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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING ANY ASSOCIATED STOCK PURCHASE RIGHTS)
OF
GUARANTY NATIONAL CORPORATION
AT
$36.00 NET PER SHARE
BY
ORION CAPITAL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME, ON THURSDAY, DECEMBER 4, 1997, UNLESS THE OFFER IS EXTENDED.
November 5, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees:
We have been appointed by Orion Capital Corporation, a Delaware corporation
("Orion") to act as Dealer Manager in connection with Orion's offer to purchase
any and all shares of common stock, $1.00 par value per share (the "Shares"), of
Guaranty National Corporation, a Colorado corporation (the "Guaranty"), at
$36.00 per Share, net to the seller in cash upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 5, 1997 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 CONDITIONED ON THERE BEING TENDERED A MINIMUM OF 50.01% OF THE
SHARES NOT OWNED BY ORION OR ITS WHOLLY-OWNED SUBSIDIARIES, AND THE RECEIPT OF
ALL REQUIRED REGULATORY APPROVALS, IF ANY, ON TERMS AND CONDITIONS SATISFACTORY
TO ORION. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS.
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED
OCTOBER 31, 1997, BY AND BETWEEN ORION AND GUARANTY. THE BOARD OF DIRECTORS OF
GUARANTY HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND THE MERGER AGREEMENT
AND DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST
INTERESTS OF GUARANTY'S STOCKHOLDERS AND RECOMMENDS THAT GUARANTY'S STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES.
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. Orion 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. Orion 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 November 5, 1997.
(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) A letter to shareholders of Guaranty from James R. Pouliot, President
and Chief Executive Officer of Guaranty, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by Guaranty and recommending that
shareholders accept the Offer and tender their Shares.
(4) Notice of Guaranteed Delivery;
(5) 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;
(6) Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number;
(7) Return envelopes addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON
DECEMBER 4, 1997, AT 12:00 MIDNIGHT, NEW YORK CITY TIME, UNLESS THE OFFER IS
EXTENDED.
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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 Orion 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 Orion.
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 ORION, 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) 290-6429
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)