1
OFFER TO PURCHASE FOR CASH
UP TO
4,600,000 SHARES OF COMMON STOCK
(INCLUDING ANY ASSOCIATED STOCK PURCHASE RIGHTS)
OF
GUARANTY NATIONAL CORPORATION
AT
$17.50 NET PER SHARE
BY
ORION CAPITAL CORPORATION
AND CERTAIN OF ITS WHOLLY-OWNED SUBSIDIARIES
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT NEW YORK CITY TIME, ON WEDNESDAY, JUNE 5, 1996, UNLESS THE OFFER IS
EXTENDED.
May 8, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees:
We have been appointed by Orion Capital Corporation, a Delaware
corporation, and certain of its subsidiaries (Orion and such subsidiaries being
hereinafter collectively referred to as the "Purchasers") to act as Dealer
Manager in connection with the Purchasers' offer to purchase up to 4,600,000
shares of common stock, $1.00 par value per share (the "Shares"), of Guaranty
National Corporation, a Colorado corporation (the "Company"), at $17.50 per
Share, net to the seller in cash upon the terms and subject to the conditions
set forth in the Offer to Purchase dated May 8, 1996 and in the related Letter
of Transmittal (which together constitute the "Offer"). We are enclosing
herewith the material listed below relating to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. HOWEVER, THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I)
EXPIRATION OR EARLIER TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND (II) THE
RECEIPT OF ALL REQUIRED STATE INSURANCE DEPARTMENT REGULATORY APPROVALS ON TERMS
AND CONDITIONS SATISFACTORY TO THE PURCHASERS. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS. IF MORE THAN 4,600,000 SHARES ARE PROPERLY TENDERED
AND NOT WITHDRAWN, THEN, SUBJECT TO THE TERMS AND CONDITIONS OF THE OFFER, SUCH
SHARES WILL BE ACCEPTED ON A PRO RATA BASIS.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. No fees or commissions will be payable to
brokers, dealers or other persons for soliciting tenders of Shares pursuant to
the Offer. The Purchasers will, however, upon request reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. The Purchasers will pay all transfer taxes
on its purchase of Shares, subject to Instruction 6 of the Letter of
Transmittal.
For your information and for forwarding to your clients we are enclosing
the following documents:
(1) Offer to Purchase, dated May 8, 1996.
(2) Letter of Transmittal to be used by holders of Shares to tender Shares
and for the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
(3) Notice of Guaranteed Delivery;
(4) Letter which may be sent to your clients for whose accounts you hold
Shares registered in your name (or in the name of your nominee), with space
provided for obtaining such clients' Instructions with regard to the Offer;
(5) Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number;
(6) Return envelopes addressed to the Depositary.
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YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD
WILL EXPIRE ON WEDNESDAY, JUNE 5, 1996, AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
UNLESS THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
either Share certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender their Shares but it is impracticable
for them to forward their certificates on or prior to the expiration date, such
Shares may be tendered pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Your solicitation of tenders of Shares will constitute your representation
to the Purchasers that (i) in connection with such solicitation, you have
complied with the applicable requirements of the Securities Exchange Act of 1934
and the applicable rules and regulations thereunder; (ii) if a foreign broker or
dealer, you have conformed to the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. in making solicitations; and (iii) in
soliciting tenders of Shares, you have not used any soliciting materials other
than those furnished by the Purchasers.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction.
Additional copies of the enclosed material may be obtained from D.F. King &
Co., Inc., the Information Agent, or from Donaldson, Lufkin & Jenrette
Securities Corporation, the Dealer Manager, at the addresses set forth below.
Any questions or requests you may have with respect to the Offer should be
directed to the undersigned at the addresses and telephone numbers listed below.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
Securities Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF ANY OF THE PURCHASERS, THE INFORMATION AGENT, THE
DEALER MANAGER OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE
ANY STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER,
OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET
FORTH IN SUCH MATERIAL.
D.F. KING & CO., INC.
INFORMATION AGENT
77 Water Street
New York, NY 10005
(212) 269-5550
(Call Collect)
Call Toll Free (800) 829-6551
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
(212) 892-7700 (Call Collect)