any) and interest on all of the Securities and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Company, such successor Person
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the party of the first part, and the Company
thereupon shall be relieved of any further liability or obligation hereunder or
upon the Securities. Such successor Person thereupon may cause to be signed,
and may issue either in its own name or in the name of Orion Capital
Corporation, any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor Person instead of
the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Securities which previously shall have been signed and delivered
by the officers of the Company to the Trustee or the Authenticating Agent for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee or the
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Authenticating Agent for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
SECTION 10.03. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or lease, and any assumption,
permitted or required by the terms of this Article X, complies with the
provisions of this Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for
cancellation all Securities theretofore authenticated (other than any
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.08) and not theretofore
cancelled, or (b) all the Securities not theretofore cancelled or delivered to
the Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
prepayment within one year under arrangements satisfactory to the Trustee for
the giving of notice of prepayment, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay on the Stated Maturity or upon
prepayment all of the Securities (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.08) not theretofore cancelled or delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or
to become due to the Stated Maturity or prepayment date, as the case may be,
but excluding, however, the amount of any moneys for the payment of principal
(or premium, if any) or interest on the Securities (1) theretofore repaid to
the Company in accordance with the provisions of Section 11.04, or (2) paid to
any State or to the District of Columbia pursuant to its unclaimed property or
similar laws, and if in either case the
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Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect except for
the provisions of Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and
11.04 hereof, which shall survive until such Securities shall mature and be
paid. Thereafter, Sections 6.06, 6.10 and 11.04 shall survive, and the
Trustee, on demand of the Company accompanied by any Officers' Certificate and
an Opinion of Counsel, to the effect that all conditions to the satisfaction
and discharge of this Indenture have been satisfied, and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture, the Company, however, hereby
agreeing to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred by the Trustee in connection with this
Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to be Held in
Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys and
U.S. Government Obligations deposited with the Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its
own paying agent), to the holders of the particular Securities for the payment
of which such moneys or U.S. Government Obligations have been deposited with
the Trustee, of all sums due and to become due thereon for principal (premium,
if any) and interest.
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 11.05 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 outstanding Securities.
SECTION 11.03. Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Securities (other than the Trustee)
shall, upon written demand of the Company, be repaid to it or paid to the
Trustee, and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
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SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of (or premium, if any, on) or interest on
Securities and not applied but remaining unclaimed by the holders of Securities
for two years after the date upon which the principal of (or premium, if any,
on) or interest on such Securities, as the case may be, shall have become due
and payable, shall be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Securities shall thereafter
look only to the Company for any payment which such holder may be entitled to
collect and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as
defined below) from its obligations with respect to the Securities on the 123rd
day after the applicable conditions set forth below have been satisfied with
respect to the Securities:
(a) The Company shall have deposited or caused to be
deposited irrevocably with the Trustee or the Defeasance Agent (as
defined below) as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the holders of
the Securities (i) money in an amount, or (ii) U.S. Government
Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide, not later
than one Business Day before the due date of any payment, money in an
amount, or (iii) a combination of (i) and (ii), sufficient, in the
opinion (with respect to (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee and the Defeasance
Agent, if any, to pay and discharge each installment of principal of
(and premium, if any) and interest on the outstanding Securities on
the dates such installments of principal, premium or interest are due;
(b) if the Securities are then listed on any national
securities exchange, the Company shall have delivered to the Trustee
and the Defeasance Agent, if
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any, an Opinion of Counsel to the effect that the exercise of the
option under this Section 11.05 would not cause such Securities to be
delisted from such exchange;
(c) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit; and
(d) the Company shall have delivered to the Trustee and
the Defeasance Agent, if any, an Opinion of Counsel to the effect that
holders of the Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of the exercise
of the option under this Section 11.05 and will be subject to United
States federal income tax in the same amount and in the same manner
and at the same times as would have been the case if such option had
not been exercised, and such opinion shall be accompanied by a private
letter ruling to that effect received from the United States Internal
Revenue Service or a revenue ruling pertaining to a comparable form of
transaction to that effect published by the United States Internal
Revenue Service.
"Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Securities and
to have satisfied all the obligations under this Indenture relating to the
Securities (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except (A) the rights of holders of
Securities to receive, from the trust fund described in clause (1) above,
payment of the principal of (and premium, if any) and the interest on the
Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which
is eligible to act as Trustee hereunder and which assumes all of the
obligations of the Trustee necessary to enable the Trustee to act hereunder.
In the event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(a) The Trustee shall have approval rights over the
document appointing such Defeasance Agent and the
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document setting forth such Defeasance Agent's rights and
responsibilities; and
(b) The Defeasance Agent shall provide verification to
the Trustee acknowledging receipt of sufficient money and/or U.S.
Government Obligations to meet the applicable conditions set forth in
this Section 11.05.
SECTION 11.06. Reinstatement.
If the Trustee or any Defeasance Agent is unable to apply any
money in accordance with Section 11.05 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section ll.05 until
such time as the Trustee or any Defeasance Agent is permitted to apply all such
money in accordance with Section 11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of (or premium,
if any) or interest on any Security, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture, or in any Security, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or of any successor Person to the Company,
either directly or through the Company, any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of
2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company and as to any successor
Person.
SECTION 13.04. Address for Notices, etc.
Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the
purpose) to the Company, 600 Fifth Avenue, 24th Floor, New York, New York
10020, Attention: Michael P. Maloney, Esq., Senior Vice President, General
Counsel and Secretary. Any notice, direction, request or demand by any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the office of
the Trustee, The Bank of New York, 101 Barclay Street, Floor 21W, New York, New
York, 10286, Attention: Corporate Trust Administration.
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SECTION 13.05. Governing Law.
This Indenture and each Security shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance with the laws of said State,
without regard to conflicts of laws principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (1) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
SECTION 13.07. Business Days.
In any case where the date of payment of principal of (or
premium, if any) or interest on the Securities will not be a Business Day, the
payment of such principal of (or premium, if any) or interest on the Securities
need not be made on such date but may be made on the next succeeding Business
Day, with the same force and effect as if made on the date of payment and no
interest shall accrue for the period from and after such date.
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SECTION 13.08. Trust Indenture Act to Control.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this
Indenture which is required to be included in this Indenture by any of Sections
310 to 317, inclusive, of the Trust Indenture Act of 1939, such required
provision shall control.
SECTION 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.10. Execution in Counterparts.
This 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 13.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Securities 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 provision of this Indenture or of
the Securities, but this Indenture and the Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of
its rights or obligations under this Indenture to a direct or indirect wholly
owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject
to the foregoing, the Indenture is binding upon and inures to the benefit of
the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.
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SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Securities
held by Orion Capital Trust I or a trustee of such Trust, if the Property
Trustee of such Trust fails to enforce its rights under this Indenture as the
holder of the Securities held as the assets of Orion Capital Trust I, any
holder of Capital Securities may institute legal proceedings directly against
the Company to enforce such Property Trustee's rights under this Indenture
without first instituting any legal proceedings against such Property Trustee
or any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of (or premium, if any) or interest on
the Securities when due, the Company acknowledges that a holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of (or premium, if any) or interest on the
Securities having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder on or after the respective due date
specified in the Securities.
ARTICLE XIV
CONDITIONAL RIGHT TO SHORTEN MATURITY;
PREPAYMENT OF SECURITIES -- NO SINKING FUND
SECTION 14.01. Special Event Prepayment.
If a Special Event has occurred and is continuing,
then the Company shall have the right, notwithstanding Section 14.02(a) but
subject to Section 14.02(b), upon (i) not less than 45 days written notice to
the Trustee and (ii) not less than 30 days nor more than 60 days written notice
to the Securityholders, to prepay the Securities, in whole (but not in part),
at any time within 90 days following the occurrence of such Special Event, at
the Special Event Prepayment Price. Following a Special Event, the Company
shall take such action as is necessary promptly to determine the Special Event
Prepayment Price, including without limitation the appointment by the Company
of a Quotation Agent. The Special Event Prepayment Price shall be paid prior
to 12:00 noon, New York City time, on the date of such prepayment or such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an
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amount sufficient to pay the Special Event Prepayment Price by 10:00 a.m., New
York City time, on the date such Special Event Prepayment Price is to be paid.
SECTION 14.02. Optional Prepayment by Company.
(a) Subject to the provisions of this Article
XIV, the Company shall have the right to prepay the Securities, in whole or in
part, from time to time, on or after January 1, 2007, at the optional
prepayment price equal to the outstanding principal amount of the Securities to
be prepaid, plus accrued and unpaid interest thereon (including Additional Sums
and Compounded Interest, if any) to the applicable date of prepayment (the
"Optional Prepayment Price").
If the Securities are only partially prepaid pursuant
to this Section 14.02, the Securities to be prepaid will be chosen pro rata or
by lot or by any other method utilized by the Trustee; provided that, as to
Securities registered as a Global Security at the time of prepayment, the
Depositary shall determine, in accordance with its procedures, the principal
amount of such Securities held by each holder of a Security to be prepaid. The
Optional Prepayment Price shall be paid prior to 12:00 noon, New York City
time, on the date of such prepayment or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Prepayment Price by 10:00 a.m., New York time,
on the date such Optional Prepayment Price is to be paid.
(b) Notwithstanding the first sentence of Section
14.02(a), upon the entry of an order for dissolution of Orion Capital Trust I
by a court of competent jurisdiction, the Securities thereafter will be subject
to optional prepayment, in whole only, but not in part, on or after January 1,
2007, at the optional prepayment price set forth in Section 14.02(a) and
otherwise in accordance with this Article XIV.
SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking
fund.
SECTION 14.04. Notice of Prepayment; Selection of Securities.
In case the Company shall desire to exercise the right to
prepay all, or, as the case may be, any part of the
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Securities in accordance with their terms, it shall fix a date for prepayment
and shall mail a notice of such prepayment at least 30 and not more than 60
days prior to the date fixed for prepayment to the holders of Securities so to
be prepaid as a whole or in part at their last addresses as the same appear on
the Security Register. Such mailing shall be by first class mail. The notice
if mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice. In any case,
failure to give such notice by mail or any defect in the notice to the holder
of any Security designated for prepayment as a whole or in part shall not
affect the validity of the proceedings for the prepayment of any other
Security.
Each such notice of prepayment shall specify the CUSIP number
of the Securities to be prepaid, the date fixed for prepayment, the prepayment
price at which the Securities are to be prepaid (or the method by which such
prepayment price is to be calculated), the place or places of payment that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for prepayment will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be prepaid will cease to accrue. If less than all the Securities are
to be prepaid the notice of prepayment shall specify the numbers of the
Securities to be prepaid. In case any Security is to be prepaid in part only,
the notice of prepayment shall state the portion of the principal amount thereof
to be prepaid and shall state that on and after the date fixed for prepayment,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unprepaid portion thereof will be issued.
Prior to 10:00 a.m., New York City time, on the prepayment date
specified in the notice of prepayment given as provided in this Section, the
Company will deposit with the Trustee or with one or more paying agents an
amount of money sufficient to prepay on the prepayment date all the Securities
so called for prepayment at the appropriate Prepayment Price, together with
accrued interest to the date fixed for prepayment.
The Company will give the Trustee notice not less than 45 days
prior to the prepayment date as to the aggregate principal amount of Securities
to be prepaid and the Trustee shall select, in such manner as in its sole
discretion it shall deem appropriate and fair, the Securities or portions
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thereof (in integral multiples of $1,000, except as otherwise set forth in the
applicable form of Security) to be prepaid.
SECTION 14.05. Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section
14.04, the Securities or portions of Securities with respect to which such
notice has been given shall become due and payable on the date and at the place
or places stated in such notice at the applicable Prepayment Price, together
with interest accrued to the date fixed for prepayment (subject to the rights of
holders of Securities on the close of business on a Regular Record Date in
respect of an Interest Payment Date occurring on or prior to the prepayment
date), and on and after said date (unless the Company shall default in the
payment of such Securities at the Prepayment Price, together with interest
accrued to said date) interest on the Securities or portions of Securities so
called for prepayment shall cease to accrue. On presentation and surrender of
such Securities at a place of payment specified in said notice, the said
Securities or the specified portions thereof shall be paid and prepaid by the
Company at the applicable Prepayment Price, together with interest accrued
thereon to the date fixed for prepayment (subject to the rights of holders of
Securities on the close of business on a Regular Record Date in respect of an
Interest Payment Date occurring on or prior to the prepayment date).
Upon presentation of any Security prepaid in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations, in principal amount equal to the
unprepaid portion of the Security so presented.
SECTION 14.06. Conditional Right to Shorten Maturity.
If a Tax Event occurs, then the Company will have the right,
prior to the termination of the Trust, either (i) to shorten the Stated Maturity
of the Securities to the minimum extent required, but not to a date earlier than
January 1, 2017, such that, in the written opinion of counsel experienced in
such matters delivered to the Company, after shortening the Stated Maturity,
interest paid on the Securities shall be deductible for federal income tax
purposes (the action referred to above being referred to herein as a "Tax Event
Maturity Shortening") or (ii) to prepay the Securities. The circumstances under
which the
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Company has the right to prepay the Securities in connection with a Tax Event
is referred to herein as a "Conditional Tax Redemption Event" and, since a
Conditional Tax Redemption Event is deemed to be a Special Event, the
Securities shall then be subject to prepayment in accordance with the
provisions of Section 14.01.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Securities issued hereunder likewise covenants and agrees, that the Securities
shall be issued subject to the provisions of this Article XV; and each holder
of a Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of (and premium,
if any) and interest on all Securities issued hereunder shall, to the extent
and in the manner hereinafter set forth, be subordinated and junior in right of
payment to the prior payment in full of the Senior Indebtedness, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence
of any Default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case,
no payment shall be made by the Company with respect to the principal
(including prepayment) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the
Securities, then no payment shall be made by the Company with respect to the
principal (including prepayments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the time
of
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such acceleration shall receive payment in full of all amounts due in respect
of such Senior Indebtedness (including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent of the amounts due in respect of such Senior Indebtedness and only to
the extent that the holders of the Senior Indebtedness (or their representative
or representatives or a trustee) notify the Trustee in writing, within 90 days
of such payment, of the amounts then due and owing on such Senior Indebtedness
and only the amounts specified in such notice to the Trustee shall be paid to
the holders of such Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due upon
all Senior Indebtedness of the Company shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Securities; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Securityholders or the Trustee would be entitled to
receive from the Company, except for the provisions of this Article XV, shall
be paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Securityholders or by the Trustee under this Indenture if received by them or
it, directly to the holders of Senior Indebtedness of the Company (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by
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the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all amounts in respect of Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, and their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all amounts due in
respect of such Senior Indebtedness in full in money in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XV with respect to the Securities to the payment of Senior Indebtedness
that may at the time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the sale, conveyance, transfer or lease of
its property as an entirety, or
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substantially as an entirety, to another Person upon the terms and conditions
provided for in Article X of this Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section
15.03 if such other Person shall, as a part of such consolidation, merger,
sale, conveyance, transfer or lease, comply with the conditions stated in
Article X of this Indenture. Nothing in Section 15.02 or in this Section 15.03
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.05 of this Indenture.
SECTION 15.04. Subrogation.
Subject to the payment in full of all amounts due in respect
of Senior Indebtedness, the rights of the Securityholders shall be subrogated
to the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any) and interest on the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this Article
XV to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of
the Securities, be deemed to be a payment by the Company to or on account of
such Senior Indebtedness. It is understood that the provisions of this Article
XV are and are intended solely for the purposes of defining the relative rights
of the holders of the Securities, on the one hand, and the holders of such
Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Securities
the principal of (and premium, if any) and interest on the Securities as and
when the same shall become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the holders of the
Securities and creditors of the Company, as
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the case may be, other than the holders of Senior Indebtedness of the Company,
as the case may be, nor shall anything herein or therein prevent the Trustee or
the holder of any Security from exercising all remedies otherwise permitted by
applicable law upon a Default under this Indenture, subject to the rights, if
any, under this Article XV of the holders of such Senior Indebtedness in
respect of cash, property or securities of the Company, as the case may be,
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee, subject to the provisions of
Article VI of this Indenture, and the Securityholders shall be entitled
conclusively to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders,
for the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV. Notwithstanding the
provisions of this Article XV or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by
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the Trustee in respect of the Securities pursuant to the provisions of this
Article XV, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 15.06 at least three Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary
that may be received by it within three Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled conclusively to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee and the Securityholders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
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reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XV, and
no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Article VI of this
Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company or by any act or failure to act, in good faith, by
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any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the holders of the Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.
(a) So long as no Event of Default has occurred
and is continuing, the Company shall have the right, at any time and from time
to time during the term of the Securities, to defer payments of interest by
extending the interest payment period of such Securities for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period (as set forth in Section
16.02(c)) (the "Extension Period"), during which Extension Period no interest
shall be due and payable, provided that no Extension Period may extend beyond
the Stated Maturity. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 16.01, will bear interest thereon at
the Coupon Rate
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compounded semi-annually for each semi-annual period of the Extension Period
("Compounded Interest"). At the end of the Extension Period, the Company shall
pay all interest accrued and unpaid on the Securities, including any Additional
Sums and Compounded Interest (together, "Deferred Interest") that shall be
payable to the holders of the Securities in whose names the Securities are
registered in the Security Register on the first record date immediately
preceding the end of the Extension Period.
(b) During any such Extension Period, the Company may not,
and may not permit any Subsidiary to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any Subsidiary of the
Company if such guarantee ranks pari passu with or junior in right of payment to
the Securities (other than (a) dividends or distributions in shares of or
options, warrants or rights to subscribe for or purchase shares of, common stock
of the Company, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the prepayment or repurchase of any such rights
pursuant thereto, (c) payments under the Capital Securities Guarantee, (d) as a
direct result of, and only to the extent necessary to avoid the issuance of
fractional shares of the Company's capital stock following, a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (e) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, and (f)
purchases of common stock related to the issuance of common stock or rights
under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans). None of the
Company's Subsidiaries will be prohibited from declaring and paying cash
distributions with respect to its capital stock or from making payments with
respect to its debt securities.
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(c) Before the termination of any such Extension Period,
the Company may further defer payments of interest by further extending such
period, provided that such period, together with all such previous and further
extensions within such Extension Period, shall not exceed 10 consecutive
semi-annual periods, including the first such semi-annual period during such
Extension Period, or extend beyond the Stated Maturity. Upon the termination
of any Extension Period and the payment of all Deferred Interest then due, the
Company may elect to commence a new Extension Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extension Period.
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder
of the Securities at the time the Company selects an Extension Period, the
Company shall give written notice to the Administrative Trustees, the Property
Trustee and the Trustee of its selection of such Extension Period at least 5
Business Days before the earlier of (i) the next succeeding date on which
distributions on the Trust Securities issued by Orion Capital Trust I are
payable, or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to any national securities
exchange or to holders of the Capital Securities issued by the Trust, but in
any event at least 5 Business Days before such record date.
(b) If the Property Trustee is not the only holder of the
Securities at the time the Company selects an Extension Period, the Company
shall give the holders of the Securities and the Trustee written notice of its
selection of such Extension Period at least 10 Business Days before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the Company
is required to give notice of the record or payment date of such interest
payment to any national securities exchange.
(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 16.02 shall be counted as one
of the 10 semi-annual periods permitted in the maximum Extension Period
permitted under Section 16.01. There is no limitation on the number of times
that the Company may elect to begin an Extension Period.
The Bank of New York hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
ORION CAPITAL CORPORATION
By/s/ Michael P. Maloney
------------------------------------
Name: Michael P. Maloney, Esq.
Title: Senior Vice President,
General Counsel and
Secretary
THE BANK OF NEW YORK, as Trustee
By/s/ Walter Gitlin
------------------------------------
Name: Walter Gitlin
Title: Vice President
<PAGE> 100
EXHIBIT A
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS (A) THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND (B) ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC (AND
ANY PAYMENT HEREON 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 SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
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(C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, AND (ii) PURSUANT TO
CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO
THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
No. CUSIP No.
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<PAGE> 102
ORION CAPITAL CORPORATION
8.73% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JANUARY 1, 2037
Orion Capital Corporation, a Delaware corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to The
Bank of New York, as Property Trustee, or registered assigns, the principal sum
of $_____________ on January 1, 2037 (the "Stated Maturity"), unless the Stated
Maturity is shortened under certain circumstances described herein or this
Debenture is previously prepaid, and to pay interest on the outstanding
principal amount hereof from January 13, 1997, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually (subject to deferral as set forth
herein) in arrears on January 1 and July 1 of each year, commencing July 1,
1997, at the rate of 8.73% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded semi-annually. 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 and, for any period less than 6 months, the actual
months elapsed and the actual days elapsed in a partial month in such period.
In the event that any date on which the principal of (or premium, if any) or
interest on this Security is payable is not a Business Day, then payment
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),
with the same force and effect as if made on such date.
The interest installment so payable, 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 this Security (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the
close of business on the Regular Record Date for such interest installment,
which shall be the 15th day preceding the relevant interest payment date. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the holders on such Regular Record Date and
may be paid to the Person in whose name this
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<PAGE> 103
Security (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the holders of
Securities not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as maybe required by such exchange, all as more fully
provided in the Indenture.
The principal of (and premium, if any) and interest on this
Security shall be payable at the office or agency of the Trustee maintained for
that purpose in any 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;
provided, however, that payment of interest may be made at the option of the
Company by (i) check mailed to the holder at such address as shall appear in
the Security Register or (ii) by transfer to an account maintained by the
Person entitled thereto, provided that proper written transfer instructions
have been received by the relevant record date. Notwithstanding the foregoing,
so long as the Holder of this Security is the Property Trustee, the payment of
the principal of (and premium, if any) and interest on this Security will be
made at such place and to such account as may be designated by the Property
Trustee.
The indebtedness evidenced by this Security is unsecured and,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of Senior Indebtedness, and this Security
is issued subject to the provisions of the Indenture with respect thereto.
Each holder of this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each holder hereof, by his
or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
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<PAGE> 104
This Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
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<PAGE> 105
The provisions of this Security are continued on the reverse
side hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
he executed.
ORION CAPITAL CORPORATION
By:_________________________
Name:
Title:
Attest:
By:________________________
Name:
Title:
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<PAGE> 106
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated______________________
THE BANK OF NEW YORK, as Trustee
By:________________________
Authorized Signatory
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<PAGE> 107
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of January
13, 1997 (the "Indenture"), duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"), to which Indenture reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Special Event, the
Company shall have the right to prepay this Security in whole (but not in part)
at the Special Event Prepayment Price. "Special Event Prepayment Price" shall
mean, with respect to any prepayment of the Securities following a Special
Event, an amount in cash equal to the greater of (i) 100% of the principal
amount to be prepaid or (ii) the sum, as determined by a Quotation Agent, of
the present values of the remaining scheduled payments of principal and
interest thereon to January 1, 2007, the first day on which this Security is
subject to optional prepayment, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months
and, for any period less than 6 months, the actual months elapsed and the
actual days elapsed in a partial month in such period) at the Adjusted Treasury
Rate, plus, in each case, any accrued and unpaid interest thereon, including
Compounded Interest, Additional Interest and Additional Sums, if any, to the
date of such prepayment.
In addition, the Company shall have the right to prepay this
Security, in whole or in part, at any time on or after January 1, 2007 (an
"Optional Prepayment"), at the Optional Prepayment Price equal to the principal
amount of this Security plus accrued and unpaid interest thereon (including
Compounded Interest and Additional Sums, if any) to the applicable date of
prepayment.
The Special Event Prepayment Price and the Optional Prepayment
Price, as the case requires, shall be paid prior to 12:00 noon, New York time,
on the date of such prepayment or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Prepayment Price by 10:00 a.m., New York City
time, on the date such Prepayment Price
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<PAGE> 108
is to be paid. Any prepayment pursuant to this paragraph will be made upon not
less than 30 days nor more than 60 days notice. If the Securities are only
partially prepaid by the Company pursuant to an Optional Prepayment, the
Securities to be prepaid will be chosen by lot or by any other method utilized
by the Trustee; provided that, as to Securities registered as a Global Security
at the time of prepayment, the Depositary shall determine the particular
Securities to be prepaid in accordance with its procedures.
In the event of prepayment of this Security in part only, a
new Security or Securities for the unprepaid portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
If a Tax Event occurs, then the Company will have the right,
prior to the termination of the Trust, either (i) to shorten the Stated
Maturity of this Security to the minimum extent, but not earlier than January
1, 2017, such that, in the written opinion of counsel experienced in such
matters delivered to the Company, after shortening the Stated Maturity,
interest paid on the Securities shall be deductible for federal income tax
purposes or (ii) to prepay the Securities.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Securities
may be declared, and upon such declaration shall become, due and payable, in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of a majority in principal amount
of the Securities at the time outstanding, as defined in the Indenture, to
execute supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Stated Maturity of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on prepayment thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of
the Indenture), or make the principal of, or interest or premium on, the
Securities payable in any coin or
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<PAGE> 109
currency other than U.S. dollars, or impair or affect the right of any holder
of Securities to institute suit for the payment thereof, or (ii) reduce the
aforesaid percentage of Securities, the holders of which are required to
consent to any such supplemental indenture. The Indenture also contains
provisions permitting the holders of a majority in principal amount of the
Securities at the time outstanding affected thereby, on behalf of all of the
holders of the Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a Default in the payment of the
principal of or premium, if any, or interest on any of the Securities or a
Default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future holders and owners of this Security and of
any Security issued in exchange heretofore or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the time and place and at the
rate and in the money herein prescribed.
As long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time and from time to time during the
term of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (an "Extension Period"), during which Extension Period no
interest shall be due and payable, provided that no Extension Period may extend
beyond the Stated Maturity of the Securities. At the end of the Extension
Period, the Company shall pay all interest then accrued and unpaid, together
with deferred interest thereon at the rate specified for the Securities (to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extension Period, the Company may further
defer payments of interest by further extending such Extension Period, provided
that such Extension
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<PAGE> 110
Period, together with all such previous and further extensions within such
Extension Period, shall not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extension Period, or extend beyond the
Stated Maturity of the Securities. Upon the termination of any such Extension
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
The Company has agreed that, if at any time (i) there shall
have occurred any event of which the Company has actual knowledge that (a) is,
or with the giving of notice or the lapse of time, or both, would be, an Event
of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) if such Securities are held by Orion Capital
Trust I, the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee, or (iii) the Company shall
have given notice of its election of the exercise of its right to extend the
interest payment period and any such extension shall be continuing, then the
Company will not, and will not permit any Subsidiary to,
(i) declare or pay any dividends or distributions on, or
prepay, purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock) (which includes common and
preferred stock);
(ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or prepay any debt securities of the
Company that rank pari passu with or junior in right of payment to the
Securities; or
(iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities or any Subsidiary of
the Company if such guarantee ranks pari passu or junior in right of
payment to the Securities
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholder rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto,
(c) payments under the Capital Securities Guarantee, (d) as a direct result of,
and
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<PAGE> 111
only to the extent necessary to avoid the issuance of fractional shares of the
Company's capital stock following, a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the exchange or conversion of such capital stock or the security
being exchanged or converted, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans. None of the Company's Subsidiaries will be prohibited from
declaring and paying cash distributions with respect to its capital stock or
from making payments with respect to its debt securities.
The Company will have the right at any time to dissolve Orion
Capital Trust I and cause the Securities to be distributed to the holders of
the Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without
coupons in denominations of $1,000.00 and any integral multiple thereof. As
provided in the Indenture and subject to the transfer restrictions limitations
as may be contained herein and therein from time to time, this Security is
transferable by the holder hereof on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any paying agent and the registrar may deem
and treat the holder hereof as the absolute owner hereof (whether or not this
Security shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the
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<PAGE> 112
Security registrar) for the purpose of receiving payment of or on account of
the principal hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any paying agent
nor any registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or premium, if any, or interest on this Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or director, past,
present or future, as such, of the Company or of any predecessor or successor
Person, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAW PROVISIONS THEREOF.
A-13
<PAGE> 1
Exhibit 4.2
FORM OF EXCHANGE DEBENTURE
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS (A) THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND (B) ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC (AND ANY PAYMENT HEREON 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 SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
<PAGE> 2
No. E _____ CUSIP No.
ORION CAPITAL CORPORATION
8.73% EXCHANGE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE
DUE JANUARY 1, 2037
Orion Capital Corporation, a Delaware corporation (the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay
to_________________________ or registered assigns, the principal sum of
_______________ ($ ) Dollars on January 1, 2037 (the "Stated Maturity"),
unless the Stated Maturity is shortened under certain circumstances described
herein or this Debenture is previously prepaid, and to pay interest on the
outstanding principal amount hereof from January 13, 1997, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, semi-annually (subject to
deferral as set forth herein) in arrears on January 1 and July 1 of each year,
commencing July 1, 1997, at the rate of 8.73% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded semi-annually. 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 and, for any period less than 6 months,
the actual months elapsed and the actual days elapsed in a partial month in such
period. In the event that any date on which the principal of (or premium, if
any) or interest on this Security is payable is not a Business Day, then payment
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),
with the same force and effect as if made on such date.
The interest installment so payable, 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 this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of
business on the Regular Record Date for such interest
-2-
<PAGE> 3
installment, which shall be the 15th day preceding the relevant interest payment
date. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the holders on such Regular Record Date
and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the holders of Securities not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in any 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; provided,
however, that payment of interest may be made at the option of the Company by
(i) check mailed to the holder at such address as shall appear in the Security
Register or (ii) by transfer to an account maintained by the Person entitled
thereto, provided that proper written transfer instructions have been received
by the relevant record date. Notwithstanding the foregoing, so long as the
Holder of this Security is The Bank of New York, as Property Trustee under the
Amended and Restated Declaration of Trust dated as of January 13, 1997, or a
successor Property Trustee (the "Property Trustee"), the payment of the
principal of (and premium, if any) and interest on this Security will be made at
such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Security is unsecured and, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by
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<PAGE> 4
his or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to he
executed.
ORION CAPITAL CORPORATION
By:_______________________________
Name:
Title:
Attest:
By:_______________________________
Name:
Title:
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<PAGE> 5
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated _______________________________
THE BANK OF NEW YORK, as Trustee
By: _______________________________
Authorized Signatory
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<PAGE> 6
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of January
13, 1997 (the "Indenture"), duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"), to which Indenture reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Special Event, the Company
shall have the right to prepay this Security in whole (but not in part) at the
Special Event Prepayment Price. "Special Event Prepayment Price" shall mean,
with respect to any prepayment of the Securities following a Special Event, an
amount in cash equal to the greater of (i) 100% of the principal amount to be
prepaid or (ii) the sum, as determined by a Quotation Agent, of the present
values of the remaining scheduled payments of principal and interest thereon to
January 1, 2007, the first day on which this Security is subject to optional
prepayment, discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months and, for any period less than 6
months, the actual months elapsed and the actual days elapsed in a partial month
in such period) at the Adjusted Treasury Rate, plus, in each case, any accrued
and unpaid interest thereon, including Compounded Interest, Additional Interest
and Additional Sums, if any, to the date of such prepayment.
In addition, the Company shall have the right to prepay this
Security, in whole or in part, at any time on or after January 1, 2007 (an
"Optional Prepayment"), at the Optional Prepayment Price equal to the principal
amount of this Security plus accrued and unpaid interest thereon (including
Compounded Interest and Additional Sums, if any) to the applicable date of
prepayment.
The Special Event Prepayment Price and the Optional Prepayment
Price, as the case requires, shall be paid prior to 12:00 noon, New York time,
on the date of such prepayment or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Prepayment Price by 10:00 a.m., New York City
time, on the date such Prepayment Price
-6-
<PAGE> 7
is to be paid. Any prepayment pursuant to this paragraph will be made upon not
less than 30 days nor more than 60 days notice. If the Securities are only
partially prepaid by the Company pursuant to an Optional Prepayment, the
Securities to be prepaid will be chosen by lot or by any other method utilized
by the Trustee; provided that, as to Securities registered as a Global Security
at the time of prepayment, the Depositary shall determine the particular
Securities to be prepaid in accordance with its procedures.
In the event of prepayment of this Security in part only, a new
Security or Securities for the unprepaid portion hereof will be issued in the
name of the holder hereof upon the cancellation hereof.
If a Tax Event occurs, then the Company will have the right, prior
to the termination of the Trust, either (i) to shorten the Stated Maturity of
this Security to the minimum extent, but not earlier than January 1, 2017, such
that, in the written opinion of counsel experienced in such matters delivered to
the Company, after shortening the Stated Maturity, interest paid on the
Securities shall be deductible for federal income tax purposes or (ii) to prepay
the Securities.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in principal amount of
the Securities at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the holders of the Securities; provided,
however, that no such supplemental indenture shall, without the consent of each
holder of Securities then outstanding and affected thereby, (i) extend the
Stated Maturity of any Securities, or reduce the principal amount thereof, or
reduce any amount payable on prepayment thereof, or reduce the rate or extend
the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the
Securities payable in any coin or
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<PAGE> 8
currency other than U.S. dollars, or impair or affect the right of any holder of
Securities to institute suit for the payment thereof, or (ii) reduce the
aforesaid percentage of Securities, the holders of which are required to consent
to any such supplemental indenture. The Indenture also contains provisions
permitting the holders of a majority in principal amount of the Securities at
the time outstanding affected thereby, on behalf of all of the holders of the
Securities, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture, and its
consequences, except a Default in the payment of the principal of or premium, if
any, or interest on any of the Securities or a Default in respect of any
covenant or provision under which the Indenture cannot be modified or amended
without the consent of each holder of Securities then outstanding. Any such
consent or waiver by the holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future holders and owners of this Security and of any Security issued in
exchange heretofore or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the time and place and at the
rate and in the money herein prescribed.
As long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (an "Extension Period"), during which Extension Period no
interest shall be due and payable, provided that no Extension Period may extend
beyond the Stated Maturity of the Securities. At the end of the Extension
Period, the Company shall pay all interest then accrued and unpaid, together
with deferred interest thereon at the rate specified for the Securities (to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extension Period, the Company may further
defer payments of interest by further extending such Extension Period,
provided that such Extension
-8-
<PAGE> 9
Period, together with all such previous and further extensions within such
Extension Period, shall not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extension Period, or extend beyond the
Stated Maturity of the Securities. Upon the termination of any such Extension
Period and the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
The Company has agreed that, if at any time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) is, or
with the giving of notice or the lapse of time, or both, would be, an Event of
Default and (b) in respect of which the Company shall not have taken reasonable
steps to cure, (ii) if such Securities are held by Orion Capital Trust I, the
Company shall be in default with respect to its payment of any obligations under
the Capital Securities Guarantee, or (iii) the Company shall have given notice
of its election of the exercise of its right to extend the interest payment
period and any such extension shall be continuing, then the Company will not,
and will not permit any Subsidiary to,
(i) declare or pay any dividends or distributions on, or prepay,
purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock) (which includes common and preferred stock);
(ii) make any payment of principal, interest or premium, if any, on
or repay or repurchase or prepay any debt securities of the Company that
rank pari passu with or junior in right of payment to the Securities; or
(iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities or any Subsidiary of the Company if
such guarantee ranks pari passu or junior in right of payment to the
Securities
other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company, (b)
any declaration of a dividend in connection with the implementation of a
stockholder rights plan, or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a direct result of, and
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<PAGE> 10
only to the extent necessary to avoid the issuance of fractional shares of the
Company's capital stock following, a reclassification of the Company's capital
stock or the exchange or the conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, (e)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the exchange or conversion of such capital stock or the security
being exchanged or converted, and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees or any of the Company's dividend
reinvestment plans. None of the Company's Subsidiaries will be prohibited from
declaring and paying cash distributions with respect to its capital stock or
from making payments with respect to its debt securities.
The Company will have the right at any time to dissolve Orion
Capital Trust I and cause the Securities held by the Property Trustee to be
distributed to the holders of the Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons
in denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Trustee in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any paying agent and the registrar may deem
and treat the holder hereof as the absolute owner hereof (whether or not this
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the
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<PAGE> 11
Security registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
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<PAGE> 1
EXHIBIT 4.3
CERTIFICATE OF TRUST
0F
ORION CAPITAL TRUST I
This certificate of trust of Orion Capital Trust I (the
"Trust"), dated as of January 3, 1997, is being duly executed and filed by the
undersigned, as Delaware trustee, to create a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801, et seq.).
1. Name: The name of the business trust being created hereby
is Orion Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware are as follows:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Second Floor
5-4-82-12
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the Delaware
trustee of the Trust, has executed this Certificate of Trust as of the date
first above written.
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.
Not in its individual capacity
but solely as Delaware Trustee
By: /s/ Richard N. Smith
--------------------------------
Richard N. Smith
Vice President
<PAGE> 1
EXHIBIT 4.4
DECLARATION OF TRUST
OF
ORION CAPITAL TRUST I
THIS DECLARATION OF TRUST ("Declaration") dated and effective
as of January 3, 1997 by the Trustee (as defined herein), the Sponsor (as
defined herein), and by the holders from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustee and the Sponsor desire to establish Orion
Capital Trust I (the "Trust") pursuant to the Delaware Business Trust Act for
the purpose of (a) selling Securities, (b) using the proceeds from the sale of
the Securities to purchase debentures of the Sponsor, (c) making distributions
to holders of the Securities, and (d) engaging only in activities necessary,
advisable or incidental to any of the foregoing.
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Delaware Business Trust
Act and that this Declaration constitute the governing instrument of such
business trust.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration of Trust as
modified, supplemented or amended from time to time;
<PAGE> 2
(d) all references in this Declaration to Articles and
Sections are to Articles and Sections of this
Declaration unless otherwise specified; and
(e) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Certificate of Trust" shall mean the certificate of trust to
be filed pursuant to Section 3810 of the Delaware Business Trust Act.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended
from time to time, or any successor legislation.
"Indemnified Person" has the meaning set forth in Section 4.3
hereof.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Security" means a security representing an undivided
beneficial interest in the assets of the Trust having such rights and with
terms as may be set out in this Declaration or in any amendment or restatement
hereof.
"Sponsor" means Orion Capital Corporation in its capacity as
sponsor of the Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof,
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<PAGE> 3
and all other Persons who may from time to time be duly appointed, qualified
and serving as Trustee in accordance with the provisions hereof, and references
herein to a Trustee or the Trustee shall refer to such Person or Persons solely
in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Orion Capital
Trust I." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Trustee.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Orion
Capital Corporation, 600 Fifth Avenue, New York, NY 10020. At any time, the
Sponsor may designate another principal office of the Trust.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a)
selling Securities, (b) using the proceeds from the sale of the Securities to
purchase debentures of the Sponsor, (c) making distributions to holders of the
Securities, and (d) engaging only in activities necessary, advisable or
incidental to any of the foregoing.
SECTION 2.4 Declaration and Authority.
(a) The Trustee declares that all assets contributed to
the Trust will be held in trust for the benefit of the holders, from
time to time, of the securities representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration. The Sponsor hereby contributes the
sum of $10 to be held by the Trustee hereunder and to which all other
assets of the Trust, from time to time, shall be added.
(b) Subject to the limitations provided in this
Declaration, the Sponsor shall have exclusive and
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complete authority to instruct the Trustee in carrying out the
purposes of the Trust. An action taken by the Trustee in accordance
with such instructions shall constitute the act of and serve to bind
the Trust. In dealing with the Trustee acting on behalf of the Trust,
no person shall be required to inquire into the authority of the
Trustee to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the
Trustee as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustee.
The Sponsor shall have the exclusive power and authority to cause the
Trustee to engage in the following activities:
(a) to issue and sell Securities in accordance with this
Declaration;
(b) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and provide for reasonable
compensation for such services;
(c) to incur expenses which are necessary or incidental
to carry out any of the purposes of this Declaration; and
(d) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On the date of execution of this Declaration, the Trustee
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.
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SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence until January 10, 2041.
SECTION 2.9 Responsibilities of the Sponsor.
The Sponsor shall have the exclusive right and responsibility
to cause the Trustee to issue and sell the Securities, the terms of which shall
be as adopted by resolution of the Sponsor.
SECTION 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a holder of a Security
or any interest therein in accordance with the terms of this Declaration, shall
be deemed to have expressly assented and agreed to the terms of, and shall be
bound by, this Declaration.
ARTICLE III
TRUSTEE
SECTION 3.1 Trustee.
The number of Trustees initially shall be one (1) , and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however, that one Trustee, in the case of a natural person, shall be a person
who is a resident of the State of Delaware or that, if not a natural person, is
an entity which has its principal place of business in the State of Delaware.
SECTION 3.2 Trustee.
The initial Trustee shall be:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Second Floor
5-4-82-12
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(a) A Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents which the Trustee has power and
authority to cause the Trust to execute pursuant to Section 2.6.
SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as
the statements of the Sponsor, and the Trustee does not assume any
responsibility for their correctness. The Trustee makes no representations as
to the value or condition of the property of the Trust or any part thereof.
The Trustee makes no representations as to the validity or sufficiency of this
Declaration.
SECTION 3.6 Compensation of Trustee.
The Sponsor agrees:
(a) to pay the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith;
(c) To the fullest extent possible the parties intend
that Section 3561 of Title 12 of the Delaware Code shall not apply to
the Trust and that compensation paid pursuant to Section 3.6(a) not be
subject to review by any court under Section 3560 of Title 12 of the
Delaware Code.
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ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEE OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions; and
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Securities might properly be
paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
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(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between Covered Persons; or
(ii) whenever this Declaration or any other
agreement contemplated herein or therein provides
that an Indemnified Person shall act in a manner that
is, or provides terms that are, fair and reasonable
to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 4.3 Indemnification.
The Sponsor agrees, to the fullest extent permitted by
applicable law, to indemnify and hold harmless (i) each Trustee, (ii) any
Affiliate of any Trustee, (iii) any
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officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates,
(referred to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor or the Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor and the Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or
opportunity. Any Covered Person and the Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor or may act as depositary for, trustee or agent for or may act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
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ARTICLE V
AMENDMENTS, TERMINATING, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issuance of any Securities, this
Declaration may be amended or restated by, and only by, a written instrument
executed by the Trustee and the Sponsor.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force
or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a Certificate of Dissolution
or its equivalent with respect to the Sponsor or the failure
of the Sponsor to revive its Charter within ten (10) days
following the revocation of the Sponsor's charter or of the
Trust's Certificate of Trust;
(iii) upon the entry of a decree of judicial
dissolution of the Sponsor, or the Trust;
(iv) before the issuance of any Securities, at the
election of the Sponsor; and
(v) upon the expiration of the period set forth in
Section 2.8 hereof.
(b) as soon as is practicable after the occurrence of an
event referred to in Section 5.2(a), the Trustee shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws. The provisions of Section 3540 of
Title 12 of the Delaware Code shall not apply to the Trust.
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SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each party to one of such counterpart signature pages. All such
counterpart signature pages shall be read as though one, and they shall have
the same force and effect as though all of the signers had signed a single
signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year above written.
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.
Not in its individual capacity
but solely as Delaware Trustee
By: /s/ Richard N. Smith
----------------------------------
Richard N. Smith
Vice President
ORION CAPITAL CORPORATION, as Sponsor
By: /s/ Victor L. Matthews
----------------------------------
Victor L. Matthews
Vice President
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<PAGE> 1
EXHIBIT 4.5
_________________________________________
AMENDED AND RESTATED DECLARATION OF TRUST
ORION CAPITAL TRUST I
Dated as of January 13, 1997
_________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I. INTERPRETATION AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II. TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3. Reports by the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.4. Periodic Reports to Property
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5. Evidence of Compliance with
Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.3. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.5. Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.6. Powers and Duties of the
Administrative Trustees . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.7. Prohibition of Actions by the
Trust and the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.8. Powers and Duties of the Property
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.9. Certain Duties and Responsibilities
of the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.10. Certain Rights of Property Trustee . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.11. Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.12. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.13. Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.14. Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IV. SPONSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.1. Sponsor's Purchase of Common
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.2. Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.3. Right to Proceed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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<TABLE>
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ARTICLE V. TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.1. Number of Trustees; Appointment
of Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.2. Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.3. Property Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.4. Certain Qualifications of
Administrative Trustees and
Delaware Trustee Generally . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.5. Administrative Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.6. Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.7. Appointment, Removal and Resignation
of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.8. Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.9. Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.10. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.11. Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.12. Merger, Conversion, Consolidation
or Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VI. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII. ISSUANCE OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.1. General Provisions Regarding
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.2. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.3. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.4. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.5. Paying Agent to Hold Money in
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.6. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.7. Outstanding Capital Securities . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.8. Capital Securities in Treasury . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.9. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.10 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII. DISSOLUTION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.1. Dissolution of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX. TRANSFER OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.1. Transfer of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.2. Transfer Procedures and
Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.3. Deemed Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.4. Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
</TABLE>
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<TABLE>
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SECTION 9.5. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 9.6. Appointment of Successor Clearing
Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X. LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.1. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.3. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.5. Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XI. ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.1. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.2. Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 11.3. Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.4. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE XII. AMENDMENTS AND MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.1. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.2. Meetings of the Holders of
Securities; Action by Written
Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE XIII. REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.1. Representations and Warranties of
Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.2. Representations and Warranties of
Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XIV. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 14.1 Registration Rights Agreement;
Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 15.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 15.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.3. Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.5. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.6. Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
</TABLE>
-iii-
<PAGE> 5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(a)
</TABLE>
___________________
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
-iv-
<PAGE> 6
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ORION CAPITAL TRUST I
January 13, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 13, 1997, by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the Holders (as defined
herein), from time to time, of undivided beneficial interests in the Trust to
be issued pursuant to this Declaration.
WHEREAS, the Delaware Trustee and the Sponsor established
Orion Capital Trust I (the "Trust"), a statutory business trust formed under
the Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of January 3, 1997 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on January 3,
1997 for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures of the Debenture Issuer
(each as hereinafter defined);
WHEREAS, as of the date hereof, no interests in the Trust
have been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration fully amend and restate the Original Trust Agreement so as to
constitute the governing instrument of such business trust, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
<PAGE> 7
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above or elsewhere herein have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration (including Annex I hereto and
Exhibit A hereto) as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in
this Declaration or the context otherwise requires;
(f) a term defined in the Indenture (as defined below)
has the same meaning when used in this Declaration unless otherwise
defined in this Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Additional Interest" means the additional interest referred
to in Article XIV.
"Administrative Trustee" has the meaning set forth in Section
5.1.
"Affiliate" shall mean, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or holding the power
to vote 20% or more of the outstanding voting securities or other ownership
interests of the specified Person,
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<PAGE> 8
(b) any Person 20% or more of whose outstanding voting securities or other
ownership interests are directly or indirectly owned, controlled or held with
power to vote by the specified Person, (c) any Person directly or indirectly
controlling, controlled by, or under common control with the specified Person,
and (d) a partnership in which the specified Person is a general partner;
provided, however, that Intercargo Corporation shall not be deemed to be an
Affiliate of the Company or Orion Capital Trust I.
"Agent" means any Paying Agent or Registrar.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday
or a day on which banking institutions in The City of New York, New York are
authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Capital Securities" has the meaning specified in Section
7.1(a).
"Capital Securities Guarantee" means the guarantee agreement
dated as of January 13, 1997 of the Sponsor in respect of the Capital
Securities.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be
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<PAGE> 9
registered a Global Certificate and which shall undertake to effect book entry
transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section
7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of January 13, 1997 of the Sponsor in respect of the Common
Securities.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Administrative Trustee; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Agreement is located at The Bank of New York, 101 Barclay
Street, Floor 21W, New York, New York 10286.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holders of Securities.
-4-
<PAGE> 10
"Debenture Issuer" means Orion Capital Corporation, a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer
of the Debentures under the Indenture.
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the 8.73% Junior Subordinated Deferrable
Interest Debentures due January 1, 2037 of the Debenture Issuer issued pursuant
to the Indenture (including, as applicable, those Debentures issued upon
consummation of the Exchange Offer).
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" has the meaning set forth in
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Offer" means the exchange offer (including any
private exchange offer) contemplated in Section 2(a) of the Registration Rights
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
-5-
<PAGE> 11
"Exchange Agent" has the meaning set forth in Section 7.4(a).
"Exchange Capital Securities" has the meaning set forth in
Section 7.1(a).
"Exchange Debentures" means the Debentures issued upon
consummation of the Exchange Offer.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Capital Securities" means the Regulation S Global
Capital Securities, the Rule 144A Global Capital Securities and the
Unrestricted Global Capital Securities.
"Global Certificates" means certificates for Capital
Securities registered in the name of a Clearing Agency or its nominee.
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of January 13, 1997,
among the Debenture Issuer and the Debenture Trustee, as amended from time to
time.
"Initial Capital Securities" means 8.73% Capital Securities
(liquidation amount $1,000 per Security) of the Trust issued at the Closing
Time.
"Initial Debentures" means the Debentures as authenticated and
issued under the Indenture at the Closing Time.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Issue Date" shall have the meaning set forth in Section 14.1.
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<PAGE> 12
"Legal Action" has the meaning set forth in Section
3.6(a)(vii).
"Like Amount" has the meaning set forth in Annex I.
"Liquidation Amount" with respect to any Security means the
amount designated as such with respect thereto in Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Offering Memorandum" has the meaning set forth in Section
3.6(b).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President (however designated), or the Secretary
or an Assistant Secretary of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
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<PAGE> 13
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Participants" has the meaning set forth in Section 7.3(b).
"Paying Agent" has the meaning specified in Section 7.4.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Trustee" has the meaning set forth in Section
5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the
initial offering and sale of Capital Securities.
"QIBs" means qualified institutional buyers as defined in Rule
144A.
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of January 13, 1997, by and among Orion Capital
Corporation, the Trust and the Initial Purchasers, as such agreement may be
amended, modified or supplemented from time to time.
"Registration Statement" has the meaning given to such term in
the Securities Act, and the regulations promulgated thereunder.
-8-
<PAGE> 14
"Regulation S" means Regulation S under the Securities Act, as
such regulation may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
"Regulation S Global Capital Security" has the meaning set
forth in Section 7.3(a).
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer," when used with respect to the Property
Trustee, means the chairman or any vice chairman of the board of directors, the
chairman or any vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the cashier, any assistant cashier,
the secretary, any assistant secretary, the treasurer, any assistant treasurer,
any trust officer or assistant trust officer, the controller or any assistant
controller or any other officer or assistant officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in
Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
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<PAGE> 15
"Rule 144A Global Capital Security" has the meaning set forth
in Section 7.3(a).
"Securities" or "Trust Securities" means the Common Securities
and the Capital Securities (including, as applicable, those Capital Securities
issued upon consummation of the Exchange Offer).
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee
and the Capital Securities Guarantee.
"Special Event" has the meaning set forth in the Indenture.
"Sponsor" means Orion Capital Corporation, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(a).
"Successor Entity" has the meaning set forth in Section
3.14(b).
"Successor Property Trustee" has the meaning set forth in
Section 5.7(a).
"Successor Securities" has the meaning set forth in Section
3.14(b).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event Maturity Shortening" has the meaning set forth in
the Indenture.
"10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding
Capital Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of 10% of the aggregate
Liquidation Amount (including the stated amount that would be paid
-10-
<PAGE> 16
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all
outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee (including the Property Trustee, the Delaware Trustee
and each Administrative Trustee), so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set
forth in Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which
is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
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<PAGE> 17
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees
on behalf of the Trust shall provide the Property Trustee, unless the Property
Trustee is Registrar for the Securities, with a list (i) within 14 days after
each record date for payment of Distributions, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of
the Securities ("List of Holders") as of such record date, provided that
neither the Sponsor nor the Administrative Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Administrative Trustees on behalf of
the Trust, and (ii) at any other time, within 30 days of receipt by the Trust
of a written request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The Property
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in a List of Holders given to it or which it receives in
its capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act
SECTION 2.3 Reports by the Property Trustee.
On or before January 10 of each year, commencing January 10,
1998, the Property Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 (if
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<PAGE> 18
any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of
Capital Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in aggregate principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate Liquidation Amount of
the Capital Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Capital Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or an Event of Default with
respect to the Capital Securities or impair any right consequent thereon. Any
waiver by the Holders of the Capital Securities of an Event of Default with
respect to the Capital Securities shall also be deemed to constitute a waiver
by the
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<PAGE> 19
Holders of the Common Securities of any such Event of Default with respect to
the Common Securities for all purposes of this Declaration without any further
act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences if all Events of Default with respect to
the Capital Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf
of the Holders of the Capital Securities and only the Holders of the Capital
Securities will have the right to direct the Property Trustee in accordance
with the terms of the Securities. The foregoing provisions of this Section
2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
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<PAGE> 20
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture
by the Property Trustee, at the direction of the Holders of the Capital
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, the Administrative Trustees and the Sponsor, notices
of all defaults with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, unless such defaults have been cured before
the giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein).
(b) The Sponsor and the Administrative Trustees shall
file annually with the Property Trustee a certification as to whether or not
they are in compliance with all the conditions and covenants applicable to them
under this Declaration.
(c) For purposes of this Section 2.7, the Property
Trustee shall not be deemed to have knowledge of any default or Event of
Default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the Declaration
shall have actual knowledge.
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ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust shall continue to be named "Orion Capital Trust I"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrative Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is 101
Barclay Street, Floor 21W, New York, New York, 10286, Attention: Corporate
Trust Administration. On ten Business Days' prior written notice to the
Holders, the Administrative Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities including effecting the Exchange Offer, (b) use the
proceeds from the sale of the Securities to acquire the Debentures, (c) to make
Distributions to Holders of the Securities as herein provided, and (d) except
as otherwise limited herein, to engage in only those other activities
necessary, advisable or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, mortgage or pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Administrative Trustees in accordance with their powers,
as set forth in Sections 3.6 and 5.5, shall constitute the act of and serve to
bind the Trust and an action taken by the Property Trustee on behalf of the
Trust in accordance with its powers shall constitute the act of and serve to
bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no
Person shall
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be required to inquire into the authority of the Trustees to bind the Trust.
Persons dealing with the Trust are entitled to rely conclusively on the power
and authority of the Trustees as set forth in this Declaration. The authority
of the Delaware Trustee is set forth in Section 3.11 hereof.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
(a) The Administrative Trustees shall have the exclusive
power, duty and authority to cause the Trust to engage in the following
activities:
(i) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however,
that (A) the Trust may issue no more than two series of Capital
Securities and no more than one series of Common Securities, (B) there
shall be no interests in the Trust other than the Securities, and (C)
the issuance of Securities shall be limited to: (x) a simultaneous
issuance of both Capital Securities and Common Securities at the
Closing Time and (y) the issuance of a second series of Capital
Securities upon the consummation of the Exchange Offer.
(ii) in connection with the issue and sale of the Capital
Securities and the Common Securities, and in connection with the
Exchange Offer, at the direction of the Sponsor, to:
(A) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form
prepared by the Sponsor, in relation to the offering and sale
of Initial Capital Securities to QIBs in reliance on Rule 144A
under the Securities Act, to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) and outside the United States to
non-U.S. Persons in offshore transactions in reliance on
Regulation S under the Securities Act, and to execute and file
with
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the Commission, at such time as is determined by the Sponsor,
any Registration Statement, including any amendment thereto,
as contemplated by the Registration Rights Agreement;
(B) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary,
in order to qualify or register all or part of the Capital
Securities in any State in which the Sponsor has determined to
qualify or register such Capital Securities for sale;
(C) if deemed necessary or advisable by the Sponsor, execute
and file an application, prepared by the Sponsor, to the New
York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market's National Market for listing or
quotation of the Capital Securities;
(D) execute and deliver letters, documents, or instruments
with DTC and other Clearing Agencies relating to the Capital
Securities;
(E) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the registration
of the Capital Securities under Section 12(b) of the Exchange
Act; and
(F) execute and enter into the Purchase Agreement providing
for the sale of the Capital Securities, the Registration
Rights Agreement, a subscription agreement providing for the
sale of the Common Securities, a subscription agreement
providing for the sale of the Debentures and any other
agreements regarding the issuance and sale of Securities;
(iii) to acquire the Initial Debentures with the proceeds of
the sale of the Initial Capital Securities and the Common Securities
and to exchange the Initial Debentures for a like principal amount of
Exchange Debentures pursuant to the Exchange Offer; provided, however,
that the Administrative Trustees shall cause legal title to the
Debentures to be held of record in the name of the Property Trustee
for the benefit of the Holders of the Capital Securities and the
Holders of the Common Securities;
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(iv) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(v) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of
the Trust Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Capital
Securities and Holders of Common Securities as to such actions and
applicable record dates;
(vi) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the
Securities;
(vii) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Property Trustee has the exclusive power to bring
such Legal Action;
(viii) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors and consultants, and pay reasonable compensation
for such services;
(ix) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(x) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may
be executed by any Administrative Trustee;
(xi) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(xii) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a Paying
Agent for the Securities as provided in Section 7.4, except for such
time as such power to appoint a Paying Agent is vested in the Property
Trustee;
(xiii) to give prompt written notice to the Property Trustee
and to Holders of any notice received from the Debenture Issuer of its
election to defer payments of
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interest on the Debentures by extending the interest payment period
under the Indenture;
(xiv) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing;
(xv) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Capital Securities or to
enable the Trust to effect the purposes for which the Trust was
created;
(xvi) to take any action, not inconsistent with this
Declaration or with applicable law, that the Administrative Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(A) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(B) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust;
(C) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes; and
(D) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed
by the Administrative Trustees, on behalf of the Trust; and
(xvii) to take all action necessary to consummate the
Exchange Offer or otherwise cause the Capital Securities to be
registered pursuant to an effective Registration Statement in
accordance with the provisions of the Registration Rights Agreement.
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(b) The Administrative Trustees must exercise the powers set
forth in this Section 3.6 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and the
Administrative Trustees shall not take any action that is inconsistent
with the purposes and functions of the Trust set forth in Section 3.3.
(c) Subject to this Section 3.6, the Administrative Trustees
shall have none of the powers or the authority of the Property Trustee
set forth in Section 3.8.
(d) Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Debenture
Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) all in their capacities as such and not in their individual
capacities shall not, engage in any activity other than as required or
authorized by this Declaration. The Trust shall not:
(i) invest any proceeds received by the Property Trustee on
behalf of the Trust from holding the Debentures, but shall distribute
all such proceeds, excluding "Additional Sums" (as defined in the
Indenture), to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
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(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of conducting any proceeding with respect to
any remedy available to the Debenture Trustee, or exercising any right or power
conferred upon the Debenture Trustee with respect to the Debentures, (B) waive
any past default that is waivable under the Indenture, (C) exercise any right
to rescind or annul any declaration that the principal of all the Debentures
shall be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, unless the Trust shall have received an Opinion of Counsel
experienced in such matters to the effect there is no more than an
insubstantial risk that the Trust would not be classified for United States
federal income tax purposes as a trust subject to the provisions of Section 671
through 679 of the Code (a "grantor trust") on account of such amendment,
modification or termination.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by
and held of record in the name of the Property Trustee in trust for the benefit
of the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right,
title and interest in the Debentures to the Administrative Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the name of
and under the exclusive control of the Property Trustee on behalf of
the Holders and, upon the receipt of payments of funds made in respect
of the Debentures held by the Property Trustee, deposit such funds into
the Property Trustee Account and make payments to the Holders of the
Securities from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The Property
Trustee Account shall be an
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account that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Capital Securities by a "nationally recognized
statistical rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice issued by the Administrative
Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities
upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and
perform such duties as may be specifically required of the Property Trustee
pursuant to the terms of the Securities.
(e) Subject to Section 3.9(a) and this Section 3.8(e),
the Property Trustee shall have the exclusive right to take any Legal Action
which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or the Trust
Indenture Act so require, and if such Property Trustee shall have failed to
take such Legal Action, the foregoing to the contrary notwithstanding, the
Holders of the Capital Securities may take such Legal Action, to the same
extent as if such Holders of Capital Securities held an aggregate principal
amount of Debentures equal to the aggregate Liquidation Amount of such Capital
Securities, without first proceeding against the Property Trustee or the Trust;
provided however, that if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to pay
the principal of or premium, if any, or interest on the Debentures on the date
such principal, premium, if any, or interest is otherwise payable (or in the
case of redemption, on the redemption date), then, the foregoing to the
contrary notwithstanding, a Holder of Capital Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
premium, if any, or interest on the Debentures having a principal amount equal
to the aggregate Liquidation Amount of the Capital Securities of such Holder (a
"Direct Action") on or after the respective due date specified in
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the Debentures. In connection with such Direct Action, the rights of the
Holders of Common Securities will be subrogated to the rights of Holders of
Capital Securities to the extent of any payment made by the Debenture Issuer to
Holders of Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant
to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7(a).
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee shall be authorized to undertake
any actions set forth in Section 317(a) of the Trust Indenture Act.
(i) Subject to Section 7.4 hereof, for such time as the
Property Trustee is the Paying Agent, the Property Trustee may authorize one or
more Persons to act as additional Paying Agents and to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to all Securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any such additional Paying Agent may be removed by
the Property Trustee at any time the Property Trustee remains as Paying Agent
and a successor Paying Agent or additional Paying Agents may be (but is not
required to be) appointed at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section
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3.6.; provided, however, that if the Administrative Trustees appoint the
Property Trustee as Registrar, Exchange Agent or Paying Agent pursuant to
Section 3.6(a)(xii), the Property Trustee shall have the power hereunder to
serve in any such capacity and perform the duties and obligations related
thereto.
(k) The Property Trustee must exercise the powers set
forth in this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Property Trustee shall
not take any action that is inconsistent with the purposes and functions of the
Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and in the Securities and no implied covenants shall
be read into this Declaration against the Property Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed
to relieve the Property Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration and of the Securities, and the Property Trustee
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration against the
Property Trustee; and
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(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the requirements of
this Declaration; provided, however, that in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee under the Indenture with respect to the
Debentures, or exercising any right or power conferred upon the
Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Property
Trustee against such risk or liability is not reasonably assured to
it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on
liability
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afforded to the Property Trustee under this Declaration, the Business
Trust Act and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to
the Property Trustee Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Declaration, nor shall
the Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
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request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any
of its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Property Trustee; provided, however, that nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its
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discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the rights or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Property
Trustee shall not be required to supervise, nor shall it be
responsible for any misconduct or negligence on the part of, any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee so to act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request written instructions
from the Holders of the Securities which instructions may only be
given by the Holders of the same proportion in Liquidation Amount of
the Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right or
action, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall
be protected in conclusively relying on or acting in accordance with
such instructions;
(xi) the Property Trustee shall not be under any obligation
to take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this
Declaration.
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(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
(c) Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the
liability of or affording protection to the Property Trustee shall be subject
to the provisions of this Section.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
Without limiting the generality of the foregoing, the Delaware Trustee shall
not be responsible for monitoring the compliance by the Administrative
Trustees, the Property Trustee or the Sponsor with their respective duties
under this Declaration, nor shall the Delaware Trustee be liable for any
default or misconduct of any of the Administrative Trustees, the Property
Trustee or the Sponsor.
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.13 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence up to January 1, 2042.
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SECTION 3.14 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.14(b) and (c).
(b) The Trust may, at the request of the Sponsor as the
holder of all the outstanding Common Securities, with the consent of the
Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge or convert with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities: or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same
as the Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Property Trustee as the holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the
Capital Securities are then listed or quoted, if any;
(iv) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities) to be downgraded by
any two nationally recognized statistical rating organizations;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does
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not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than any dilution of such Holders' interests
in the new entity);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor
has received an opinion of an independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
(including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders'
interest in the new entity); and
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(viii) the Sponsor or any permitted successor or assignee
owns all of the common securities of such Successor Entity and
guarantees the obligations of such Successor Entity under the
Successor Securities at least to the extent provided by the Capital
Securities Guarantee and the Common Securities Guarantee.
(c) Notwithstanding Section 3.14(b), the Trust shall not,
except with the consent of the Holders of 100% in Liquidation Amount of the
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, conversion, replacement, conveyance,
transfer or lease would cause the Trust or the Successor Entity not to be
classified as a grantor trust for United States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in a Liquidation Amount equal to at
least 3% of the total capital of the Trust, at the same time as the Initial
Capital Securities are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
(a) In connection with the issue and sale of the Capital
Securities and the Common Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(i) to prepare the Offering Memorandum and to prepare for
filing by the Trust with the Commission any Registration Statement,
including any amendments thereto, as contemplated by the Registration
Rights Agreement (or to delegate such preparation to the
Administrative Trustees pursuant to Section 3.6(a)(ii)(A) hereof);
(ii) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Administrative Trustees pursuant to Section
3.6(a)(ii)(B) hereof, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(iii) if deemed necessary or advisable by the Sponsor, to
prepare for execution and filing by the Administrative Trustees
pursuant to Section 3.6(a)(ii)(C) hereof, an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Capital Securities;
(iv) if required, to prepare for filing by the Administrative
Trustees pursuant to Section 3.6(a)(ii)(E) hereof with the Commission
a registration statement on Form 8-A relating to the registration of
the Capital Securities
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under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(v) to negotiate the terms and cause the preparation of the
Purchase Agreement and the Registration Rights Agreement providing for
the sale and registration, respectively, of the Capital Securities for
execution by the Administrative Trustees pursuant to Section
3.6(a)(ii)(F) hereof.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on
the Capital Securities is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures, to institute a proceeding
directly against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a
natural Person, shall be a Person who is a resident of the State of
Delaware or that, if not a natural Person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); (2) there shall be at least one Trustee who is an employee
or officer of, or is affiliated with the Sponsor (an "Administrative
Trustee"); and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture under
the
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Trust Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding the
above, unless an Event of Default shall have occurred and be
continuing, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the
Trust's property may at the time be located, the Holders of a Majority
in Liquidation Amount of the Common Securities acting as a class at a
meeting of the Holders of the Common Securities, and the
Administrative Trustees, shall have power at any time or times, to
appoint one or more Persons either to act as a co-trustee, jointly
with the Property Trustee, of all or any part of the Trust's property,
or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment,
and to vest in such Person or Persons in such capacity any property,
title, right or power deemed necessary or desirable, subject to the
provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have
power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
As required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural Person who is a resident of the State of
Delaware; or
(b) if not a natural Person, an entity which has its
principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law; provided that, if the
Property Trustee has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee may also be the Delaware Trustee in which case
Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the
"Property Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
Person who is at least 21 years of age or a
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legal entity otherwise satisfying the provisions of this Declaration that shall
act through one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
(a) The initial Administrative Trustees shall be:
W. Marston Becker
Daniel L. Barry
Michael P. Maloney, Esq.
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with respect to
any matter over which the Administrative Trustees have power to act, any power
of the Administrative Trustees may be exercised by, or with the consent of, any
one such Administrative Trustee.
(c) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust Act or
applicable law, any Administrative Trustee is authorized to execute on behalf
of the Trust any documents which the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Second Floor
5-4-82-12
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), any Trustee may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after the
issuance of any Securities, by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities
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voting as a class at a meeting of the Holders of the Common
Securities;
(iii) in the case of the Property Trustee and the Delaware
Trustee, unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities; and
(iv) in the case of the Property Trustee and the Delaware
Trustee, if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, by vote of Holders of a Majority
in Liquidation Amount of the Capital Securities voting as a class at a
meeting of the Holders of the Capital Securities.
The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Administrative Trustees and the Sponsor.
The Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrative Trustees and the Sponsor.
(b) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation or removal of the Trustee that acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee
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and delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and, after complying with the provisions of Section
3808(e) of the Business Trust Act, the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation or removal of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
(c) The Holders of the Common Securities shall use their
best efforts promptly to appoint a Successor Delaware Trustee or Successor
Property Trustee, as the case may be, if the Property Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this
Section 5.7.
(d) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.7 within 30 days after delivery of an instrument of
resignation or removal, the Property Trustee or Delaware Trustee resigning or
being removed, as applicable, may petition any court of competent jurisdiction
for appointment of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and appropriate, appoint a Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(e) No Property Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees, shall be conclusive evidence of the existence of such vacancy. The
vacancy
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shall be filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of
the Administrative Trustees shall be held from time to time as needed upon the
call of any Administrative Trustee. Regular meetings of the Administrative
Trustees may be held at a time and place fixed by resolution of the
Administrative Trustees. Notice of any in-person meeting of the Administrative
Trustees shall be hand delivered or otherwise delivered in writing (including
by facsimile) not less than 24 hours before such meeting. Notice of any
telephonic meeting of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile) not less than 24 hours before such meeting. Notices shall contain a
brief statement of the time, place and anticipated purposes of the meeting.
The presence (whether in person or by telephone) of an Administrative Trustee
at a meeting shall constitute a waiver of notice of such meeting except where
an Administrative Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether
in person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Administrative Trustees. In the event there is only one
Administrative Trustee, any and all action of such Administrative Trustee shall
be evidenced by a written consent of such Administrative Trustee.
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SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural Person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to
delegate from time to time to such of their number or to officers of the Trust
the doing of such things and the execution of such instruments either in the
name of the Trust or the names of the Administrative Trustees or otherwise as
the Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of this
Declaration or the Securities.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which any Trustee (excluding any
Administrative Trustee that is a natural Person) may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 5.13 Undertaking for Costs
In any suit for the enforcement of any right or remedy under
this Declaration or in any suit against the Property Trustee for any action
taken or omitted by it as a Property Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorney's fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Each Holder shall receive Distributions in accordance with the
terms of such Holder's Securities. If and to the extent that the Debenture
Issuer makes a payment of interest (including Compounded Interest (as defined
in the Indenture), Additional Interest, additional Distributions, premium
and/or principal on the Debentures held by the Property Trustee or any other
payments pursuant to the Registration Rights Agreement with respect to the
Debentures held by the Property Trustee (but excluding Additional Sums (as
defined in the Indenture) (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a Distribution of the Payment Amount to
Holders in accordance with the respective terms of the Securities held by them.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the
Trust issue one class of capital securities representing undivided beneficial
interests in the assets of the Trust, which class may be divided into no more
than two series each having such terms as are set forth in Annex I (the
"Capital Securities"), and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). At such time, if ever, as
the Exchange Debentures are issued, the Administrative Trustees shall on behalf
of the Trust issue one series of capital securities representing undivided
beneficial interests in the Trust having such terms as are set forth in Annex I
(the "Exchange Capital Securities") in exchange for the Initial Capital
Securities accepted for exchange in the Exchange Offer, which Exchange Capital
securities shall not bear the legends set forth in Section 9.2 unless the
holder of the Initial Capital Securities is either (i) a broker-dealer who
purchased such Initial Capital Securities directly from the Trust for resale
pursuant to Rule 144A, or any other available exemption, under the Securities
Act, (ii) a person participating in the distribution of the Initial Capital
Securities or (iii) a Person who is an affiliate (as defined in
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Rule 144A) of the Trust. The Trust shall issue no securities or other
interests in the assets of the Trust other than the Capital Securities and the
Common Securities.
(b) The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.
(c) Upon receipt of the stated consideration in full, and
the subsequent issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(d) Every Person, by virtue of having become a Holder or
a Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust
by an Administrative Trustee. In case any Administrative Trustee of the Trust
who shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be delivered by
the Trust, such Securities nevertheless may be delivered as though the Person
who signed such Securities had not ceased to be such Administrative Trustee;
and any Securities may be signed on behalf of the Trust by such Persons who, at
the actual date of execution of such Security, shall be the Administrative
Trustees of the Trust, although at the date of the execution and delivery of
the Declaration any such Person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common
Securities, be a manual signature.
(c) A Capital Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee. The signature shall be conclusive evidence that the Capital
Security has been authenticated under this Declaration.
(d) Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate
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the Capital Securities for original issue. The aggregate number of Capital
Securities outstanding at any time shall not exceed the number set forth in
Annex I hereto except as provided in Section 7.6.
(e) The Property Trustee may appoint an authenticating
agent acceptable to the Administrative Trustees to authenticate Capital
Securities. An authenticating agent may authenticate Capital Securities
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent.
An authenticating agent has the same rights as the Property Trustee to deal
with the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks
of identification or designation and such legends or endorsements required by
law, stock exchange rule, agreements to which the Trust is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Property Trustee in
writing. Each Capital Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms
of Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee, Administrative
Trustees and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to be bound thereby.
(a) Global Securities. Securities offered and sold to
QIBs in reliance on Rule 144A or offered and sold outside the United
States to non-U.S. Persons in offshore transactions in reliance on
Regulation S, as provided in the Purchase Agreement, shall be issued
in the form of one or more permanent Global Securities in definitive,
fully registered form without Distribution coupons with the
appropriate global legends and Restricted Securities Legend set forth
in Exhibit
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A-1 hereto (respectively, a "Rule 144A Global Capital Security" or
"Regulation S Global Capital Security"), which shall be deposited on
behalf of the purchasers of the Capital Securities represented thereby
with the Property Trustee, at its New York office, as custodian for
the Clearing Agency, and registered in the name of the Clearing Agency
or a nominee of the Clearing Agency, duly executed by an
Administrative Trustee and authenticated by the Property Trustee as
hereinafter provided. The number of Capital Securities represented by
the Rule 144A Global Capital Security and the Regulation S Global
Capital Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall
apply only to the Rule 144A Global Capital Securities, the Regulation
S Global Capital Securities and such other Capital Securities in
global form as may be authorized by the Trust to be deposited with or
on behalf of the Clearing Agency.
(i) An Administrative Trustee shall execute and
the Property Trustee shall authenticate and, in accordance
with this Section 7.3, make available for delivery initially
one or more Rule 144A Global Capital Securities and one or
more Regulation S Global Capital Securities that (A) shall be
registered in the name of Cede & Co. or other nominee of such
Clearing Agency and (B) shall be delivered by the Property
Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee
as custodian for the Clearing Agency.
(ii) Members of, or participants in, the Clearing
Agency ("Participants") shall have no rights under this
Declaration with respect to any Rule 144A Global Capital
Security or any Regulation S Global Capital Security held on
their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Rule
144A Global Capital Security or such Regulation S Global
Capital Security, and the Clearing Agency may be treated by
the Trust, the Property Trustee and any agent of the Trust or
the Property Trustee as the absolute owner of such Rule 144A
Global Capital Security or such Regulation S Global Capital
Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the
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Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the
Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such
Clearing Agency governing the exercise of the rights of a
holder of a beneficial interest in any Rule 144A Global Capital
Security or any Regulation S Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
Section 7.9, owners of beneficial interests in a Rule 144A Global
Capital Security or a Regulation S Global Capital Security will not be
entitled to receive physical delivery of certificated Capital
Securities ("Definitive Capital Securities"). Purchasers of
Securities who are "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and did not
purchase Capital Securities in reliance on Regulation S will receive
Capital Securities in the form of individual certificates in
definitive, fully registered form without Distribution coupons and
with the Restricted Securities Legend set forth in Exhibit A-1 hereto
("Restricted Definitive Capital Securities"); provided, however, that
upon transfer of such Restricted Definitive Capital Securities to a
QIB, such Restricted Definitive Capital Securities will, unless the
Rule 144A Global Capital Security has previously been exchanged, be
exchanged for an interest in a Rule 144A Global Capital Security
pursuant to the provisions of Section 9.2. Restricted Definitive
Capital Securities will bear the Restricted Securities Legend set
forth on Exhibit A-1 unless removed in accordance with this Section
7.3 or Section 9.2.
SECTION 7.4 Registrar and Paying Agent.
(a) The Trust shall maintain in The City of New York, (i)
an office or agency where Capital Securities may be presented for registration
of transfer ("Registrar"), (ii) an office or agency where Capital Securities
may be presented for payment ("Paying Agent") and (iii) an office or agency
where Securities may be presented for exchange in connection with the Exchange
Offer (the "Exchange Agent"). The Registrar shall keep a register of the
Capital Securities and of their transfer. The Administrative Trustees shall
appoint the Registrar, the Paying Agent and the Exchange Agent and may appoint
one or more co-Registrars, one or more additional Paying Agents and one or more
additional Exchange Agents in such other locations as they shall determine.
The term "Registrar" includes any additional registrar, the term "Paying Agent"
includes any additional paying
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agent and the term "Exchange Agent" includes any additional Exchange Agent."
The Administrative Trustees may change any Registrar or co-Registrar, Paying
Agent or Exchange Agent without prior notice to any Holder. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to
the Administrative Trustees. The Administrative Trustees shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Administrative Trustees fail to appoint or maintain
another entity as Registrar, Paying Agent or Exchange Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent, Registrar or Exchange Agent. The Trust shall act as Paying
Agent, Registrar and co-registrar and the Exchange Agent for the Common
Securities.
(b) The Administrative Trustees initially appoint the
Property Trustee as Registrar, Paying Agent and Exchange Agent for the Capital
Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of Liquidation Amounts or Distributions on the
Securities, and will notify the Property Trustee if there are insufficient
funds for such purpose. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to the Property
Trustee. The Trust at any time may require a Paying Agent to pay all money
held by it to the Property Trustee and to account for any money disbursed by
it. Upon payment over to the Property Trustee, the Paying Agent (if other than
the Trust or an Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or an Affiliate of the Trust or the Sponsor
acts as Paying Agent, it shall segregate and hold in a separate trust fund or
account for the benefit of the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If the Holder claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, the Trust shall issue, an Administrative Trustee shall
execute and the Property Trustee shall authenticate a replacement Security if
the requirements of this Section 7.6 are satisfied. An indemnity bond must be
provided by the Holder which, in the judgment of the Property
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Trustee, is sufficient to protect the Trustees, the Sponsor or any
authenticating agent from any loss which any of them may suffer if a Security
is replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is a substitute beneficial interest
in the Trust to the same extent as the original it replaces.
SECTION 7.7 Outstanding Capital Securities.
(a) The Capital Securities outstanding at any time are
all the Capital Securities authenticated by the Property Trustee except for
those cancelled by it, those delivered to it for cancellation, and those
described in this Section as not outstanding.
(b) If a Capital Security is replaced (pursuant to
Section 7.6 hereof), or purchased, it ceases to be outstanding unless the
Property Trustee receives proof satisfactory to it that the replaced or
purchased Capital Security is held by a bona fide purchaser satisfying the
conditions of this Declaration, including without limitation the provisions of
Article IX hereof.
(c) If Capital Securities are considered redeemed,
including any and all distributions and liquidation preferences, in accordance
with the terms of this Declaration, they cease to be outstanding and
Distributions on them shall cease to accumulate.
(d) A Capital Security does not cease to be outstanding
because one of the Administrative Trustees, the Sponsor or an Affiliate of the
Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Administrative Trustees, the Sponsor or an Affiliate of
the Sponsor, as the case may be, shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Property
Trustee shall be fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee actually knows are so owned
shall be so disregarded.
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SECTION 7.9 Temporary Securities.
(a) Until definitive Securities are ready for delivery,
the Administrative Trustees may cause to be prepared and execute, and, in the
case of the Capital Securities, the Property Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Administrative
Trustees consider appropriate for temporary Securities. Without unreasonable
delay, the Administrative Trustees shall prepare and, in the case of the
Capital Securities, the Property Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof
in the form of certificated Capital Securities only if such transfer complies
with Section 9.2 and (i) the Clearing Agency notifies the Company that it is
unwilling or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a "clearing
agency" registered under the Exchange Act and a clearing agency is not
appointed by the Sponsor within 90 days of such notice, (ii) a Default or an
Event of Default has occurred and is continuing or (iii) the Administrative
Trustees in their sole discretion elect to cause the issuance of certificated
Capital Securities.
(c) Any Global Capital Security that is transferable to
the beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the City of New York, New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and make available for delivery, upon such
transfer of each portion of such Global Capital Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the form of
certificated Capital Securities. Any portion of a Global Capital Security
transferred pursuant to this Section shall be registered in such names as the
Clearing Agency shall direct. Any Capital Security in the form of certificated
Capital Securities delivered in exchange for an interest in the Restricted
Global Capital Security shall, except as otherwise provided by Sections 7.3 and
9.1, bear the Restricted Securities Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the
Holder of a Global Capital Security may grant proxies and
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otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which such Holder is
entitled to take under this Declaration or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Administrative Trustees will promptly make
available to the Property Trustee a reasonable supply of certificated Capital
Securities in fully registered form without distribution coupons.
SECTION 7.10 Cancellation.
The Administrative Trustees at any time may deliver Capital
Securities to the Property Trustee for cancellation. The Registrar, Paying
Agent and Exchange Agent shall forward to the Property Trustee any Capital
Securities surrendered to them for registration of transfer, redemption,
exchange or payment. The Property Trustee shall promptly cancel all Capital
Securities surrendered for registration of transfer, redemption, exchange,
payment, replacement or cancellation and shall dispose of canceled Capital
Securities as the Administrative Trustees direct, provided that the Property
Trustee shall not be obligated to destroy Capital Securities. The Trust may
not issue new Capital Securities to replace Capital Securities that it has
redeemed or that have been delivered to the Property Trustee for cancellation
or that any Holder has exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property
Trustee of any change in the CUSIP numbers.
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ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
(a) The Trust shall automatically dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders; provided that the Property Trustee has
received a written notice from the Sponsor as the holder of all the
outstanding Common Securities directing it to terminate the Trust
(which direction is at the discretion of the Sponsor, except as
provided below); provided, further, that such distribution is
conditioned on the Administrative Trustees' receipt of an opinion by
independent tax counsel experienced in such matters, which opinion may
rely on published rulings of the Internal Revenue Service, to the
effect that the Holders will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of
the Trust and such distribution of a Like Amount of the Debentures;
(iv) upon the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(vi) upon the repayment of the Debentures or at such time as
no Debentures are outstanding;
(vii) the expiration of the term of the Trust provided in
Section 3.13; or
(viii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities pursuant to the terms
thereof upon receipt of a written notice from the Sponsor that it
intends to effect a Tax Event Maturity Shortening and directing the
Administrative Trustees to
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dissolve the Trust and distribute a Like Amount of the Debentures to
the Holders of the Securities.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a), the Trust shall be wound up pursuant to
Section 3808 of the Business Trust Act and the Administrative Trustees shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware; provided, however, that in the event of any of the events of
dissolution set forth in Sections 8.1(a)(iii), (v) or (viii), the provisions of
Section 3808(e) of the Business Trust Act shall be satisfied in advance of the
making of any payments or distributions to Holders of Securities pursuant to
this Declaration.
(c) The provisions of Section 3.9 and Article X shall
survive the dissolution of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Capital Securities may
only be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration. Any transfer or purported transfer
of any security not made in accordance with this Declaration shall be null and
void.
(c) Subject to Section 3.14, the Sponsor may not transfer
the Common Securities.
(d) The Registrar shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge except as provided in Section 7.6 hereof, but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Securities, the Registrar shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for
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registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered
for registration of transfer shall be canceled by the Registrar. A transferee
of a Security shall be entitled to the rights and subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section
9.2(c), if Capital Securities are issued upon the transfer, exchange or
replacement of Capital Securities bearing the Restricted Securities Legend set
forth in Exhibit A-1 hereto, or if a request is made to remove such Restricted
Securities Legend on Capital Securities, the Capital Securities so issued shall
bear the Restricted Securities Legend, or the Restricted Securities Legend
shall not be removed, as the case may be, unless there is delivered to the
Trust and the Property Trustee such satisfactory evidence, which shall include
an Opinion of Counsel licensed to practice law in the State of New York, as may
be reasonably required by the Sponsor and the Property Trustee, that neither
the legend nor the restrictions on transfer set forth therein are required to
ensure that transfers thereof are made pursuant to an exception from the
registration requirements of the Securities Act or, with respect to Restricted
Securities, that such Securities are not "restricted" within the meaning of
Rule 144. Upon provision of such satisfactory evidence, the Property Trustee,
at the written direction of the Administrative Trustees, shall authenticate and
deliver Capital Securities that do not bear the legend.
(b) Transfers After Effectiveness of a Registration
Statement. After the effectiveness of a Registration Statement with respect to
any Capital Securities, all requirements pertaining to legends on such Capital
Securities will cease to apply, and beneficial interests in a Capital Security
in global form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest in
the Global Capital Security. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Trust a certificate in
a form substantially similar to that attached
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hereto as the "Form of Assignment" in Exhibit A-1. Except as otherwise
provided in Section 9.2(m), after the effectiveness of a Registration
Statement, the Trust shall issue and the Property Trustee, upon a written order
of the Trust signed by one Administrative Trustee, shall authenticate a Capital
Security in global form without the Restricted Securities Legend (the
"Unrestricted Global Capital Security") to deposit with the Clearing Agent to
evidence transfers of beneficial interests from the (i) Global Capital Security
and (ii) Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to the Registrar
or co-Registrar:
(x) to register the transfer of such Definitive Capital
securities or
(y) to exchange such Definitive Capital Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Capital Securities,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust
and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) in the case of Definitive Capital Securities that are
Restricted Definitive Capital Securities:
(A) if such Restricted Capital Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Restricted Capital Securities are being
transferred: (x) a certification from the transferor in a
form substantially similar to that attached hereto as the
"Form of Assignment" in Exhibit A-1, and (y) if the Trust or
Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the
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restrictions set forth in the Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital
Security for a Beneficial Interest in a Global Capital Security. A Definitive
Capital Security may not be exchanged for a beneficial interest in a Global
Capital Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Capital Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) if such Definitive Capital Security is a Restricted
Capital Security, a written certificate (in a form substantially
similar to that attached hereto as the "Form of Assignment" in Exhibit
A-1); provided, however, that such Definitive Capital Security may
only be exchanged for an interest in a Regulation S Global Security
where such Definitive Capital Security is being transferred pursuant
to Regulation S or Rule 144 (if available); and
(ii) whether or not such Definitive Capital Security is a
Restricted Capital Security, written instructions directing the
Property Trustee to make, or to direct the Clearing Agency to make, an
adjustment on its books and records with respect to the appropriate
Global Capital Security to reflect an increase in the number of the
Capital Securities represented by such Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the appropriate Global Capital Security to be
increased accordingly. If no Global Capital Securities are then outstanding,
the Trust shall issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of Capital
Securities in global form.
(e) Transfer and Exchange of Global Capital Securities.
Subject to Section 9.2(f), the transfer and exchange of Global Capital
Securities or beneficial interests therein shall be effected through the
Clearing Agency, in accordance with this Declaration (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital
Security for a Definitive Capital Security.
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(i) Any Person having a beneficial interest in a Global
Capital Security may upon request, but only upon 20 days prior notice
to the Property Trustee, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Capital Security representing the same number of Capital Securities.
Upon receipt by the Property Trustee from the Clearing Agency or its
nominee on behalf of any Person having a beneficial interest in a
Global Capital Security of written instructions or such other form of
instructions as is customary for the Clearing Agency or the Person
designated by the Clearing Agency as having such a beneficial interest
in a Restricted Capital Security and a certification from the
transferor (in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1), which may be submitted by
facsimile, then the Property Trustee will cause the aggregate number
of Capital Securities represented by Global Capital Securities to be
reduced on its books and records and, following such reduction, the
Administrative Trustees will execute and the Property Trustee will
authenticate and make available for delivery to the transferee a
Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security pursuant to this
Section 9.2(f) shall be registered in such names and in such
authorized denominations as the Clearing Agency, pursuant to
instructions from its Participants or indirect participants or
otherwise, shall instruct the Property Trustee in writing. The
Property Trustee shall deliver such Capital Securities to the Persons
in whose names such Capital Securities are so registered in accordance
with such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global
Capital Securities. Notwithstanding any other provisions of this Declaration
(other than the provisions set forth in subsection (h) of this Section 9.2), a
Global Capital Security may not be transferred as a whole except by the
Clearing Agency to a nominee of the Clearing Agency or another nominee of the
Clearing Agency or by the Clearing Agency or any such nominee to a successor
Clearing Agency or a nominee of such successor Clearing Agency.
(i) Prior to the expiration of the restricted period, as
contemplated by Regulation S, beneficial interests in the Regulation S
Global Capital Security may be exchanged for beneficial interests in
the Rule 144A Global Capital Security only if such exchange occurs in
connection with a transfer of the Capital Securities pursuant to Rule
144A and the
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transferor first delivers to the Property Trustee a written
certificate (in a form substantially similar to that attached hereto
as the "Form of Assignment" in Exhibit A-1) to the effect that the
Capital Securities are being transferred to a Person whom the
transferor reasonably believes to be a QIB, purchasing for its own
account or the account of a QIB in a transaction meeting the
requirements of Rule 144A and in accordance with all applicable
securities laws of the states of the United States and other
jurisdictions.
(ii) Beneficial interests in the Rule 144A Global Capital
Security may be transferred to a Person who takes delivery in the form
of an interest in the Regulation S Global Capital Security, whether
before or after the expiration of such restricted period, as
contemplated by Regulation S, only if the transferor first delivers to
the Property Trustee a written certificate (in a form substantially
similar to that attached hereto as the "Form of Assignment" in Exhibit
A-1) to the effect that such transfer is being made in accordance with
Rule 903 or 904 of Regulation S or Rule 144 (if available) and that,
if such transfer occurs prior to the expiration of such restricted
period, the interest transferred will be held immediately thereafter
through Euroclear or CEDEL.
(h) Authentication of Definitive Capital Securities. If
at any time:
(i) there occurs a Default or an Event of Default which
is continuing, or
(ii) the Administrative Trustees, in their sole discretion,
notify the Property Trustee in writing that they elect to cause the
issuance of Definitive Capital Securities under this Declaration,
then the Administrative Trustees will execute, and the Property Trustee, upon
receipt of a written order of the Trust signed by one Administrative Trustee
requesting the authentication and delivery of Definitive Capital Securities to
the Persons designated by the Trust, will authenticate and make available for
delivery Definitive Capital Securities, equal in number to the number of
Capital Securities represented by the Global Capital Securities, in exchange
for such Global Capital Securities.
(i) Legend.
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(i) Except as permitted by the following paragraph (ii), each
Capital Security certificate evidencing the Global Capital Securities
and the Definitive Capital Securities (and all Capital Securities
issued in exchange therefor or substitution thereof, except in the
Exchange Offer) shall bear a legend (the "Restricted Securities
Legend") in substantially the following form:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES
LAW. NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
CORPORATION OR ANY "AFFILIATE" OF THE CORPORATION WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS
CAPITAL SECURITY) EXCEPT (A) TO THE CORPORATION, (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE
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SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE
CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (E),
TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE REVERSE OF THIS CAPITAL SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
and in the case of the Regulation S Global Capital Security
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT IS AVAILABLE.
(ii) Upon any sale or transfer of a Restricted Capital
Security (including any Restricted Capital Security represented by a
Global Capital Security) pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144 under the
Securities Act after such registration statement ceases to be
effective:
(A) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Registrar shall permit the
Holder thereof to exchange such Restricted Capital Security
for a Definitive Capital Security that does not bear the
Restricted Securities Legend and rescind any restriction on
the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented by a Global Capital Security, the Registrar shall
permit the Holder of such Global Capital Security to exchange
such Global Capital Security for another Global Capital
Security that does not bear the Restricted Securities Legend.
(j) Cancellation or Adjustment of Global Capital
Security. At such time as all beneficial interests in a Global Capital
Security have either been exchanged for Definitive Capital Securities to the
extent permitted by this Declaration or
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redeemed, repurchased or canceled in accordance with the terms of this
Declaration, such Global Capital Security shall be returned to the Clearing
Agency for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if
it is then the custodian for such Global Capital Security) with respect to such
Global Capital Security, by the Property Trustee or the Securities custodian,
to reflect such reduction.
(k) Obligations with Respect to Transfers and Exchanges
of Capital Securities.
(i) To permit registrations of transfers and exchanges, the
Administrative Trustees shall execute and the Property Trustee shall
authenticate Definitive Capital Securities and Global Capital
Securities at the Registrar's or co-Registrar's request in accordance
with the terms of this Declaration.
(ii) Subject to Section 7.6 hereof, registrations of
transfers or exchanges will be effected without charge, but only upon
payment (with such indemnity as the Trust or the Sponsor may require)
in respect of any tax or other governmental charge that may be imposed
in relation to it.
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) Capital Securities during
a period beginning at the opening of business 15 days before the day
of mailing of a notice of redemption or any notice of selection of
Capital Securities for redemption and ending at the close of business
on the day of such mailing; or (b) any Capital Security so selected
for redemption in whole or in part, except the unredeemed portion of
any Capital Security being redeemed in part.
(iv) Prior to the due presentation for registration of
transfer of any Capital Security, the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-Registrar may deem and treat the
Person in whose name a Capital Security is registered as the absolute
Holder of such Capital Security for the purpose of receiving
Distributions on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the Paying
Agent,
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the Registrar or any co-Registrar shall be affected by notice to the
contrary.
(v) All Capital Securities issued upon any transfer pursuant
to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the
Capital Securities surrendered upon such transfer or exchange.
(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Capital Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of
any Participant thereof, with respect to any ownership interest in the
Capital Securities or with respect to the delivery to any Participant,
beneficial owner or other Person (other than the Clearing Agency) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Capital Securities. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Capital Securities shall be given or made
only to or upon the order of the registered Holders (which shall be
the Clearing Agency or its nominee in the case of a Global Capital
Security). The rights of beneficial owners in any Global Capital
Security shall be exercised only through the Clearing Agency subject
to the applicable rules and procedures of the Clearing Agency. The
Property Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Clearing Agency or any agent
thereof with respect to its Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Capital Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in any Global
Capital Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by, the terms of this
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
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(m) Exchange of Initial Capital Securities for Exchange
Capital Securities. The Initial Capital Securities may be exchanged for
Exchange Securities pursuant to the terms of the Exchange Offer. The Property
Trustee shall make the exchange as follows:
(i) The Sponsor shall present the Property Trustee with
an Officers' Certificate certifying the following:
(A) the Registration Statement has become effective;
and
(B) the number of Initial Capital Securities
properly tendered in the Exchange Offer that are represented
by a Global Capital Security and the number of Initial Capital
Securities properly tendered in the Exchange Offer that are
represented by Definitive Capital Securities, the name of each
Holder of such Definitive Capital Securities, the liquidation
amount of Capital Securities properly tendered in the Exchange
Offer by each such Holder and the name and address to which
Definitive Capital Securities for Exchange Capital Securities
shall be registered and sent for each such Holder.
(ii) The Property Trustee upon receipt of (A) such Officers'
Certificate, (B) an Opinion of Counsel (x) to the effect that the
Exchange Capital Securities have been registered under Section 5 of
the Securities Act and the Indenture), has been qualified under the
Trust Indenture Act and (y) with respect to the matters set forth in
Section 3(p) of the Registration Rights Agreement and (C) a Company
Order (as defined in the Indenture), shall authenticate (I) a Global
Capital Security for Exchange Capital Securities for Exchange Capital
Securities in aggregate liquidation amount equal to the aggregate
liquidation amount of Initial Capital Securities represented by a
Global Capital Security indicated in such Officers' Certificate as
having been properly tendered and (II) Definitive Capital Securities
representing Exchange Capital Securities registered in the names of,
and in the liquidation amounts indicated in such Officers'
Certificate.
(iii) If, upon consummation of the Exchange Offer, less than
all the outstanding Initial Capital Securities shall have been
properly tendered and not withdrawn, the Property Trustee shall make
an endorsement on the Global Capital Security for Initial Capital
Securities indicating the
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reduction in the number and aggregate liquidation amount represented
thereby as a result of the Exchange Offer.
(iv) The Trust shall deliver such Definitive Capital
Securities for Exchange Capital Securities to the Holders thereof as
indicated in such Officers' Certificate.
(n) Minimum Transfers. Initial Capital Securities may
only be transferred in minimum blocks of $100,000 aggregate Liquidation Amount
until such Initial Capital Securities are registered pursuant to an effective
registration statement filed under the Securities Act or become "unrestricted"
pursuant to Rule 144 under the Securities Act.
(o) Indemnity; ERISA. Each Holder of the Securities agrees
to indemnify the Sponsor and the Property Trustee against any liability that
may result from the transfer, exchange or assignment of such Holder's
Securities in violation of any provision of this Declaration and/or applicable
United States federal or state securities law.
Subject to this Article, Securities shall be freely
transferable. Notwithstanding the foregoing, Securities may not be acquired by
any Person who is, or who, in acquiring such Securities is using the assets of,
an employee benefit plan subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA Plan"), unless the acquisition of such Securities
is not a "Prohibited Transaction" (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or one of the following class exemptions (or
another applicable exemption) is available to the ERISA Plan: (i) Prohibited
Transaction Class Exemption 90-1 ("PTE 90-1"), regarding investments by
insurance company pooled separate accounts, (ii) Prohibited Transaction Class
Exemption 91-38 ("PTE 91-38"), regarding investments by bank collective
investment funds, (iii) Prohibited Transaction Class Exemption 84-14 ("PTE
84-14"), regarding transactions effected by qualified professional asset
managers, (iv) Prohibited Transaction Class Exemption 96-23 ("PTE 96-23"),
regarding transactions effected by in-house asset managers, or (v) Prohibited
Transaction Class Exemption 95-60 ("PTE 95-60"), regarding investments by
insurance company general accounts. The acquisition of Capital Securities by
any Person who is, or who in acquiring such Capital Securities is using the
assets of, an ERISA Plan shall be deemed to constitute a representation by such
Person to the Trust that, if such acquisition or the holding of Capital
Securities by such Person would constitute a Prohibited Transaction, such
Person is eligible for exemptive relief available pursuant to either one of PTE
90-1, PTE 91-38, PTE 84-14, PTE 96-23, PTE 95-60 or another
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applicable exemption with respect to the acquisition and holding of such
Securities. To avoid Prohibited Transactions, any ERISA Plan purchasing
Capital Securities will be deemed to have directed the Trust to invest in the
Debentures and to have appointed the Trustees.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole Holder of
such Security for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Security on the part of any
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
(a) Global Capital Securities shall initially be
registered on the books and records of the Trust in the name of Cede & Co., the
nominee of the Clearing Agency, and no Capital Security Beneficial Owner will
receive a definitive Capital Security Certificate representing such Capital
Security Beneficial Owner's interests in such Global Capital Securities, except
as provided in Section 9.2. Unless and until definitive, fully registered
Capital Securities certificates have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.2:
(i) the provisions of this Section 9.4 shall be in full force
and effect;
(ii) the Trust and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Declaration
(including the payment of Distributions on the Global Capital
Securities and receiving approvals, votes or consents hereunder) as
the Holder of the Capital Securities and the sole holder of the Global
Certificates and shall have no obligation to the Capital Security
Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(iv) the rights of the Capital Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Capital Security Beneficial Owners
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and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book
entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, the Trustees shall give
all such notices and communications specified herein to be given to the Holders
of Global Capital Security to the Clearing Agency, and shall have no notice
obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration,
the Securities Guarantees and the terms of the Securities, the Sponsor shall
not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders, which
shall be made solely from assets of the Trust; or
(ii) required to pay to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
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(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders of the Capital Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Property Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to or otherwise becomes involved
in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the fact
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that he is or was a Company Indemnified Person against expenses
(including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and with respect to any
criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to or otherwise becomes involved
in any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the
fact that he is or was a Company Indemnified Person, against expenses
(including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person
shall have been adjudged to be liable to the Trust unless and only to
the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such Person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent
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permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees by a
majority vote of a quorum consisting of such Administrative Trustees
who were not parties to such action, suit or proceeding, (2) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of
the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending or participating in a civil,
criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall
be paid by the Debenture Issuer in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or
on behalf of such Company Indemnified Person to repay such amount if
it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly
made (1) by the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (3) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or
the Common Security Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that
such Person did not reasonably believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Administrative
Trustees, independent legal counsel or Common
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Security Holder reasonably determine that such Person deliberately
breached his duty to the Trust or its Common Security Holders or
Capital Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a)
shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors
of the Debenture Issuer or Common Security Holders or Capital Security
Holders of the Trust or otherwise, both as to action in their official
capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a)
shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity
at any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Debenture Issuer would have the power to indemnify him against
such liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any Person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a Person who has
ceased to be a Company
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Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a Person.
(b) The Debenture Issuer agrees to indemnify the (i)
Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Property Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees' representatives, custodians,
nominees or agents of the Property Trustee and the Delaware Trustee (each of
the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of such Fiduciary Indemnified Person) incurred
without gross negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this Section
10.4(b) shall survive the satisfaction and discharge of this Declaration.
(c) Each Indemnified Person shall give prompt notice to each
indemnifying party from whom indemnification is to be sought hereunder by such
Indemnified Person of any action threatened or commenced against it in respect
of which any indemnity is sought hereunder, enclosing a copy of all papers
served on, and notices and demands delivered to, such Indemnified Person, if
any, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have under this Section
10.4, except to the extent that it is materially prejudiced by such failure.
The indemnifying party shall be entitled to assume the defense of any such
action or proceeding with counsel reasonably satisfactory to the Indemnified
Person who shall not, except with the consent of such Indemnified Person be
counsel to the indemnifying party. Upon assumption by the indemnifying party
of the defense of any such action or proceeding, the Indemnified Person shall
have the right to participate in such action or proceeding and to retain its
own counsel, but the indemnifying party shall not be liable for any legal fees
or expenses subsequently incurred by such Indemnified Person in connection with
the defense thereof unless (i) the indemnifying party has agreed to pay such
fees and expenses, (ii) the indemnifying party shall have failed to employ
counsel reasonably satisfactory to the Indemnified Person in a timely manner,
or (iii) the Indemnified Person shall have been advised by counsel (who shall
not be employed by such Indemnified Person and
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who shall be reasonably satisfactory to the indemnifying party) that such
representation would constitute an actual or potential conflict of interests
for counsel selected by the indemnifying party. The indemnifying party shall
not consent to the terms of any compromise or settlement of any action defended
by the indemnifying party in accordance with the foregoing without the prior
consent of the Indemnified Person, and the Indemnified Person shall not consent
to the terms of any compromise or settlement of any action being defended by
the indemnifying party in accordance with the foregoing without the prior
consent of the indemnifying party. Notwithstanding the immediately preceding
sentence, if at any time an Indemnified Person shall have requested an
indemnifying party to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated above, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than thirty business days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or may
act as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
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ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes.
(b) The Administrative Trustees shall cause to be
prepared and delivered to each of the Holders of Securities, within 90 days
after the end of each Fiscal Year of the Trust, unaudited annual financial
statements of the Trust, including a balance sheet of the Trust as of the end
of such Fiscal Year, and the related statements of income or loss for such
Fiscal Year prepared in accordance with generally accepted accounting
principles; provided that if the Trust is required to comply with the periodic
reporting requirements of Sections 13(a) or 15(d) of the Exchange Act, such
financial statements for such Fiscal Year shall be examined and reported on by
a firm of independent certified public accountants selected by the
Administrative Trustees (which firm may be the firm used by the Sponsor).
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder
as is required and at such time as is required by the Code and the Treasury
Regulations.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by
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the Administrative Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding
with respect to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining the extent of,
and in fulfilling, its withholding obligations. The Administrative Trustees
shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To
the extent that the Trust is required to withhold and pay over any amounts to
any authority with respect to Distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed over-withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or
by any applicable terms of the Securities, this Declaration may only be amended
by a written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more than
two Administrative Trustees a majority of the Administrative
Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(B) an Opinion of Counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities),
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provided, however, that the Property Trustee shall not be required to
sign any such amendment, to the extent the result of such amendment
would be to:
(1) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(2) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act;
or
(3) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) At such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the
terms of such Securities;
(d) Sections 3.14(c) and 9.1(c) and this Section 12.1
shall not be amended without the consent of all of the Holders of the
Securities;
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in Liquidation Amount of the Common Securities,
and;
(f) The rights of the Holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees, shall not be amended without the consent of the Holders of a Majority
in Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may
be amended by the Property Trustee, the Administrative Trustees and the Sponsor
without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision
in this Declaration that may be inconsistent with any other provision
of this Declaration or to make any other provisions with respect to
matters or questions arising under this Declaration which shall not be
inconsistent with the other provisions of the Declaration;
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(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or
to ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act; or
(iii) to qualify or maintain qualification of this
Declaration of Trust under the Trust Indenture Act;
provided, however, that in each case, such action shall not adversely affect in
any material respect the interests of the Holders of the Securities. Any
amendments of this Declaration shall become effective when notice thereof is
sent to the Holders of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in Liquidation Amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in a writing stating that the
signing Holders wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders calling a meeting
shall specify in writing the Security Certificates held by the Holders
exercising the right to call a meeting and only those Securities specified
shall be counted for purposes of determining whether the required percentage
set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the
Holders having a right to vote thereat at least seven days and not
more than 60 days before the date of such meeting. Whenever a vote,
consent or approval of the Holders
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is permitted or required under this Declaration or the rules of any
stock exchange on which the Capital Securities are listed or admitted
for trading, such vote, consent or approval may be given at a meeting
of the Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent or consents in
writing setting forth the action so taken is signed by the Holders
owning not less than the minimum amount of Securities in Liquidation
Amount that would be necessary to authorize or take such action at a
meeting at which all Holders having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders entitled to vote who have not
consented in writing. The Administrative Trustees may specify that
any written ballot submitted to the Holder for the purpose of taking
any action without a meeting shall be returned to the Trust within the
time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder executing it.
Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
or trading, otherwise provides, the Administrative Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person
or by proxy or any other
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matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a New York banking
corporation with trust powers and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;
(b) The execution, delivery and performance by the
Property Trustee of the Declaration has been duly authorized by all
necessary corporate action on the part of the Property Trustee. The
Declaration has been duly executed and delivered by the Property
Trustee and constitutes a legal, valid and binding obligation of the
Property Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of
the court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property Trustee;
and
(d) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is
required for the execution, delivery and performance by the Property
Trustee of this Declaration.
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SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the
Delaware Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee. This
Declaration has been duly executed and delivered by the Delaware
Trustee and constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of
the court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Delaware Trustee;
(d) The Delaware Trustee is a natural Person who is a
resident of the State of Delaware or, if not a natural Person, an
entity which has its principal place of business in the State of
Delaware; and
(e) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this
Declaration.
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ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Additional Interest.
(a) The Holders of the Capital Securities, the Debentures and
the Capital Securities Guarantee (collectively, the "Registrable Securities")
are entitled to the benefits of a Registration Rights Agreement. Pursuant to
the Registration Rights Agreement, the Sponsor and the Trust have agreed for
the benefit of the Holders of Registrable Securities that: (i) they will, at
the Sponsor's cost, within 150 days after January 13, 1997 (the "Issue Date"),
file a registration statement (the "Exchange Registration Statement") relating
to an Exchange Offer pursuant to which each issuer of such respective
Registrable Securities would issue amounts of such Registrable Securities as
are accepted in the Exchange Offer which shall be identical in all respects to
those exchanged, except they will have been registered under the Securities Act
and will no longer be subject to transfer restrictions under the Securities Act
or the $100,000 minimum aggregate principal or liquidation amount transfer
restriction and, if required pursuant to the terms of the Registration Rights
Agreement, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to resales of the Registrable
Securities, (ii) they will use their best efforts to cause such Exchange
Registration Statement and/or Shelf Registration Statement, as the case
requires, to be declared effective by the Commission within 180 days after the
Issue Date and (iii) they will use their best efforts to maintain the Shelf
Registration Statement, if any, continuously effective under the Securities Act
until the third anniversary of the effectiveness of the Shelf Registration
Statement or such earlier date as is provided in the Registration Rights
Agreement (the "Effectiveness Period"). All references herein to such
Registrable Securities shall be deemed to include, as the context may require,
the Registrable Securities into which such Securities have been exchanged
pursuant to the Exchange Registration ("Exchange Securities") and all reference
to numbers or amounts of such Securities shall be deemed to include, as the
context may require, such Exchange Securities.
(b) If (i) (A) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement is filed with the Commission on or
prior to the 150th day after the Issue Date, or (B) notwithstanding that the
Debenture Issuer and the Trust have consummated or will consummate an Exchange
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Offer, the Debenture Issuer and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by the Registration Rights
Agreement, then commencing on the day after either such required
filing date, Additional Interest shall accrue on the principal amount
of the Debentures, and additional Distributions shall accumulate on
the Liquidation Amount of the Capital Securities at a rate of 0.25%
per annum; or
(ii) (A) neither the Exchange Offer Registration Statement
nor a Shelf Registration Statement is declared effective by the
Commission on or prior to the 180th day after the Issue Date or (B)
notwithstanding that the Debenture Issuer and the Trust have
consummated or will consummate an Exchange Offer, the Debenture Issuer
and the Trust are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not declared effective by the
Commission on or prior to the 180th day after the Issue Date, then,
commencing on the 181st day after the Issue Date, Additional Interest
shall accrue on the principal amount of the Debentures, and additional
Distributions shall accumulate on the Liquidation Amount of the
Capital Securities at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital
Securities for all Capital Securities or the Debenture Issuer has not
exchanged Exchange Guarantees or Exchange Subordinated Debentures for
all Guarantees or Subordinated Debentures validly tendered, in
accordance with the terms of the Exchange Offer on or prior to the
30th day after the date on which the Exchange Offer Registration
Statement was declared effective or (B) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
third anniversary of the Issue Date or such shorter period as may be
referred to in Rule 144(k) under the Securities Act (other than after
such time as all Capital Securities have been disposed of thereunder
or otherwise cease to be Registrable Securities), then Additional
Interest shall accrue on the principal amount of the Debentures, and
additional Distributions shall accumulate on the Liquidation Amount of
the Capital Securities, at a rate of 0.25% per annum commencing on (x)
the 31st day after such effective date, in the case of (A) above, or
(y) the day such Shelf Registration Statement ceases to be effective
in the case of (B) above;
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provided, however, that neither the Additional Interest rate on the Debentures,
nor the additional Distributions rate on the Liquidation Amount of the Capital
Securities, may exceed in the aggregate 0.25% per annum; provided, further,
however, that (1) upon the filing of the Exchange Offer Registration Statement
or a Shelf Registration Statement (in the case of Section 14.1(b)(i)), (2) upon
the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of Section 14.1(b)(ii), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Subordinated Debentures for all Capital Securities, Guarantees and Subordinated
Debentures tendered (in the case of Section 14.1(b)(iii)(A)), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of Section 14.1(b)(iii)(B)), Additional Interest on the
Debentures, and additional Distributions on the Liquidation Amount of the
Capital Securities as a result of this Section 14.1(b) (or the relevant
subclause thereof), as the case may be, shall cease to accumulate.
(c) Any amounts of Additional Interest and additional
Distributions due pursuant to Sections 14.1(b)(i), (ii) or (iii) above will be
payable in cash on January 1 and July 1 of each year to the Holders on the
fifteenth day preceding the relevant Distribution date; provided, however, that
the payment of such amounts may be deferred during any Extension Period.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
(a) All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(i) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set
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forth below (or such other address as the Trust may give notice of to
the Holders):
Orion Capital Trust I
600 Fifth Avenue
24th Floor
New York, New York 10020
Attention: Michael P. Maloney, Esq.
Administrative Trustee
(ii) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders):
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Second Floor
5-4-82-12
(iii) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as
the Property Trustee may give notice of to the Holders):
The Bank of New York
101 Barclay Street, Floor 21W
New York, New York 10286
Attention: Corporate Trust Administration
(iv) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
Orion Capital Corporation
600 Fifth Avenue
24th Floor
New York, New York 10020
Attention: Michael P. Maloney, Esq.
Senior Vice President, General
Counsel and Secretary
(v) if given to any other Holder, at the address set forth
on the books and records of the Trust.
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(b) All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws; provided, however, that the
provisions of 12 Del. C. Sections 3540 and 3561 shall not apply, and, to the
fullest extent possible, it is the intent of the parties hereto the
compensation payable to any Trustee not be subject to review by any Court
whether pursuant to 12 Del. C. Section 3560 or otherwise.
SECTION 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 15.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 15.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 15.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of
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such provision to Persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 15.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned have caused this Amended
and Restated Declaration of Trust to be duly executed as of the day and year
first above written.
/s/ W. Marston Becker
-----------------------------------
W. Marston Becker, not in his
individual capacity but solely in
his capacity as Administrative
Trustee
/s/ Daniel L. Barry
-----------------------------------
Daniel L. Barry, not in his
individual capacity but solely in
his capacity as Administrative
Trustee
/s/ Michael P. Maloney
-----------------------------------
Michael P. Maloney, Esq., not in
his individual capacity but
solely in his capacity as
Administrative Trustee
DELAWARE TRUST CAPITAL MANAGEMENT,
INC., not in its individual
capacity but solely in its
capacity as Delaware Trustee
By: /s/ Richard N. Smith
--------------------------------
Name:
Title:
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THE BANK OF NEW YORK,
not in its individual capacity
but solely in its capacity as
Property Trustee
By: /s/ Walter Gitlin
--------------------------------
Walter Gitlin
Vice President
ORION CAPITAL CORPORATION,
as Sponsor
By: /s/ Michael P. Maloney
--------------------------------
Michael P. Maloney, Esq.
Senior Vice President, General
Counsel and Secretary
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ANNEX I
TERMS OF
8.73% CAPITAL SECURITIES
8.73% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 13, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities (collectively, the "Securities") are set out below and
supplement the other rights and obligations of Holders of Securities contained
in the Declaration (each capitalized term used but not defined herein has the
meaning set forth in the Declaration or, if not defined in such Declaration, as
defined in the Indenture.
1. Designation and Number.
(a) Capital Securities. 125,000 Capital Securities of the
Trust, with an aggregate Liquidation Amount (as defined in Section 2 hereof) of
one hundred twenty-five million dollars ($125,000,000), and with a Liquidation
Amount of $1,000 per security, are hereby designated for the purposes of
identification only as "8.73% Capital Securities" (the "Capital Securities").
Upon consummation of the Exchange Offer a second series of the Capital
Securities may be issued which shall be identical in all respects to the series
of Capital Securities issued at the Closing Time except that such Capital
Securities will not be subject to (i) the transfer restrictions under the
Securities Act contained in the series of Capital Securities issued at the
Closing Time (except Private Exchange Securities (as defined in the
Registration Rights Agreement), which may be subject to such restrictions),
(ii) the $100,000 minimum Liquidation Amount transfer restriction set forth in
Section 9.2(n) of the Declaration or (iii) any increase in the Distribution
rate thereon under the Registration Rights Agreement. The certificates
evidencing the Capital Securities to be issued at Closing Time shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange or
quotation system on which the Capital Securities are listed or quoted.
(b) Common Securities. 4,000 Common Securities of the Trust
with an aggregate Liquidation Amount with respect to the assets of the Trust of
four million dollars ($4,000,000) and a Liquidation Amount with respect to the
assets of the Trust of
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$1,000 per security, are hereby designated for the purposes of identification
only as "8.73% Common Securities" (the "Common Securities"). The certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Subject to Section 9 hereof, Distributions payable on
each Security will be fixed at a rate per annum of 8.73% (the "Coupon Rate") of
the Liquidation Amount of $1,000 per Security (the "Liquidation Amount"), such
rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions not due during an Extension Period (including
the first semi-annual period during such period) in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes distributions of any such interest
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds on hand legally available
therefor.
(b) Subject to Section 9 hereof, Distributions on the
Securities will be cumulative, will accumulate from the most recent date to
which Distributions have been paid or, if no Distributions have been paid, from
January 13, 1997, and will be payable semi-annually in arrears on January 1 and
July 1 of each year, commencing on July 1, 1997, except as otherwise described
below. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months and, for any
period less than 6 months, the actual months elapsed and the actual days
elapsed in a partial month in such period. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date shall 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), with the same force and effect as if made on such date (each date
on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). So long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Debentures for a period not
exceeding 10 consecutive
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semi-annual periods, including the first semi-annual period during such period
(each an "Extension Period"), provided that no Extension Period shall extend
beyond the Stated Maturity of the Debentures. Upon any such election,
Distributions will be deferred during such Extension Period. Notwithstanding
such deferral, Distributions to which Holders of Securities are entitled shall
continue to accumulate additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
semi-annually from the relevant Distribution Dates during any such Extension
Period. Prior to the expiration of any Extension Period, the Debenture Issuer
may further defer payments of interest by further extending such Extension
Period; provided that such Extension Period, together with all such previous
and further extensions within such Extension Period, may not exceed 10
consecutive semi-annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Stated Maturity of the Debentures.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
(c) Subject to Section 9 hereof, Distributions on the
Securities will be payable to the Holders thereof as they appear on the books
and records of the Trust on the fifteenth day preceding the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as follows: (i) if the Capital Securities are held in
global form by a Clearing Agency (or its nominee), in accordance with the
procedures of the Clearing Agency; and (ii) if the Capital Securities are held
in definitive form, by check mailed to the address of the Holder thereof as
reflected in the records of the Registrar unless otherwise agreed by the Trust.
The relevant record dates for the Common Securities shall be the same as the
record dates for the Capital Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution Date will cease to
be payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
applicable to the Debentures determined in accordance with the Indenture,
mutatis mutandis.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed on a Pro Rata basis
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as set forth Section 8 hereof among the Holders of the Securities, except as
otherwise required by Section 9 hereof.
3. Liquidation Distribution Upon Dissolution.
In the event of any dissolution or termination of the Trust,
or the Sponsor otherwise gives notice of its election to liquidate the Trust
pursuant to Section 8.1(a)(iii) of the Declaration, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the
Administrative Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, and subject to Section 9 hereof, to the Holders of the Securities a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive out of the assets of the Trust legally
available for distribution to Holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount of $1,000 per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal
amount of Debentures to be paid in accordance with their terms and (ii) with
respect to a distribution of Debentures upon the liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Securities shall be paid on a
Pro Rata basis as set forth in Section 8 hereof among the Holders of the
Securities, except as otherwise required by Section 9 hereof.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures on the Stated
Maturity thereof or prepayment thereof (in whole or in part) prior thereto in
accordance with the terms thereof, the proceeds from such repayment or
prepayment shall be simultaneously applied by the Property Trustee (subject to
the Property Trustee having received not less than 45 days written notice to
the repayment
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date or prepayment date) to redeem a Like Amount of the Securities at a
redemption price equal to (i) in the case of the repayment of the Debentures on
the Stated Maturity, the Maturity Redemption Price (as defined below), (ii) in
the case of the optional prepayment of the Debentures upon the occurrence and
continuation of a Special Event, the Special Event Redemption Price (as defined
below) and (iii) in the case of the optional prepayment of the Debentures other
than as a result of the occurrence and continuance of a Special Event, the
Optional Redemption Price (as defined below). The Maturity Redemption Price,
the Special Event Redemption Price and the Optional Redemption Price are
referred to collectively as the "Redemption Price".
(b) (i) The "Maturity Redemption Price", with respect to
a redemption of Securities, shall mean an amount equal to the principal of and
accrued interest on the Debentures as of the Stated Maturity thereof.
(ii) "Special Event Redemption Price" shall mean a price
equal to the greater of (i) 100% of the Liquidation Amount of
Securities to be redeemed or (ii) the sum, as determined by a Quotation
Agent, of the present values of the remaining scheduled payments of
principal and interest on the Debentures to January 1, 2007 (the first
date on which the Debentures are subject to optional prepayment),
discounted to the prepayment date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months and, for any period
less than 6 months, the actual months elapsed and the actual days
elapsed in a partial month in such period) at the Adjusted Treasury
Rate, plus, in each case, accumulated and unpaid Distributions thereon,
if any, to the date of such prepayment.
(iii) "Optional Redemption Price" shall mean a price equal to
the outstanding principal amount of the Debentures to be redeemed, plus
accrued interest thereon to the date of prepayment.
(c) On and from the date fixed by the Administrative Trustees
for any distribution of Debentures and liquidation of the Trust and subject to
Section 9 hereof: (i) the Securities will no longer be deemed to be
outstanding, (ii) each Holder of Securities will receive a registered
certificate or certificates representing the Debentures to be delivered upon
such distribution and (iii) Securities will be deemed to represent beneficial
interests in a Like Amount of Debentures, and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Securities, until such Securities are presented to the Administrative Trustee
or their agent for
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cancellation and such Debentures are transferred to the Holders of such
Securities.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on
all Securities for all semi-annual Distribution periods that expire on or
before the date of redemption.
(e) The procedure with respect to redemptions or
distributions of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date fixed for repayment or
prepayment of the Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder
shall affect the validity of the redemption or exchange proceedings
with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
allocated on a Pro Rata basis as set forth in Section 8 hereof among
the Holders of Securities, except as otherwise required by Section 9
hereof, it being understood that, in respect of Capital Securities
registered in the name of and held of record by a Clearing Agency or
its nominee, the distribution of the proceeds of such redemption will
be made to the Clearing Agency and disbursed by such Clearing Agency in
accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, such notice shall be irrevocable and
(A) with respect to Capital Securities registered in the name of or
held of record by a Clearing Agency or its nominee, by 12:00 noon, New
York City time, on the redemption
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date, provided that the Debenture Issuer has paid the Property Trustee
a sufficient amount of cash in connection with the related maturity or
prepayment of the Debentures by 10:00 a.m., New York City time, on the
Stated Maturity of the Debentures or the date of prepayment, as the
case may be, the Property Trustee or the Paying Agent will pay to the
Clearing Agency or its nominee funds sufficient to pay the applicable
Redemption Price with respect to such Capital Securities, and (B) with
respect to Capital Securities issued in certificated form and Common
Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related
maturity or prepayment of the Debentures, the Property Trustee or the
Paying Agent will pay the relevant Redemption Price to the Holders of
such Securities against presentation to the Registrar of the
certificates therefor. If a Redemption/Distribution Notice shall have
been given and funds deposited with the Property Trustee to pay the
Redemption Price (including all unpaid Distributions) with respect to
the Securities called for redemption, then immediately prior to the
close of business on the redemption date, Distributions will cease to
accumulate on the Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such
Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on the
redemption date of any Securities will be subject to the rights of
Holders of such Securities on the close of business on a regular record
date in respect of a Distribution Date occurring on or prior to such
Redemption Date.
(v) Neither the Administrative Trustees nor the Trust shall
be required to register or cause to be registered the transfer of (A)
any Securities beginning on the opening of business 15 days before the
day of mailing of a Redemption/Distribution Notice or (B) any
Securities selected for redemption (except the unredeemed portion of
any Security being redeemed). If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price
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), with the same force and effect as if made on such date
fixed for redemption. If payment of the Redemption Price in respect of
any Securities is improperly withheld or refused and not paid either by
the Property Trustee or the Paying Agent or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, or the date fixed for
redemption, Distributions on such
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Securities will continue to accumulate from such redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor
or any of its Affiliates may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by
private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 hereof and
as otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property
Trustee for the benefit of the Holders of the Trust Securities, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 5.07 of the Indenture,
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Debentures or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of a majority in Liquidation Amount of all
outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Capital Securities except by subsequent vote of such Holders.
The Property Trustee shall notify each Holder of Capital Securities of any
notice of default with respect to the Debentures. In addition to obtaining the
foregoing approvals of such Holders of the Capital Securities, prior to taking
any of the foregoing actions, the Trustees shall obtain an Opinion of Counsel
experienced in such matters to the effect there is no more than an
insubstantial risk that the Trust would not be classified for United States
federal income tax purposes as a trust subject to the provisions of Sections
671 through 679 of the Code (a "grantor trust") on account of such action. The
foregoing provisions of this Section 5(b) shall be in lieu of Sections
316(a)(1)(A) and (B) of
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the Trust Indenture Act, and such Sections 316(a)(1)(A) and (B) are hereby
expressly excluded from this Trust Agreement.
(c) If an Event of Default under the Declaration has occurred
and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on the
Debentures on any due date (including any Interest Payment Date or prepayment
date or Stated Maturity of the Debenture), then a Holder of Capital Securities
may directly institute a proceeding for enforcement of payment to such Holder
of the principal of or premium, if any, or interest on a Like Amount of
Debentures (a "Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the rights of the
Common Securities Holders will be subrogated to the rights of the Holder of
Capital Securities to the extent of any payment made by the Debenture Issuer to
the Holders of Capital Securities in such Direct Action. Except as provided in
the second preceding sentence, the Holders of Capital Securities will not be
able to exercise directly any other remedy available to the holders of the
Debentures.
(d) Any required approval of Holders of Capital Securities
may be given at a separate meeting of Holders of Capital Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Administrative Trustees will cause a
notice of any meeting at which Holders of Capital Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders is
to be taken, to be mailed to each Holder of record of Capital Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consent.
(e) No vote or consent of the Holders of the Capital
Securities will be required for the Trust to redeem and cancel Capital
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
(f) Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled
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to vote or consent and shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
(g) If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at
such time by the holders of a majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the holders of the Capital Securities
have the right to vote to appoint, remove or replace the Administrative
Trustees, which voting rights are vested exclusively in the Sponsor as the
holder of all the Common Securities. No resignation or removal of a Trustee
and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 and
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by the Holder of the
Common Securities. No resignation or removal of a Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment
by the successor trustee in accordance with the provisions of the Declaration.
(c) So long as any Debentures are held by the Property
Trustee for the benefit of the Holders of the Trust Securities, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee, or execute any trust or
power conferred on such Debenture Trustee with respect to the Debentures, (ii)
waive any past default that is waivable under Section 5.07 of the Indenture,
(iii) exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of the Debentures or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of a majority in Liquidation Amount of all
outstanding Common Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior approval of each Holder of the Common Securities. The Trustees shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Common Securities except by subsequent vote of such Holders. The
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Property Trustee shall notify each Holder of Common Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Common Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an Opinion of Counsel experienced
in such matters to the effect there is no more than an insubstantial risk that
the Trust would not be classified for United States federal income tax purposes
as a trust subject to the provisions of Sections 671 through 679 of the Code (a
"grantor trust") on account of such action. The foregoing provisions of this
Section 6(c) shall be in lieu of Sections 316(a)(1)(A) and (B) of the Trust
Indenture Act, and such Sections 316(a)(1)(A) and (B) are hereby expressly
excluded from this Trust Agreement.
(d) If an Event of Default under the Declaration has occurred
and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay principal of or premium, if any, or interest on the
Debentures on the due date (including any Interest Payment Date or prepayment
date or Stated Maturity of the Debenture), then a Holder of Common Securities
may institute a Direct Action for enforcement of payment to such Holder of the
principal of or premium, if any, or interest on a Like Amount of Debentures on
or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities Holders will be
subrogated to the rights of the Holders of Capital Securities to the extent of
any payment made by the Debenture Issuer to Holders of Common Securities in
such Direct Action. Except as provided in the second preceding sentence, the
Holders of Common Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(e) Any required approval of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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(f) No vote or consent of the Holders of the Common
Securities will be required for the Trust to redeem and cancel Common
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
7. Amendments to Declaration and Indenture.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor as
the holder of all of the outstanding Common Securities, the Property Trustee
and the Administrative Trustees, without the consent of the Holders of the
Securities (i) to cure any ambiguity, correct or supplement any provisions in
the Declaration that may be inconsistent with any other provisions, or to make
any other provisions with respect to matters or questions arising under the
Declaration which shall not be inconsistent with the other provisions of the
Declaration, (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an Investment Company under the Investment
Company Act, or (iii) to qualify or maintain qualification of the Declaration
under the Trust Indenture Act; provided, however, that in each case, such
action shall not adversely affect in any material respect the interests of any
Holder of Securities. Any amendments of the Declaration pursuant to the
foregoing shall become effective when notice thereof is sent to the Holders of
the Securities. The Declaration also may be amended by the Trustees and the
Sponsor as the holder of all the outstanding Common Securities (i) with the
consent of Holders representing a majority in Liquidation Amount of all
outstanding Securities and (ii) upon receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an Investment Company under the Investment
Company Act; provided that, without the consent of each Holder of Securities,
the Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
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8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate Liquidation Amount of the
Securities held by the relevant Holder in relation to the aggregate Liquidation
Amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Capital Securities pro rata according to the aggregate Liquidation Amount
of Capital Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of Common Securities pro rata according to the aggregate
Liquidation Amount of Common Securities held by the relevant Holder relative to
the aggregate Liquidation Amount of all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs
and is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and other
payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
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12. Additional Interest.
If the Debenture Issuer fails to comply with its obligations
under the Registration Rights Agreement or if the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) or the Shelf
Registration Statement (as defined in the Registration Rights Agreement) fails
to become effective, then Additional Interest shall accrue on the principal
amount of the Debentures, and additional Distributions shall accumulate on the
Liquidation Amount of the Trust Securities, each at a rate of 0.25% per annum
as more fully set forth in Article XIV of the Declaration.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal place
of business.
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EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO
TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER
NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.]
[IF THIS GLOBAL SECURITY IS A RULE 144A GLOBAL SECURITY,
INSERT: UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY
(OR ANY PREDECESSOR OF THIS CAPITAL SECURITY).
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EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE
(E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE
TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM OF
THE TRUST DATED JANUARY 8, 1997. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR (ii) THE ACQUISITION AND HOLDINGS OF THIS CAPITAL
SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975
OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH
PROHIBITION.
[IF THIS GLOBAL SECURITY IS A REGULATION S GLOBAL SECURITY,
INSERT: THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.]
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<PAGE> 110
Certificate No. No. of Capital Securities
CUSIP NO.
Certificate Evidencing Capital Securities
of
ORION CAPITAL TRUST I
8.73% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
ORION CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________________ (the "Holder") is the registered owner of
__________________ capital securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.73% Capital
Securities (Liquidation Amount $1,000 per Capital Security) (the "Capital
Securities"). The Capital Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of
this certificate duly endorsed, in proper form for transfer and otherwise
complying with the terms and conditions of the Declaration (as hereinafter
defined). The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Securities represented hereby are set
forth herein, on the reverse hereof and in the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of January 13, 1997, as the
same may be amended from time to time (the "Declaration"), and shall in all
respects be subject to the provisions thereof, including the designation of the
terms of the Capital Securities as set forth in Annex I to the Declaration.
Each capitalized term used but not defined herein or in any legend form or
certificate hereon shall have the meaning given it in the Declaration. The
Sponsor will provide a copy of the Declaration, without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as
A1-3
<PAGE> 111
indebtedness and the Capital Securities as evidence of indirect beneficial
ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this 13th day of January, 1997.
ORION CAPITAL TRUST I
By:_________________________
Michael P. Maloney, Esq.
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated: January __, 1997.
THE BANK OF NEW YORK
as Property Trustee
By:_________________________
Walter Gitlin
Authorized Signatory
A1-4
<PAGE> 112
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed
at a rate per annum of 8.73% (the "Coupon Rate") of the Liquidation Amount of
$1,000 per Capital Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions not due
during an Extension Period (including the first semi-annual period during such
period) in arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or, if no Distributions have been paid, from January 13, 1997 and will be
payable semi-annually in arrears on January 1 and July 1, of each year,
commencing on July 1, 1997, except as otherwise described below and in the
Declaration. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period less than 6 months, the
actual months elapsed and the actual days elapsed in a partial month in such
period.
As long as no Event of Default has occurred and is continuing,
the Debenture Issuer has the right under the Indenture, at any time and from
time to time during the term of the Debentures, to defer payments of interest
by extending the interest payment period on the Debentures for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period (an "Extension Period"), during
which Extension Period no interest shall be due and payable, provided that no
Extension Period shall extend beyond the Stated Maturity of the Debentures.
Upon any such election, semi-annual Distributions on the Capital Securities
will be deferred by the Trust during the term of the Extension Period.
Distributions will continue to accumulate interest thereon (to the extent
permitted by applicable law, but not exceeding the rate of interest then
accruing on the Debentures) at the Coupon Rate compounded semi-annually during
any such Extension Period. Before the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period, provided
that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity of the
A1-5
<PAGE> 113
Debentures. Payments of Distributions that have accumulated during any
Extension Period will be payable to Holders as they appear on the books and
records of the Trust on the record date for the first scheduled Distribution
payment date following the expiration of such Extension Period. Upon the
expiration of any Extension Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Administrative Trustees shall, at the direction of the
Sponsor, at any time dissolve the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of
the Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the Declaration.
A1-6
<PAGE> 114
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:___________________
Signature:______________________________________
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee:____________________________
________________________
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
A1-7
<PAGE> 115
[Include the following if the Capital Security bears a Restricted Capital
Securities Legend]
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) [ ] exchanged for the undersigned's own account without
transfer; or
(2) [ ] transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(3) [ ] transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
(4) [ ] transferred to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3)
or (7) of Rule 501 under the Securities Act of 1933
that is acquiring the Capital Securities for its own
account, or for the account of such an institutional
"accredited investor," for investment purposes and
not with a view to, or for offer or sale in
connection with, any distribution in violation of the
Securities Act of 1933; or
(5) [ ] transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933; or
(6) [ ] transferred pursuant to an effective registration
statement.
Unless one of the boxes is checked, the Registrar will refuse to register any
of the Capital Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Registrar may require, prior to registering any
such transfer of the Capital Securities such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such
as
A1-8
<PAGE> 116
the exemption provided by Rule 144 under such Act; provided, further, that (i)
if box 2 is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (4) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached as Annex A to the Offering Memorandum of
the Trust dated January 8, 1997.
Date:______________________________
Signature:_________________________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
A1-9
<PAGE> 117
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF
AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS COMMON SECURITY
(OR ANY PREDECESSOR OF THIS COMMON SECURITY) EXCEPT (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS COMMON SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE
TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM OF THE TRUST DATED JANUARY 8,
1997. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS COMMON SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
A2-1
<PAGE> 118
Certificate No. No. of Common Securities
Certificate Evidencing Common Securities
of
ORION CAPITAL TRUST I
8.73% Common Securities
(Liquidation Amount $1,000 per Common Security)
ORION CAPITAL TRUST I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Orion
Capital Corporation (the "Holder") is the registered owner of
__________________ common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 8.73% Common
Securities (Liquidation Amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of
this certificate duly endorsed, in proper form for transfer and otherwise
complying with the terms and conditions of the Declaration (as hereinafter
defined). The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are set
forth herein, on the reverse hereof and in the Amended and Restated Declaration
of Trust of the Trust dated as of January 13, 1997, as the same may be amended
from time to time (the "Declaration"), and shall in all respects be subject to
the provisions thereof, including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Each capitalized term
used but not defined herein or in any legend, form or certificate hereon shall
have the meaning given it in the Declaration. The Sponsor will provide a copy
of the Declaration, the Common Securities Guarantee and the Indenture
(including any supplemental indenture) to any Holder without charge upon
written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of indirect beneficial ownership in the
Debentures.
A2-2
<PAGE> 119
IN WITNESS WHEREOF, the Trust has executed this certificate
this 13th day of January, 1997.
ORION CAPITAL TRUST I
By:_________________________
Michael P. Maloney, Esq.
Administrative Trustee
A2-3
<PAGE> 120
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 8.73% (the "Coupon Rate") of the Liquidation Amount of
$1,000 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions not due during an
Extension Period (including the first semi-annual period during such period) in
arrears for more than one semi-annual period will bear interest thereon
compounded semiannually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative,
will accrue from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 13, 1997 and will be payable
semi-annually in arrears on January 1 and July 1, of each year, commencing on
July 1, 1997, except as otherwise described below and in the Declaration.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30 day months and, for any period less than 6 months, the actual months
elapsed and the actual days elapsed in a partial month in such period.
As long as no Event of Default has occurred and is continuing,
the Debenture Issuer has the right under the Indenture, at any time and from
time to time during the term of the Debentures, to defer payments of interest
by extending the interest payment period on the Debentures for a period not
exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period (an "Extension Period"), during
which Extension Period no interest shall be due and payable, provided that no
Extension Period shall extend beyond the Stated Maturity of the Debentures.
Upon any such election, semi-annual Distributions on the Common Securities will
be deferred by the Trust during the term of the Extension Period.
Distributions will continue to accumulate interest thereon (to the extent
permitted by applicable law, but not exceeding the rate of interest then
accruing on the Debentures) at the Coupon Rate compounded semi-annually during
any such Extension Period. Before the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period, provided
that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 10 consecutive
semi-annual periods or extend beyond the Stated Maturity of the
A2-4
<PAGE> 121
Debentures. Payments of Distributions that have accumulated during any
Extension Period will be payable to Holders as they appear on the books and
records of the Trust on the record date for the first scheduled Distribution
payment date following the expiration of such Extension Period. Upon the
expiration of any Extension Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Administrative Trustees shall, at the direction of the
Sponsor, at any time dissolve the Trust and cause the Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of
the Securities to be redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-5
<PAGE> 122
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Common Security Certificate to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------------------------
Signature:
--------------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee:
----------------------------
- ----------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
A2-6
<PAGE> 123
[Include the following if the Common Security bears a Restricted Common
Securities Legend]
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) [ ] exchanged for the undersigned's own account without
transfer; or
(2) [ ] transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(3) [ ] transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
(4) [ ] transferred to an institutional "accredited investor"
within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act that is
acquiring the Preferred Security for its own account,
or for the account of such an institutional
"accredited investor," for investment purposes and not
with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities
Act; or
(5) [ ] transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933; or
(6) [ ] transferred pursuant to an effective registration
statement
Unless one of the boxes is checked, the Registrar will refuse to register any
of the Common Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Registrar may require, prior to registering any
such transfer of the Common Securities such legal opinions, certifications and
other information as the Trust has reasonably
A2-7
<PAGE> 124
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act; provided, further, that (i) if box 2 is checked, the transferee must also
certify that it is a qualified institutional buyer as defined in Rule 144A or
(ii) if box 4 is checked, the transferee must also provide a Transferee
Representation Letter in the form attached as Annex A to the Offering
Memorandum of the Trust, dated January 8, 1997.
Date:___________________________________
Signature:______________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-8
<PAGE> 1
Exhibit 4.6
FORM OF EXCHANGE CAPITAL SECURITY
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: THIS 8.73% EXCHANGE
CAPITAL SECURITY OF ORION CAPITAL TRUST I (THE "CAPITAL SECURITY") IS A GLOBAL
EXCHANGE CAPITAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE
"CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY. THIS CAPITAL SECURITY IS
EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE DECLARATION.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR (ii) THE ACQUISITION AND HOLDINGS OF THIS CAPITAL SECURITY
BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH
PROHIBITION.
<PAGE> 2
Certificate No. E-_____ No. of Exchange Capital Securities
125,000
CUSIP NO. 68626P AA 3
Certificate Evidencing Exchange Capital Securities
of
ORION CAPITAL TRUST I
8.73% Exchange Capital Securities
(Liquidation Amount $1,000 per Exchange Capital Security)
ORION CAPITAL TRUST I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that _______ (the
"Holder") is the registered owner of _________ capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 8.73% Exchange Capital Securities (Liquidation Amount $1,000 per
Exchange Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed, in proper
form for transfer and otherwise complying with the terms and conditions of the
Declaration (as hereinafter defined). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are set forth herein, on the reverse hereof and in
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January 13, 1997, as the same may be amended from time to time (the
"Declaration"), and shall in all respects be subject to the provisions thereof,
including the designation of the terms of the Capital Securities as set forth in
Annex I to the Declaration. Each capitalized term used but not defined herein or
in any legend form or certificate hereon shall have the meaning given it in the
Declaration. The Sponsor will provide a copy of the Declaration, the Exchange
Guarantee and the Indenture to any Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Exchange Guarantee to the extent provided therein.
-2-
<PAGE> 3
By its acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Exchange Debentures as indebtedness and
the Capital Securities as evidence of indirect beneficial ownership in the
Exchange Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this __
day of __________, 1997.
ORION CAPITAL TRUST I
By:_____________________________
Michael P. Maloney
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated: __, 1997.
THE BANK OF NEW YORK
as Property Trustee
By:_____________________________
Walter Gitlin
Authorized Signatory
-3-
<PAGE> 4
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at a
rate per annum of 8.73% (the "Coupon Rate") of the Liquidation Amount of $1,000
per Capital Security, such rate being the rate of interest payable on the
Exchange Debentures to be held by the Property Trustee. Distributions not due
during an Extension Period (including the first semi-annual period during such
period) in arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Exchange Debentures held by the Property Trustee and to the extent the
Property Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 13, 1997 and will be payable
semi-annually in arrears on January 1 and July 1 of each year, commencing on
July 1, 1997, except as otherwise described below and in the Declaration.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months and, for any period less than 6 months, the actual months
elapsed and the actual days elapsed in a partial month in such period.
As long as no Event of Default has occurred and is continuing, the
Debenture Issuer has the right under the Indenture, at any time and from time to
time during the term of the Exchange Debentures, to defer payments of interest
by extending the interest payment period on the Exchange Debentures for a period
not exceeding 10 consecutive semi-annual periods, including the first such
semi-annual period during such extension period (an "Extension Period"), during
which Extension Period no interest shall be due and payable, provided that no
Extension Period shall extend beyond the Stated Maturity of the Exchange
Debentures. Upon any such election, semi-annual Distributions on the Capital
Securities will be deferred by the Trust during the term of the Extension
Period. Distributions will continue to accumulate interest thereon (to the
extent permitted by applicable law, but not
-4-
<PAGE> 5
exceeding the rate of interest then accruing on the Exchange Debentures) at the
Coupon Rate compounded semi-annually during any such Extension Period. Before
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period, provided that such Extension Period, together with
all such previous and further extensions within such Extension Period, may not
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Exchange Debentures. Payments of Distributions that have accumulated
during any Extension Period will be payable to Holders as they appear on the
books and records of the Trust on the record date for the first scheduled
Distribution payment date following the expiration of such Extension Period.
Upon the expiration of any Extension Period and the payment of all accrued and
unpaid interest and any additional amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above requirements.
The Administrative Trustees shall, at the direction of the Sponsor,
at any time dissolve the Trust and cause the Exchange Debentures to be
distributed to the holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Exchange Debentures, cause a Like
Amount of the Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification
number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
-5-
<PAGE> 6
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:___________________
Signature:__________________________________
(Sign exactly as your name appears
on the other side of this Capital Security Certificate)
Signature Guarantee:____________________________
___________________________
* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
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<PAGE> 1
Exhibit 4.7
-----------------------------------------------
CAPITAL SECURITIES GUARANTEE AGREEMENT
ORION CAPITAL CORPORATION
DATED AS OF JANUARY 13, 1997
-----------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I. DEFINITIONS AND INTERPRETATION Page
SECTION 1.1. Definitions and Interpretation........................... 2
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application......................... 7
SECTION 2.2. List of Holders of Securities............................ 7
SECTION 2.3. Reports by the Capital Securities
Guarantee Trustee...................................... 7
SECTION 2.4. Periodic Reports to Capital
Securities Guarantee Trustee........................... 8
SECTION 2.5. Evidence of Compliance with
Conditions Precedent................................... 8
SECTION 2.6. Events of Default; Waiver................................ 8
SECTION 2.7. Event of Default; Notice................................. 9
SECTION 2.8. Conflicting Interests.................................... 9
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Capital
Securities Guarantee Trustee........................... 9
SECTION 3.2. Certain Rights of Exchange Capital
Securities Guarantee Trustee........................... 12
SECTION 3.3. Not Responsible for Recitals or
Issuance of Capital Securities
Guarantee.............................................. 15
ARTICLE IV. CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1. Capital Securities Guarantee
Trustee; Eligibility................................... 15
SECTION 4.2. Appointment, Removal and Resignation
of Capital Securities
Guarantee Trustee...................................... 16
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee................................................ 17
SECTION 5.2. Waiver of Notice and Demand.............................. 17
SECTION 5.3. Obligations Not Affected................................. 18
SECTION 5.4. Rights of Holders........................................ 19
SECTION 5.5. Guarantee of Payment..................................... 19
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.6. Subrogation.............................................. 19
SECTION 5.7. Independent Obligations.................................. 20
ARTICLE VI. LIMITATION OF TRANSACTION; SUBORDINATION
SECTION 6.1. Limitation of Transactions............................... 20
SECTION 6.2. Ranking.................................................. 21
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.............................................. 22
ARTICLE VIII. INDEMNIFICATION
SECTION 8.1. Exculpation.............................................. 22
SECTION 8.2. Indemnification.......................................... 23
ARTICLE IX. MISCELLANEOUS
SECTION 9.1. Successors and Assigns................................... 24
SECTION 9.2. Amendments............................................... 24
SECTION 9.3. Notices.................................................. 24
SECTION 9.4. Benefit.................................................. 26
SECTION 9.5. Governing Law............................................ 26
</TABLE>
-ii-
<PAGE> 4
CAPITAL SECURITIES GUARANTEE AGREEMENT
This EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT (the
"Capital Securities Guarantee"), dated as of January 13, 1997, delivered by
Orion Capital Corporation, a Delaware corporation (the "Guarantor"), and The
Bank of New York, a New York banking corporation, as trustee (the "Capital
Securities Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of Orion
Capital Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January 13, 1997, the Guarantor as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing on the date hereof 125,000
capital securities, having an aggregate liquidation amount of $125,000,000, such
capital securities being designated as the 8.73% Capital Securities
(collectively the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined below). The
Guarantor agrees to make certain other payments on the terms and conditions set
forth herein; and
WHEREAS, the Guarantor has executed and delivered a guarantee
agreement with substantially identical terms to this Capital Securities
Guarantee, for the benefit of the holders of the Original Capital Securities (as
defined herein) (the "Original Capital Securities Guarantee") and a guarantee
agreement, with substantially identical terms to this Capital Securities
Guarantee, for the benefit of the holders of the Common Securities (as defined
herein), except that if an Event of Default (as defined in the Declaration) has
occurred and is continuing, the rights of holders of the Common Securities to
receive Guarantee Payments under the Common Securities Guarantee are subordinate
to the rights of holders of Capital Securities and the Original Capital
Securities to receive Guaranty Payments under this Capital Securities Guarantee
and the Original Capital Securities Guarantee.
<PAGE> 5
NOW, THEREFORE, in consideration of the purchase by each
Holder, which purchase the Guarantor hereby acknowledges shall benefit the
Guarantor, the Guarantor executes and delivers this Capital Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Capital Securities
Guarantee but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Capital Securities Guarantee have the same meaning
when used in this Capital Securities Guarantee unless otherwise defined
in this Capital Securities Guarantee;
(c) a term defined anywhere in this Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Capital Securities Guarantee" or
"this Capital Securities Guarantee" are to this Capital Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Capital
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Capital Securities Guarantee, unless
otherwise defined in this Capital Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
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<PAGE> 6
"Affiliate" shall mean, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or holding the power
to vote 20% or more of the outstanding voting securities or other ownership
interests of the specified Person, (b) any Person 20% or more of whose
outstanding voting securities or other ownership interests are directly or
indirectly owned, controlled or held with power to vote by the specified Person,
(c) any Person directly or indirectly controlling, controlled by, or under
common control with the specified Person, and (d) a partnership in which the
specified Person is a general partner; provided, however, that Intercargo
Corporation shall not be deemed to be an Affiliate of the Company or Orion
Capital Trust I.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to close.
"Original Capital Securities: means the $125,000,000 aggregate
principal amount of 8.73% Capital Securities (liquidation amount $1.00 per
Capital Security) issued by the Issuer January 13, 1997.
"Capital Securities Guarantee Trustee" means The Bank of New
York, a New York banking corporation, until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Capital Securities Guarantee Agreement and thereafter means
each such Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Capital
Securities Guarantee Trustee at which the corporate trust business of the
Capital Securities Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Agreement is located at The Bank of New York, 101 Barclay Street, Floor 21W, New
York, New York 10286.
"Covered Person" means any Holder or beneficial owner of
Capital Securities.
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<PAGE> 7
"Debentures" means the series of subordinated debt securities
of the Guarantor designated the 8.73% Junior Subordinated Deferrable Interest
Debentures due January 1, 2037 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
"Exchange Debentures" means the series of subordinated debt
securities of the Guarantor designated the 8.73% Exchange Junior Subordinated
Deferrable Interest Debentures due January 1, 2037 held by the Property Trustee
(as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payments or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Capital Securities to the extent the Issuer has funds on hand legally
available therefor at such time, (ii) the redemption price, including all
accumulated and unpaid Distributions to the date of redemption (the "Redemption
Price") to the extent the Issuer has funds on hand legally available therefor at
such time, with respect to any Capital Securities called for redemption by the
Issuer, and (iii) upon a voluntary or involuntary dissolution or liquidation of
the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Capital Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accumulated and
unpaid Distributions on the Capital Securities to the date of payment, to the
extent the Issuer has funds on hand legally available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer. If an Event of Default (as defined in the
Indenture) has occurred and is continuing, no Guarantee Payments under the
Common Securities Guarantee with respect to the Common Securities shall be made
until the Holders of Capital Securities shall be paid in full the Guarantee
Payments to which they are entitled under this Capital Securities Guarantee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Capital Securities;
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<PAGE> 8
provided, however, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.
"Indemnified Person" means the Capital Securities Guarantee
Trustee, any Affiliate of the Capital Securities Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.
"Indenture" means the Indenture, dated as of January 13, 1997,
between the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, pursuant to which the Debentures are to be issued to the Property
Trustee.
"Majority in Liquidation Amount of the Capital Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Capital Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all Capital
Securities.
"Officers' Certificate" means, with respect to any person, a
certificate signed by the Chairman, a Vice Chairman, the Chief Executive
Officer, the President, a Vice President (however designated), the Secretary or
an Assistant Secretary of the Guarantor. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Capital Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express
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<PAGE> 9
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Debentures" means only those junior subordinated
debentures issued by the Guarantor from time to time and sold to trusts to be
established by the Guarantor (if any), which are in each case similar to the
Issuer.
"Other Guarantees" means any guarantee now or hereafter to be
entered into by the Guarantor in respect to any capital securities or common
securities of any other trust similar to the Issuer, or of any trustee of such
trust, or of a partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" when used with respect to the Capital
Securities Guarantee Trustee, means the chairman or any vice chairman of the
board of directors, the chairman or any vice chairman of the executive committee
of the board of directors, the chairman of the trust committee, the president,
any vice president, any assistant vice president, the cashier, any assistant
cashier, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer, the controller or any
assistant controller or any other officer or assistant officer of the Capital
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Successor Capital Securities Guarantee Trustee" means a
successor Capital Securities Guarantee Trustee possessing the qualifications to
act as Capital Securities Guarantee Trustee under Section 4.1.
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<PAGE> 10
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
This Capital Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Capital
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and if and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Capital Securities
Guarantee Trustee (unless the Capital Securities Guarantee Trustee is otherwise
the registrar of the Capital Securities) with a list, in such form as the
Capital Securities Guarantee Trustee may reasonably require, of the names and
addressees of the Holders of the Capital Securities ("List of Holders") as of
such date, (i) within one Business Day after each record date, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Capital Securities Guarantee Trustee; provided, that the Guarantor
shall not be obligated to provide such List of Holders at any time when the List
of Holders does not differ from the most recent List of Holders given to the
Capital Securities Guarantee Trustee by the Guarantor. The Capital Securities
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with
its obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
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<PAGE> 11
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee
On or before January 10 of each year, commencing January 10,
1998, the Capital Securities Guarantee Trustee shall provide to the Holders of
the Capital Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Capital Securities Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by Section
314 of the Trust Indenture Act. Delivery of such reports, information and
documents to the Capital Securities Guarantee Trustee is for informational
purposes only and the Capital Securities Guarantee Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Capital
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in Liquidation Amount of
Capital Securities may, by vote, on behalf of the Holders of
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<PAGE> 12
all of the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Capital Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Capital Securities Guarantee Trustee shall, within 90
days after the occurrence of a default with respect to this Capital Securities
Guarantee, mail by first class postage prepaid, to all Holders of the Capital
Securities, notices of all defaults actually known to a Responsible Officer of
the Capital Securities Guarantee Trustee, unless such defaults have been cured
before the giving of such notice, provided, that, except in the case of default
in the payment of any Guarantee Payment, the Capital Securities Guarantee
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Capital Securities Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
holders of the Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be
deemed to have knowledge of any Event of Default unless the Capital Securities
Guarantee Trustee shall have received written notice, or a Responsible Officer
of the Capital Securities Guarantee Trustee charged with the administration of
the Declaration shall have obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Capital Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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<PAGE> 13
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee
(a) This Capital Securities Guarantee shall be held by the
Capital Securities Guarantee Trustee for the benefit of the Holders, and the
Capital Securities Guarantee Trustee shall not transfer this Capital Securities
Guarantee to any Person except a Holder exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Capital Securities Guarantee Trustee upon
acceptance by such Successor Capital Securities Guarantee Trustee of its
appointment to act as Successor Capital Securities Guarantee Trustee. The right,
title and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not documents
have been executed and delivered pursuant to the appointment of such Successor
Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Capital Securities Guarantee Trustee has occurred and is
continuing, the Capital Securities Guarantee Trustee shall enforce this Capital
Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Capital Securities Guarantee, and no implied
covenants shall be read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Capital Securities Guarantee, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
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<PAGE> 14
(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the
Capital Securities Guarantee Trustee shall be determined
solely by the express provisions of this Capital Securities
Guarantee, and the Capital Securities Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Capital
Securities Guarantee, and no implied covenants or obligations
shall be read into this Capital Securities Guarantee against
the Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Capital Securities Guarantee Trustee and conforming to
the requirements of this Capital Securities Guarantee; but in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith by a Responsible
Officer of the Capital Securities Guarantee Trustee, unless it shall be proved
that the Capital Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee Trustee shall
not be liable with respect to any action taken
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<PAGE> 15
or omitted to be taken by it in good faith in accordance with the direction of
the Holders of not less than a Majority in Liquidation Amount of the Capital
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities Guarantee
Trustee under this Capital Securities Guarantee; and
(iv) no provision of this Capital Securities
Guarantee shall require the Capital Securities Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Capital Securities Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Capital Securities Guarantee or
indemnity, reasonably satisfactory to the Capital Securities Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Capital Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Capital Securities Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Securities
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith
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<PAGE> 16
on its part, request evidence as to such matter from the Guarantor,
which evidence shall be promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration thereof).
(v) The Capital Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or opinion of
such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees. The Capital
Securities Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Capital Securities
Guarantee from any court of competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall
be under no obligation to exercise any of the rights or powers vested
in it by this Capital Securities Guarantee at the request or direction
of any Holder, unless such Holder shall have provided to the Capital
Securities Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Securities Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Capital Securities Guarantee
Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Capital Securities Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Capital Securities
Guarantee in the case of an Event of Default.
(vii) The Capital Securities Guarantee Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report,
notice, request,
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<PAGE> 17
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Securities
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, nominees, custodians
or attorneys, and the Capital Securities Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Capital Securities
Guarantee Trustee or its agents hereunder shall bind the Holders, and
the signature of the Capital Securities Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority of the
Capital Securities Guarantee Trustee so to act or as to its compliance
with any of the terms and provisions of this Capital Securities
Guarantee, both of which shall be conclusively evidenced by the Capital
Securities Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee the Capital Securities Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Capital
Securities Guarantee Trustee (i) may request instructions from the
Holders of a Majority in Liquidation Amount of the Capital Securities,
(ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(xi) The Capital Securities Guarantee Trustee shall
not be liable for any action taken, suffered, or omitted to be taken by
it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Capital Securities Guarantee.
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<PAGE> 18
(b) No provision of this Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Capital Securities Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital Securities
Guarantee
The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Securities
Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Securities Guarantee Trustee makes no representation as to the validity
or sufficiency of this Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or
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examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee
shall cease to be eligible so to act under Section 4.1(a), the Capital
Securities Guarantee Trust shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Capital Securities Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee
Trustee
(a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee shall hold office
until a Successor Capital Securities Guarantee Trustee shall have been appointed
or until its removal or resignation. The Capital Securities Guarantee Trustee
may resign from office (without the need for prior or subsequent accounting) by
an instrument in writing executed by the Capital Securities Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take effect until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Capital Securities Guarantee Trustee.
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(d) If no Successor Capital Securities Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery of an instrument of removal or resignation, the
Capital Securities Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor Capital
Securities Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Capital Securities
Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be liable
for the acts or omissions to act of any Successor Capital Securities Guarantee
Trustee.
(f) Upon termination of this Capital Securities Guarantee or
removal or resignation of the Capital Securities Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Capital Securities Guarantee
Trustee all amounts due to the Capital Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
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Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
(a) The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(i) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition relating to
the Capital Securities to be performed or observed by the Issuer;
(ii) the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the terms of
the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Capital Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(iii) any failure, omission, delay or lack of
diligence on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders pursuant to
the terms of the Capital Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(vi) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;
(v) any invalidity of, or defect or deficiency in,
the Capital Securities;
(vi) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
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(vii) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the obligations
of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.
(b) There shall be no obligation of the Holders to give notice
to, or obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in Liquidation Amount of the
Capital Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Securities
Guarantee Trustee in respect of this Capital Securities Guarantee or exercising
any trust or power conferred upon the Capital Securities Guarantee Trustee under
this Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to
enforce this Capital Securities Guarantee, any Holder of Capital Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Capital Securities Guarantee Trustee's rights under this Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Capital Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Capital Securities Guarantee; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any
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indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Capital Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a)(i) through (vii), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTION; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, if at
any time (i) there shall have occurred any event of which the Guarantor has
actual knowledge that (x) with the giving of notice or the lapse of time, or
both, would constitute an Event of Default and (y) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) the Guarantor
shall be in default with respect to its payment of any obligations under this
Capital Securities Guarantee and the Debentures held by the Property Trustee, or
(iii) the Guarantor shall have given notice of its election of the exercise of
its right to defer payment of interest pursuant to Section 16.01 of the
Indenture and any such extension shall be continuing, then the Guarantor shall
not
(1) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect
to any of the Guarantor's capital stock (which includes common and
preferred stock);
(2) make any payment of principal, premium, if any, or
interest on or repay or repurchase or redeem any debt
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<PAGE> 24
securities of the Guarantor (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Debentures; or
(3) make any guarantee payments with respect to any guarantee
by the Guarantor of the debt securities of any subsidiary of the
Guarantor (including Other Guarantees) if such guarantee ranks pari
passu or junior in right of payment to the Debentures
other than (a) dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of common stock of the Guarantor, (b)
any declaration of a dividend in connection with the implementation of a
stockholder's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee, (d) as a direct result of, and
only to the extent necessary to avoid the issuance of fractional shares of the
Guarantor's capital stock following, a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans.
SECTION 6.2 Ranking
This Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor (other than obligations in
respect of Other Guarantees), (ii) pari passu with (A) the most senior preferred
or preference stock now or hereafter issued by the Guarantor, and (B) with the
Original Capital Securities Guarantee, any Other Guarantee and the Common
Securities Guarantee, and (iii) senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Capital Securities Guarantee shall terminate (i) upon
full payment of the Redemption Price (as defined in the Declaration) of all
Capital Securities, or (ii) upon liquidation of the Issuer, the full payment of
the amounts payable in accordance with the Declaration or the distribution of
the Debentures to the Holders of all of the Capital Securities. Notwithstanding
the foregoing, this Capital Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of Capital
Securities must restore payment of any sums paid under the Capital Securities or
under this Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Capital
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been
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<PAGE> 26
selected with reasonable care by or on behalf of the Guarantor, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of Capital
Securities might properly be paid.
SECTION 8.2 Indemnification
(a) The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Capital Securities Guarantee.
(b) Each Indemnified Person shall give prompt notice to the
Guarantor of any action threatened or commenced against it in respect of which
any indemnity is sought hereunder, enclosing a copy of all papers served on, and
notices and demands delivered to, such Indemnified Person, if any, but failure
so to notify the Guarantor shall not relieve the Guarantor from any liability
which it may have under this Section 8.2, except to the extent that it is
materially prejudiced by such failure. The Guarantor shall be entitled to assume
the defense of any such action or proceeding with counsel reasonably
satisfactory to the Indemnified Person who shall not, except with the consent of
the Indemnified Person, be counsel to the Guarantor. Upon assumption by the
Guarantor of the defense of any such action or proceeding, the Indemnified
Person shall have the right to participate in such action or proceeding and to
retain its own counsel, but the Guarantor shall not be liable for any legal fees
or expenses subsequently incurred by such Indemnified Person in connection with
the defense thereof unless (i) the Guarantor has agreed to pay such fees and
expenses, (ii) the Guarantor shall have failed to employ counsel reasonably
satisfactory to the Indemnified Person in a timely manner, or (iii) the
Indemnified Person shall have been advised by counsel (who shall not be employed
by such Indemnified Person and who shall be reasonably satisfactory to the
Guarantor) that such
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representation would constitute an actual or potential conflict of interests for
counsel selected by the Guarantor. The Guarantor shall not consent to the terms
of any compromise or settlement of any action defended by the Guarantor in
accordance with the foregoing without the prior consent of the Indemnified
Person, and the Indemnified Person shall not consent to the terms of any
compromise or settlement of any action being defended by the Guarantor in
accordance with the foregoing without the prior consent of the Guarantor.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Person shall have requested the Guarantor to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated above, the
Guarantor agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 business days after receipt by the Guarantor of the aforesaid request
and (ii) the Guarantor shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Capital Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Capital Securities apply to the giving of
such approval.
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SECTION 9.3 Notices
All notices provided for in this Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustees at the Issuer's mailing address set forth below (or such other
address as to which the Issuer may give notice to the Holders of the
Capital Securities):
Orion Capital Trust I
600 Fifth Avenue
24th Floor
New York, New York 10020
Attention: Michael P. Maloney
Administrative Trustee
Telecopy: (212) 247-4824
with a copy to
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Attn: John J. McCann, Esq.
Fax: (212) 632-3315
(b) If given to the Capital Securities Guarantee Trustee, at
the Capital Securities Guarantee Trustee's mailing address set forth
below (or such other address as to which the Capital Securities
Guarantee Trustee may give notice to the Holders of the Capital
Securities);
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-5915
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as to which the
Guarantor may give notice to the Holders of the Capital Securities):
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<PAGE> 29
Orion Capital Corporation
600 Fifth Avenue
24th Floor
New York, New York 10020
Attention: Michael P. Maloney, Esq.
Senior Vice President, General
Counsel and Secretary
Telecopy: (212) 247-4824
(d) If given to any Holder of Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery, such notice or other document shall be deemed to have been delivered
on the date of such refusal.
SECTION 9.4 Benefit
This Capital Securities Guarantee is solely for the benefit of
the Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.6 Governing Law
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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<PAGE> 30
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
ORION CAPITAL CORPORATION,
as Guarantor
By: ____________________________________
Michael P. Maloney, Esq.
Senior Vice President, General
Counsel and Secretary
THE BANK OF NEW YORK, as
Capital Securities Guarantee
Trustee
By: ____________________________________
Walter Gitlin
Vice President
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<PAGE> 1
EXHIBIT 4.8
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of January 13, 1997
among
ORION CAPITAL CORPORATION
ORION CAPITAL TRUST I
and
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
as Initial Purchasers
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is made and entered into as of January 13, 1997 among ORION CAPITAL
CORPORATION, a Delaware corporation (the "Company"), ORION CAPITAL TRUST I, a
business trust formed under the laws of the state of Delaware (the "Trust"),
and DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION ("DLJ"), LEHMAN
BROTHERS INC., and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(collectively the "Initial Purchasers").
This Agreement is made pursuant to the Purchase
Agreement, dated January 8, 1997 (the "Purchase Agreement"), among the Company,
as issuer of the 8.73% Junior Subordinated Deferrable Interest Debentures due
2037 (the "Subordinated Debentures"), the Trust and the Initial Purchasers,
which provides for, among other things, the sale by the Trust to the Initial
Purchasers of 125,000 of the Trust's 8.73% Capital Securities, liquidation
amount $1,000 per Capital Security (the "Capital Securities"), the proceeds of
which will be used by the Trust to purchase Subordinated Debentures. The
Capital Securities, together with the Subordinated Debentures and the Company's
guarantee of the Capital Securities (the "Capital Securities Guarantee"), are
collectively referred to as the "Securities". In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Trust have
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"Additional Interest" shall mean the additional amounts which
shall become payable in respect of the Subordinated Debentures if the Company
or the Trust fails to comply with the Agreement or if the Exchange Offer
Registration Statement or the Shelf Registration Statement fails to become
effective.
"Advice" shall have the meaning set forth in the last
paragraph of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in
Section 3(t) hereof.
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<PAGE> 3
"Business Day" shall mean a day that is not a Saturday, a
Sunday, or a day on which banking institutions in New York, New York are
authorized or required to be closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and permitted
assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended
and Restated Declaration of Trust, dated as of January 13, 1997, by the
trustees named therein and the Company as sponsor.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Trust; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City of New
York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the
Trust to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the
Subordinated Debentures, the 8.73% Junior Subordinated Deferrable Interest
Debentures due January 1, 2037 which are to be offered in exchange for the
Subordinated Debentures (the
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<PAGE> 4
"Exchange Debentures") and which will contain terms identical to the
Subordinated Debentures (except that they will not contain terms with respect
to the transfer restrictions under the Securities Act, will not require
transfers thereof to be in minimum blocks of $100,000 principal amount and will
not provide for any increase in the interest rate thereon), (ii) with respect
to the Capital Securities, the Trust's 8.73% Capital Securities, liquidation
amount $1,000 per Capital Security, which are to be offered in exchange for the
Capital Securities (the "Exchange Capital Securities") and which will have
terms identical to the Capital Securities (except they will not contain terms
with respect to transfer restrictions under the Securities Act, will not
require minimum transfers thereof to be in blocks of $100,000 liquidation
amount and will not provide for any increase in the distribution rate thereon)
and (iii) with respect to the Capital Securities Guarantee, the Company's
guarantee (the "Exchange Capital Securities Guarantee") of the Exchange Capital
Securities which will have terms identical to the Capital Securities Guarantee.
"Extension Period" shall have the meaning set forth in the
Indenture.
"Holder" shall mean the Initial Purchasers, for so long as
they own any Registrable Securities, and each of its respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the
Subordinated Debentures and the Exchange Debentures dated as of January 13,
1997 among the Company, as issuer, and The Bank of New York, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
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<PAGE> 5
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability Company, or a
government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including posteffective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; provided, however, that Securities or
Private Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities or
Private Exchange Securities, as the case may be, may be sold to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act, (iii) such Securities or Private Exchange
Securities, as the case may be, shall have ceased to be outstanding or (iv)
with respect to the Securities, such Securities have been exchanged for
Exchange Securities upon consummation of the Exchange Offer and are thereafter
freely tradeable by the holder thereof (other than an affiliate of the Company
as defined in Rule 405 under the Securities Act).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National
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<PAGE> 6
Association of Securities Dealers, Inc. (the "NASD") registration and filing
fees, including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be retained by
any Holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable fees
and disbursements of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Exchange Securities or Registrable
Securities) and compliance with the rules of the NASD, (iii) all expenses of
any Persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus and any amendments
or supplements thereto, and in preparing or assisting in preparing, printing
and distributing any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) the fees and disbursements of
counsel for the Company and of the independent auditors of the Company,
including the expenses of any "cold comfort" letters required by or incident to
such performance and compliance, (vi) the fees and expenses of the Trustee, and
any exchange agent or custodian, (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on
any securities exchange or exchanges, and (viii) the reasonable fees and
expenses of any special experts retained by the Company in connection with any
Registration Statement.
"Registration Statement" shall mean any registration statement
of the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of three years (or
such shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
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"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company and the Trust pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable Securities or all of
the Private Exchange Securities, as the case may be, on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
"Trustees" shall mean any and all trustees with respect to (i)
the Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by
any applicable law or applicable interpretation of the staff of the SEC, the
Company and the Trust shall, for the benefit of the Holders, at the Company's
cost, use its best efforts to (i) cause to be filed with the SEC within 150
days after the Issue Date an Exchange Offer Registration Statement on an
appropriate form under the Securities Act covering the Exchange Offer, (ii)
cause such Exchange Offer Registration Statement to be declared effective under
the Securities Act by the SEC not later than the date which is 180 days after
the Issue Date, and (iii) keep such Exchange Offer Registration Statement
effective for not less than 30 calendar days (or longer if required by
applicable law) after the date notice of the Exchange Offer is mailed to the
Holders. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company and the Trust shall promptly commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of
Exchange Debentures or a like liquidation amount of Exchange Capital
Securities, together with the Exchange Capital Securities Guarantee, as
applicable (assuming that such Holder (A) is not an
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<PAGE> 8
affiliate of the Company within the meaning of Rule 405 under the Securities
Act and is not a broker-dealer tendering Registrable Securities acquired
directly from the Company for its own account, (B) acquires the Exchange
Securities in the ordinary course of such Holder's business and (C) has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities), to transfer
such Exchange Securities from and after their receipt without any limitations
or restrictions under the Securities Act and under state securities or blue sky
laws.
In connection with the Exchange Offer, the Company
and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as the
"Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer:
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such Securities
exchanged;
(v) notify each Holder that any Security not tendered by such Holder
in the Exchange Offer will remain outstanding and continue to accrue interest
or accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If any Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Trust of a written request from such Initial Purchaser,
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<PAGE> 9
the Company and the Trust, as applicable, shall issue and deliver to such
Initial Purchaser in exchange (the "Private Exchange") for the Securities held
by such Initial Purchaser, a like liquidation amount of Capital Securities of
the Trust, together with the Exchange Capital Securities Guarantee, or a like
principal amount of the Subordinated Debentures of the Company, as applicable,
that are identical (except that such securities may bear a customary legend
with respect to restrictions on transfer pursuant to the Securities Act) to the
Exchange Securities (the "Private Exchange Securities") and which are issued
pursuant to the Indenture or the Declaration or the agreement pursuant to which
the Exchange Capital Securities Guarantee is issued (which provides that the
Exchange Securities, the Private Exchange Securities and the Securities will
vote and consent together on all matters as one class and that neither the
Exchange Securities, the Private Exchange Securities nor the Securities will
have the right to vote or consent as a separate class on any matter). The
Private Exchange Securities shall be of the same series as the Exchange
Securities and the Company and the Trust will seek to cause the CUSIP Service
Bureau to issue the same CUSIP Numbers for the Private Exchange Securities as
for the Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer
and, if applicable, the Private Exchange, the Company and the Trust, as the
case requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by the
Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Capital Securities Guarantee, as applicable, promptly to
authenticate and deliver to each Holder, new Exchange Securities or Private
Exchange Securities, as applicable, equal in principal amount to the principal
amount of the Subordinated Debentures or equal in liquidation amount to the
liquidation amount of the Capital Securities (together with the guarantee
thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and interest
on each Exchange Debenture and Private Exchange Security issued pursuant to the
Exchange Offer and in the Private Exchange will accrue from the last date on
which a distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefor or, if no distribution
or interest has been paid on such Capital Security or
8
<PAGE> 10
Subordinated Debenture, from the Issue Date. To the extent not prohibited by
any law or applicable interpretation of the staff of the SEC, the Company and
the Trust shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC. Each Holder of Registrable
Securities who wishes to exchange such Registrable Securities for Exchange
Securities in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder
of Capital Securities, representations that (i) it is not an affiliate of the
Trust or the Company, (ii) the Exchange Securities to be received by it were
acquired in the ordinary course of its business and (iii) at the time of the
Exchange Offer, it has no arrangement with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Capital
Securities. The Company and the Trust shall inform the Initial Purchasers,
after consultation with the Trustee, of the names and addresses of the Holders
to whom the Exchange Offer is made, and the Initial Purchasers shall have the
right to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply
solely with respect to Registrable Securities that are Private Exchange
Securities and Exchange Securities held by Participating Broker-Dealers, and
the Company and the Trust shall have no further obligation to register the
Registrable Securities (other than Private Exchange Securities) pursuant to
Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company,
the Trust or the Majority Holders reasonably determine, after conferring with
counsel (which may be in-house counsel), that the Exchange Offer Registration
provided in Section 2(a) above is not available because of any change in law or
in currently prevailing interpretations of the staff of the SEC, (ii) the
Exchange Offer Registration Statement is not declared effective within 180 days
of the Issue Date or (iii) upon the request of any Initial Purchaser with
respect to any Registrable Securities held by it, if such Initial Purchaser is
not permitted, in the reasonable opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, pursuant to applicable law or applicable interpretations of the staff
of the SEC, to participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the Securities Act and
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<PAGE> 11
applicable blue sky or state securities laws (any of the events specified in
(i)-(iii) being a "Shelf Registration Event" and the date of occurrence
thereof, the "Shelf Registration Event Date"), the Company and the Trust shall,
at their cost, use their best efforts to cause to be filed as promptly as
practicable after such Shelf Registration Event Date, as the case may be, and,
in any event, within 45 days after such Shelf Registration Event Date (which
shall be not be required to be earlier than 150 days after the Closing Time), a
Shelf Registration Statement providing for the sale by the Holders of all of
the Registrable Securities, and shall use its best efforts to have such Shelf
Registration Statement declared effective by the SEC as soon as practicable.
No Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use their best efforts to
keep the Shelf Registration Statement continuously effective for the Rule
144(k) Period (subject to extension pursuant to the last paragraph of Section 3
hereof) or for such shorter period which will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be outstanding
or, if the Shelf Registration Statement is filed solely as a result of a
request made in accordance with clause (iii) of the preceding paragraph, if the
Company shall have furnished to an Initial Purchaser an opinion of counsel
reasonably acceptable to such Initial Purchaser to the effect that registration
is no longer necessary for resale by such Initial Purchaser (the "Effectiveness
Period"). The Company and the Trust shall not permit any securities other than
Registrable Securities to be included in the Shelf Registration. The Company
and the Trust will, in the event a Shelf Registration Statement is declared
effective, provide to each Holder a reasonable number of copies of the
Prospectus which is a part of the Shelf Registration Statement, notify each
such Holder when the Shelf Registration has become effective and use its best
efforts to take certain other actions as are required to permit certain
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<PAGE> 12
unrestricted resales of the Registrable Securities. The Company and the Trust
further agree, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company and the Trust agree to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) or 2(b)
hereof and will reimburse the Initial Purchasers for the reasonable fees and
disbursements of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Initial Purchasers, incurred in connection with the Exchange Offer and, if
applicable, the Private Exchange, and either Skadden, Arps, Slate, Meagher &
Flom LLP or any one other counsel designated in writing by the Majority Holders
to act as counsel for the Holders of the Registrable Securities in connection
with a Shelf Registration Statement, which other counsel shall be reasonably
satisfactory to the Company. Except as provided herein, each Holder shall pay
all expenses of its counsel, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that if, after it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust will be deemed not to have used their best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period
unless such action is required by applicable law.
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(e) Additional Interest. In the event that (i)(A) neither
the Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to the 150th day after the Issue Date or (B)
notwithstanding that the Company and the Trust have consummated or will
consummate an Exchange Offer, the Company and the Trust are required to file a
Shelf Registration Statement and such Shelf Registration Statement is not filed
on or prior to the date required by Section 2(b) hereof, then commencing on the
day after either such required filing date, Additional Interest shall accrue on
the principal amount of the Subordinated Debentures, and additional
distributions shall accumulate on the liquidation amount of the Capital
Securities, each at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the
180th day after the Issue Date or (B) notwithstanding that the Company and the
Trust have consummated or will consummate an Exchange Offer, the Company and
the Trust are required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the SEC on or prior to the
180th day after the Issue Date then, commencing on the 181st day after the
Issue Date, Additional Interest shall accrue on the principal amount of the
Subordinated Debentures and additional distributions shall accumulate on the
liquidation amount of the Capital Securities, each at a rate of 0.25% per
annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities for
all Capital Securities validly tendered, or the Company has not exchanged the
Exchange Capital Securities Guarantee for the Capital Securities Guarantee or
exchanged all the Exchange Subordinated Debentures for Subordinated Debentures
validly tendered, in accordance with the terms of the Exchange Offer on or
prior to the 30th day after the date on which the Exchange Offer Registration
Statement was declared effective or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Capital Securities have been disposed
of thereunder or otherwise cease to be Registrable Securities), then Additional
Interest shall accrue on the principal amount of Subordinated Debentures, and
additional distributions shall accumulate on the liquidation amount of the
Capital Securities, each at a rate of 0.25% per annum commencing on (x) the
31st day after such effective date, in the case of (A) above, or (y) the day
such Shelf Registration Statement ceases to be effective in the case of (B)
above;
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<PAGE> 14
provided, however, that neither the Additional Interest rate on the
Subordinated Debentures, nor the additional distribution rate on the
liquidation amount of the Capital Securities, may exceed in the aggregate 0.25%
per annum; provided, further, however, that (1) upon the filing of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
clause (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(ii) above), or (3) upon the exchange of Exchange Capital Securities, the
Exchange Capital Securities Guarantee and Exchange Subordinated Debentures for
all Capital Securities, the Capital Securities Guarantee and all Subordinated
Debentures validly tendered (in the case of clause (iii)(A) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), Additional Interest on the
Subordinated Debentures, and additional distributions on the liquidation amount
of the Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of Additional Interest and additional distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above will be payable in cash on the
relevant record dates for the payment of interest and Distributions pursuant to
the Indenture and the Declaration respectively; provided, however, that the
payment of such amounts may be deferred during any Extension Period.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company and the Trust acknowledge that any
failure by the Company or the Trust to comply with its obligations under
Section 2(a) and Section 2(b) hereof may result in material irreparable injury
to the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any Holder may obtain such relief as may be required
to specifically enforce the Company's and the Trust's obligations under Section
2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Company and the Trust with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the Trust
shall use their best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form
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under the Securities Act, which form (i) shall be selected by the
Company and the Trust, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof; provided, however, that if (1) such filing is
pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange
Offer Registration Statement filed pursuant to Section 2(a) is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities, then before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company and the Trust shall furnish to and
afford the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters,
if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed. The
Company and the Trust shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of
which the Holders must be afforded an opportunity to review prior to
the filing of such document if the Majority Holders or such
Participating Broker-Dealer, as the case may be, their counsel or the
managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Company or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities
covered by each Registration Statement during the Effectiveness Period
or the Applicable Period, as the case may be, in accordance with the
intended method or methods of distribution by the selling Holders
thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
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(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method
selected by the Majority Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement
and to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the
use of the Prospectus or any amendment or supplement thereto by each
of the selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts
to register or qualify the Registrable Securities under all applicable
state securities or "blue sky" laws of such jurisdictions by the time
the applicable Registration Statement is declared effective by the SEC
as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request in writing
sufficiently in advance of such date of effectiveness, and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Securities
owned by such Holder; provided, however, that the Company and the
Trust shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file
any general consent to service of process in any jurisdiction where it
would not otherwise be subject to such service of process or (iii)
subject itself to taxation in any such jurisdiction if it is not then
so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof and who are seeking to sell Exchange
Securities and are
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<PAGE> 17
required to deliver Prospectuses, notify each Holder of Registrable
Securities, or such Participating Broker-Dealers, as the case may be,
their counsel and the managing underwriters, if any, promptly and
promptly confirm such notice in writing (i) when a Registration
Statement has become effective and when any post-effective amendments
and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for amendments and supplements
to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration
Statement or the qualification of the Registrable Securities or the
Exchange Securities to be offered or sold by any Participating
Broker-Dealer in any jurisdiction described in paragraph 3(d) hereof
or the initiation of any proceedings for that purpose, (iv) in the
case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company and the Trust contained in any purchase agreement, securities
sales agreement or other similar agreement, if any, cease to be true
and correct in all material respects, (v) of the happening of any
event or the failure of any event to occur or the discovery of any
facts, during the Effectiveness Period, which makes any statement made
in such Registration Statement or the related Prospectus untrue in any
material respect or which causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company and the Trust's
reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such
Shelf Registration Statement, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to
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facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends and in such denominations (consistent with the
provisions of the Indenture and the Declaration) and registered in
such names as the selling Holders or the underwriters may reasonably
request at least two Business Days prior to the closing of any sale of
Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not materially misleading; and to notify each Holder to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or supplemented
the Prospectus to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after the
initial filing of a Registration Statement, provide a reasonable
number of copies of such document to the Holders; and make such of the
representatives of the Company and the Trust as shall be reasonably
requested by the Holders of Registrable Securities or the Initial
Purchasers on behalf of such Holders available for discussion of such
document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution
of the Subordinated Debentures to the Holders of the Capital
Securities, the Subordinated Debentures or the Exchange Subordinated
Debentures) as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities or the Registrable
Securities, as the case may be, in a form eligible for deposit with
the Depositary;
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<PAGE> 19
(l) cause the Indenture, the Declaration, the Capital
Securities Guarantee and the Exchange Capital Securities Guarantee to
be qualified under the Trust Indenture Act of 1939 (the "TIA") in
connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, and effect such changes to
such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best
efforts to cause the relevant trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such documents to be so
qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten
registration, if requested by (x) any Initial Purchaser, in the case
where an Initial Purchaser holds Securities acquired by it as part of
its initial distribution or (y) Majority Holders of Securities covered
thereby: (i) make such representations and warranties to Holders of
such Registrable Securities and the underwriters (if any), with
respect to the business of the Trust, the Company and its subsidiaries
as then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and the
Trust and updates thereof (which may be in the form of a reliance
letter) in form and substance reasonably satisfactory to the managing
underwriters (if any) and the Holders of a majority in principal
amount of the Registrable Securities being sold, addressed to each
selling Holder and the underwriters (if any) covering the matters
customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such
underwriters (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters from
the independent auditors of the Company and the Trust (and, if
necessary, any other independent auditors of any subsidiary of the
Company and the Trust or of any business acquired by the Company and
the Trust for which financial statements and
18
<PAGE> 20
financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as are reasonably
requested by such underwriters in accordance with Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 4 hereof
(or such other provisions and procedures acceptable to the Company and
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such
underwriters and selling Holders). The above shall be done at each
closing under such underwriting agreement, or as and to the extent
required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, make
reasonably available for inspection by any selling Holder of such
Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in
any such disposition of Registrable Securities, if any, and any
attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be,
or underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the
Trust, the Company and its subsidiaries (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers,
directors and employees of the Trust, the Company and its subsidiaries
to supply all relevant information in each case reasonably requested
by any such Inspector in connection with such Registration Statement;
provided, however, that the foregoing inspection and information
gathering shall be conducted on behalf of the Initial Purchasers by
Donaldson, Lufkin & Jenrette Securities Corporation and on behalf of
all other selling Holders by one counsel selected in accordance with
Section 2(c) hereof. Records which the Company and the Trust
determine, in good
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<PAGE> 21
faith, to be confidential and any records which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is
necessary in connection with any action, suit or proceeding or (iii)
the information in such Records has been made generally available to
the public. Each selling Holder of such Registrable Securities and
each such Participating Broker-Dealer will be required to agree in
writing that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the
Trust or the Company unless and until such is made generally available
to the public by the Company. Each such Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required
to agree in writing that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company at its expense to
undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(o) as soon as practicable after the first day of the first
fiscal quarter of the Company beginning after the effective date of a
Registration Statement, but in any event not later than the earliest
required filing date by the Company of a Form 10-K after the end of
the 12-month period beginning at the end of the fiscal quarter of the
Company during which the effective date of a Registration Statement
occurs, to make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the
Securities Act covering such 12-month period.
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) the Company and the Trust, as the case requires, has duly
authorized, executed and delivered the Exchange Securities and Private
Exchange Securities, and (ii) each of the Exchange Securities or the
Private Exchange Securities, as the case may be, constitute a legal,
valid and binding obligation of the Company or the Trust, as the case
requires, enforceable against the Company or the Trust, as the case
requires, in accordance with its respective terms (in each case, with
customary exceptions);
20
<PAGE> 22
(q) if an Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Registrable Securities by
Holders to the Company or the Trust, as applicable (or to such
other Person as may be directed by the Company or the Trust),
in exchange for the Exchange Securities or the Private
Exchange Securities, as the case may be, the Company or the
Trust, as applicable, shall mark, or cause to be marked, on
such Registrable Securities delivered by such Holders that
such Registrable Securities are being cancelled in exchange
for the Exchange Securities or the Private Exchange
Securities, as the case may be;
(r) cooperate with each seller of Registrable
Securities covered by any Registration Statement and each
underwriter, if any, participating in the disposition of such
Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(s) use its best efforts to take all other steps
necessary to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated
hereby;
(t) (A) in the case of the Exchange Offer
Registration Statement (i) include in the Exchange Offer
Registration Statement a section entitled "Plan of
Distribution," which section shall be reasonably acceptable to
the Initial Purchasers or another representative of the
Participating Broker-Dealers, and which shall contain a
summary statement of the positions taken or policies made by
the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating
Broker-Dealer") that holds Registrable Securities acquired for
its own account as a result of market-making activities or
other trading activities and that will be the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the
Exchange Offer, whether such positions or policies have been
publicly disseminated by the staff of the SEC or such
positions or policies, in the reasonable judgment of the
Initial Purchasers or such other representative, represent the
prevailing views of the staff of the SEC, including a
statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange
Offer may be deemed a statutory underwriter and must deliver a
prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities, (ii)
furnish to each Participating Broker-Dealer who has delivered
to the Company the notice referred to in Section 3(e), without
charge, as many copies
21
<PAGE> 23
of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any
amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (each of the Company and
the Trust hereby consents to the use of the Prospectus forming
part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Person subject to the
prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, in connection with
the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto), (iii) use
its best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus
delivery requirements of the Securities Act for such period of
time as such Persons must comply with such requirements under
the Securities Act and applicable rules and regulations in
order to resell the Exchange Securities; provided, however,
that such period shall not be required to exceed 90 days (or
such longer period if extended pursuant to the last sentence
of Section 3 hereof) (the "Applicable Period"), and (iv)
include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in
the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of Exchange Securities
received in respect of such Registrable Securities pursuant to
the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company and the Trust agree to deliver to the
Initial Purchasers or to another representative of the
Participating Broker-Dealers, if requested by any such Initial
Purchasers or such other representative of the Participating
Broker-Dealers, on behalf of the Participating Broker-Dealers
upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably
22
<PAGE> 24
satisfactory to the Initial Purchasers or such other
representative of the Participating Broker-Dealers, covering
the matters customarily covered in opinions requested in
connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being
agreed that the matters to be covered by such opinion may be
subject to customary qualifications and exceptions), (ii) an
officers' certificate containing certifications substantially
similar to those set forth in Section 5(d) of the Purchase
Agreement and such additional certifications as are
customarily delivered in a public offering of debt securities
and (iii) as well as upon the effectiveness of the Exchange
Offer Registration Statement, a comfort letter, in each case,
in customary form if permitted by Statement on Auditing
Standards No. 72.
The Company or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to
furnish to the Company or the Trust, as applicable, such information regarding
such seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or
(2) Participating Broker-Dealers who have notified the Company and the Trust
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof and who are seeking
to sell Exchange Securities and are required to deliver Prospectuses, each
Holder agrees that, upon receipt of any notice from the Company or the Trust of
the happening of any event of the kind described in Section 3(e)(ii),
3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(i) hereof or until it is advised in
writing (the "Advice") by the Company and the Trust that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company and
the Trust, such Holder will deliver to the Company or the Trust (at the
Company's or the Trust's expense, as the case requires) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company or the Trust shall give any such notice to suspend the
23
<PAGE> 25
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Trust shall use
their best efforts to file and have declared effective (if an amendment) as
soon as practicable an amendment or supplement to the Registration Statement
and shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and
including the date when the Company and the Trust shall have made available to
the Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In
connection with any Registration Statement, the Company and the Trust shall,
jointly and severally, indemnify and hold harmless each Initial Purchaser, each
Holder, each underwriter who participates in an offering of the Registrable
Securities, each Participating Broker-Dealer, each Person, if any, who controls
any of such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and each of their respective directors,
officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, arising
out of any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment
thereto), covering Registrable Securities or Exchange Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any court or governmental agency
or body, commenced or threatened, or of any claim whatsoever based
upon any such untrue statement or omission referred to in clause (i)
above, or any such alleged untrue statement or omission referred to in
clause (i) above, if such settlement
24
<PAGE> 26
is effected with the prior written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel
chosen by such Holder, such Participating Broker-Dealer, or any
underwriter (except to the extent otherwise expressly provided in
Section 4(c) hereof)), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission referred to in clause (i) above, or any such
alleged untrue statement or omission referred to in clause (i) above,
to the extent that any such expense is not paid under subparagraph (i)
or (ii) of this Section 4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in the Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) and (ii) the Company and the Trust shall not be liable to
any such Holder, Participating Broker-Dealer, any underwriter or controlling
person, with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary Prospectus to the extent that
any such loss, liability, claim, damage or expense of any Holder, Participating
Broker-Dealer, any underwriter or controlling person results from the fact that
such Holder, Participating Broker-Dealer, underwriter or controlling person
sold Securities to a Person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the final Prospectus as then
amended or supplemented if the Company had previously furnished copies thereof
to such Holder, Participating Broker-Dealer, underwriter or controlling person
and the loss, liability, claim, damage or expense of such Holder, Participating
Broker-Dealer, underwriter or controlling person results from an untrue
statement or omission of a material fact contained in the preliminary
Prospectus which was corrected in the final Prospectus. Any amounts advanced
by the Company or the Trust to an indemnified party pursuant to this Section 4
as a result of such losses shall be returned to the Company or the Trust if it
shall be finally determined by such a court in a judgment not
25
<PAGE> 27
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company or the Trust.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Trust, any underwriter and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company and the Trust who signed the
Registration Statement), employees, trustees and agents and each Person, if
any, who controls the Company, the Trust, any underwriter or any other selling
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all loss, liability, claim, damage
and expense whatsoever described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment or supplement thereto); provided,
however, that, in the case of a Shelf Registration Statement, no such Holder
shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action threatened or commenced against it in respect
of which any indemnity is sought hereunder, enclosing a copy of all papers
served on, and notices and demands delivered to, such indemnified party, if
any, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have under this Section 7,
except to the extent that it is materially prejudiced by such failure. The
indemnifying party shall be entitled to assume the defense of any such action
or proceeding with counsel reasonably satisfactory to the indemnified party who
shall not, except with the consent of such indemnified party, be counsel to the
indemnifying party. Upon assumption by the indemnifying party of the defense
of any such action or proceeding, the indemnified party shall have the right to
participate in such action or proceeding and to retain its own counsel, but the
indemnifying party shall not be liable for any legal fees or expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to employ counsel
reasonably satisfactory to the indemnified party in a timely manner, or (iii)
the indemnified party shall have been advised by counsel (who shall
26
<PAGE> 28
not be employed by such indemnified party and who shall be reasonably
satisfactory to the indemnifying party) that such representation would
constitute an actual or potential conflict of interests for counsel selected by
the indemnifying party. The indemnifying party shall not consent to the terms
of any compromise or settlement of any action defended by the indemnifying
party in accordance with the foregoing without the prior consent of the
indemnified party, and the indemnified party shall not consent to the terms of
any compromise or settlement of any action being defended by the indemnifying
party in accordance with the foregoing without the prior consent of the
indemnifying party. Notwithstanding the immediately preceding sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated above, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 business days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution
in circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust and
the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Trust and the Holders, as incurred; provided that
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person that
was not guilty of such fraudulent misrepresentation. As between the Company,
the Trust and the Holders, such parties shall contribute to such aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement in such proportion as shall be appropriate to reflect
the relative fault of the Company and Trust, on the one hand, and the Holders,
on the other hand, with respect to the statements or omissions which resulted
in such loss, liability, claim, damage or expense, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
fault of the Company and the Trust, on the one hand, and of the Holders, on the
other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Trust, on the one hand, or by or on behalf of the Holders,
on the other, and the parties' relative intent, knowledge, access to
27
<PAGE> 29
information and opportunity to correct or prevent such statement or omission.
The Company, the Trust and the Holders of the Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 4
were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 4, each affiliate of a Holder,
and each director, officer, employee, agent and Person, if any, who controls a
Holder or such affiliate within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution
from the Trust or the Company, as the case may be, as such Holder, and each
director of each of the Company and the Trust, each officer of each of the
Company and the Trust who signed the Registration Statement, and each Person,
if any, who controls each of the Company and the Trust within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have
the same rights to contribution from the Holders as each of the Company or the
Trust.
5. Participation in Underwritten Registrations. No Holder
may participate in any underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's Registrable Securities on the basis provided
in any underwriting arrangements provided for herein and (b) completes and
executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters
and manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be satisfactory to the Company and the Trust and any fees of
such underwriters and managers must be paid by the Holders.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or
the Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, the Company and
the Trust, as the case may be, will each use its best efforts to file the
reports required to be filed by it under the Securities Act and Section 13(a)
or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, that if it ceases to be so
28
<PAGE> 30
required to file such reports, it will, upon the request of any Holder of
Registrable Securities (a) make publicly available such information as is
necessary to permit sales of their securities pursuant to Rule 144 under the
Securities Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales of their securities pursuant to Rule 144A under the
Securities Act and it will take such further action as any Holder of
Registrable Securities may reasonably request, and (c) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, (ii) Rule 144A under the Securities Act, as such
rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company and the Trust will deliver to such Holder a
written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company or the Trust has
not entered into nor will the Company or the Trust on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not conflict with and are not inconsistent with the rights granted
to the holders of the Company's or the Trust's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company and the Trust has
obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure; provided no
amendment, modification, supplement, waiver or consent to the departure with
respect to the provisions of Section 4 hereof shall be effective as against any
Holder of Registrable Securities unless consented to in writing by such Holder
of Registrable Securities. Notwithstanding the foregoing sentence, (i) this
Agreement may be amended, without the consent of any Holder of Registrable
Securities, by written agreement signed by the Company, the Trust and DLJ, to
cure any ambiguity, correct or supplement any provision of this Agreement that
may be inconsistent with any other provision of this Agreement or to make any
other provisions with respect to matters or questions
29
<PAGE> 31
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company, the Trust and DLJ to
the extent that any such amendment, modification, supplement, waiver or consent
is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the SEC) or any
change therein and (iii) to the extent any provision of this Agreement relates
to the Initial Purchasers, such provision may be amended, modified or
supplemented, and waivers or consents to departures from such provisions may be
given, by written agreement signed by DLJ, the Company and the Trust.
(d) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company or the Trust by means of a notice given in
accordance with the provisions of this Section 7(d), which address initially
is, with respect to the Initial Purchasers, the address set forth in the
Purchase Agreement; and (ii) if to the Company or the Trust, initially at the
Company's address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee,
at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchasers, including, without limitation and without the need for
an express assignment, subsequent Holders; provided, however, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the Purchase Agreement
or the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
30
<PAGE> 32
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be entitled
to receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Holders shall be a
third party beneficiary of the agreements made hereunder between the Company
and the Trust, on the one hand, and the Initial Purchasers, on the other hand,
and shall have the right to enforce such agreements directly to the extent it
deems such enforcement necessary or advisable to protect its rights.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Securities Held by the Company, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust
31
<PAGE> 33
or its affiliates (as such term is defined in Rule 405 under the Securities
Act) shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ORION CAPITAL CORPORATION
By:/s/ Michael P. Maloney
--------------------------------
Michael P. Maloney
Senior Vice President,
General Counsel and
Secretary
ORION CAPITAL TRUST I
By:/s/ Michael P. Maloney
-------------------------------
Michael P. Maloney
Administrative Trustee
Confirmed and accepted as of
the date first above
written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
as Representative of the
Several Initial Purchasers
By:/s/ Perry Braun
-------------------------------
Name:
Title:
32
<PAGE> 1
EXHIBIT 12.1
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Nine Months
Year Ended December 31, Ended
-------------------------------------------- September 30,
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
(000s omitted-except for ratios and percentages)
<S> <C> <C> <C> <C> <C> <C>
Earnings before equity in
earnings of affiliates,
federal income taxes,
minority interest expense,
cumulative effect of adoption
of new accounting principles
and extraordinary item....... $44,862 $36,720 $63,118 $59,960 $ 82,531 $ 91,252
Dividends from affiliates ..... - 3,072 3,135 3,295 2,597 302
Fixed charges deducted from
earnings..................... 20,837 17,007 17,280 17,689 21,134 23,753
------- ------- ------- ------- -------- --------
Earnings available for payment
of fixed charges ............ $65,699 $56,799 $83,533 $80,944 $106,262 $115,307
======= ======= ======= ======= ======== ========
Fixed charges:
Interest expense ............ $16,330 $12,932 $13,288 $13,849 $ 16,430 $ 18,670
Portion of rent deemed to be
interest .................. 4,507 4,075 3,992 3,840 4,704 5,083
------- ------- ------- ------- -------- --------
Total fixed charges ......... $20,837 $17,007 $17,280 $17,689 $ 21,134 $ 23,753
======= ======= ======= ======= ======== ========
Ratio of earnings to fixed
charges ..................... 3.2 3.3 4.8 4.6 5.0 4.9
======= ======= ======= ======= ======== ========
Preferred stock dividends ..... $ 7,276 $ 6,358 $ 409 $ - $ - $ -
Effective tax rate ............ 3.0% 2.0% 21.4% 22.8% 23.2% 23.0%
------- ------- ------- ------- -------- --------
Earnings required for
preferred stock dividends ... $ 7,501 $ 6,488 $ 520 $ - $ - -
======= ======= ======= ======= ======== ========
Earnings available for payment
of fixed charges and
preferred stock dividend
requirements ................ $73,200 $63,287 $84,053 $80,944 $106,262 $115,307
======= ======= ======= ======= ======== ========
Combined fixed charges and
preferred stock dividend
requirements ................ $28,338 $23,495 $17,800 $17,689 $ 21,134 $ 23,753
======= ======= ======= ======= ======== ========
Ratio of earnings to combined
fixed charges and preferred
stock dividends ............. 2.6 2.7 4.7 4.6 5.0 4.9
======= ======= ======= ======= ======== ========
</TABLE>
<PAGE> 1
Exhibit 15.1
February 4, 1997
Orion Capital Corporation
600 Fifth Avenue
New York, New York
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited interim financial
information of Orion Capital Corporation and subsidiaries for the periods ended
March 31, 1996 and 1995, June 30, 1996 and 1995, and September 30, 1996 and
1995, as indicated in our reports dated April 29, 1996, July 24, 1996 and
October 23, 1996, respectively; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996, are being incorporated by reference in this
Registration Statement on Form S-4.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Hartford, Connecticut
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENTS
We consent to the incorporation by reference in this Registration Statement of
Orion Capital Corporation on Form S-4 of our report dated February 21, 1996
appearing in the Annual Report on Form 10-K of Orion Capital Corporation for the
year ended December 31, 1995, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Hartford, Connecticut
February 4, 1997
We consent to the incorporation by reference in this Registration Statement of
Orion Capital Corporation on Form S-4 of our reports dated February 21, 1996
appearing in the Annual Report on Form 10-K of Guaranty National Corporation for
the year ended December 31, 1995 that is incorporated by reference in the Annual
Report on Form 10-K of Orion Capital Corporation, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement
DELOITTE & TOUCHE LLP
Denver, Colorado
February 4, 1997
<PAGE> 1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 27, 1997
By: /s/ John R. Thorne
--------------------------
John R. Thorne
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: February 3, 1997
By: /s/ Roger B. Ware
--------------------------
Roger B. Ware
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 27, 1997
By: /s/ William J. Shepherd
---------------------------
William J. Shepherd
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Robert B. Sanborn
--------------------------
Robert B. Sanborn
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 27, 1997
By: /s/ Ronald W. Moore
--------------------------
Ronald W. Moore
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 27, 1997
By: /s/ James K. McWilliams
--------------------------
James K. McWilliams
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 29, 1997
By: /s/ Warren R. Lyons
--------------------------
Warren R. Lyons
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Robert H. Jeffrey
--------------------------
Robert H. Jeffrey
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Alan R. Gruber
--------------------------
Alan R. Gruber
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
by: /s/ John C. Colman
--------------------------
John C. Colman
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 27, 1997
By: /s/ Bertram J. Cohn
---------------------------
Bertram J. Cohn
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 29, 1997
By: /s/ Gordon F. Cheesbrough
--------------------------
Gordon F. Cheesbrough
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ W. Marston Becker
---------------------------
W. Marston Becker
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby
constitutes and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and
each of them, his true and lawful attorneys-in-fact and agents, each acting
alone, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign the Corporation's
Registration Statement under the Securities Act of 1933, as amended, on Form
S-4 or any other appropriate form, relating to the registration of $125,000,000
aggregate principal amount of Exchange Capital Securities (liquidation amount
$1,000 per Exchange Capital Security) of Orion Capital Trust I, and to sign
any and all amendments (including post-effective amendments) to such
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Daniel L. Barry
---------------------------
Daniel L. Barry
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer
or director of Orion Capital Corporation (the "Corporation") hereby constitutes
and appoints Michael P. Maloney, Esq. and Victor L. Matthews, and each of them,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign the Corporation's Registration
Statement under the Securities Act of 1933, as amended, on Form S-4 or any
other appropriate form, relating to the registration of $125,000,000 aggregate
principal amount of Exchange Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) of Orion Capital Trust I for all such securities,
and to sign any and all amendments (including post-effective amendments) to
such Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Victoria R. Fash
----------------------------
Victoria R. Fash
<PAGE> 1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Administrative Trustee of Orion Capital Trust I (the "Trust") hereby
constitutes and appoints Michael P. Maloney, Esq., his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign
the Trust's Registration Statement under the Securities Act of 1933, as
amended, on Form S-4 or any other appropriate form, relating to the
registration of $125,000,000 aggregate principal amount of Exchange Capital
Securities (liquidation amount $1,000 per Exchange Capital Security) of the
Trust, and to sign any and all amendments (including post-effective amendments)
to such Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ W. Marston Becker
---------------------------
W. Marston Becker
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Administrative Trustee of Orion Capital Trust I (the "Trust") hereby
constitutes and appoints Michael P. Maloney, Esq., his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign
the Trust's Registration Statement under the Securities Act of 1933, as
amended, on Form S-4 or any other appropriate form, relating to the
registration of $125,000,000 aggregate principal amount of Exchange Capital
Securities (liquidation amount $1,000 per Exchange Capital Security) of the
Trust, and to sign any and all amendments (including post-effective amendments)
to such Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated: January 28, 1997
By: /s/ Daniel L. Barry
---------------------------
Daniel L. Barry
<PAGE> 1
EXHIBIT 25.1
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
------------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) [ ]
------------------------
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
ORION CAPITAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-6069054
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
NAME ADDRESS
------------------------------------------------------- ----------------------------
<S> <C>
Superintendent of Banks of the State of New York 2 Rector Street, New York,
N.Y. 10006 and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29
UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 29th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
--------------------------------------
Name: Vivian Georges
Title: Assistant Vice President
3
<PAGE> 4
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
THE BANK OF NEW YORK
OF 48 WALL STREET, NEW YORK, N.Y. 10286
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM, AT THE CLOSE OF BUSINESS SEPTEMBER 30,
1996,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS
DISTRICT
PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
--------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........................... $ 4,404,522
Interest-bearing balances.................................................... 732,833
Securities:
Held-to-maturity securities.................................................. 789,964
Available-for-sale securities................................................ 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold........................................................... 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned income..................................... 28,728,602
LESS Allowance for loan and lease losses..................................... 584,525
LESS Allocated transfer risk reserve......................................... 429
Loans and leases, net of unearned income allowance and reserve............... 28,143,646
Assets held in trading accounts................................................ 1,004,242
Premises and fixed assets (including capitalized leases)....................... 605,668
Other real estate owned........................................................ 41,238
Investments in unconsolidated subsidiaries and associated companies............ 205,031
Customers' liability to this bank on acceptances outstanding................... 949,154
Intangible assets.............................................................. 490,524
Other assets................................................................... 1,305,839
-----------
Total assets......................................................... $ 44,043,010
===========
LIABILITIES
Deposits:
In domestic offices.......................................................... $ 20,441,318
Noninterest-bearing.......................................................... 8,158,472
Interest-bearing............................................................. 12,282,846
In foreign offices, Edge and Agreement subsidiaries, and IBFs................ 11,710,903
Noninterest-bearing.......................................................... 46,182
Interest-bearing............................................................. 11,664,721
Federal funds purchased in domestic offices of the bank:
Federal funds purchased...................................................... 1,565,288
Demand notes issued to the U.S. Treasury....................................... 293,186
Trading liabilities............................................................ 826,856
Other borrowed money:
With original maturity of one year or less................................... 2,103,443
With original maturity of more than one year................................. 20,766
Bank's liability on acceptances executed and outstanding....................... 951,116
Subordinated notes and debentures.............................................. 1,020,400
Other liabilities.............................................................. 1,522,884
-----------
Total liabilities.................................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock................................................................... 942,284
Surplus........................................................................ 525,666
Undivided profits and capital reserves......................................... 2,129,376
Net unrealized holding gains (losses) on available-for-sale securities......... (2,073)
Cumulative foreign currency translation adjustments............................ (8,403)
-----------
Total equity capital...................................................... 3,586,850
-----------
Total liabilities and equity capital................................. $ 44,043,010
===========
</TABLE>
<PAGE> 5
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Directors
J. Carter Bacot
Thomas A. Renyi
Alan R. Griffith
<PAGE> 1
EXHIBIT 25.2
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(D) OF REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
------------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) [ ]
------------------------
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
ORION CAPITAL TRUST I
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
CAPITAL SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
NAME ADDRESS
- ---------------------------------------------- -------------------------------------
<S> <C>
Superintendent of Banks of the State of New 2 Rector Street, New York, N.Y.
York 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29
UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 29th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
------------------------------------
Name: Vivian Georges
Title: Assistant Vice President
3
<PAGE> 4
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
THE BANK OF NEW YORK
OF 48 WALL STREET, NEW YORK, N.Y. 10266
AND FOREIGN AND DOMESTIC SUBSIDIARIES
A MEMBER OF THE FEDERAL RESERVE SYSTEM, AT THE CLOSE OF BUSINESS SEPTEMBER 30,
1996,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS
DISTRICT
PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
--------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........................... $ 4,404,522
Interest-bearing balances.................................................... 732,833
Securities:
Held-to-maturity securities.................................................. 789,964
Available-for-sale securities................................................ 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold........................................................... 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned income..................................... 28,728,602
LESS Allowance for loan and lease losses..................................... 584,525
LESS Allocated transfer risk reserve......................................... 429
Loans and leases, net of unearned income, allowance, and reserve............. 28,143,648
Assets held in trading accounts................................................ 1,004,242
Premises and fixed assets (including capitalized leases)....................... 605,668
Other real estate owned........................................................ 41,238
Investments in unconsolidated subsidiaries and associated companies............ 205,031
Customers' liability to this bank on acceptances outstanding................... 949,154
Intangible assets.............................................................. 490,524
Other assets................................................................... 1,305,839
-----------
Total assets......................................................... $ 44,043,010
===========
LIABILITIES
Deposits:
In domestic offices............................................................ $ 20,441,318
Noninterest-bearing.......................................................... 8,158,472
Interest-bearing............................................................. 12,282,846
In foreign offices, Edge and Agreement subsidiaries, and IBFs................ 11,710,903
Noninterest-bearing.......................................................... 46,182
Interest-bearing............................................................. 11,664,721
Federal funds purchased in domestic offices of the bank:
Federal funds purchased...................................................... 1,565,288
Demand notes issued to the U.S. Treasury....................................... 293,186
Trading liabilities............................................................ 826,856
Other borrowed money:
With original maturity of one year or less................................... 2,103,443
With original maturity of more than one year................................. 20,766
Bank's liability on acceptances executed and outstanding....................... 951,116
Subordinated notes and debentures.............................................. 1,020,400
Other liabilities.............................................................. 1,522,884
-----------
Total liabilities.................................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock................................................................... 942,284
Surplus........................................................................ 525,666
Undivided profits and capital reserves......................................... 2,129,376
Net unrealized holding gains (losses) on available-for-sale securities......... (2,073)
Cumulative foreign currency translation adjustments............................ (8,403)
-----------
Total equity capital...................................................... 3,586,850
-----------
Total liabilities and equity capital................................. $ 44,043,010
===========
</TABLE>
<PAGE> 5
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Directors
J. Carter Bacot
Thomas A. Renyi
Alan R. Griffith
<PAGE> 1
EXHIBIT 25.3
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(D) OR REGULATION S-T
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
------------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) [ ]
------------------------
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
ORION CAPITAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-6069054
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020-2302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
------------------------
GUARANTEE OF ORION CAPITAL CORPORATION OF
ORION CAPITAL TRUST I
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
NAME ADDRESS
---------------------------------------- ----------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y. 10006,
New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29
UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 29th day of January, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
--------------------------------------
Name: Vivian Georges
Title: Assistant Vice President
3
<PAGE> 4
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
THE BANK OF NEW YORK
OF 48 WALL STREET, NEW YORK, N.Y. 10266
AND FOREIGN AND DOMESTIC SUBSIDIARIES
A MEMBER OF THE FEDERAL RESERVE SYSTEM, AT THE CLOSE OF BUSINESS SEPTEMBER 30,
1996,
PUBLISHED IN ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS
DISTRICT
PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
--------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........................... $ 4,404,522
Interest-bearing balances.................................................... 732,833
Securities:
Held-to-maturity securities.................................................. 789,964
Available-for-sale securities................................................ 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold........................................................... 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned income..................................... 28,728,602
LESS Allowance for loan and lease losses..................................... 584,525
LESS Allocated transfer risk reserve......................................... 429
Loans and leases, net of unearned income, allowance, and reserve............. 28,143,648
Assets held in trading accounts................................................ 1,004,242
Premises and fixed assets (including capitalized leases)....................... 605,668
Other real estate owned........................................................ 41,238
Investments in unconsolidated subsidiaries and associated companies............ 205,031
Customers' liability to this bank on acceptances outstanding................... 949,154
Intangible assets.............................................................. 490,524
Other assets................................................................... 1,305,839
-----------
Total assets......................................................... $ 44,043,010
===========
LIABILITIES
Deposits:
In domestic offices............................................................ $ 20,441,318
Noninterest-bearing.......................................................... 8,158,472
Interest-bearing............................................................. 12,282,846
In foreign offices, Edge and Agreement subsidiaries, and IBFs................ 11,710,903
Noninterest-bearing.......................................................... 46,182
Interest-bearing............................................................. 11,664,721
Federal funds purchased in domestic offices of the bank:
Federal funds purchased...................................................... 1,565,288
Demand notes issued to the U.S. Treasury....................................... 293,186
Trading liabilities............................................................ 826,856
Other borrowed money:
With original maturity of one year or less................................... 2,103,443
With original maturity of more than one year................................. 20,766
Bank's liability on acceptances executed and outstanding....................... 951,116
Subordinated notes and debentures.............................................. 1,020,400
Other liabilities.............................................................. 1,522,884
-----------
Total liabilities.................................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock................................................................... 942,284
Surplus........................................................................ 525,666
Undivided profits and capital reserves......................................... 2,129,376
Net unrealized holding gains (losses) on available-for-sale securities......... (2,073)
Cumulative foreign currency translation adjustments............................ (8,403)
-----------
Total equity capital...................................................... 3,586,850
-----------
Total liabilities and equity capital................................. $ 44,043,010
===========
</TABLE>
<PAGE> 5
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Directors
J. Carter Bacot
Thomas A. Renyi
Alan R. Griffith
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
Offer For Any and All Outstanding
8.73% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
in Exchange for
8.73% Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Which Have Been Registered Under The Securities Act Of 1933
Pursuant to the Prospectus dated February __, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON MARCH __, 1997, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<S> <C> <C>
By Hand Or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
The Bank of New York The Bank of New York
101 Barclay Street (212) 571-3080 101 Barclay Street, 7E
Corporate Trust Services Window New York, New York 10286
Ground Level To Confirm by Telephone Attention: Reorganization Section,
Attention: Reorganization Section, or for Information Call: Arwen Gibbons
Arwen Gibbons
(212) 815-6333
</TABLE>
Delivery of this letter of transmittal to an address other than as set
forth above or transmission of this letter of transmittal via facsimile to a
number other than as set forth above does not constitute a valid delivery.
The undersigned acknowledges that he or she has received the
Prospectus, dated February __, 1997 (the "Prospectus"), of Orion Capital
Corporation, a Delaware corporation ("Orion"), and Orion Capital Trust I, a
Delaware business trust (the "Trust"), and this Letter of Transmittal, which
together constitute Orion's and the Trust's offer (the "Exchange Offer") to
exchange an aggregate Liquidation Amount of up to $125,000,000 8.73% Capital
Securities due January 1, 2037, which have been registered under the Securities
Act of 1933, as amended (the "Securities Act") (the "Exchange Capital
Securities") of the Trust for a like Liquidation Amount of the issued and
outstanding 8.73% Capital Securities due January 1, 2037 (the "Capital
Securities") of the Trust from the holders thereof.
<PAGE> 2
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if Old Capital Securities are to be
forwarded herewith or if tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company (the "Book-Entry Transfer
Facility" or "DTC") pursuant to the procedures set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Holders of Old Capital Securities whose certificates (the
"Certificates") for such Old Capital Securities are not immediately available or
who cannot deliver their Certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus)
or who cannot complete the procedures for book-entry transfer on a timely basis,
must tender their Old Capital Securities according to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
The undersigned has completed the appropriate boxes below and signed
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
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<PAGE> 3
<TABLE>
<CAPTION>
DESCRIPTION OF OLD CAPITAL SECURITIES 1 2 3
Aggregate Liquidation
Liquidation Amount of
Amount of Old Capital
Name(s) and Address(es) of Registered Holder(s): Certificate Old Capital Securities
(Please fill in, if blank) Number(s)* Securities Tendered**
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Total
------------------------------------------------
</TABLE>
* Need not be completed if Old Capital Securities are being tendered by
book-entry holders.
** Old Capital Securities may be tendered in integral multiples of $1,000,
provided that if any Old Capital Securities are tendered for exchange
in part, the untendered principal amount thereof must be $100,000 or
any integral multiple of $1,000 in excess thereof. See instruction 4.
Unless otherwise indicated in the column, a holder will be deemed to
have tendered all Old Capital Securities represented by the Old Capital
Securities indicated in Column 2. See Instruction 4.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution__________________________________________
Account Number_________________________________________________________
Transaction Code Number________________________________________________
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s)___________________________________________
Window Ticket Number (if any)__________________________________________
Date of Execution of Notice of Guaranteed Delivery_____________________
Name of Institution which Guaranteed Delivery__________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
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<PAGE> 4
Name of Tendering Institution__________________________________________
Account Number_________________________________________________________
Transaction Code Number________________________________________________
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY
TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:___________________________________________________________________________
Address:________________________________________________________________________
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Trust and Orion, the above described aggregate
Liquidation Amount of the Trust's 8.73% Capital Securities due January 1, 2037
(the "Old Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 8.73% Capital Securities due January 1, 2037 (the
"Exchange Capital Securities") which have been registered under the Securities
Act upon the terms and subject to the conditions set forth in the Prospectus
dated February __, 1997 (as the same may be amended or supplemented from time to
time, the "Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Capital Securities tendered herewith in accordance with the
terms and conditions of the Exchange Offer (including, if the Exchange Offer is
extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Old Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of Orion
and the Trust in connection with the Exchange Offer) with respect to the
tendered Old Capital Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest)
subject
-4-
<PAGE> 5
only to the right of withdrawal described in the Prospectus, to (i) deliver
Certificates for Old Capital Securities to Orion or the Trust together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Trust, upon receipt by the Exchange Agent, as the undersigned's agent, of
the Exchange Capital Securities to be issued in exchange for such Old Capital
Securities, (ii) present Certificates for such Old Capital Securities for
transfer, and to transfer the Old Capital Securities on the books of the Trust,
and (iii) receive for the account of the Trust all benefits and otherwise
exercise all rights of beneficial ownership of such Old Capital Securities, all
in accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY ORION, THE TRUST OR THE EXCHANGE
AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND
TRANSFER OF THE OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL
COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE
UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate number(s) and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes above.
If any tendered Old Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if Certificates are submitted for more Old
Capital Securities than are tendered or accepted for exchange, Certificates for
such nonexchanged or nontendered Old Capital Securities will be returned (or, in
the case of Old Capital Securities tendered by book-entry transfer, such Old
Capital Securities will be credited to an account maintained at DTC), without
expense to the tendering holder, promptly following the expiration or
termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus and in
the instruction, attached hereto will, upon Orion's and the Trust's acceptance
for exchange of such tendered Old Capital Securities, constitute a binding
agreement between the undersigned, Orion and the Trust upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances
-5-
<PAGE> 6
set forth in the Prospectus, Orion and the Trust may not be required to accept
for exchange any of the Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Old Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities, will be credited to
the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please deliver Exchange Capital
Securities to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING OLD CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE
UNDERSIGNED IS NOT AN "AFFILIATE" OF ORION OR THE TRUST, (II) ANY EXCHANGE
CAPITAL SECURITIES TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE
ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF EXCHANGE CAPITAL SECURITIES TO BE RECEIVED IN
THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER, THE
UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE CAPITAL SECURITIES.
BY TENDERING OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD CAPITAL SECURITIES WHICH IS A
BROKER- DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD CAPITAL
SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD
CAPITAL SECURITIES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING
THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH
EXCHANGE CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT
IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
ORION AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY
-6-
<PAGE> 7
A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF
EXCHANGE CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR OLD CAPITAL SECURITIES,
WHERE SUCH OLD CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE
(SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE
PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH EXCHANGE CAPITAL SECURITIES HAVE BEEN
DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH
BROKER-DEALER WHO ACQUIRED OLD CAPITAL SECURITIES FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER"), BY TENDERING SUCH OLD CAPITAL SECURITIES AND EXECUTING THIS
LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM ORION OR THE
TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES
ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN
ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY
REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE
SALE OF EXCHANGE CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL ORION AND
THE TRUST HAVE AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH
MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF THE AMENDED OR
SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR ORION OR THE TRUST
HAS GIVEN NOTICE THAT THE SALE OF THE EXCHANGE CAPITAL SECURITIES MAY BE
RESUMED, AS THE CASE MAY BE. IF ORION OR THE TRUST GIVES SUCH NOTICE TO SUSPEND
THE SALE OF THE EXCHANGE CAPITAL SECURITIES, THEY SHALL EXTEND THE 90-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE
THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE CAPITAL SECURITIES BY
THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING
OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE EXCHANGE CAPITAL SECURITIES OR TO AND INCLUDING THE DATE
ON WHICH ORION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accrued interest on such Old Capital
Securities for any period from and after the last Interest Payment Date to which
interest has been paid or duly provided for on such Old Capital Securities prior
to the original issue date of the Exchange Capital Securities or, if no such
-7-
<PAGE> 8
interest has been paid or duly provided for, will not receive any accrued
interest on such Old Capital Securities, and the undersigned waives the right to
receive any interest on such Old Capital Securities accrued from and after such
Interest Payment Date or, if no such interest has been paid or duly provided
for, from and after January 13, 1997.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Capital Securities tendered hereby. All
authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
CAPITAL SECURITIES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE
TENDERED THE OLD CAPITAL SECURITIES AS SET FORTH IN SUCH BOX.
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 7)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Capital Securities hereby tendered or on the register
of holders maintained by the Trust, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by the Trust or the Trustee for the Old Capital Securities to comply
with the restrictions on transfer applicable to the Old Capital Securities). If
signature is by an attorney-in-fact, executor, administrator, trustee, guardian,
officer of a corporation or another acting in a fiduciary capacity or
representative capacity, please set forth the signer's full title. See
Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date: ___________, 199_
Name(s)_________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (full title)___________________________________________________________
-8-
<PAGE> 9
Address_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number__________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
________________________________________________________________________________
(AUTHORIZED SIGNATURE)
Date: ___________, 199_
Name of Firm____________________________________________________________________
Capacity (full title)__________________________________________________
(PLEASE PRINT)
Address_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number__________________________________________________
-9-
<PAGE> 10
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the Exchange Capital Securities or Old Capital
Securities not tendered are to be issued in the name of someone other than the
registered holder of the Old Capital Securities whose name(s) appear(s) above.
Issue
/ / Old Capital Securities not tendered to:
/ / Exchange Capital Securities, to:
Name(s)_________________________________________________________________________
Address_________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and
Telephone Number________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Capital Securities or Old Capital Securities
not tendered are to be sent to someone other than the registered holder of the
Old Capital Securities whose name(s) appear(s) above, or such registered
holder(s) at an address other than that shown above.
Mail
/ / Old Capital Securities not tendered to:
/ / Exchange Capital Securities, to:
Name(s)_________________________________________________________________________
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<PAGE> 11
Address_________________________________________________________________________
_________________________________________________________________________
(INCLUDE CODE)
Area Code and
Telephone Number________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of such Old
Capital Securities into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein on or prior to the Expiration Date. Old Capital
Securities may be tendered in whole or in part in the principal amount of
$100,000 (100 Capital Securities) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Capital Securities are tendered for exchange
in part, the untendered principal amount thereof must be $100,000 (100 Capital
Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose
Old Capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on a timely
basis, may tender their Old Capital Securities by properly completing and duly
executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Procedures for Tendering Old
Capital Securities" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Company, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates
(or a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Old Capital Securities, in proper form for transfer, together with a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
-11-
<PAGE> 12
required by this Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must include a
guarantee by an Eligible Institution in the form set forth in such Notice. For
Old Capital Securities to be properly tendered pursuant to the guaranteed
delivery procedure, the Exchange Agent must receive a Notice of Guaranteed
Delivery on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity identified in
Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution,"
including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(iii) a credit union; (v) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither Orion nor the Trust will accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any notice of
the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any
participant in DTC whose name appears on the register of
holders maintained by the Trust as the owner of the Old
Capital Securities) of Old Capital Securities tendered
herewith, unless such holder(s) has completed either the box
entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
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<PAGE> 13
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Capital Securities" is inadequate, the Certificate number(s)
and/or the principal amount of Old Capital Securities and any other required
information should be listed on a separate signed schedule which is attached to
this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital
Securities will be accepted in integral multiples of $1,000, provided that if
any Old Capital Securities are tendered for exchange in part, the untendered
principal amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all the Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the principal amount of Old Capital Securities which are to be tendered in the
box entitled "Liquidation Amount of Old Capital Securities Tendered (if less
than all)." In such case, new Certificate(s) for the remainder of the Old
Capital Securities that were evidenced by your old Certificate(s) will only be
sent to the holder of the Old Capital Security, promptly after the Expiration
Date. All Old Capital Securities represented by Certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at one of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Old Capital Securities to
be withdrawn, the aggregate principal amount of Old Capital Securities to be
withdrawn, and (if Certificates for Old Capital Securities have been tendered)
the name of the registered holder of the Old Capital Securities as set forth on
the Certificate for the Old Capital Securities, if different from that of the
person who tendered such Old Capital Securities. If Certificates for the Old
Capital Securities have been delivered or otherwise identified to the Exchange
Agent, then prior to the physical release of such Certificates for the Old
Capital Securities, the tendering holder must submit the serial numbers shown on
the particular Certificates for the Old Capital Securities to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been tendered
pursuant to the procedures for book-entry transfer set forth in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Capital Securities," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Capital Securities, in which case a
notice of withdrawal will be effective if delivered to the Exchange Agent by
written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of
Old Capital Securities may not be rescinded. Old Capital Securities properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Capital Securities."
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<PAGE> 14
All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by Orion and the
Trust, in their sole discretion, whose determination shall be final and binding
on all parties. None of Orion, the Trust, any affiliates or assigns of Orion and
the Trust, the Exchange Agent or any other person shall be under any duty to
give any notification of any irregularities in any notice of withdrawal or incur
any liability for failure to give any such notification. Any Old Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof without cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the Old
Capital Securities tendered hereby, the signature(s) must correspond exactly
with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Old Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Old Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence satisfactory to Orion and the Trust, in their sole discretion, of each
such person's authority so to act.
When this Letter of Transmittal is signed by the registered owner(s) of
the Old Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless Exchange Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Capital Securities listed, the Certificates must
be endorsed or accompanied by appropriate bond powers, signed exactly as the
name or names of the registered owner(s) appear(s) on the Certificates, and also
must be accompanied by such opinions of counsel, certifications and other
information as Orion, the Trust or the Trustee for the Old Capital Securities
may require in accordance with the restrictions on transfer applicable to the
Old Capital Securities. Signatures on such Certificates or bond powers must be
guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Capital
Securities are to be issued in the name of a person other than the signer of
this Letter of Transmittal, or if Exchange Capital Securities are to be sent to
someone other than the signer of
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<PAGE> 15
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Capital Securities not exchanged will be returned by mail
or, if tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. Orion and the Trust will determine, in their sole
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
Capital Securities, which determination shall be final and binding on all
parties. Orion and the Trust reserve the absolute right to reject any and all
tenders determined by either of them not to be in proper form or the acceptance
of which, or exchange for which, may, in the view of counsel to Orion and the
Trust, be unlawful. Orion and the Trust also reserve the absolute right, subject
to applicable law, to waive any of the conditions of the Exchange Offer set
forth in the Prospectus under "The Exchange Offer--Certain Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old Capital
Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders. Orion's and the Trust's
interpretation of the terms and conditions of the Exchange Offer (including this
Letter of Transmittal and the instructions hereto) will be final and binding. No
tender of Old Capital Securities will be deemed to have been validly made until
all irregularities with respect to such tender have been cured or waived. Orion,
the Trust, any affiliates or assigns of Orion, the Trust, the Exchange Agent, or
any other person shall not be under any duty to give notification of any
irregularities in tenders or incur any liability for failure to give such
notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal
income tax law, a holder whose tendered Old Capital Securities are accepted for
exchange is required to provide the Exchange Agent with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 below. If the
Exchange Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the holder or other payee to a $50 penalty. In
addition, payments to such holders or other payees with respect to Old Capital
Securities exchanged pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments
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<PAGE> 16
made prior to the time a properly certified TIN is provided to the Exchange
Agent. The Exchange Agent will retain such amounts withheld during the 60 day
period following the date of the Substitute Form W-9. If the holder furnishes
the Exchange Agent with its TIN within 60 days after the date of the Substitute
Form W-9, the amounts retained during the 60 day period will be remitted to the
holder and no further amounts shall be retained or withheld from payments made
to the holder thereafter. If, however, the holder has not provided the Exchange
Agent with its TIN within such 60 day period, amounts withheld will be remitted
to the IRS as backup withholding. In addition, 31% of all payments made
thereafter will be withheld and remitted to the IRS until a correct TIN is
provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax.
Rather, the U.S. Federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained provided certain
conditions are satisfied.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
waive satisfaction of any or all conditions enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Capital
Securities, by execution of this Letter of Transmittal, shall waive any right to
receive notice of the acceptance of their Old Capital Securities for exchanges.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Old Capital Securities nor shall any of them incur any liability for
failure to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Capital Securities have been lost, destroyed or stolen, the
holder should promptly notify the Exchange Agent. The holder will then be
instructed as to the steps that must
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<PAGE> 17
be taken in order to replace the Certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their Old Capital
Securities for exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Capital Securities are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Capital Securities tendered, or if a transfer tax
is imposed for any reason other than the exchange of Old Capital Securities in
connection with the Exchange Offer, then the amount of any such transfer tax
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF)
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 9)
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
PART 1-PLEASE PROVIDE YOUR TIN ON THE LINE TIN:_____________________________
AT RIGHT AND CERTIFY BY SIGNING AND DATING Social Security Number or
BELOW Employer Identification Number
PART 2 -- TIN Applied For / /
SUBSTITUTE CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
Form W-9 (1) the number shown on this form is my correct taxpayer identification number (or I am
Department Of The Treasury waiting for a number to be issued to me).
Internal Revenue Service
(2) I am not subject to backup withholding either because (i) I am exempt from backup
Payor's Request For withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I am
Taxpayer subject to backup withholding as a result of a failure to report all interest or dividends, or
Identification Number (iii) the IRS has notified me that I am no longer subject to backup withholding, and
("TIN")
and Certification (3) any other information provided on this form is true and correct.
Signature_______________________________ Date_________________, 1997
</TABLE>
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
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<PAGE> 18
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the Exchange Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature_____________________________ Date___________, 1997
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<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING
8.73% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
ORION CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED
BY ORION CAPITAL CORPORATION
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 8.73% Capital Securities due
January 1, 2037 (the "Old Capital Securities") are not immediately available,
(ii) Old Capital Securities, the Letter of Transmittal and all other required
documents cannot be delivered to The Bank of New York (the "Exchange Agent") on
or prior to 5:00 P.M. New York City time, on the Expiration Date (as defined in
the Prospectus referred to below) or (iii) the procedures for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus. In
addition, in order to utilize the guaranteed delivery procedure to tender Old
Capital Securities pursuant to the Exchange Offer, a completed, signed and dated
Letter of Transmittal relating to The Old Capital Securities (or facsimile
thereof) must also be received by the Exchange Agent prior to 5:00 P.M. New York
City time, on the Expiration Date. Capitalized terms not defined herein have the
meanings assigned to them in the Prospectus.
The Exchange Agent For The Exchange Offer Is:
The Bank Of New York
<TABLE>
<CAPTION>
By Registered or Certified Mail Facsimile Transmissions: By Hand Or Overnight Delivery
(Eligible Institutions Only)
<S> <C> <C>
The Bank of New York The Bank of New York
101 Barclay Street, 7E (212) 571-3080 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attn: Reorganization Section Confirm By Telephone: Ground Level
Arwen Gibbons (212) 815-6333 New York, New York 10286
Attn: Reorganization Section,
For Information Call: Arwen Gibbons
(212) 815-6333
</TABLE>
<PAGE> 2
Delivery of this Notice Of Guaranteed Delivery to an address other than as
set forth above or transmission of this Notice of Guaranteed Delivery via
facsimile to a number other than as set forth above will not constitute a valid
delivery.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTY
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Orion Capital Corporation, a Delaware
Corporation (the "Corporation") and to Orion Capital Trust I, a Delaware
business trust (the "Trust"), upon the terms and subject to the conditions set
forth in the Prospectus dated February _, 1997 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Capital Securities
set forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old
Capital Securities."
Aggregate Liquidation Amount Name(s) of Registered Holder(s):_________
Amount Tendered: $______________* _________________________________________
Certificate No(s)
if available):__________________
:_______________________________
(Total Liquidation Amount Represented by
Old Capital Securities Certificate(s)
$_______________________________
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
DTC Account Number:______________________
Date:____________________________________
________________
* Must be in denominations of a Liquidation Amount of $1,000 and any integral
multiple thereof.
<PAGE> 3
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs personal representatives,
successors and assigns of the undersigned.
PLEASE SIGN HERE
X_______________________________ ______________
X_______________________________ ______________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:________________________
Must be signed by the holder(s) of the Old Capital Securities as their
name(s) appear(s) on certificates for Old Capital Securities or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
Please print name(s) and address(es)
Name(s): _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Capacity: _________________________________________________________________
Address(es): _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE> 4
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
learning agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Capital
Securities tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Old Capital Securities to the Exchange Agent's
account at The Depositary Trust Company ("DTC"), pursuant to the procedures for
book-entry transfer set forth in the Prospectus, in either case together with
one or more properly completed and duly executed Letter(s) of Transmittal (or
facsimile thereof) and any other required documents within five business days
after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Capital Securities tendered hereby to the Exchange Agent
within the time period set forth above and that failure to do so could result in
a financial loss to the undersigned.
- --------------------------------- ----------------------------------------
Name of Firm Authorized Signature
- --------------------------------- ----------------------------------------
Address Title
- --------------------------------- ----------------------------------------
Zip Code (Please Type or Print)
Area Code and Telephone No.______ Dated:___________________________________
NOTE: DO NOT SEND CERTIFICATES FOR OLD CAPITAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR OLD CAPITAL SECURITIES SHOULD ONLY BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE> 1
Exhibit 99.3
March __, 1997
EXCHANGE AGENT AGREEMENT
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Orion Capital Trust I (the "Company") proposes to make an offer (the
"Exchange Offer") to exchange its 8.73% Capital Securities (the "Old
Securities") for its 8.73% Exchange Capital Securities (the "New Securities").
The terms and conditions of the Exchange Offer as currently contemplated are set
forth in a prospectus, dated February __, 1997 (the "Prospectus"), proposed to
be distributed to all record holders of the Old Securities. The Old Securities
and the New Securities are collectively referred to herein as the "Securities".
The Company hereby appoints The Bank of New York to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company on or
about February __, 1997. The Letter of Transmittal accompanying the Prospectus
(or in the case of book-entry securities, the DTC system) is to be used by the
holders of the Old Securities to accept the Exchange Offer and contains
instructions with respect to the delivery of certificates for Old Securities
tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
March __, 1997 or on such later date or time to which the Company may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set
forth in the Prospectus, the Company expressly reserves the right to extend the
Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the business day following the previously scheduled Expiration
Date.
<PAGE> 2
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Securities not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the caption "The
Exchange Offer -- Conditions to the Exchange Offer."] The Company will give oral
(confirmed in writing) or written notice of any amendment, termination or
nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Securities
at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer not later than two business days after the date
of the Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and (ii) the Old Securities have otherwise been properly rendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to
-2-
<PAGE> 3
inform the presenters of the need for fulfillment of all requirements and to
take any other action as may be necessary or advisable to cause such
irregularity to be corrected.
4. With the approval of the Chairman, any Senior Vice President, or
any Vice President of the Company (such approval, if given orally, to be
confirmed in writing) or any other party designated by such an officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Old Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures for Tendering Old Capital Securities", and Old
Securities shall be considered properly tendered to you only when tendered in
accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old Securities
which the Chairman, any Senior Vice President or any Vice President of the
Company shall approve as having been properly tendered shall be considered to be
properly tendered (such approval, if given orally, shall be confirmed
in writing).
6. You shall advise the Company with respect to any Old Securities
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Securities provided that customary transfer requirements, including any
applicable transfer taxes, are fulfilled.
-3-
<PAGE> 4
You shall accept partial tenders of Old Securities where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Securities to the transfer agent for split-up and return any untendered
Old Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Securities properly tendered and you, on behalf of the Company, will
exchange such Old Securities for New Securities and cause such Old Securities to
be cancelled. Delivery of New Securities will be made on behalf of the Company
by you at the rate of $1,000 principal amount of New Securities for each $1,000
principal amount of the corresponding series of Old Securities tendered promptly
after notice (such notice if given orally, to be confirmed in writing) of
acceptance of said Old Securities by the Company; provided, however, that in all
cases, Old Securities tendered pursuant to the Exchange Offer will be exchanged
only after timely receipt by you of certificates for such Old Securities (or
confirmation of book-entry transfer into your account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and any other required
documents. You shall issue New Securities only in denominations of $1,000 or any
integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Securities
tendered shall be given (and confirmed in writing) by the Company to you.
-4-
<PAGE> 5
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Securities tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the caption "The Exchange Offer -Conditions to the Exchange Offer" or otherwise,
you shall as soon as practicable after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Securities (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old
Securities or for New Securities shall be forwarded by (a) first-class certified
mail, return receipt requested under a blanket surety bond protecting you and
the Company from loss or liability arising out of the non-receipt or
non-delivery of such certificates or (b) by registered mail insured separately
for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing by
you and the Company;
(b) will be regarded as making no representations and having
no responsibilities as to the validity, sufficiency, value or genuineness of any
of the certificates or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder
which might in your reasonable judgment involve any expense or liability, unless
you shall have been furnished with reasonable indemnity;
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(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which you shall in good
faith believe to be genuine or to have been signed or represented by a proper
person or persons;
(f) may rely on and shall be protected in acting upon written
or oral instructions from any officer of the Company;
(g) may consult with your counsel with respect to any
questions relating to your duties and responsibilities and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you hereunder in
good faith and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to
the market value or decline or appreciation in market value of any Old
Securities.
15. You shall take such action as may from time to time be requested
by the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request. All
other requests for information relating to the Exchange Offer shall be directed
to the Company, Attention: Michael P. Maloney, Esq.
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16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Michael P. Maloney, Esq. of the
Company and such other person or persons as it may request, daily (and more
frequently during the week immediately preceding the Expiration Date and if
otherwise requested) up to and including the Expiration Date, as to the number
of Old Securities which have been tendered pursuant to the Exchange Offer and
the items received by you pursuant to this Agreement, separately reporting and
giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company or any such other person or persons upon oral request made from
time to time prior to the Expiration Date of such other information as it or he
or she reasonably requests. Such cooperation shall include, without limitation,
the granting by you to the Company and such person as the Company may request of
access to those persons on your staff who are responsible for receiving tenders,
in order to ensure that immediately prior to the Expiration Date the Company
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders shall have been accepted, the aggregate principal amount
of Old Securities tendered, the aggregate principal amount of Old Securities
accepted and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall
be stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
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20. You hereby acknowledge receipt of the Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery and further acknowledge that
you have examined each of them. Any inconsistency between this Agreement, on the
one hand, and the Prospectus and the Letter of Transmittal (as they may be
amended from time to time), on the other hand, shall be resolved in favor of the
latter two documents, except with respect to the duties, liabilities and
indemnification of you as Exchange Agent, which shall be controlled by this
Agreement.
21. The Company covenants and agrees to indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any loss,
liability, cost or expense, including attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities; provided, however, that the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your gross negligence or
willful misconduct. In no case shall the Company be liable under this indemnity
with respect to any claim against you unless the Company shall be notified by
you, by letter or cable or by facsimile confirmed by letter, of the written
assertion of a claim against you or of any other action commenced against you,
promptly after you shall have received any such assertion or notice of
commencement of action. The Company shall be entitled to participate at its own
expense in the defense of any such claim or other action, and, if the Company so
elects, the Company shall assume the defense of any suit brought to enforce any
such claim. In the event that the Company shall assume the defense of any such
suit, the Company shall not be liable for the fees and expenses of any
additional counsel thereafter retained by you so long as the Company shall
retain counsel satisfactory to you to defend such suit.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are required to deduct 31% on
payments to holders who have not supplied their
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<PAGE> 9
correct Taxpayer Identification Number or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall deliver or cause to be delivered, in a timely manner
to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Securities, your check in the amount of all
transfer taxes so payable, and the Company shall reimburse you for the amount of
any and all transfer taxes payable in respect of the exchange of Old Securities;
provided, however, that you shall reimburse the Company for amounts refunded to
you in respect of your payment of any such transfer taxes, at such time as such
refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it,
at its address or telecopy number set forth below:
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If to the Company:
Orion Capital Trust I
600 Fifth Avenue
24th Floor
New York, New York 10020-2302
Facsimile: 212-247-4824
Attention: Michael P. Maloney, Esq.
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Securities, funds or property then held by you
as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of
the date hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
ORION CAPITAL TRUST I
By:__________________________
Name: Michael P. Maloney, Esq.
Title: Administrative Trustee
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Accepted as of the date first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:__________________________
Name: Walter Gitlin
Title:
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Schedule I
FEES
