<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998
REGISTRATION NUMBER 333-50715
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
ORION CAPITAL CORPORATION ORION CAPITAL TRUST II
(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 9 FARM SPRINGS ROAD
9 FARM SPRINGS ROAD FARMINGTON, CT 06032
FARMINGTON, CT 06032 (860) 674-7337
(860) 674-7337 (NAME, ADDRESS, INCLUDING
(NAME, ADDRESS, INCLUDING ZIP CODE, AND ZIP CODE, AND TELEPHONE NUMBER,
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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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 [ ].
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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.
PROSPECTUS
ORION CAPITAL TRUST II
OFFER TO EXCHANGE ITS
7.701% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
FOR ANY AND ALL OF ITS OUTSTANDING
7.701% 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 JUNE 3, 1998 UNLESS EXTENDED.
------------------------
Orion Capital Trust II is a statutory business trust formed under the laws
of the State of Delaware (the "Trust"),at the instance of Orion Capital
Corporation, a Delaware corporation ("Orion" or "the Corporation"), which has
agreed to pay all fees, expenses, debts, and obligations (other than the Trust
Securities as defined below) related to the Trust. 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 7.701%
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 7.701% 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 7.701% Junior
Subordinated Interest Deferrable Debentures due April 15, 2028 (the "Old Junior
Subordinated Debentures") for a like aggregate principal amount of its 7.701%
Exchange Junior Subordinated Deferrable Interest Debentures due April 15, 2028
(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 (and to the extent such restriction
might be deemed applicable to the Exchange Offer, it is being waived by the
Corporation and the Trust), (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 February 5, 1998 (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 May 6, 1998.
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.
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The date of this Prospectus is May , 1998.
<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 April 15, 2028 (the "Stated Maturity"). 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 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. The Capital Securities may also be redeemed 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 more fully
described below, the Corporation, in addition to agreeing to pay all fees,
expenses, debts and obligations (other than the Trust Securities) related to the
Trust has entered into several contractual undertakings which, the Corporation
believes, taken together, guarantee to the holders of the Capital Securities a
full and unconditional right to enforce the payment of distributions, the
payment of the redemption price upon redemption of the Capital Securities and
the payment of the Liquidation Amount with respect to the Capital Securities
upon liquidation of the Trust. (See "Risk Factors -- Rights Under the Guarantee;
Direct Action For Payment.") Those contractual arrangements include the
Corporation's obligations under (i) the Guarantee for the benefit of the holders
of Capital Securities, (ii) the Trust Agreement, (iii) the Junior Subordinated
Debentures and (iv) the Indenture.
As used herein, (i) the "Indenture" means the Indenture, dated as of
February 5, 1998, 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"), Bank of New York (Delaware) 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 April 15, 1998 and payable
semi-annually in arrears on April 15 and October 15 of each year, commencing
October 15, 1998, at the annual rate of 7.701% 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
2
<PAGE> 4
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.
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 7.701% 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 --
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<PAGE> 5
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, at any time, 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) at any time,
in whole or in part, at a prepayment price (the "Optional Prepayment Price")
equal to the greater of (a) 100% of the principal amount to be prepaid or (b)
the sum, as determined by a Quotation Agent, of the present values of the
remaining scheduled payments of principal to be prepaid and interest thereon
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
either case, 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 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 discounted to
the prepayment date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Special Event 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
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<PAGE> 6
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.
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
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<PAGE> 7
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
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
6
<PAGE> 8
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 June 3, 1998 (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 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 February 5, 1998. 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 II...................................... 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, the Exchange
Guarantee and the Trust Agreement......................... 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 II" and "Description of
the Exchange Securities." The Corporation and the Trust intend to apply to the
Securities and Exchange Commission pursuant to Staff Accounting Bulletin No. 53
("SAB 53") for exemption from the periodic reporting requirements of the
Exchange Act and confirmation that the Corporation need not include either
separate financial statements of the Trust or summarized financial information
with respect to the Trust in its periodic reports filed pursuant to the Exchange
Act. See "Accounting Treatment."
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 Corporation's Annual Report on Form 10-K for the year ended December
31, 1997 filed with the Commission by Orion (File No. 1-7801) is incorporated
herein by reference and made a part hereof.
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.
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
9
<PAGE> 11
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, 9 Farm Springs Road,
Farmington, Connecticut 06032, telephone number (860) 674-7337.
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, 1997, 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 13.9% per
year. The combined ratio for the Corporation's insurance operations, computed on
the basis of generally accepted accounting principles, has steadily improved
from 103.2% in 1993 to 99.7% in 1997.
ORION CAPITAL TRUST II
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 The
Bank of New York (Delaware) as Delaware Trustee, and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on February 2, 1998.
The Trust's business and affairs are conducted by the Issuer Trustees: the
Property Trustee, the Delaware 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) effecting the Exchange Offer, (iii) using the proceeds from the
sale of the Trust Securities to acquire the Junior Subordinated Debentures
issued by the Corporation, (iv) making Distributions to holders of the Trust
Securities as provided in the Trust Agreement and (v) 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.
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 in the Exchange Offer for
exchange in whole or in part in any integral
multiple of $1,000 (one Old Capital Security)
notwithstanding the requirement, applicable to
all other transfers of a minimum transfer amount
of $100,000 in Liquidation Amount. 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 June 3, 1998,
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 Exchange Offer is extended). See
"The Exchange Offer -- Terms of the Exchange
Offer."
11
<PAGE> 13
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 expressly reserve the
right in their sole and absolute discretion,
reasonably exercised in accordance with
applicable law and the terms of this Exchange
Offer, 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 Exchange Offer as it has in such
interpretive letters to third parties. Based on
these interpretations by the staff of the
Division of Corpora-
12
<PAGE> 14
tion 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 broker-dealer
will not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act.
13
<PAGE> 15
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 freely sell untendered Old
Capital Securities could be adversely affected.
14
<PAGE> 16
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......... April 15 and October 15 of each year, commencing
October 15, 1998.
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
consecutive 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.
15
<PAGE> 17
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
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.
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
16
<PAGE> 18
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 Old Capital Securities or the Exchange
Capital Securities on any securities exchange or
for quotation through The Nasdaq Stock Market.
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 December 31, 1997, the aggregate principal
amount of outstanding Senior Indebtedness of the Corporation 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 December 31, 1997, the Corporation's subsidiaries had total
liabilities of approximately $2.8 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 7.701% 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 7.701%,
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 --
18
<PAGE> 20
Distributions" and "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.
OPTIONAL PREPAYMENT
The Junior Subordinated Debentures will be prepayable, in whole or in part,
at any time at the option of the Corporation, at a prepayment price (the
"Optional Prepayment Price") 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 to be prepaid
and interest thereon 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 either case, accrued and unpaid interest thereon to the
date of prepayment and any Additional Sums (as defined herein).
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
19
<PAGE> 21
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 Revenue Service,
there is more than an insubstantial risk that (i) the Trust 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 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 an 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 LEGISLATION
In the past the Clinton Administration has proposed tax provisions which,
if applicable to the Junior Subordinated Debentures, would have prevented the
Corporation from deducting interest thereon for United States federal income tax
purposes. Congress has not enacted these provisions. There can be no assurance
that future legislative proposals, future regulations or official administrative
pronouncements, or future judicial decisions will not affect the ability of the
Corporation to deduct interest 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 the Exchange Securities -- Description of the Exchange Capital
Securities -- Redemption" and "-- Description of Junior Subordinated
Debentures -- Conditional Right to Shorten Maturity and Special Event
Prepayment."
20
<PAGE> 22
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; DIRECT ACTION FOR PAYMENT
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. The Bank of New York (Delaware) 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 and (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 the 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 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
21
<PAGE> 23
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 July
5, 1998 or declared effective by August 4, 1998, additional Distributions will
thereupon accrue on the Old Capital Securities commencing on July 6, 1998 or
August 5, 1998 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 used approximately $100,000,000 of the net proceeds from the sale of
the Old Junior Subordinated Debentures to retire bank indebtedness of Guaranty
National, a wholly-owned subsidiary of the Corporation, and the balance 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,
- --------------------------------
1993 1994 1995 1996 1997
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
4.7 4.6 5.0 5.0 4.6
</TABLE>
24
<PAGE> 26
The ratios of earnings to combined fixed charges and preferred stock
dividends represent the number of times fixed charges (interest, debt expense,
preferred stock dividends, minority interest of subsidiary trust preferred
securities and one-third of all rent and related costs, considered to represent
an appropriate interest factor, charged to income) are covered by income before
income taxes, minority interest expense, cumulative effect of changes in
accounting principles 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
included on its balance sheet as "Company-obligated mandatorily redeemable
preferred capital securities of subsidiary trust holding solely the Junior
Subordinated Debentures of Orion." An audited footnote to the Corporation's
annual consolidated financial statements will indicate that (a) the Trust is
wholly owned by the Corporation, (b) its sole assets are the $125,000,000
aggregate principal amount of 7.701% Junior Subordinated Debentures due April
15, 2028 and (c) the Corporation has given its partial guarantee, which when
taken together with the Corporation's obligations under the Trust Agreement, the
Junior Subordinated Debentures, and the Indenture pursuant to which the Capital
Securities are issued including its obligations to pay costs, expenses, debts
and liabilities of the Trust (other than with respect to the Capital
Securities), provides a full and unconditional guarantee of amounts due on the
Capital Securities. The Corporation will record Distributions payable on the
Capital Securities as a minority interest expense net of federal income tax
benefits in its consolidated statement of earnings.
25
<PAGE> 27
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of December 31, 1997 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, 1997, which are incorporated herein by
reference. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Borrowings under bank loan agreement (1).................. $ 100,000 $ 0
6 1/2% Term loan.......................................... 938 938
9 1/8% Senior notes due 2002.............................. 109,919 109,919
7 1/4% Senior notes due 2005.............................. 99,371 99,371
---------- ----------
Total debt........................................ 310,228 210,228
---------- ----------
Company-obligated mandatorily redeemable preferred capital
securities of subsidiary trusts holding solely the junior
subordinated debentures of Orion:
8.73% due January 1, 2037................................. 125,000 125,000
7.701% due April 15, 2028................................. 0 125,000
---------- ----------
125,000 250,000
---------- ----------
Stockholders' equity:
Common stock.............................................. 30,675 30,675
Capital surplus........................................... 152,114 152,114
Net unrealized investment gains........................... 113,592 113,592
Net unrealized foreign exchange translation losses........ (4,398) (4,398)
Retained earnings(2)...................................... 469,512 469,358
Treasury stock at cost.................................... (34,332) (34,332)
Deferred compensation on restricted stock................. (4,053) (4,053)
---------- ----------
Total stockholders' equity........................ 723,110 722,956
---------- ----------
Total capitalization.............................. $1,158,338 $1,183,184
========== ==========
</TABLE>
- ---------------
(1) As described herein, $100,000,000 of the proceeds from the Old Capital
Securities offering, for which Exchange Capital Securities are hereby
offered, were used by the Corporation to repay the borrowings under a bank
loan agreement.
(2) Upon retirement of the bank indebtedness of Guaranty National, deferred debt
issuance costs of $154,000, net of taxes, were expensed.
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<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, 1997.
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 approximately 81% in July, 1996 and to 100% in December, 1997. For
the years ended December 31, 1996 and 1997, Guaranty National is included in the
financial statements of the Corporation on a consolidated basis with minority
interest recorded for the portion of Guaranty National earnings that are
attributable to shares not owned by the Corporation until Guaranty National
became a wholly-owned subsidiary of the Corporation. For 1993 through 1995, the
Corporation's investment in Guaranty National is accounted for using the equity
method. All common stock and per-common-share data of the Corporation presented
has been restated to give effect to a two-for-one split of its common stock
effected through a stock dividend declared June 5, 1997.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Gross premiums written......... $ 780,128 $ 812,344 $ 926,729 $1,606,131 $1,593,304
Premiums earned................ 617,404 691,223 749,003 1,300,752 1,357,680
Net investment income.......... 91,803 84,915 99,040 145,391 164,908
Realized investment gains
(losses).................... 9,478 3,437 11,885 24,180 47,775
Total revenues......... 720,155 780,947 874,280 1,493,449 1,590,535
Earnings before federal income
taxes, minority interest
expense, and cumulative
effect of accounting
changes..................... 72,505 71,546 88,035 127,356 176,180
Earnings before cumulative
effect of accounting
changes..................... 56,988 55,245 67,622 86,631 115,806
Net earnings................... 68,813 55,245 67,622 86,631 115,806
Operating earnings(a).......... 51,100 52,818 59,914 72,944 85,691
Net earnings per share:
Basic....................... 2.37 1.94 2.41 3.16 4.24
Diluted..................... 2.34 1.93 2.38 3.12 4.15
Operating earnings per
share(a):
Basic....................... 1.75 1.85 2.13 2.66 3.14
Diluted..................... 1.74 1.84 2.11 2.63 3.07
RATIOS:
GAAP combined ratios:
Loss........................ 74.4% 72.1% 68.4% 67.9% 66.7%
Expense..................... 26.8 27.0 29.0 30.1 31.2
Policyholders' dividends.... 2.0 2.1 2.9 1.8 1.8
---------- ---------- ---------- ---------- ----------
Combined.................. 103.2% 101.2% 100.3% 99.8% 99.7%
========== ========== ========== ========== ==========
</TABLE>
27
<PAGE> 29
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C>
Statutory combined ratios:
Loss........................ 74.4% 71.5% 67.7% 67.3% 66.7%
Expense..................... 25.6 27.4 29.2 31.2 31.4
Policyholders' dividends.... 2.1 2.2 2.0 1.5 1.9
---------- ---------- ---------- ---------- ----------
Combined.................. 102.1% 101.1% 98.9% 100.0% 100.0%
========== ========== ========== ========== ==========
Industry statutory combined
ratios(b)................... 106.9% 108.5% 106.5% 105.9% 101.8%
========== ========== ========== ========== ==========
Ratio of statutory net premiums
written to policyholders'
surplus..................... 1.4 1.6 1.5 2.0 1.8
========== ========== ========== ========== ==========
BALANCE SHEET DATA (AT END OF
PERIOD):
Total cash and investments..... $1,328,969 $1,325,241 $1,606,445 $2,321,374 $2,553,008
Total assets................... 2,117,454 2,112,761 2,473,588 3,464,357 3,884,058
Total policy liabilities....... 1,412,285 1,450,835 1,596,033 2,304,402 2,443,796
Notes payable and debentures... 160,372 152,382 209,148 310,904 310,228
Minority interest.............. -- -- -- 45,231 --
Company-obligated mandatorily
redeemable preferred capital
securities of subsidiary
trust holding solely junior
subordinated debentures of
Orion....................... -- -- -- -- 125,000
Stockholders' equity........... 394,195 365,088 490,903 576,733 723,110
Book value per common share.... 13.71 13.00 17.59 20.94 26.19
Statutory policyholders'
surplus..................... 460,986 458,676 521,510 670,572 789,036
</TABLE>
- ---------------
(a) Earnings after taxes, excluding the effects of the adoption of new
accounting principles and after-tax realized investment gains.
(b) Source: A.M. Best Company.
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 specialty property and
casualty insurance, commercial lines and collateral protection, principally
through Orion 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. and writes nonstandard
personal automobile insurance business through Guaranty National. The
Corporation owns approximately 24.7% of the outstanding common stock of
Intercargo Corporation, an insurance holding company whose subsidiaries
specialize in international trade and transportation coverages.
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 3,600 employees, substantially all of whom are
employed in insurance-related operations.
For the five-year period ended December 31, 1997, the Corporation's return
on equity from operating earnings (earnings after taxes, excluding the effects
of the adoption of new accounting principles and after-tax realized investment
gains) averaged 13.9% per year. The combined ratio for the Corporation's
insurance operations, computed on the basis of generally accepted accounting
principles, has steadily improved from 103.2% in 1993 to 99.7% in 1997.
ORION CAPITAL TRUST II
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 The
Bank of New York (Delaware) as Delaware Trustee, and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on February 2, 1998.
The Trust has a term of 35 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) effecting the Exchange Offer, (iii) using the
proceeds from the sale of Trust Securities to acquire the Junior Subordinated
Debentures, (iv) making Distributions to holders of the Trust Securities as
provided in the Trust Agreement and (v) 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, The Bank of New York (Delaware) as the Delaware 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
29
<PAGE> 31
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 9 Farm
Springs Road, Farmington, Connecticut 06032 and its telephone number is (860)
674-7337.
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 July
5, 1998 or has not been declared effective by August 4, 1998, then additional
Distributions will accrue on the Old Capital Securities commencing on July 6,
1998 or August 5, 1998, 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.
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
30
<PAGE> 32
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); for
purposes of tenders of Old Capital Securities in the Exchange Offer, the
requirement for minimum transfers of $100,000 Liquidation Amount will be waived.
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 June 3,
1998 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). The Corporation and the Trust have no
present expectation that the Expiration Date will be extended but if it is
extended for any reason each such extension will be for a minimum of five
business days from the date thereof.
The Corporation and the Trust expressly reserve the right in their sole and
absolute discretion, reasonably exercised in accordance with applicable law and
the terms of this Exchange Offer, 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
31
<PAGE> 33
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 post-effective amendment to the
Registration Statement and distribution of a prospectus supplement to the
holders of the Old Capital Securities. 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-1(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."
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
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<PAGE> 34
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; (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.
33
<PAGE> 35
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.
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
34
<PAGE> 36
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
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.
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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 (or the Exchange Guarantee or the
Exchange Debentures, as applicable) may be resumed, as the case may be.
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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 April 15, 1998. Accordingly, holders of
Exchange Capital Securities as of the record date for the payment of
Distributions on October 15, 1998 will be entitled to receive Distributions
accumulated from April 15, 1998.
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 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
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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 reasonable 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 Ground Level
Only)
Attn: Reorganization Section, Confirm by Telephone New York, New York 10286
(212) 815-6333 Attn: Reorganization Section
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 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
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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 undivided
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 description of all the material
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 April 15, 1998 and will be payable semi-annually in arrears on
April 15 and October 15 of each year, commencing on October 15, 1998, at the
annual rate of 7.701% 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 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. Upon any such election, semi-annual
Distributions on the Exchange Capital Securities will be
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<PAGE> 41
deferred by the Trust during such Extension Period. Distributions to which
holders of the Exchange Capital Securities are entitled during such Extension
Period will accumulate additional Distributions thereon at the rate per annum of
7.701% 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 such 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 such 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 such 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 the Exchange
Capital Securities. The payment of Distributions (if and to the extent the Trust
has funds on
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<PAGE> 42
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, at any time, 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.
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
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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; (v) the entry
of an order for the dissolution of the Trust by a court of competent
jurisdiction; and (vi) repayment of the Junior Subordinated Debentures.
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 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 liquidation of the
Trust, may trade at a discount to the price that the investor paid to purchase
the Exchange Capital Securities offered hereby.
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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 and Common Securities;
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
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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.
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
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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 the same as the Capital Securities rank in priority
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 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
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Securities. The Trust Agreement may be amended by the Issuer 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 Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer 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 Issuer
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 principal 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, 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
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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 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 or the Corporation nor the
Property Trustee will be liable for any delay by DTC or any of its
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Participants in identifying the beneficial owners of the Capital Securities, and
the Trust or 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 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.
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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.
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.
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The Exchange Junior Subordinated Debentures will bear interest from April
15, 1998 at the annual rate of 7.701% of the principal amount thereof, payable
semi-annually in arrears on April 15 and October 15 of each year (each, an
"Interest Payment Date"), commencing October 15, 1998, 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 7.701%
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 April 15, 2028.
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
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
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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
such Extension Period, the Corporation must pay all interest then accrued and
unpaid (together with interest thereon at the annual rate of 7.701%, 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 such 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 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 such 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 such 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
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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 any time at the option of the Corporation, at a prepayment price
(the "Optional Prepayment Price") 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 to
be prepaid and interest thereon 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 either case, accrued and unpaid interest
thereon to the date of prepayment and any Additional Sums (as defined herein).
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 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.
"Special Event Adjusted Treasury Rate" means, with respect to any
prepayment date, the rate per annum equal to the semi-annual equivalent yield to
maturity to 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) 1.55% if such
prepayment date occurs on or prior to February 1, 1999 and (ii) 0.50% in all
other cases.
"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 0.30%.
"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
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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 (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
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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) 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 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
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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, 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.
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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 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
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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 description 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 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.
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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 Indebtedness that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional indebtedness
constituting Senior Indebtedness.
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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 (which will be waived in respect of
tenders of Old Capital Securities in the Exchange Offer) 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 July 5, 1998 or has not been declared
effective by August 4, 1998 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 August
4, 1998, 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 July 6, or
August 5, 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, THE EXCHANGE GUARANTEE AND THE TRUST AGREEMENT
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 Shereff, Friedman, Hoffman & Goodman, LLP, special tax
counsel to the Corporation and the Trust with respect to the Exchange Offer
("Tax Counsel"), the following is a fair and accurate 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,
Donovan Leisure Newton & Irvine LLP ("Donovan Leisure") 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 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 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, Donovan
Leisure 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 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.
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INTEREST INCOME AND OID
Under Treasury regulations (the "Regulations") promulgated under the OID
provisions of the Code, 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 has taken, and intends to continue to take, the position 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 that of the Corporation.
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 and assuming the Trust continues to qualify as a grantor trust at the time
of distribution, such a distribution, for United States federal income tax
purposes, would be treated as a nontaxable event to the Trust and 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 the Trust and 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 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."
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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 (which will equal his adjusted tax basis in his pro rata
share of the underlying Junior Subordinated Debentures deemed disposed of) 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. The recently
enacted Taxpayer Relief Act of 1997 made certain changes to the Code with
respect to the taxation of capital gains of taxpayers other than corporations.
Under the Taxpayer Relief Act of 1997, capital gain realized on the disposition
of an asset held for more than one year but not more than 18 months is taxed at
a maximum rate of 28% and capital gain realized on the disposition of an asset
held for more than 18 months is taxed at a maximum rate of 20%. Capital gain on
the disposition of assets held for not more than one year continues to be taxed
at the rate applicable to ordinary income (i.e., up to 39.6%).
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 accrued on the Junior Subordinated
Debentures through the date of disposition. 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
Investors should be aware that the Corporation's exercise of its right to
shorten the maturity of the Junior Subordinated Debentures may result in the
recognition of taxable income (but not loss) 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."
POSSIBLE TAX LEGISLATION
In the past, the Clinton Administration has proposed tax provisions which,
if applicable to the Junior Subordinated Debentures, would have prevented the
Corporation from deducting interest thereon for United States federal income tax
purposes. Congress has not enacted these provisions. There can be no assurance
that future legislative proposals, future regulations or official administrative
pronouncements, or future judicial decisions will not affect the ability of the
Corporation to deduct interest 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 the Capital Securities -- Redemption" and "Description of Junior
Subordinated Debentures -- Special Event Prepayment."
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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 (i) a
citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for federal income tax purposes, (ii) 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, (iii) an estate the income of which
is includable in its gross income for federal income tax purposes without regard
to its source or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and 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 (except that under the 1997
final Regulations, withholding of United States federal income tax may apply to
payments on a taxable sale or other disposition of a Capital Security in respect
of OID by a United States Alien Holder who does not provide appropriate
certification to the withholding agent with respect to such transaction).
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 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.
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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
under "The Exchange Offer -- Exchange Agent." See "The Exchange Offer -- Resales
of Exchange Capital Securities."
66
<PAGE> 68
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 LLP, 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, LLP, Wilmington, Delaware. Certain matters relating to
United States federal income tax considerations will be passed upon for the
Corporation by Shereff, Friedman, Hoffman & Goodman, LLP, 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, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
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 II................ 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, the
Exchange Guarantee and the Trust
Agreement........................... 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 II
7.701% EXCHANGE CAPITAL
SECURITIES
FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED
HEREIN, BY
ORION CAPITAL
CORPORATION
------------------------
PROSPECTUS
------------------------
May , 1998
======================================================
<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 dated as of February 5, 1998, between Orion
Capital Corporation and The Bank of New York, as Trustee of
Orion's 7.701% Junior Subordinated Deferrable Interest
Debentures; filed as Exhibit 4(viii) to the Company's Annual
Report on Form 10-K for 1997
*4.2 Form of Exchange Debenture Certificate
4.3 Certificate of Trust of Orion Capital Trust II, dated as of
February 2, 1998; filed as Exhibit 4(xi) to the Company's
Annual Report on Form 10-K for 1997
4.4 Declaration of Trust of Orion Capital Trust II, dated as of
February 2, 1998; filed as Exhibit 4(xiii) to the Company's
Annual Report on Form 10-K for 1997
4.5 Amended and Restated Declaration of Trust of Orion Capital
Trust II, dated as of February 5, 1998; filed as Exhibit
4(xv) to the Company's Annual Report on Form 10-K for 1997
*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 LLP 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 LLP as to the legality
of the Exchange Capital Securities to be issued by Orion
Capital Trust II
8.1 Tax Opinion of Shereff, Friedman, Hoffman & Goodman, LLP
</TABLE>
- ------------------------
* Previously filed.
II-1
<PAGE> 71
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
*12.1 Computation of Ratio of Earnings to Fixed Charges
*23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Donovan Leisure Newton & Irvine LLP (included in
Exhibit 5.1)
23.3 Consent of Potter Anderson & Corroon LLP (included in
Exhibit 5.2)
23.4 Consent of Shereff, Friedman, Hoffman & Goodman, LLP
(included in Exhibit 8.1)
*24.1 Powers of Attorney for Orion Capital Corporation
*24.2 Powers of Attorney for Orion Capital Trust II
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>
- ------------------------
* Previously filed.
The following financial statement schedules are filed as part of this
Registration Statement:
None.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
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.
II-2
<PAGE> 72
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, each registrant 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-3
<PAGE> 73
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 Amendment
No. 1 to the 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 30th day of April, 1998.
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 Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C>
Date: April 30, 1998 /s/ W. MARSTON BECKER*
-----------------------------------------------------
W. Marston Becker
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: April 30, 1998 /s/ DONALD W. EBBERT, JR.*
-----------------------------------------------------
Donald W. Ebbert, Jr.
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: April 30, 1998 /s/ BERTRAM J. COHN*
-----------------------------------------------------
Bertram J. Cohn
Director
*By: /s/ MICHAEL P. MALONEY
------------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-4
<PAGE> 74
<TABLE>
<S> <C>
Date: April 30, 1998 /s/ GORDON F. CHEESBROUGH*
-----------------------------------------------------
Gordon F. Cheesbrough
Director
Date: April 30, 1998 /s/ JOHN C. COLMAN*
-----------------------------------------------------
John C. Colman
Director
Date: April 30, 1998 /s/ DAVID H. ELLIOTT*
-----------------------------------------------------
David H. Elliott
Director
Date: April 30, 1998 /s/ VICTORIA R. FASH*
-----------------------------------------------------
Victoria R. Fash
Director
Date: April 30, 1998 /s/ ROBERT H. JEFFREY*
-----------------------------------------------------
Robert H. Jeffrey
Director
Date: April 30, 1998 /s/ GORDON W. KREH*
-----------------------------------------------------
Gordon W. Kreh
Director
Date: April 30, 1998 /s/ WARREN R. LYONS*
-----------------------------------------------------
Warren R. Lyons
Director
Date: April 30, 1998 /s/ JAMES K. MCWILLIAMS*
-----------------------------------------------------
James K. McWilliams
Director
Date: April 30, 1998 /s/ RONALD W. MOORE*
-----------------------------------------------------
Ronald W. Moore
Director
Date: April 30, 1998 /s/ ROBERT B. SANBORN*
-----------------------------------------------------
Robert B. Sanborn
Director
*By: /s/ MICHAEL P. MALONEY
------------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-5
<PAGE> 75
<TABLE>
<S> <C>
Date: April 30, 1998 /s/ WILLIAM J. SHEPHERD*
-----------------------------------------------------
William J. Shepherd
Director
Date: April 30, 1998 /s/ JOHN R. THORNE*
-----------------------------------------------------
John R. Thorne
Director
Date: April 30, 1998 /s/ WILLIAM B. WEAVER*
-----------------------------------------------------
William B. Weaver
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 Amendment
No. 1 to the 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 30th day of April, 1998.
ORION CAPITAL TRUST II
<TABLE>
<S> <C>
Date: April 30, 1998 By: /s/ W. MARSTON BECKER
-------------------------------------------------
W. Marston Becker
Administrative Trustee
Date: April 30, 1998 By: /s/ CRAIG A. NYMAN
-------------------------------------------------
Craig A. Nyman
Administrative Trustee
Date: April 30, 1998 By: /s/ MICHAEL P. MALONEY
-------------------------------------------------
Michael P. Maloney
Administrative Trustee
*By: /s/ MICHAEL P. MALONEY
-------------------------------------------------
Michael P. Maloney
Attorney-in-fact
</TABLE>
II-6
<PAGE> 76
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S> <C>
4.1 Indenture dated as of February 5, 1998, between Orion
Capital Corporation and The Bank of New York, as Trustee of
Orion's 7.701% Junior Subordinated Deferrable Interest
Debentures; filed as Exhibit 4(viii) to the Company's Annual
Report on Form 10-K for 1997
*4.2 Form of Exchange Debenture Certificate
4.3 Certificate of Trust of Orion Capital Trust II, dated as of
February 2, 1998; filed as Exhibit 4(xi) to the Company's
Annual Report on Form 10-K for 1997
4.4 Declaration of Trust of Orion Capital Trust II, dated as of
February 2, 1998; filed as Exhibit 4(xiii) to the Company's
Annual Report on Form 10-K for 1997
4.5 Amended and Restated Declaration of Trust of Orion Capital
Trust II, dated as of February 5, 1998; filed as Exhibit
4(xv) to the Company's Annual Report on Form 10-K for 1997
*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 LLP 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 LLP as to the legality
of the Exchange Capital Securities to be issued by Orion
Capital Trust II
**8.1 Tax Opinion of Shereff, Friedman, Hoffman & Goodman, LLP
*12.1 Computation of Ratio of Earnings to Fixed Charges
*23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Donovan Leisure Newton & Irvine LLP (included in
Exhibit 5.1)
**23.3 Consent of Potter Anderson & Corroon LLP (included in
Exhibit 5.2)
**23.4 Consent of Shereff, Friedman, Hoffman & Goodman, LLP
(included in Exhibit 8.1)
*24.1 Powers of Attorney for Orion Capital Corporation
*24.2 Powers of Attorney for Orion Capital Trust II
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>
- ---------------
*Previously filed.
**To be filed by amendment.
<PAGE> 1
EXHIBIT 4.8
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of February 5, 1998
among
ORION CAPITAL CORPORATION
ORION CAPITAL TRUST II
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 February 5, 1998 among ORION CAPITAL
CORPORATION, a Delaware corporation (the "Company"), ORION CAPITAL TRUST II, 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 February 2, 1998 (the "Purchase Agreement"), among the Company,
as issuer of the 7.701% Junior Subordinated Deferrable Interest Debentures due
2028 (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 7.701% 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.
1
<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 Februry 5, 1998, 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 7.701% Junior Subordinated Deferrable Interest
Debentures due April 15, 2028 which are to be offered in exchange for the
Subordinated Debentures (the
2
<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 7.701% 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 February 5,
1998 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.
3
<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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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 two 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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<PAGE> 15
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
16
<PAGE> 18
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
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<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 II
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 H. Braun
-------------------------------
Name: Perry H. Braun
Title: Senior Vice President
32
<PAGE> 1
April 30, 1998
Orion Capital Corporation
9 Farm Springs Road
Farmington, CT 06032
Re: Orion Capital Corporation
Registration Statement on Form S-4
Filed With The Securities and Exchange
Commission on April 22, 1998
--------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Orion Capital Corporation, a Delaware
corporation ("Orion" or the "Company"), in connection with the registration by
the Company and Orion Capital Trust II, a Delaware business trust (the "Trust"),
under the Securities Act of 1933, as amended (the "Act"), of (i) 7.701% Capital
Securities (liquidation amount $1,000 per security) of the Trust, aggregating
125,000 Capital Securities (the "Capital Securities") to be issued under the
Amended and Restated Declaration of Trust of the Trust dated as of February 5,
1998, (ii) $125,000,000 in aggregate principal amount of 7.701% Junior
Subordinated Deferrable Interest Debentures due April 15, 2028 (the
"Subordinated Debentures") to be issued under the Indenture dated as of February
5, 1998 (the "Indenture") by and between the Company and The Bank of New York,
as Trustee, and (iii) the Exchange Capital Securities Guarantee Agreement dated
as of February 5, 1998, by and between the Company, as guarantor, and The Bank
of New York, as trustee (the "Capital Securities Guarantee," and, together with
the Capital Securities and the Subordinated Debentures, the "Securities"), under
the Registration Statement on Form S-4, as filed with the Securities and
Exchange Commission (Registration No. 333-50715) on April 22, 1998 (the
"Registration Statement").
We are familiar with the proceedings of the Company relating to the
authorization of the Securities and the Indenture filed as an Exhibit to the
Registration Statement. In addition, we have made such further examinations of
law and fact as we have deemed appropriate in connection with the opinion
hereinafter set forth.
<PAGE> 2
Orion Capital Corporation Page 2
April 30, 1998
Based on the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
(i) The Capital Securities Guarantee has been duly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery by all other parties thereto, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether considered in a proceeding in equity
or at law).
(ii) The execution and delivery of the Subordinated Debentures have
been duly authorized by all necessary corporate action of the Company, and the
Subordinated Debentures, when executed, authenticated and delivered in
accordance with the Indenture, will be entitled to the benefits of the
Indenture, and will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether considered in a proceeding in equity or at law).
As contemplated by the qualifications set forth in the foregoing
paragraph, we express no opinion as to Federal or state laws relating to
fraudulent transfers.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to our firm as set forth under the
caption "Validity of Exchange Securities" in the Prospectus constituting part of
the Registration Statement. In giving such consent, we do not hereby admit that
we are within the category of persons whose consent is required by Section 7 of
the Act and the rules and regulations thereunder.
Very truly yours,
<PAGE> 1
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
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)
------------------------
Orion Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 95-6069054
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
9 Farm Springs Road
Farmington, Connecticut 06032
(Address of principal executive offices) (Zip code)
------------------------
Exchange 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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
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 10005
(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 17 C.F.R.
229.10(d).
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.)
-2-
<PAGE> 3
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.
-3-
<PAGE> 4
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 April, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE> 5
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 December 31,
1997, 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
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 5,742,986
Interest-bearing balances ................................. 1,342,769
Securities:
Held-to-maturity securities ............................... 1,099,736
Available-for-sale securities ............................. 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell ......................... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................................................. 35,019,608
LESS: Allowance for loan and
lease losses ............................................ 627,350
LESS: Allocated transfer risk
reserve ................................................. 0
Loans and leases, net of unearned
income, allowance, and reserve .......................... 34,392,258
Assets held in trading accounts ............................. 2,521,451
Premises and fixed assets (including
capitalized leases) ....................................... 659,209
Other real estate owned ..................................... 11,992
Investments in unconsolidated
subsidiaries and associated
companies ................................................. 226,263
Customers' liability to this bank on
acceptances outstanding ................................... 1,187,449
Intangible assets ........................................... 781,684
Other assets ................................................ 1,736,574
------------
Total assets ................................................ $ 56,153,587
============
LIABILITIES
Deposits:
In domestic offices ....................................... $ 27,031,362
Noninterest-bearing ....................................... 11,899,507
Interest-bearing .......................................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .......................... 13,794,449
Noninterest-bearing ....................................... 590,999
Interest-bearing .......................................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase ....................... 2,338,881
Demand notes issued to the U.S. .............................
Treasury .................................................. 173,851
Trading liabilities ......................................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less ................................................. 1,905,330
With remaining maturity of more than
one year through three years ............................ 0
With remaining maturity of more than
three years ............................................. 25,664
Bank's liability on acceptances exe-
cuted and outstanding ..................................... 1,195,923
Subordinated notes and debentures ........................... 1,012,940
Other liabilities ........................................... 2,018,960
------------
Total liabilities ........................................... 51,192,576
------------
EQUITY CAPITAL
Common stock ................................................ 1,135,284
Surplus ..................................................... 731,319
Undivided profits and capital
reserves .................................................. 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ................................................ 36,866
Cumulative foreign currency transla-
tion adjustments .......................................... (36,184)
------------
Total equity capital ........................................ 4,961,011
------------
Total liabilities and equity
capital ................................................... $ 56,153,587
============
</TABLE>
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.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
- --------------------------------------------------------------------------------
<PAGE> 1
Exhibit 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
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)
------------------------
Orion Capital Trust II
(Exact name of obligor as specified in its charter)
Delaware Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
9 Farm Springs Road
Farmington, Connecticut 06032
(Address of principal executive offices) (Zip code)
------------------------
Exchange 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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
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 10005
(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 17 C.F.R.
229.10(d).
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.)
-2-
<PAGE> 3
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.
-3-
<PAGE> 4
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 April, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE> 5
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 December 31,
1997, 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
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 5,742,986
Interest-bearing balances ................................. 1,342,769
Securities:
Held-to-maturity securities ............................... 1,099,736
Available-for-sale securities ............................. 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell ......................... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................................................. 35,019,608
LESS: Allowance for loan and
lease losses ............................................ 627,350
LESS: Allocated transfer risk
reserve ................................................. 0
Loans and leases, net of unearned
income, allowance, and reserve .......................... 34,392,258
Assets held in trading accounts ............................. 2,521,451
Premises and fixed assets (including
capitalized leases) ....................................... 659,209
Other real estate owned ..................................... 11,992
Investments in unconsolidated
subsidiaries and associated
companies ................................................. 226,263
Customers' liability to this bank on
acceptances outstanding ................................... 1,187,449
Intangible assets ........................................... 781,684
Other assets ................................................ 1,736,574
------------
Total assets ................................................ $ 56,153,587
============
LIABILITIES
Deposits:
In domestic offices ....................................... $ 27,031,362
Noninterest-bearing ....................................... 11,899,507
Interest-bearing .......................................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .......................... 13,794,449
Noninterest-bearing ....................................... 590,999
Interest-bearing .......................................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase ....................... 2,338,881
Demand notes issued to the U.S. .............................
Treasury .................................................. 173,851
Trading liabilities ......................................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less ................................................. 1,905,330
With remaining maturity of more than
one year through three years ............................ 0
With remaining maturity of more than
three years ............................................. 25,664
Bank's liability on acceptances exe-
cuted and outstanding ..................................... 1,195,923
Subordinated notes and debentures ........................... 1,012,940
Other liabilities ........................................... 2,018,960
------------
Total liabilities ........................................... 51,192,576
------------
EQUITY CAPITAL
Common stock ................................................ 1,135,284
Surplus ..................................................... 731,319
Undivided profits and capital
reserves .................................................. 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ................................................ 36,866
Cumulative foreign currency transla-
tion adjustments .......................................... (36,184)
------------
Total equity capital ........................................ 4,961,011
------------
Total liabilities and equity
capital ................................................... $ 56,153,587
============
</TABLE>
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.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
- --------------------------------------------------------------------------------
<PAGE> 1
Exhibit 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
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)
------------------------
Orion Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 95-6069054
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
9 Farm Springs Road
Farmington, Connecticut 06032
(Address of principal executive offices) (Zip code)
------------------------
Guarantee of Exchange Capital Securities of
Orion Capital Trust II
(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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
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 10005
(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 17 C.F.R.
229.10(d).
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.)
-2-
<PAGE> 3
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.
-3-
<PAGE> 4
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 April, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE MORRISSEY
--------------------------------
Name: MARY JANE MORRISSEY
Title: VICE PRESIDENT
-4-
<PAGE> 5
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 December 31,
1997, 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
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 5,742,986
Interest-bearing balances ................................. 1,342,769
Securities:
Held-to-maturity securities ............................... 1,099,736
Available-for-sale securities ............................. 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell ......................... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................................................. 35,019,608
LESS: Allowance for loan and
lease losses ............................................ 627,350
LESS: Allocated transfer risk
reserve ................................................. 0
Loans and leases, net of unearned
income, allowance, and reserve .......................... 34,392,258
Assets held in trading accounts ............................. 2,521,451
Premises and fixed assets (including
capitalized leases) ....................................... 659,209
Other real estate owned ..................................... 11,992
Investments in unconsolidated
subsidiaries and associated
companies ................................................. 226,263
Customers' liability to this bank on
acceptances outstanding ................................... 1,187,449
Intangible assets ........................................... 781,684
Other assets ................................................ 1,736,574
------------
Total assets ................................................ $ 56,153,587
============
LIABILITIES
Deposits:
In domestic offices ....................................... $ 27,031,362
Noninterest-bearing ....................................... 11,899,507
Interest-bearing .......................................... 15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .......................... 13,794,449
Noninterest-bearing ....................................... 590,999
Interest-bearing .......................................... 13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase ....................... 2,338,881
Demand notes issued to the U.S. .............................
Treasury .................................................. 173,851
Trading liabilities ......................................... 1,695,216
Other borrowed money:
With remaining maturity of one year
or less ................................................. 1,905,330
With remaining maturity of more than
one year through three years ............................ 0
With remaining maturity of more than
three years ............................................. 25,664
Bank's liability on acceptances exe-
cuted and outstanding ..................................... 1,195,923
Subordinated notes and debentures ........................... 1,012,940
Other liabilities ........................................... 2,018,960
------------
Total liabilities ........................................... 51,192,576
------------
EQUITY CAPITAL
Common stock ................................................ 1,135,284
Surplus ..................................................... 731,319
Undivided profits and capital
reserves .................................................. 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ................................................ 36,866
Cumulative foreign currency transla-
tion adjustments .......................................... (36,184)
------------
Total equity capital ........................................ 4,961,011
------------
Total liabilities and equity
capital ................................................... $ 56,153,587
============
</TABLE>
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.
-
Thomas A. Renyi |
Alan R. Griffith | Directors
J. Carter Bacot |
-
- --------------------------------------------------------------------------------
<PAGE> 1
LETTER OF TRANSMITTAL
OFFER FOR ANY AND ALL OUTSTANDING
7.701% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
IN EXCHANGE FOR 7.701% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
PURSUANT TO THE PROSPECTUS DATED MAY 6, 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JUNE 3, 1998, 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
By Hand Or Overnight Delivery:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
Attention: Reorganization Section,
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 571-3080
To Confirm by Telephone
or for Information Call:
(212) 815-6333
By Registered Or Certified Mail:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attention: Reorganization Section,
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 May 6, 1998 (the "Prospectus"), of Orion Capital Corporation, a Delaware
corporation ("Orion"), and Orion Capital Trust II, 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 7.701% Capital Securities due April 15,
2028, 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 7.701% Capital Securities
due April 15, 2028 (the "Capital Securities") of the Trust from the holders
thereof.
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.
<PAGE> 2
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.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
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**
- ----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
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.
- --------------------------------------------------------------------------------
-2-
<PAGE> 3
(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:
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:
-3-
<PAGE> 4
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 7.701% Capital Securities due April 15, 2028
(the "Old Capital Securities") in exchange for a like aggregate Liquidation
Amount of the Trust's 7.701% Capital Securities due April 15, 2028 (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 May 6, 1998 (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 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
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
-4-
<PAGE> 5
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 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
-5-
<PAGE> 6
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 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 February 5, 1998.
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.
-6-
<PAGE> 7
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 13)
(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)
Address
(Include Zip Code)
Area Code and Telephone Number
--------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
- --------------------------------------------------------------------------------
-7-
<PAGE> 8
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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)
Address
(INCLUDE CODE)
Area Code and Telephone Number
- ---------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
-8-
<PAGE> 9
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 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.
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
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; (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.
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.
-9-
<PAGE> 10
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
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."
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.
-10-
<PAGE> 11
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 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 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
-11-
<PAGE> 12
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 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.
-12-
<PAGE> 13
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: THE BANK OF NEW YORK
- --------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
Department of the Treasury
Internal Revenue Service
Payor's Request for
Taxpayer Identification Number
("TIN") and Certification
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW. For individuals this is your Social
Security number. For other entities it is your employer
identification number.
TIN:_________________________________________________________
Social Security Number
or
Employer Identification Number
- --------------------------------------------------------------------------------
PART 2 -- TIN APPLIED FOR [ ]
- --------------------------------------------------------------------------------
CERTIFICATION:
UNDER THE PENALTIES OF PERJURY,
I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER
(OR I AM WAITING FOR A NUMBER TO BE ISSUED TO ME),
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE:
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR
(B) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE "IRS")
THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO
REPORT ALL INTEREST OR DIVIDENDS, OR
(C) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING, AND
(3) ANY OTHER INFORMATION PROVIDED ON THIS FORM IS TRUE AND CORRECT.
SIGNATURE..............................
DATE...................................
- --------------------------------------------------------------------------------
YOU MUST CROSS OUT ITEM (2) OF THE ABOVE CERTIFICATION IF YOU HAVE BEEN NOTIFIED
BY THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING
OF 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.
- --------------------------------------------------------------------------------
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...................
- --------------------------------------------------------------------------------
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<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING
7.701% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
ORION CAPITAL TRUST II
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) 7.701% Capital Securities due
April 15, 2028 (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>
Facsimile Transmissions:
By Registered or Certified Mail (Eligible Institutions Only) By Hand Or Overnight Delivery
<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
(212) 815-6333 New York, New York 10286
Attn: Reorganization Section
For Information Call:
(212) 815-6333
</TABLE>
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.
-14-
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Orion Capital Corporation, a Delaware
Corporation (the "Corporation") and to Orion Capital Trust II, a Delaware
business trust (the "Trust"), upon the terms and subject to the conditions set
forth in the Prospectus dated May 6, 1998 (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
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.
Name(s) of Registered Holder(s):
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.
-15-
<PAGE> 3
PLEASE SIGN HERE
<TABLE>
<S> <C>
X
- ------------------------------------------------------------ ------------------------
X
- ------------------------------------------------------------ ------------------------
SIGNATURE(S) OF OWNER(S) OR AUTHORIZED SIGNATORY Date
</TABLE>
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)
<TABLE>
<S> <C>
Name(s):
============================================================
------------------------------------------------------------
Capacity:
------------------------------------------------------------
Address(es):
============================================================
------------------------------------------------------------
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
-16-
<PAGE> 4
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
------------------------------------------------------------
ADDRESS
------------------------------------------------------------
ZIP CODE
AREA CODE AND TELEPHONE NO.
- ------------------------------------------------------------
AUTHORIZED SIGNATURE
------------------------------------------------------------
TITLE
------------------------------------------------------------
(PLEASE TYPE OR PRINT)
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.
-17-
<PAGE> 1
EXHIBIT 99.3
June , 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 II (the "Company") proposes to make an offer (the
"Exchange Offer") to exchange its 7.701% Capital Securities (the "Old
Securities") for its 7.701% Exchange Capital Securities (the "New Securities").
The terms and conditions of the Exchange Offer as currently contemplated are set
forth in a prospectus, dated April , 1998 (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
April , 1998. 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 June
, 1998 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.
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
<PAGE> 2
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 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.
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.
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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.
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;
(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
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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.
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.
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
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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 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:
If to the Company:
Orion Capital Trust II
9 Farm Springs Road
Farmington, CT 06032
Facsimile: 860-674-6890
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.
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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 II
By:
------------------------------------
Name: Michael P. Maloney, Esq.
Title: Administrative Trustee
Accepted as of the date first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:
Name:
Title:
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SCHEDULE I
FEES
