------------------------------------------------------------------------------

 ------------------------------------------------------------------------------





                            ORION CAPITAL CORPORATION


             ------------------------------------------------------


                                    INDENTURE

                          Dated as of February 5, 1998


             ------------------------------------------------------


                              THE BANK OF NEW YORK

                                   as Trustee


             ------------------------------------------------------


                                  $129,000,000

            7.701% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES





 ------------------------------------------------------------------------------

 ------------------------------------------------------------------------------



<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE


ARTICLE I     DEFINITIONS....................................................1

   SECTION 1.01. DEFINITIONS.................................................1

ARTICLE II    SECURITIES....................................................11

   SECTION 2.01. FORMS GENERALLY............................................11
   SECTION 2.02. EXECUTION AND AUTHENTICATION...............................11
   SECTION 2.03. FORM AND PAYMENT...........................................12
   SECTION 2.04. LEGENDS....................................................12
   SECTION 2.05. GLOBAL SECURITY............................................12
   SECTION 2.06. INTEREST...................................................14
   SECTION 2.07. TRANSFER AND EXCHANGE......................................14
   SECTION 2.08. REPLACEMENT SECURITIES.....................................16
   SECTION 2.09. TREASURY SECURITIES........................................16
   SECTION 2.10. TEMPORARY SECURITIES.......................................16
   SECTION 2.11. CANCELLATION...............................................17
   SECTION 2.12. DEFAULTED INTEREST.........................................17
   SECTION 2.13. CUSIP NUMBERS..............................................18

ARTICLE III   PARTICULAR COVENANTS OF THE COMPANY...........................18

   SECTION 3.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.................18
   SECTION 3.02. OFFICES FOR NOTICES AND PAYMENTS, ETC......................19
   SECTION 3.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S
                  OFFICE....................................................19
   SECTION 3.04. PROVISION AS TO PAYING AGENT...............................19
   SECTION 3.05. CERTIFICATE TO TRUSTEE.....................................20
   SECTION 3.06. COMPLIANCE WITH CONSOLIDATION PROVISIONS...................20
   SECTION 3.07. LIMITATION ON DIVIDENDS....................................21
   SECTION 3.08. COVENANTS AS TO ORION CAPITAL TRUST II.....................21
   SECTION 3.09. PAYMENT OF EXPENSES........................................22
   SECTION 3.10. PAYMENT UPON RESIGNATION OR REMOVAL........................22

ARTICLE IV    SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY
              AND THE TRUSTEE...............................................23

   SECTION 4.01. SECURITYHOLDERS' LISTS.....................................23
   SECTION 4.02. PRESERVATION AND DISCLOSURE OF LISTS.......................23
   SECTION 4.03. REPORTS OF THE COMPANY.....................................24
   SECTION 4.04. REPORTS BY THE TRUSTEE.....................................25

ARTICLE V     REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
              EVENT OF DEFAULT..............................................26

   SECTION 5.01. EVENTS OF DEFAULT..........................................26
   SECTION 5.02. PAYMENT OF SECURITIES ON DEFAULT; SUIT THEREFOR............27
   SECTION 5.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE.................29
   SECTION 5.04. PROCEEDINGS BY SECURITYHOLDERS.............................30
   SECTION 5.05. PROCEEDINGS BY TRUSTEE.....................................31
   SECTION 5.06. REMEDIES CUMULATIVE AND CONTINUING.........................31
   SECTION 5.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS
                  BY MAJORITY OF SECURITYHOLDERS............................31
   SECTION 5.08. NOTICE OF DEFAULTS.........................................32
   SECTION 5.09. UNDERTAKING TO PAY COSTS...................................32

ARTICLE VI    CONCERNING THE TRUSTEE........................................33

   SECTION 6.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE.....................33
   SECTION 6.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC.......................34
   SECTION 6.03. NO RESPONSIBILITY FOR RECITALS, ETC........................35
   SECTION 6.04. TRUSTEE, AUTHENTICATING AGENT, PAYING AGENTS,
                  TRANSFER AGENTS OR REGISTRAR MAY OWN SECURITIES...........35
   SECTION 6.05. MONEYS TO BE HELD IN TRUST.................................35
   SECTION 6.06. COMPENSATION AND EXPENSES OF TRUSTEE.......................35
   SECTION 6.07. OFFICERS' CERTIFICATE AS EVIDENCE..........................36
   SECTION 6.08. CONFLICTING INTEREST OF TRUSTEE............................36
   SECTION 6.09. ELIGIBILITY OF TRUSTEE.....................................37
   SECTION 6.10. RESIGNATION OR REMOVAL OF TRUSTEE..........................37
   SECTION 6.11. ACCEPTANCE BY SUCCESSOR TRUSTEE............................38
   SECTION 6.12. SUCCESSION BY MERGER, ETC..................................39
   SECTION 6.13. LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR..............39
   SECTION 6.14. AUTHENTICATING AGENTS......................................39

ARTICLE VII   CONCERNING THE SECURITYHOLDERS................................40

   SECTION 7.01. ACTION BY SECURITYHOLDERS..................................40
   SECTION 7.02. PROOF OF EXECUTION BY SECURITYHOLDERS......................41
   SECTION 7.03. WHO ARE DEEMED ABSOLUTE OWNERS.............................41
   SECTION 7.04. SECURITIES OWNED BY COMPANY DEEMED NOT
                  OUTSTANDING...............................................42
   SECTION 7.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND...............42

ARTICLE VIII  SECURITYHOLDERS' MEETINGS.....................................42

   SECTION 8.01. PURPOSE OF MEETINGS........................................42
   SECTION 8.02. CALL OF MEETINGS BY TRUSTEE................................43
   SECTION 8.03. CALL OF MEETINGS BY COMPANY OR SECURITYHOLDERS.............43
   SECTION 8.04. QUALIFICATIONS FOR VOTING..................................43
   SECTION 8.05. REGULATIONS................................................44
   SECTION 8.06. VOTING.....................................................45

ARTICLE IX    AMENDMENTS....................................................46

   SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.........................46
   SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS............................47
   SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF
                  SUPPLEMENTAL INDENTURES...................................48
   SECTION 9.04. NOTATION ON SECURITIES.....................................48
   SECTION 9.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE
                  TO BE FURNISHED TRUSTEE...................................48

ARTICLE X     CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.............49

   SECTION 10.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS...........49
   SECTION 10.02. SUCCESSOR CORPORATION TO BE SUBSTITUTED FOR
                  COMPANY...................................................49
   SECTION 10.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE....................50

ARTICLE XI    SATISFACTION AND DISCHARGE OF INDENTURE.......................50

   SECTION 11.01. DISCHARGE OF INDENTURE....................................50
   SECTION 11.02. DEPOSITED MONEYS AND U.S. GOVERNMENT
                  OBLIGATIONS TO BE HELD IN TRUST BY TRUSTEE................51
   SECTION 11.03. PAYING AGENT TO REPAY MONEYS HELD.........................51
   SECTION 11.04. RETURN OF UNCLAIMED MONEYS................................51
   SECTION 11.05. DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S.
                  GOVERNMENT OBLIGATIONS....................................51
   SECTION 11.06. REINSTATEMENT.............................................53

ARTICLE XII   IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
              AND DIRECTORS.................................................53

   SECTION 12.01. INDENTURE AND SECURITIES SOLELY CORPORATE
                  OBLIGATIONS...............................................53

ARTICLE XIII  MISCELLANEOUS PROVISIONS......................................53

   SECTION 13.01. SUCCESSORS................................................53
   SECTION 13.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION....................53
   SECTION 13.03. SURRENDER OF COMPANY POWERS...............................54
   SECTION 13.04. ADDRESS FOR NOTICES, ETC..................................54
   SECTION 13.05. GOVERNING LAW.............................................54
   SECTION 13.06. EVIDENCE OF COMPLIANCE WITH CONDITIONS
                  Precedent.................................................54
   SECTION 13.07. BUSINESS DAYS.............................................55
   SECTION 13.08. TRUST INDENTURE ACT TO CONTROL............................55
   SECTION 13.09. TABLE OF CONTENTS, HEADINGS, ETC..........................55
   SECTION 13.10. EXECUTION IN COUNTERPARTS.................................55
   SECTION 13.11. SEPARABILITY..............................................55
   SECTION 13.12. ASSIGNMENT................................................55
   SECTION 13.13. ACKNOWLEDGMENT OF RIGHTS..................................56

ARTICLE XIV   CONDITIONAL RIGHT TO SHORTEN MATURITY; PREPAYMENT
              OF SECURITIES -- NO SINKING FUND..............................56

   SECTION 14.01. SPECIAL EVENT PREPAYMENT..................................56
   SECTION 14.02. OPTIONAL PREPAYMENT BY COMPANY............................56
   SECTION 14.03. NO SINKING FUND...........................................57
   SECTION 14.04. NOTICE OF PREPAYMENT; SELECTION OF SECURITIES.............57
   SECTION 14.05. PAYMENT OF SECURITIES CALLED FOR PREPAYMENT...............58
   SECTION 14.06. CONDITIONAL RIGHT TO SHORTEN MATURITY.....................58

ARTICLE XV    SUBORDINATION OF SECURITIES...................................59

   SECTION 15.01. AGREEMENT TO SUBORDINATE..................................59
   SECTION 15.02. DEFAULT ON SENIOR INDEBTEDNESS............................59
   SECTION 15.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY......................60
   SECTION 15.04. SUBROGATION...............................................61
   SECTION 15.05. TRUSTEE TO EFFECTUATE SUBORDINATION.......................62
   SECTION 15.06. NOTICE BY THE COMPANY.....................................62
   SECTION 15.07. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
                  INDEBTEDNESS..............................................63
   SECTION 15.08. SUBORDINATION MAY NOT BE IMPAIRED.........................63

ARTICLE XVI   EXTENSION OF INTEREST PAYMENT PERIOD..........................64

   SECTION 16.01. EXTENSION OF INTEREST PAYMENT PERIOD......................64
   SECTION 16.02. NOTICE OF EXTENSION.......................................65

EXHIBIT A         Form of Security; Trustee's Certificate of
                  Authentication...........................................A-1



<PAGE>

                             CROSS-REFERENCE TABLE*

            of provisions of Trust Indenture Act of 1939 with Indenture dated as
of February 5, 1998 between Orion Capital  Corporation and The Bank of New York,
as Trustee:

ACT SECTION                                                  INDENTURE SECTION

310(a)(1)        ...........................................      6.09
   (a)(2)        ...........................................      6.09
310(a)(3)        ...........................................      N/A
   (a)(4)        ...........................................      N/A
310(a)(5)        ...........................................      N/A
310(b)           ...........................................      6.10, 6.11
310(c)           ...........................................      N/A
311(a) and (b)   ...........................................      6.13
311(c)           ...........................................      N/A
312(a)           ...........................................      4.01,
4.02(a)
312(b) and (c)   ...........................................      4.02
313(a)           ...........................................      4.04
313(b)(1)        ...........................................      4.04
313(b)(2)        ...........................................      4.04
313(c)           ...........................................      4.04
313(d)           ...........................................      4.04
314(a)           ...........................................      4.03
314(b)           ...........................................      N/A
314(c)(1) and (2)...........................................            6.07
314(c)(3)        ...........................................      N/A
314(d)           ...........................................      N/A
314(e)           ...........................................      6.07
314(f)           ...........................................      N/A
315(a)(c) and (d)...........................................            6.01
315(b)           ...........................................      5.08
315(e)           ...........................................      5.09
316(a)(1)        ...........................................      5.07
316(a)(2)        ...........................................      N/A
316(a) last sentence........................................            2.09
316(b)           ...........................................      9.02
317(a)           ...........................................      5.05
317(b)           ...........................................      6.05
318(a)           ...........................................      13.08
------------------
*     This  Cross-Reference  Table does not constitute  part of the Indenture as
      executed  and shall not affect the  interpretation  of any of its terms or
      provisions.


<PAGE>

            THIS INDENTURE,  dated as of February 5, 1998, between Orion Capital
Corporation,   a  Delaware   corporation   (hereinafter   sometimes  called  the
"Company"), and The Bank of New York, a New York banking corporation, as trustee
(hereinafter sometimes called the "Trustee").

                              W I T N E S S E T H :

            In consideration of the premises, and the purchase of the Securities
by the holders  thereof,  the Company  covenants and agrees with the Trustee for
the equal and proportionate  benefit of the respective holders from time to time
of the Securities, as follows:

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01. DEFINITIONS.

            The terms  defined in this Section 1.01 (except as herein  otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this  Indenture  shall have the  respective  meanings  specified in this Section
1.01.  All other  terms used in this  Indenture  which are  defined in the Trust
Indenture Act of 1939, as amended (the "Trust  Indenture  Act"), or which are by
reference  therein  defined  in the  Securities  Act,  shall  (except  as herein
otherwise  expressly provided or unless the context otherwise requires) have the
meanings  assigned  to  such  terms  in  said  Trust  Indenture  Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
The  following  terms have the meanings  given to them in the  Declaration:  (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Depository;  (iv) Capital Security
Certificate;  (v) Property Trustee; (vi) Administrative  Trustees;  (vii) Direct
Action; and (viii) Purchase Agreement.  All accounting terms used herein and not
expressly  defined shall have the meanings  assigned to such terms in accordance
with generally accepted  accounting  principles and the term "generally accepted
accounting  principles"  means  such  accounting  principles  as  are  generally
accepted  at the time of any  computation.  The  words  "herein",  "hereof"  and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not to any particular  Article,  Section or other subdivision.  Headings are
used for  convenience  of reference only and do not affect  interpretation.  The
singular includes the plural and vice versa.

            "Additional  Interest"  shall  have  the  meaning  set  forth in the
Registration Rights Agreement.

            "Additional  Sums"  shall  have the  meaning  set  forth in  Section
2.06(c).

            "Adjusted  Treasury Rate" shall mean, with respect to any prepayment
date  pursuant to Section  14.02,  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%.

             "Adverse Tax  Consequence"  shall have the meaning set forth in the
definition of Tax Event.

            "Affiliate" shall mean, with respect to a specified Person,  (a) any
Person directly or indirectly  owning,  controlling or holding the power to vote
20% or more of the outstanding voting securities or other ownership interests of
the specified  Person,  (b) any Person 20% or more of whose  outstanding  voting
securities  or other  ownership  interests  are  directly or  indirectly  owned,
controlled  or held with power to vote by the specified  Person,  (c) any Person
directly or indirectly controlling,  controlled by, or under common control with
the specified  Person,  and (d) a partnership in which the specified Person is a
general partner;  provided,  however,  that Intercargo  Corporation shall not be
deemed to be an Affiliate of the Company or Orion Capital Trust II.

            "Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.

            "Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.

            "Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of the Board of Directors.

            "Board  Resolution"  shall mean a copy of a resolution  certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

            "Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking institutions
in The City of New York, New York are authorized or required by law or executive
order to close.

            "Capital  Securities" shall mean undivided  beneficial  interests in
the  assets of Orion  Capital  Trust II which  rank pari  passu  with the Common
Securities issued by Orion Capital Trust II; provided, however, that if an Event
of  Default  has  occurred  and  is  continuing,   no  payments  in  respect  of
distributions  on, or payments upon  liquidation,  prepayment or otherwise  with
respect to, the Common Securities shall be made until the holders of the Capital
Securities  shall  be paid  in  full  the  distributions  and  the  liquidation,
prepayment and other payments to which they are entitled. References to "Capital
Securities"  shall  include  collectively  any Initial  Capital  Securities  and
Exchange Capital Securities.

            "Capital  Securities  Guarantee"  shall mean any guarantee  that the
Company  may enter  into  with  Orion  Capital  Trust II or other  Persons  that
operates directly or indirectly for the benefit of holders of Capital Securities
of Orion  Capital  Trust II and shall  include  an  Initial  Capital  Securities
Guarantee  and an Exchange  Capital  Securities  Guarantee  with  respect to the
Initial Capital Securities and the Exchange Capital Securities, respectively.

            "Commission" shall mean the Securities and Exchange  Commission,  as
from time to time constituted, created under the Exchange Act, or if at any time
after the  execution  of this  Indenture  such  Commission  is not  existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

            "Common Securities" shall mean undivided beneficial interests in the
assets of Orion Capital  Trust II which rank pari passu with Capital  Securities
issued by Orion Capital Trust II; provided, however, that if an Event of Default
has occurred and is continuing,  no payments in respect of Distributions  on, or
payments upon  liquidation,  prepayment or otherwise with respect to, the Common
Securities  shall be made until the holders of the Capital  Securities  shall be
paid  in full  the  Distributions  and the  liquidation,  prepayment  and  other
payments to which they are entitled.

            "Common  Securities  Guarantee"  shall mean any  guarantee  that the
Company  may enter into with any Person or Persons  that  operates  directly  or
indirectly for the benefit of holders of Common Securities.

            "Common  Stock"  shall mean the Common  Stock,  par value  $1.00 per
share,  of the Company or any other  class of stock  resulting  from  changes or
reclassifications  of such  Common  Stock  consisting  solely of  changes in par
value, or from par value to no par value, or from no par value to par value.

            "Company"   shall  mean  Orion  Capital   Corporation,   a  Delaware
corporation,  and,  subject to the  provisions  of Article X, shall  include its
successors and assigns.

            "Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman,  a Vice  Chairman,  the
Chief Executive Officer, the President,  a Vice President (however  designated),
the  Secretary or an Assistant  Secretary of the Company,  and  delivered to the
Trustee.

            "Comparable  Treasury  Issue" shall mean the United States  Treasury
security selected by the Quotation Agent as having a maturity  comparable to the
Remaining  Life  that  would  be  utilized,  at the  time  of  selection  and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Life.

            "Comparable   Treasury  Price"  shall  mean,  with  respect  to  any
prepayment date pursuant to Section 14.01,  (i) the average of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal  amount) on the third  Business Day preceding  such  prepayment
date, as set forth in the daily statistical  release (or any successor  release)
published by the Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government  Securities" or (ii) if such release (or any
successor  release) is not  published  or does not  contain  such prices on such
Business Day, (A) the average of the Reference  Treasury  Dealer  Quotations for
such  prepayment  date,  after  excluding the highest and lowest such  Reference
Treasury Dealer Quotations,  or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.

            "Compounded  Interest"  shall have the  meaning set forth in Section
16.01.

            "Conditional Tax Redemption  Event" shall have the meaning set forth
in Section 14.06.

            "Custodian" shall mean any receiver, trustee, assignee,  liquidator,
or similar official under any Bankruptcy Law.

            "Declaration"  shall mean the Amended and  Restated  Declaration  of
Trust of Orion Capital Trust II, dated as of February 5, 1998.

            "Default" shall mean any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.

            "Deferred  Interest"  shall  have the  meaning  set forth in Section
16.01.

            "Definitive  Securities" shall mean those Securities issued in fully
registered certificated form but not Securities issued in global form.

            "Depositary"  shall mean,  with respect to Securities of any series,
for which the Company shall  determine that such  Securities will be issued as a
Global  Security,  The  Depository  Trust Company,  New York, New York,  another
clearing  agency,  or any successor  registered  as a clearing  agency under the
Exchange Act or other  applicable  statute or regulation,  which,  in each case,
shall be designated by the Company pursuant to Section 2.05(d).

            "Dissolution Event" shall mean the liquidation of the Trust pursuant
to the Declaration,  and the distribution of the Securities held by the Property
Trustee to the holders of the Trust  Securities  issued by the Trust pro rata in
accordance with the Declaration.

            "Event of Default"  shall mean any event  specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.

            "Exchange  Act" shall mean the  Securities  Exchange Act of 1934, as
amended.

            "Exchange Capital  Securities" shall mean 7.701% Capital  Securities
(liquidation  amount  $1,000 per  security) of Orion  Capital  Trust II,  issued
pursuant to an Exchange Offer.

            "Exchange  Capital  Securities  Guarantee"  shall  mean the  Capital
Securities Guarantee Agreement, issued pursuant to an Exchange Offer.

            "Exchange  Offer" shall mean the offer that may be made  pursuant to
the  Registration  Rights  Agreement  (i) by the  Company to  exchange  Exchange
Securities for Initial Securities and to exchange an Exchange Capital Securities
Guarantee for an Initial Capital Securities  Guarantee and (ii) by Orion Capital
Trust II to exchange Exchange Capital Securities for Initial Capital Securities.

            "Exchange   Securities"  shall  mean  the  Company's  7.701%  Junior
Subordinated  Deferrable Interest Debentures due April 15, 2028, issued pursuant
to an Exchange Offer, as authenticated and issued under this Indenture.

            "Extension  Period"  shall  have the  meaning  set forth in  Section
16.01.

            "Global  Securities"  shall mean those  Securities  issued in global
form, and "Global  Security" shall mean the Security executed by the Company and
delivered  by the Trustee to the  Depositary  or  pursuant  to the  Depositary's
instruction,  all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.

            "Indebtedness  for Money  Borrowed" shall mean any obligation of, or
any obligation  guaranteed by, the Company for the repayment of borrowed  money,
whether  or  not  evidenced  by  bonds,  debentures,   notes  or  other  written
instruments.

            "Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.

            "Initial Capital  Securities"  shall mean 7.701% Capital  Securities
(liquidation amount $1,000 per security) of Orion Capital Trust II.

            "Initial  Capital  Securities  Guarantee"  shall  mean  the  Capital
Securities Guarantee Agreement,  dated February 5, 1998, between the Company and
The Bank of New York, as guarantee trustee.

            "Initial   Securities"   shall  mean  the  Company's  7.701%  Junior
Subordinated Deferrable Interest Debentures due April 15, 2028, as authenticated
and issued under this Indenture.

            "Investment  Company Act" shall mean the  Investment  Company Act of
1940, as amended.

            "Investment  Company  Event" shall mean that the Company  shall have
received an opinion of an independent  counsel experienced in practice under the
Investment  Company Act, to the effect that, as a result of the  occurrence of a
change in law or regulation or a change in  interpretation or application of law
or regulation by any legislative body, court,  governmental agency or regulatory
authority  (a "Change in  Investment  Company  Act Law"),  there is more than an
insubstantial  risk that  Orion  Capital  Trust II 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 February 5, 1998.

            "Interest  Payment Date" shall have the meaning set forth in Section
2.06.

             "Non  Book-Entry  Capital  Securities"  shall have the  meaning set
forth in Section 2.05.

            "Officers"  shall mean any of the  Chairman,  a Vice  Chairman,  the
Chief Executive Officer, the President,  a Vice President (however  designated),
the Secretary or an Assistant Secretary of the Company.

            "Officers'  Certificate"  shall  mean a  certificate  signed  by two
Officers and delivered to the Trustee.

            "Opinion of Counsel"  shall mean a written  opinion of counsel,  who
may be an employee of the Company, and who shall be acceptable to the Trustee.

            "Optional  Prepayment  Price"  shall mean 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.

            "Orion  Capital  Trust II" or "Trust" shall mean Orion Capital Trust
II, a Delaware  business  trust created for the purpose of issuing its undivided
beneficial  interests in connection  with the issuance of Securities  under this
Indenture.

            "Other  Debentures"  shall  mean  only  those  junior   subordinated
debentures  issued  by the  Company  from  time to time and sold to trusts to be
established  by the  Company (if any),  which are in each case  similar to Orion
Capital Trust II.

            "Other  Guarantees"  shall mean all  guarantees  to be issued by the
Company with respect to capital  securities (if any) and issued to other trusts,
or to any trustee of such trusts or other entities  affiliated  with the Company
that are financing vehicles of the Company.

            The term  "outstanding"  when used  with  reference  to  Securities,
shall,  subject to the  provisions of Section 7.04,  mean, as of any  particular
time,  all  Securities  authenticated  and  delivered  by  the  Trustee  or  the
Authenticating Agent under this Indenture, except

            (a)...Securities   theretofore  cancelled  by  the  Trustee  or  the
Authenticating Agent or delivered to the Trustee for cancellation;

            (b)...Securities, or portions thereof, for the payment or prepayment
of which moneys in the necessary  amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall have been
set aside and  segregated  in trust by the Company (if the Company  shall act as
its own paying agent);  provided that, if such Securities,  or portions thereof,
are to be prepaid prior to maturity  thereof,  notice of such  prepayment  shall
have been given as in Article XIV  provided  or  provision  satisfactory  to the
Trustee shall have been made for giving such notice; and

            (c)...Securities  in  lieu of or in  substitution  for  which  other
Securities shall have been  authenticated and delivered pursuant to the terms of
Section  2.08  unless  proof  satisfactory  to the  Company  and the  Trustee is
presented that any such Securities are held by bona fide holders in due course.

            "Person"   shall   mean   any   individual,   corporation,   estate,
partnership, joint venture, association,  joint-stock company, limited liability
company,  trust,  unincorporated  organization  or  government  or any agency or
political subdivision thereof.

            "Predecessor  Security" of any particular  Security shall mean every
previous Security evidencing all or a portion of the same debt as that evidenced
by such  particular  Security;  and,  for the purposes of this  definition,  any
Security  authenticated  and  delivered  under  Section  2.08 in lieu of a lost,
destroyed  or stolen  Security  shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.

            "Prepayment  Price" shall mean the Optional  Prepayment Price or the
Special Event Prepayment Price, as the context requires.

            The term "principal  office of the Trustee",  or other similar term,
shall mean the principal office of the Trustee,  at which at any particular time
its corporate trust business shall be administered.

            "Property  Trustee"  shall have the same meaning as set forth in the
Declaration.

            "Purchase   Agreement"  shall  mean  the  Purchase  Agreement  dated
February  2, 1998 among the  Company,  Orion  Capital  Trust II and the  Initial
Purchasers as defined therein.

            "Quotation Agent" shall mean the Reference Treasury Dealer.

            "Reference  Treasury  Dealer"  shall  mean (i)  Donaldson,  Lufkin &
Jenrette Securities Corporation and its successors;  provided,  however, that if
the foregoing shall cease to be a primary U.S.  Government  securities dealer in
New York City (a  "Primary  Treasury  Dealer"),  the  Company  shall  substitute
therefor another Primary  Treasury  Dealer,  and (ii) any other Primary Treasury
Dealer selected by the Trustee after consultation with the Company.

            "Reference  Treasury Dealer  Quotations" shall mean, with respect to
each  Reference  Treasury  Dealer and any  prepayment  date  pursuant to Section
14.01,  the average,  as determined by the Trustee,  of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal  amount)  quoted to the Trustee by such Reference  Treasury  Dealer at
5:00  p.m.  New York  City  time,  on the  third  Business  Day  preceding  such
prepayment date.

            "Registration  Rights Agreement" shall mean the Registration  Rights
Agreement, dated as of February 5, 1998, by and among the Company, Orion Capital
Trust II and the Initial Purchasers,  as such agreement may be amended, modified
or supplemented from time to time.

            "Regular  Record  Date"  with  respect to the  payment  of  interest
installments  on the  Securities,  shall mean the  fifteenth  day  preceding the
relevant  Interest Payment Date. If a Regular Record Date is not a Business Day,
such Regular Record Date shall be deemed to be the next preceding Business Day.

            "Remaining  Life"  shall mean the period  from the  prepayment  date
pursuant to Section 14.01 to the Stated Maturity.

            "Responsible  Officer," when used with respect to the Trustee, shall
mean the chairman or any vice chairman of the board of  directors,  the chairman
or any vice chairman of the executive  committee of the board of directors,  the
chairman  of the  trust  committee,  the  president,  any  vice  president,  any
assistant vice president, the cashier, any assistant cashier, the secretary, any
assistant secretary,  the treasurer,  any assistant treasurer, any trust officer
or assistant  trust officer,  the controller or any assistant  controller or any
other  officer  or  assistant  officer  of the  Trustee  customarily  performing
functions similar to those performed by any of the above designated officers and
also means,  with  respect to a particular  corporate  trust  matter,  any other
officer  to whom  such  matter  is  referred  because  of his  knowledge  of and
familiarity with the particular subject.

            "Restricted  Security"  shall  mean  Securities  that  bear  or  are
required to bear the legends set forth in Exhibit A hereto.

            "Rule 144A" shall mean Rule 144A under the  Securities  Act, as such
Rule may be amended from time to time,  or under any similar rule or  regulation
hereafter adopted by the Commission.

            "Securities"  shall mean,  collectively,  the Initial Securities and
the Exchange Securities.

            "Securities Act" shall mean the Securities Act of 1933 as amended.

            "Securityholder",  "holder of  Securities",  or other similar terms,
shall  mean any  person  in  whose  name at the time a  particular  Security  is
registered  on the register  kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.

            "Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders  kept by a  Securities  registrar  or  provided  to the  Trustee
pursuant to Section  4.01,  as the case may be and (ii)  following a Dissolution
Event,  any  security  register  maintained  by a  security  registrar  for  the
securities  appointed by the Company  following the execution of a  supplemental
indenture providing for transfer procedures as provided for in Section 2.07(a).

            "Senior  Indebtedness"  shall mean with respect to the Company,  (i)
the principal,  premium, if any, and interest in respect of (A) Indebtedness for
Money Borrowed and (B) indebtedness evidenced by securities,  notes, debentures,
bonds or other similar instruments issued by the Company, (ii) all capital lease
obligations  of the  Company,  (iii) all  obligations  of the Company  issued or
assumed  as the  deferred  purchase  price of  property,  all  conditional  sale
obligations  of the  Company  and  all  obligations  of the  Company  under  any
conditional  sale or title  retention  agreement (but  excluding  trade accounts
payable  arising in the  ordinary  course of  business),  (iv) all  obligations,
contingent  or  otherwise  of the  Company  in  respect of any letter of credit,
banker's acceptance, security purchase facilities or similar credit transaction,
(v) all  obligations in respect of interest rate swap, cap or other  agreements,
interest rate future or option  contracts,  currency swap  agreements,  currency
future or option contracts and other similar agreements, (vi) all obligations of
the type  referred to in clauses (i) through (v) above of other  persons for the
payment of which the Company is responsible  or liable as obligor,  guarantor or
otherwise  and (vii) all  obligations  of the type  referred  to in clauses  (i)
through (vi) above of other persons secured by any lien on any property or asset
of the  Company  (whether  or not such  obligation  is assumed by the  Company),
except for (1) any such  indebtedness  that is by its terms  subordinated  to or
pari passu  with the Junior  Subordinated  Debentures  and (2) any  indebtedness
between  or among the  Company  or its  affiliates,  including  all  other  debt
securities and guarantees in respect of those debt securities  issued to (a) any
other Orion Capital Trust or a trustee of such trust and (b) any other trust, or
of a trustee of such trust, or of a partnership or other entity  affiliated with
the Company that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such a financing entity of preferred  securities
or other  securities  that rank pari  passu  with,  or junior  to,  the  Capital
Securities.  Such Senior  Indebtedness shall continue to be Senior  Indebtedness
and be entitled to the benefits of the subordination  provisions irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.

            "Special  Event" shall mean either an Investment  Company Event or a
Conditional Tax Redemption Event, as the case may be.

            "Special  Event Adjusted  Treasury Rate" means,  with respect to any
prepayment date, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable  Treasury Issue,  assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal  amount) equal to the
Comparable  Treasury  Price  for such  prepayment  date  plus (i)  1.55% if such
prepayment  date  occurs on or prior to  February  1, 1999 and (ii) 0.50% in all
other cases.

            "Special  Event  Prepayment  Price" shall mean,  with respect to any
prepayment of the Securities pursuant to Section 14.01 hereof, an amount in cash
equal to the  greater of (i) 100% of the  principal  amount  thereof 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 and, for any period less than 6 months,  the actual months
elapsed and the actual days  elapsed in a partial  month in such  period) at the
Special Event  Adjusted  Treasury  Rate plus,  in each case,  accrued and unpaid
interest  thereon,  including  Compounded  Interest,   Additional  Interest  and
Additional Sums, if any, to the date of such prepayment.

            "Stated  Maturity"  shall mean April 15, 2028, or such other date to
which the  maturity of the  Securities  is changed  pursuant to the right of the
Company to shorten the stated  maturity  pursuant to the  provisions  of Section
14.06.

            "Subsidiary"  shall  mean  with  respect  to  any  Person,  (i)  any
corporation  at least a majority  of the  outstanding  voting  stock of which is
owned,  directly  or  indirectly,  by  such  Person  or by  one or  more  of its
Subsidiaries,  or by such Person and one or more of its  Subsidiaries,  (ii) any
general  partnership,  joint venture or similar  entity,  at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited  partnership of which such Person
or any of its  Subsidiaries  is a  general  partner.  For the  purposes  of this
definition,  "voting  stock" means shares,  interests,  participations  or other
equivalents in the equity  interest  (however  designated) in such Person having
ordinary  voting power for the election of a majority of the  directors  (or the
equivalent)  of such Person,  other than shares,  interests,  participations  or
other  equivalents  having  such  power  only by reason of the  occurrence  of a
contingency.

            "Tax Event" shall mean the receipt by Orion Capital Trust II and the
Company of an opinion of counsel experienced in such matters to the effect that,
as a result of any amendment to, or change (including any announced  prospective
change) in, the laws or any  regulations  thereunder of the United States or any
political  subdivision or taxing authority  thereof or therein or as a result of
any official  administrative  pronouncement or judicial decision interpreting or
applying  such laws or  regulations,  which  amendment or change is effective or
which  pronouncement  or decision is announced on or after February 5, 1998, or,
as a result of a final  determination,  as evidenced by the  execution of a Form
870 AD, arising from an audit or examination  by the Internal  Revenue  Service,
there is more than an insubstantial  risk that (i) Orion Capital Trust II is, or
will be within 90 days of the date of such  opinion,  subject  to United  States
Federal income tax with respect to income received or accrued on the Securities,
(ii) interest payable by the Company on the Securities is not, or within 90 days
of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States  Federal income tax purposes,  or (iii) Orion Capital
Trust II is, or will be within 90 days of the date of such  opinion,  subject to
more than a de  minimis  amount  of other  taxes,  duties or other  governmental
charges  (each of the  circumstances  referred to in clauses (i), (ii) and (iii)
being referred to herein as an "Adverse Tax Consequence").

            "Tax Event Maturity  Shortening" shall have the meaning specified in
Section 14.06.

            "Trustee" shall mean the Person identified as "Trustee" in the first
paragraph  hereof,  and,  subject to the provisions of Article VI hereof,  shall
also include its successors and assigns as Trustee hereunder. The term "Trustee"
as used with respect to a  particular  series of the  Securities  shall mean the
trustee with respect to that series.

            "Trust  Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture,  except as provided
in Section 9.03.

            "Trust  Securities" shall mean the Capital Securities and the Common
Securities, collectively.

            "U.S.  Government  Obligations"  shall mean  securities that are (i)
direct  obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii)  obligations of a Person  controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is  unconditionally  guaranteed as a full faith and
credit  obligation by the United States of America,  which, in either case under
clauses (i) or (ii) are not callable or  prepayable  at the option of the issuer
thereof,  and shall also include a depository  receipt issued by a bank or trust
company as custodian  with respect to any such U.S.  Government  Obligation or a
specific  payment  of  interest  on or  principal  of any such  U.S.  Government
Obligation  held by such custodian for the account of the holder of a depository
receipt,  provided  that  (except  as  required  by law) such  custodian  is not
authorized to make any deduction  from the amount  payable to the holder of such
depository  receipt from any amount  received by the custodian in respect of the
U.S.  Government  Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.

                                   ARTICLE II

                                   SECURITIES

SECTION 2.01. FORMS GENERALLY.

            The Securities and the Trustee's certificate of authentication shall
be  substantially  in the form set  forth in  Exhibit  A, the terms of which are
incorporated  in and  made a part of this  Indenture.  The  Securities  may have
notations,  legends  or  endorsements  required  by law,  stock  exchange  rule,
agreements  to which the  Company is subject or usage.  Each  Security  shall be
dated  the  date of its  authentication.  The  Securities  shall  be  issued  in
denominations of $1,000 and integral multiples thereof.

SECTION 2.02. EXECUTION AND AUTHENTICATION.

            Two Officers  shall sign the Securities for the Company by manual or
facsimile  signature.  If an Officer whose  signature is on a Security no longer
holds that office at the time the Security is authenticated,  the Security shall
nevertheless be valid.

            A  Security  shall not be valid  until  authenticated  by the manual
signature  of the Trustee.  The  signature  of the Trustee  shall be  conclusive
evidence that the Security has been authenticated under this Indenture. The form
of Trustee's  certificate of  authentication to be borne by the Securities shall
be substantially as set forth in Exhibit A hereto.

            The Trustee shall,  upon a Company Order,  authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at any
time may not exceed  $129,000,000  aggregate principal amount of the Securities;
except as  provided  in  Sections  2.07,  2.08,  2.10 and  14.05.  The series of
Securities to be initially issued hereunder shall be the Initial Securities.

SECTION 2.03. FORM AND PAYMENT.

            Except as provided in Section 2.05, the  Securities  shall be issued
in fully registered certificated form without interest coupons. Principal of and
premium, if any, and interest on the Securities issued in certificated form will
be  payable,  the  transfer  of such  Securities  will be  registrable  and such
Securities  will be  exchangeable  for Securities  bearing  identical  terms and
provisions  at the office or agency of the Company  maintained  for such purpose
under Section 3.02; provided,  however, that payment of interest with respect to
Securities  may be made at the option of the Company (i) by check  mailed to the
holder at such  address  as shall  appear in the  Security  Register  or (ii) by
transfer to an account maintained by the Person entitled thereto,  provided that
proper  transfer  instructions  have been  received  in writing by the  relevant
record  date.  Notwithstanding  the  foregoing,  so  long as the  holder  of any
Securities is the Property Trustee, the payment of the principal of and premium,
if any, and interest (including Compounded Interest and Additional Sums, if any)
on such Securities  held by the Property  Trustee will be made at such place and
to such account as may be designated by the Property Trustee.

SECTION 2.04. LEGENDS.

            (a)...Except  as permitted by subsection (b) of this Section 2.04 or
as otherwise  determined by the Company in accordance  with applicable law, each
Security shall bear the applicable  legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.

            (b)...The  Company  shall issue and the Trustee  shall  authenticate
Exchange  Securities in exchange for Initial Securities accepted for exchange in
the  Exchange  Offer,  which  Exchange  Securities  shall  not bear the  legends
required by subsection (a) above, in each case unless the holder of such Initial
Securities is either (A) a broker-dealer  who purchased such Initial  Securities
directly  from  the  Company  for  resale  pursuant  to Rule  144A or any  other
available exemption under the Securities Act, (B) a Person  participating in the
distribution  of the Initial  Securities or (C) a Person who is an affiliate (as
defined in Rule 144 under the Securities Act) of the Company.

SECTION 2.05. GLOBAL SECURITY.

            (a)...In connection with a Dissolution Event,

 ..................(i) if any Capital Securities are held in book-entry form, the
related  Definitive  Securities  shall  be  presented  to  the  Trustee  (if  an
arrangement  with the Depositary has been maintained) by the Property Trustee in
exchange  for one or more  Global  Securities  (as may be  required  pursuant to
Section 2.07) in an aggregate  principal amount equal to the aggregate principal
amount of all such outstanding  Securities,  to be registered in the name of the
Depositary,  or its nominee,  and delivered by the Trustee to the Depositary for
crediting to the accounts of its  participants  pursuant to the  instructions of
the  Administrative  Trustees;  the  Company  upon any such  presentation  shall
execute one or more Global  Securities in such  aggregate  principal  amount and
deliver the same to the Trustee for  authentication  and delivery in  accordance
with this Indenture;  and payments on the Securities issued as a Global Security
will be made to the Depositary; and

 ..................(ii)  if any Capital Securities are held in certificated form,
the  related  Definitive  Securities  may be  presented  to the  Trustee  by the
Property Trustee and any Capital Security  certificate which represents  Capital
Securities  other than Capital  Securities in book-entry  form ("Non  Book-Entry
Capital  Securities")  will be  deemed  to  represent  beneficial  interests  in
Securities  presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non Book-Entry
Capital Securities until such Capital Security certificates are presented to the
Security  registrar  for  transfer  or  reissuance,  at which time such  Capital
Security  certificates will be cancelled and a Security,  registered in the name
of the holder of the Capital Security  certificate,  with an aggregate principal
amount  equal  to the  aggregate  liquidation  amount  of the  Capital  Security
certificate  cancelled,  will be executed by the  Company and  delivered  to the
Trustee for authentication and delivery in accordance with this Indenture.  Upon
the  issuance  of  such  Securities,  Securities  with an  equivalent  aggregate
principal amount that were presented by the Property Trustee to the Trustee will
be deemed to have been cancelled.

            (b)...The Global  Securities shall represent the aggregate amount of
outstanding  Securities from time to time endorsed thereon;  provided,  that the
aggregate amount of outstanding  Securities represented thereby may from time to
time  be  reduced  or  increased,  as  appropriate,  to  reflect  exchanges  and
prepayments.  Any  endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall  be  made  by  the  Trustee,  in  accordance  with  applicable  procedures
established by the Depositary.

            (c)...The Global Securities may be transferred,  in whole but not in
part, only to another nominee of the  Depositary,  or to a successor  Depositary
selected  or  approved  by  the  Company  or  to a  nominee  of  such  successor
Depositary.

            (d)...If at any time the Depositary  notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a clearing agency registered under the Exchange Act, and a successor  Depositary
is not appointed by the Company  within 90 days after the Company  receives such
notice or becomes aware of such condition,  as the case may be, the Company will
execute,  and  the  Trustee,   upon  written  notice  from  the  Company,   will
authenticate  and  make  available  for  delivery  Definitive   Securities,   in
authorized  denominations  and in an  aggregate  principal  amount  equal to the
principal amount of the Global Security in exchange for such Global Security. If
there is an Event of Default,  the  Depositary  shall have the right to exchange
the Global Securities for Definitive Securities. In addition, the Company may at
any time  determine  that the  Securities  shall no longer be  represented  by a
Global  Security.  In  the  event  of  such  an  Event  of  Default  or  such  a
determination,  the Company  shall  execute,  and subject to Section  2.07,  the
Trustee, upon receipt of an Officers' Certificate  evidencing such determination
by the Company,  will  authenticate  and make available for delivery  Definitive
Securities,  in authorized  denominations  and in an aggregate  principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security.  Upon  the  exchange  of  the  Global  Security  for  such  Definitive
Securities, in authorized denominations,  the Global Security shall be cancelled
by the Trustee.  Such  Definitive  Securities  issued in exchange for the Global
Security shall be registered in such names and in such authorized  denominations
as the  Depositary,  pursuant  to  instructions  from  its  direct  or  indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such  Definitive  Securities  to the  Depositary  for delivery to the Persons in
whose names such Definitive Securities are so registered.

SECTION 2.06. INTEREST.

            (a)...Each  Security  will bear  interest  at the rate of 7.701% per
annum (the "Coupon  Rate") from the most recent date to which  interest has been
paid or,  if no  interest  has been  paid,  from  February  5,  1998,  until the
principal  thereof  becomes due and payable,  and on any overdue  principal  and
premium, if any, and (to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at the Coupon Rate,
compounded  semi-annually,  payable  (subject to the  provisions of Article XVI)
semi-annually  in arrears  on April 15 and  October  15 of each year  (each,  an
"Interest  Payment  Date")  commencing on April 15, 1998, to the Person in whose
name such Security or any predecessor Security is registered on the books of the
Company,  at the close of business on the Regular  Record Date for such interest
installment.

            (b)...Interest  will be  computed  on the  basis of a  360-day  year
consisting of twelve 30-day months and, for any period less than six months, the
actual  months  elapsed and the actual days  elapsed in a partial  month in such
period. In the event that any Interest Payment Date falls on a day that is not a
Business Day, then payment of interest  payable on such date will be made on the
next  succeeding  day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if made
on such date.

            (c)...During  such time as the Property Trustee is the holder of any
Securities,  the Company shall pay any  additional  amounts on the Securities as
may be necessary in order that the amount of Distributions  then due and payable
by Orion  Capital  Trust II on the  outstanding  Trust  Securities  shall not be
reduced  as a result of any  additional  taxes,  duties  and other  governmental
charges  to which  the  Trust  has  become  subject  as a result  of a Tax Event
("Additional Sums").

SECTION 2.07. TRANSFER AND EXCHANGE.

            (a)...TRANSFER  RESTRICTIONS.  The  Initial  Securities,  and  those
Exchange  Securities  with  respect  to which any  Person  described  in Section
2.04(b)(A), (B) or (C) is the beneficial owner, may not be transferred except in
compliance with any legend contained in Exhibit A unless otherwise determined by
the Company in accordance  with  applicable  law. Upon any  distribution  of the
Securities  following a  Dissolution  Event,  the Company and the Trustee  shall
enter into a supplemental  indenture pursuant to Section 9.01 to provide for the
transfer   restrictions   and   procedures   with  respect  to  the   Securities
substantially  similar  to those  contained  in the  Declaration  to the  extent
applicable in the circumstances existing at such time.

            (b)...GENERAL  PROVISIONS  RELATING TO TRANSFERS AND  EXCHANGES.  To
permit  registrations of transfers and exchanges,  the Company shall execute and
the Trustee shall  authenticate  Definitive  Securities and Global Securities at
the Trustee's  request.  All Definitive  Securities and Global Securities issued
upon any registration of transfer or exchange of Definitive Securities or Global
Securities  shall be the valid  obligations of the Company,  evidencing the same
debt, and entitled to the same benefits under this Indenture,  as the Definitive
Securities or Global  Securities  surrendered upon such registration of transfer
or exchange.

            No service charge shall be made to a holder for any  registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any  transfer tax or similar  governmental  charge  payable in  connection
therewith.

            The  Company  shall  not be  required  to (i)  issue,  register  the
transfer of or exchange  Securities  during a period beginning at the opening of
business  30 days  before the day of mailing  of a notice of  prepayment  or any
notice of selection of Securities  for  prepayment  under Article XIV hereof and
ending at the close of business on the day of such mailing; or (ii) register the
transfer of or exchange any Security so selected for  prepayment  in whole or in
part, except the unprepaid portion of any Security being prepaid in part.

            Prior to due presentment  for the  registration of a transfer of any
Security,  the Trustee,  any agent and the Company may deem and treat the Person
in whose name any Security is registered as the absolute  owner of such Security
for the purpose of receiving  payment of  principal of and premium,  if any, and
interest on such Securities,  and neither the Trustee, any agent nor the Company
shall be affected by notice to the contrary.

            (c)...EXCHANGE OF INITIAL SECURITIES FOR EXCHANGE SECURITIES.
The Initial Securities may be exchanged for Exchange Securities pursuant to
the terms of the Exchange Offer.  The Trustee shall make the exchange as
follows:

            The Company shall present the Trustee with an Officers'  Certificate
certifying the following:

 ..................(i)   upon issuance of the Exchange Securities, the
transactions contemplated by the Exchange Offer have been consummated; and

 ..................(ii)  the  principal  amount of  Initial  Securities  properly
tendered in the Exchange Offer that are represented by a Global Security and the
principal amount of Initial  Securities  properly tendered in the Exchange Offer
that are represented by Definitive  Securities,  the name of each holder of such
Definitive Securities, the principal amount at maturity properly tendered in the
Exchange Offer by each such holder and the name and address to which  Definitive
Securities  for Exchange  Securities  shall be registered and sent for each such
holder.

            The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel  (x) to the effect  that the  Exchange  Securities  have been
registered  under  Section 5 of the  Securities  Act and the  Indenture has been
qualified  under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(p) of the  Registration  Rights Agreement and (iii) a Company
Order,  shall  authenticate  (A) a Global  Security for Exchange  Securities  in
aggregate  principal  amount equal to the aggregate  principal amount of Initial
Securities  represented  by  a  Global  Security  indicated  in  such  Officers'
Certificate  as having been  properly  tendered  and (B)  Definitive  Securities
representing  Exchange  Securities  registered  in  the  names  of,  and  in the
principal amounts indicated in, such Officers' Certificate.

            If the principal  amount at Stated  Maturity of the Global  Security
for the Exchange Securities is less than the principal amount at Stated Maturity
of the Global  Security for the Initial  Securities,  the Trustee  shall make an
endorsement  on such Global  Security  for the Initial  Securities  indicating a
reduction in the principal amount at maturity represented thereby.

            The Trustee shall deliver such  Definitive  Securities  for Exchange
Securities to the holders thereof as indicated in such Officers' Certificate.

SECTION 2.08. REPLACEMENT SECURITIES.

            (a)...If any mutilated Security is surrendered to the Trustee or the
Company,   or  the  Trustee  receives   evidence  to  its  satisfaction  of  the
destruction,  loss or theft of any  Security,  the  Company  shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's  requirements
for  replacements  of Securities  are met. An indemnity bond must be supplied by
the  Securityholder  that is  sufficient  in the judgment of the Trustee and the
Company to protect the  Company,  the Trustee,  any Agent or any  authenticating
agent from any loss that any of them may suffer if a Security is  replaced.  The
Company or the Trustee may charge for its expenses in replacing a Security.

            (b)...Every replacement Security is an obligation of the Company and
shall  be  entitled  to  all of the  benefits  of  this  Indenture  equally  and
proportionately with all other Securities duly issued hereunder.

            (c)...The  provisions  of this Section 2.08 are  exclusive and shall
preclude (to the extent  lawful) all other  rights and remedies  with respect to
the replacement of mutilated, destroyed, lost or stolen Securities.

SECTION 2.09. TREASURY SECURITIES.

            In determining  whether the holders of the required principal amount
of Securities  have  concurred in any direction,  waiver or consent,  Securities
owned by the Company or any  Affiliate  of the Company  shall be  considered  as
though not  outstanding,  except that for  purposes of  determining  whether the
Trustee shall be protected in relying on any such direction,  waiver or consent,
only  Securities  that the  Trustee  actually  knows to be so owned  shall be so
considered.

SECTION 2.10. TEMPORARY SECURITIES.

            Pending the  preparation of Definitive  Securities,  the Company may
execute,  and  upon  Company  Order  the  Trustee  shall  authenticate  and make
available for delivery,  temporary  Securities  that are printed,  lithographed,
typewritten,   mimeographed   or  otherwise   reproduced,   in  any   authorized
denomination, substantially of the tenor of the Definitive Securities in lieu of
which  they  are  issued  and  with  such  appropriate  insertions,   omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.

            If  temporary   Securities  are  issued,  the  Company  shall  cause
Definitive  Securities to be prepared without unreasonable delay. The Definitive
Securities  shall be  printed,  lithographed  or  engraved,  or  provided by any
combination  thereof,  or in  any  other  manner  permitted  by  the  rules  and
regulations  of any  applicable  securities  exchange,  all as determined by the
Officers  executing  such  Definitive  Securities.   After  the  preparation  of
Definitive  Securities,  the  temporary  Securities  shall be  exchangeable  for
Definitive  Securities upon surrender of the temporary  Securities at the office
or agency  maintained  by the Company for such purpose  pursuant to Section 3.02
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary  Securities,  the Company shall execute, and the Trustee shall
authenticate  and make  available  for delivery,  in exchange  therefor the same
aggregate principal amount of Definitive Securities of authorized denominations.
Until so exchanged,  the temporary  Securities shall in all respects be entitled
to the same benefits under this Indenture as Definitive Securities.

SECTION 2.11. CANCELLATION.

            The  Company at any time may deliver  Securities  to the Trustee for
cancellation.   The  Trustee  and  no  one  else  shall  cancel  all  Securities
surrendered for  registration  of transfer,  exchange,  payment,  replacement or
cancellation  and shall  return  the  cancelled  Securities  to the  Company  in
accordance  with  its  normal   practices   (subject  to  the  record  retention
requirement of the Exchange Act) unless the Company  directs them to be returned
to it. The Company may not issue new Securities to replace  Securities that have
been  prepaid  or  paid  or  that  have  been   delivered  to  the  Trustee  for
cancellation.

SECTION 2.12. DEFAULTED INTEREST.

            Any interest on any Security that is payable,  but is not punctually
paid  or  duly  provided  for,  on any  Interest  Payment  Date  (herein  called
"Defaulted  Interest")  shall forthwith cease to be payable to the holder on the
relevant  Regular  Record  Date by virtue of having been such  holder;  and such
Defaulted Interest shall be paid by the Company, at its election, as provided in
clause (a) or clause (b) below:

            (a)...The  Company  may make  payment of any  Defaulted  Interest on
Securities to the Persons in whose names such  Securities  (or their  respective
Predecessor  Securities)  are  registered  at the close of business on a special
record date for the payment of such Defaulted Interest,  which shall be fixed in
the  following  manner:  the Company  shall notify the Trustee in writing of the
amount of Defaulted  Interest  proposed to be paid on each such Security and the
date of the proposed  payment,  and at the same time the Company  shall  deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid  in  respect  of  such  Defaulted   Interest  or  shall  make  arrangements
satisfactory  to the Trustee for such deposit  prior to the date of the proposed
payment,  such money when  deposited  to be held in trust for the benefit of the
Persons  entitled  to  such  Defaulted  Interest  as in  this  clause  provided.
Thereupon  the Trustee  shall fix a special  record date for the payment of such
Defaulted  Interest  which shall not be more than 30 nor less than 10 days prior
to the date of the proposed  payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify  the  Company of such  special  record  date and,  in the name and at the
expense of the  Company,  shall  cause  notice of the  proposed  payment of such
Defaulted  Interest  and the special  record date  therefor to be mailed,  first
class  postage  prepaid,  to each  Securityholder  at his or her  address  as it
appears in the  Security  Register,  not less than 10 days prior to such special
record date.  Notice of the proposed payment of such Defaulted  Interest and the
special  record date therefor  having been mailed as aforesaid,  such  Defaulted
Interest  shall be paid to the Persons in whose names such  Securities (or their
respective  Predecessor  Securities)  are registered on such special record date
and shall be no longer payable pursuant to the following clause (b).

            (b)...The Company may make payment of any Defaulted  Interest on any
Securities in any other lawful manner not inconsistent  with the requirements of
any securities  exchange on which such  Securities may be listed,  and upon such
notice as may be  required  by such  exchange,  if,  after  notice  given by the
Company to the Trustee of the proposed  payment  pursuant to this  clause,  such
manner of payment shall be deemed practicable by the Trustee.

SECTION 2.13. CUSIP NUMBERS.

            The Company in issuing the  Securities  may use "CUSIP"  numbers (if
then  generally in use),  and, if so, the Trustee  shall use "CUSIP"  numbers in
notices of  prepayment as a convenience  to  Securityholders;  provided that any
such notice may state that no  representation  is made as to the  correctness of
such numbers  either as printed on the  Securities or as contained in any notice
of a prepayment and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such prepayment shall not be affected
by any defect in or omission of such numbers.  The Company will promptly  notify
the Trustee of any change in the CUSIP numbers.

                                   ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 3.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

            The   Company   covenants   and  agrees  for  the   benefit  of  the
Securityholders  that it will  duly and  punctually  pay or cause to be paid the
principal of and premium,  if any, and interest on the  Securities at the place,
at the respective times and in the manner provided herein. Except as provided in
Section 2.03,  each  installment  of interest on the  Securities  may be paid by
mailing  checks for such  interest  payable  to the order of the  Securityholder
entitled  thereto,  as it may appear in the  Securities  register.  The  Company
further  covenants  to pay any and all amounts  including,  without  limitation,
Additional  Interest,  if any, on the dates and in the manner required under the
Registration Rights Agreement.

SECTION 3.02. OFFICES FOR NOTICES AND PAYMENTS, ETC.

            So long as any of the Securities  remains  outstanding,  the Company
will  maintain in The City of New York,  New York, an office or agency where the
Securities  may be  presented  for  payment,  an  office  or  agency  where  the
Securities may be presented for  registration of transfer and for exchange as in
this Indenture  provided and an office or agency where notices and demands to or
upon the  Company in  respect  of the  Securities  or of this  Indenture  may be
served.  The Company will give to the Trustee  written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Company in a notice to the Trustee, any such
office or agency for all of the above  purposes shall be the office or agency of
The Bank of New York, 101 Barclay  Street,  Floor 21W, New York, New York 10286,
Attention:  Corporate  Trust  Administration.  In case the Company shall fail to
maintain any such office or agency in The City of New York,  New York,  or shall
fail to give  such  notice of the  location  or of any  change  in the  location
thereof,  presentations and demands may be made and notices may be served at the
principal corporate trust office of the Trustee.

            In addition to any such office or agency,  the Company may from time
to time designate one or more offices or agencies  outside The City of New York,
New York where the Securities may be presented for  registration of transfer and
for exchange in the manner provided in this Indenture,  and the Company may from
time to time  rescind  such  designation,  as the Company may deem  desirable or
expedient;  provided,  however,  that no such designation or rescission shall in
any manner  relieve the Company of its obligation to maintain any such office or
agency in the City of New York, New York, for the purposes above mentioned.  The
Company will give to the Trustee prompt  written notice of any such  designation
or rescission thereof.

SECTION 3.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE.

            The  Company,  whenever  necessary to avoid or fill a vacancy in the
office of Trustee,  will  appoint,  in the manner  provided in Section  6.10,  a
Trustee, so that there shall at all times be a Trustee hereunder.

SECTION 3.04. PROVISION AS TO PAYING AGENT.

            (a)...If  the Company  shall  appoint a paying  agent other than the
Trustee  with  respect to the  Securities,  it will cause such  paying  agent to
execute and deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provision of this Section 3.04,

 ..................(i)  that it will hold all sums  held by it as such  agent for
the  payment  of the  principal  of and  premium,  if any,  or  interest  on the
Securities  (whether  such sums have  been paid to it by the  Company  or by any
other obligor on the  Securities) in trust for the benefit of the holders of the
Securities;

 ..................(ii)  that it will give the  Trustee  notice of any failure by
the Company (or by any other obligor on the  Securities)  to make any payment of
the principal of and premium or interest on the  Securities  when the same shall
be due and payable; and

 ..................(iii)  that it will at any time during the  continuance of any
such  failure,  upon the written  request of the Trustee,  forthwith  pay to the
Trustee all sums so held in trust by it as such paying agent.

            (b)...If the Company shall act as its own paying agent,  it will, on
or before each due date of the principal of and premium,  if any, or interest on
the  Securities,  set aside,  segregate and hold in trust for the benefit of the
holders of the  Securities a sum  sufficient to pay such  principal,  premium or
interest so becoming due and will notify the Trustee of any failure to take such
action and of any  failure by the  Company  (or by any other  obligor  under the
Securities)  to make any payment of the  principal  of and  premium,  if any, or
interest on the Securities when the same shall become due and payable.

            (c)...Anything in this Section 3.04 to the contrary notwithstanding,
the Company may, at any time,  for the purpose of obtaining a  satisfaction  and
discharge with respect to the Securities hereunder, or for any other reason, pay
or  cause  to be  paid to the  Trustee  all  sums  held in  trust  for any  such
Securities  by the Trustee or any paying  agent  hereunder,  as required by this
Section  3.04,  such  sums to be held by the  Trustee  upon  the  trusts  herein
contained.

            (d)...Anything in this Section 3.04 to the contrary notwithstanding,
the  agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 11.03 and 11.04.

SECTION 3.05. CERTIFICATE TO TRUSTEE.

            The Company  will deliver to the Trustee on or before 120 days after
the end of each fiscal year in each year,  commencing with the first fiscal year
ending after the date hereof,  so long as Securities are outstanding  hereunder,
an  Officers'  Certificate,  one of the signers of which shall be the  principal
executive,  principal financial or principal  accounting officer of the Company,
stating that in the course of the  performance by the signers of their duties as
officers of the Company they would normally have knowledge of any Default by the
Company in the performance of any covenants contained herein, stating whether or
not they have  knowledge of any such Default  and, if so,  specifying  each such
Default of which the signers have knowledge and the nature thereof.

SECTION 3.06. COMPLIANCE WITH CONSOLIDATION PROVISIONS.

            The  Company  will  not,  while  any  of  the   Securities   remains
outstanding,  consolidate  with, or merge into, or merge into itself, or sell or
convey all or  substantially  all of its property to any other Person unless the
provisions of Article X hereof are complied with.

SECTION 3.07. LIMITATION ON DIVIDENDS.

            If at any time (i) there shall have  occurred any event of which the
Company  has  actual  knowledge  that (a) is or with the giving of notice or the
lapse of time, or both,  would  constitute an Event of Default and (b) which the
Company shall not have taken  reasonable steps to cure, (ii) Securities are held
by the Property  Trustee and the Company shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee,  or (iii) the
Company  shall have given notice of its election of the exercise of its right to
extend the  interest  payment  period  pursuant  to  Section  16.01 and any such
extension  shall be  continuing,  then the Company will not, and will not permit
any Subsidiary to,

 ..................(i)  declare  or pay any  dividends  or  distributions  on, or
prepay, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred stock);

 ..................(ii)  make any payment of principal,  interest or premium,  if
any,  on or repay or  repurchase  or prepay any debt  securities  of the Company
(including any Other Debentures) that rank pari passu with or junior in right of
payment to the Securities; or

 ..................(iii)   make  any  guarantee  payments  with  respect  to  any
guarantee by the Company of the debt securities of any Subsidiary of the Company
(including  Other  Guarantees) if such guarantee ranks pari passu with or junior
in right of payment to the Securities  other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase shares
of, Common Stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future,  or the  prepayment or repurchase of any such
rights pursuant thereto,  (c) payments under the Capital  Securities  Guarantee,
(d) as a  direct  result  of,  and only to the  extent  necessary  to avoid  the
issuance of  fractional  shares of the  Company's  capital  stock  following,  a
reclassification  of  the  Company's  capital  stock  or  the  exchange  or  the
conversion  of one class or series of the  Company's  capital  stock for another
class or series of the Company's  capital stock,  (e) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,  and (f)  purchases of Common Stock related to the issuance of Common
Stock or rights  under any of the  Company's  benefit  plans for its  directors,
officers or employees or any of the Company's dividend reinvestment plans.

SECTION 3.08. COVENANTS AS TO ORION CAPITAL TRUST II.

            In the event  Securities  are issued to Orion  Capital Trust II or a
trustee of such trust in  connection  with the issuance of Trust  Securities  by
Orion  Capital  Trust II,  for so long as any of such Trust  Securities  remains
outstanding, the Company will (i) directly or indirectly maintain 100% ownership
of the Common Securities of Orion Capital Trust II; provided,  however, that any
successor  of the Company,  permitted  pursuant to Article X, may succeed to the
Company's  ownership of such Common Securities,  (ii) use its reasonable efforts
to cause  Orion  Capital  Trust II (a) to  remain a  business  trust,  except in
connection with a distribution of Securities, the redemption of all of the Trust
Securities  of Orion  Capital  Trust II or certain  mergers,  consolidations  or
amalgamations,  each as permitted by the Declaration,  and (b) to continue to be
treated as a grantor  trust and not as an  association  taxable as a corporation
for United  States  federal  income tax purposes,  and (iii) use its  reasonable
efforts  to cause  each  holder of Trust  Securities  to be treated as owning an
individual beneficial interest in the Securities.

SECTION 3.09. PAYMENT OF EXPENSES.

            In connection with the offering, sale and issuance of the Securities
to  Orion  Capital  Trust  II and in  connection  with  the  sale  of the  Trust
Securities by Orion  Capital Trust II, the Company,  in its capacity as borrower
with respect to the Securities, shall:

            (a)...pay all costs and expenses relating to the offering,  sale and
issuance of the  Securities,  including  commissions  to the Initial  Purchasers
payable pursuant to the Purchase Agreement, fees and expenses in connection with
the  Exchange  Offer or other  action to be taken  pursuant to the  Registration
Rights  Agreement  and  compensation  of the  Trustee  in  accordance  with  the
provisions of Section 6.06;

            (b)...pay  all costs and expenses of the Trust  (including,  but not
limited to, costs and expenses  relating to the  organization  of Orion  Capital
Trust II, the  offering,  sale and issuance of the Trust  Securities  (including
commissions  to the initial  purchasers in connection  therewith),  the fees and
expenses  of the  Property  Trustee  and the  Delaware  Trustee,  the  costs and
expenses relating to the operation of the Trust;

            (c)...be   primarily  and  fully  liable  for  any   indemnification
obligations arising with respect to the Declaration;

            (d)...pay  any and all taxes (other than United  States  withholding
taxes  attributable to the Trust or its assets) and all  liabilities,  costs and
expenses with respect to such taxes of the Trust; and

            (e)...pay all other fees,  expenses,  debts and  obligations  (other
than  payments of principal  of, and  premium,  if any, or interest on the Trust
Securities) related to Orion Capital Trust II.

SECTION 3.10. PAYMENT UPON RESIGNATION OR REMOVAL.

            Upon  termination of this Indenture or the removal or resignation of
the Trustee,  unless otherwise stated,  the Company shall pay to the Trustee all
amounts  accrued  and  owing  to  the  date  of  such  termination,  removal  or
resignation.  Upon  termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property  Trustee,  as the case may be, all amounts accrued and owing to the
date of such termination, removal or resignation.

                                   ARTICLE IV

                  SECURITYHOLDERS' LISTS AND REPORTS BY THE
                             COMPANY AND THE TRUSTEE

SECTION 4.01. SECURITYHOLDERS' LISTS.

            The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:

            (a)...on a  semi-annual  basis on each  Regular  Record Date for the
Securities,  a list, in such form as the Trustee may reasonably  require, of the
names and addresses of the Securityholders as of such record date;

            (b)...at  such other  times as the  Trustee  may request in writing,
within 30 Business Days after the receipt by the Company of any such request,  a
list of similar  form and  content as of a date not more than 15  Business  Days
prior to the time such list is  furnished,  except  that,  no such lists need be
furnished  so long as the  Trustee  is in  possession  thereof  by reason of its
acting as Security registrar; and

            (c)...the   Company  hereby   appoints  the  Trustee  as  Securities
registrar.

SECTION 4.02. PRESERVATION AND DISCLOSURE OF LISTS.

            (a)...The  Trustee  shall  preserve,  in as  current  a  form  as is
reasonably  practicable,  all  information  as to the names and addresses of the
holders of the  Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of  Securities
registrar (if so acting)  hereunder.  The Trustee may destroy any list furnished
to it as provided in Section 4.01 upon receipt of a new list so furnished.

            (b)...In  case  three or more  holders  of  Securities  (hereinafter
referred to as "applicants")  apply in writing to the Trustee and furnish to the
Trustee  reasonable  proof that each such  applicant  has owned a Security for a
period of at least six months preceding the date of such  application,  and such
application  states that the applicants desire to communicate with other holders
of  Securities  or with holders of all  Securities  with respect to their rights
under this  Indenture and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit,  then the Trustee shall
within 5 Business Days after the receipt of such  application,  at its election,
either:

 ..................(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance  with the  provisions of subsection (a)
of this Section 4.02; or

 ..................(ii)  inform such applicants as to the  approximate  number of
holders of all Securities  whose names and addresses  appear in the  information
preserved  at the time by the  Trustee  in  accordance  with the  provisions  of
subsection (a) of this Section 4.02, and as to the  approximate  cost of mailing
to such  Securityholders  the  form of proxy  or  other  communication,  if any,
specified in such application.

            If the Trustee shall elect not to afford such  applicants  access to
such  information,   the  Trustee  shall,  upon  the  written  request  of  such
applicants,  mail to each  Securityholder  whose name and address  appear in the
information  preserved  at the  time  by the  Trustee  in  accordance  with  the
provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or
other   communication  which  is  specified  in  such  request  with  reasonable
promptness  after a tender to the  Trustee of the  material  to be mailed and of
payment,  or provision for the payment,  of the reasonable  expenses of mailing,
unless within 5 Business Days after such tender,  the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be  mailed,  a written  statement  to the  effect  that,  in the  opinion of the
Trustee,  such mailing would be contrary to the best interests of the holders of
all  Securities  or  would be in  violation  of  applicable  law.  Such  written
statement  shall specify the basis of such  opinion.  If the  Commission,  after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after  the  entry of an order  sustaining  one or more of such  objections,  the
Commission  shall find,  after notice and opportunity for hearing,  that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee  shall mail  copies of such  material to all such  Securityholders  with
reasonable  promptness  after the entry of such  order and the  renewal  of such
tender;  otherwise  the Trustee  shall be relieved of any  obligation or duty to
such applicants respecting their application.

            (c)...Each and every holder of Securities,  by receiving and holding
the same,  agrees with the Company and the Trustee  that neither the Company nor
the Trustee  nor any paying  agent  shall be held  accountable  by reason of the
disclosure of any such  information as to the names and addresses of the holders
of  Securities  in accordance  with the  provisions  of  subsection  (b) of this
Section 4.02,  regardless of the source from which such information was derived,
and that the  Trustee  shall not be held  accountable  by reason of mailing  any
material pursuant to a request made under said subsection (b).

SECTION 4.03. REPORTS OF THE COMPANY.

            (a)...The  Company  covenants  and agrees to file with the  Trustee,
within 15 Business  Days after the date on which the Company files the same with
the Commission,  copies of the annual reports and of the information,  documents
and other  reports (or copies of such  portions of any of the  foregoing  as the
Commission may from time to time by rules and regulations  prescribe)  which the
Company may be required  to file with the  Commission  pursuant to Section 13 or
Section  15(d) of the  Exchange  Act; or, if the Company is not required to file
information,  documents or reports pursuant to either of such sections,  then to
file  with  the  Trustee  and the  Commission,  in  accordance  with  rules  and
regulations  prescribed  from  time  to  time  by the  Commission,  such  of the
supplementary  and  periodic  information,  documents  and reports  which may be
required  pursuant  to Section 13 of the  Exchange  Act in respect of a security
listed and  registered  on a national  securities  exchange as may be prescribed
from time to time in such rules and regulations.

            (b)...The  Company covenants and agrees to file with the Trustee and
the Commission,  in accordance  with the rules and  regulations  prescribed from
time to time by the  Commission,  such  additional  information,  documents  and
reports  with  respect to  compliance  by the Company  with the  conditions  and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.

            (c)...The  Company  covenants  and agrees to transmit by mail to all
holders of  Securities,  as the names and addresses of such holders  appear upon
the Security Register, within 30 days after the filing thereof with the Trustee,
such summaries of any information, documents and reports required to be filed by
the Company  pursuant to subsections  (a) and (b) of this Section 4.03 as may be
required  by  rules  and  regulations  prescribed  from  time  to  time  by  the
Commission.

            (d)...Delivery  of such  reports,  information  and documents to the
Trustee is for  informational  purposes only and the  Trustee's  receipt of such
shall not constitute constructive notice of any information contained therein or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).

            (e)...So long as is required for an offer or sale of the  Securities
to  qualify  for an  exemption  under Rule 144A under the  Securities  Act,  the
Company shall, upon request,  provide the information  required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Securities  identified by any holder of  Restricted  Securities,  unless such
information  is furnished to the  Commission  pursuant to Section 13 or 15(d) of
the Exchange Act.

SECTION 4.04. REPORTS BY THE TRUSTEE.

            (a)...The  Trustee shall  transmit to  Securityholders  such reports
concerning  the Trustee and its actions under this  Indenture as may be required
pursuant  to the Trust  Indenture  Act at the times and in the  manner  provided
pursuant thereto.  If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall on or before each February 4 following the date of this Indenture,
commencing  February 4, 1999,  deliver to  Securityholders  a brief report which
complies with the provisions of such Section 313(a).

            (b)...A  copy  of  each  such  report  shall,  at the  time  of such
transmission  to  Securityholders,  be  filed by the  Trustee  with  each  stock
exchange,  if any, upon which the Securities are listed, with the Commission and
with the  Company.  The  Company  will  promptly  notify  the  Trustee  when the
Securities are listed on any stock exchange.

                                    ARTICLE V

                 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

SECTION 5.01. EVENTS OF DEFAULT.

            One or more of the following  events of default shall  constitute an
Event of Default  hereunder  (whatever  the reason for such Event of Default and
whether it shall be voluntary or  involuntary or be effected by operation of law
or pursuant to any judgment,  decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

            (a)...default  in the payment of any  interest  upon any Security or
any Other  Debentures  when it becomes due and payable,  and continuance of such
default for a period of 30 days; provided, however, that a valid extension of an
interest  payment period by the Company in accordance  with the terms hereof or,
in the case of any Other Debenture,  the indenture  related  thereto,  shall not
constitute a default in the payment of interest for this purpose; or

            (b)...default  in the payment of all or any part of the principal of
(or premium,  if any, on) any Security or any Other  Debentures  as and when the
same shall  become due and  payable  either at  maturity,  upon  prepayment,  by
declaration of acceleration of maturity or otherwise; or

            (c)...default  in the  performance,  or breach,  of any  covenant or
warranty of the Company in this  Indenture  (other than a covenant or warranty a
default  in whose  performance  or whose  breach is  elsewhere  in this  Section
specifically dealt with), and continuance of such default or breach for a period
of 90 days after there has been given,  by registered or certified  mail, to the
Company by the  Trustee or to the  Company  and the Trustee by the holders of at
least 25% in principal  amount of the  outstanding  Securities a written  notice
specifying  such  default or breach and  requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or

            (d)...a  court having  jurisdiction  in the  premises  shall enter a
decree or order for  relief in respect of the  Company  in an  involuntary  case
under  any  applicable  bankruptcy,  insolvency  or  other  similar  law  now or
hereafter in effect, or appointing a receiver, liquidator,  assignee, custodian,
trustee,   sequestrator  (or  similar   official)  of  the  Company  or  all  or
substantially all of its property,  or ordering the winding-up or liquidation of
its affairs and such decree or order shall  remain  unstayed and in effect for a
period of 90 consecutive days; or

            (e)...the   Company  shall  commence  a  voluntary  case  under  any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking  possession
by a receiver, liquidator, assignee, trustee, custodian,  sequestrator (or other
similar official) of the Company or all or substantially all of its property, or
shall make any general  assignment  for the benefit of creditors,  or shall fail
generally to pay its debts as they become due.

            If an  Event of  Default  with  respect  to  Securities  at the time
outstanding occurs and is continuing, then in every such case the Trustee or the
holders of not less than 25% in principal  amount of the  Securities at the time
outstanding  may declare the  principal  amount of all  Securities to be due and
payable  immediately,  by a notice in writing to the Company (and to the Trustee
if  given  by the  holders  of the  outstanding  Securities),  and upon any such
declaration the same shall become immediately due and payable.

            The foregoing provisions, however, are subject to the condition that
if,  at any time  after  the  principal  of the  Securities  shall  have been so
declared due and  payable,  and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided,  (i)
the Company shall pay or shall deposit with the Trustee a sum  sufficient to pay
(A) all  matured  installments  of  interest  upon  all the  Securities  and the
principal of and  premium,  if any, on any and all  Securities  which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that payment of such interest is enforceable
under applicable law, on overdue  installments of interest,  at the same rate as
the rate of interest  specified in the Securities to the date of such payment or
deposit)  and (B)  such  amount  as  shall be  sufficient  to  cover  reasonable
compensation  to the  Trustee and each  predecessor  Trustee,  their  respective
agents,  attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each  predecessor  Trustee except as a
result of negligence or bad faith,  and (ii) any and all Events of Default under
the Indenture  shall have been cured,  waived or otherwise  remedied as provided
herein,  then, in every such case, the holders of a majority in principal amount
of the Securities at the time outstanding,  by written notice to the Company and
to the Trustee, may rescind and annul such declaration and its consequences, but
no such waiver or rescission  and annulment  shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.

            In case the Trustee shall have  proceeded to enforce any right under
this Indenture and such  proceedings  shall have been  discontinued or abandoned
because of such  rescission  or  annulment or for any other reason or shall have
been  determined  adversely  to the  Trustee,  then and in every  such  case the
Company,  the  Trustee  and the  holders  of the  Securities  shall be  restored
respectively to their several  positions and rights  hereunder,  and all rights,
remedies  and  powers  of the  Company,  the  Trustee  and  the  holders  of the
Securities shall continue as though no such proceeding had been taken.

SECTION 5.02. PAYMENT OF SECURITIES ON DEFAULT; SUIT THEREFOR.

            The Company  covenants that (a) in case default shall be made in the
payment of any  installment  of interest upon any of the  Securities as and when
the same shall become due and payable, and such default shall have continued for
a period of 30 days,  or (b) in case default shall be made in the payment of the
principal of or premium,  if any, on any of the  Securities as and when the same
shall have become due and payable, whether at maturity of the Securities or upon
prepayment or by declaration  of  acceleration  of maturity or otherwise,  then,
upon demand of the Trustee, the Company will pay to the Trustee, for the benefit
of the holders of the  Securities,  the whole amount that then shall have become
due and payable on all such  Securities  for principal  and premium,  if any, or
interest,  or both, as the case may be, with interest upon the overdue principal
and  premium,  if any,  and (to the  extent  that  payment of such  interest  is
enforceable  under  applicable  law  and,  if the  Securities  are held by Orion
Capital Trust II or a trustee of such trust,  without  duplication  of any other
amounts paid by Orion Capital Trust II or a trustee in respect thereof) upon the
overdue  installments of interest at the rate borne by the  Securities;  and, in
addition thereto,  such further amount as shall be sufficient to cover the costs
and expenses of collection,  including a reasonable compensation to the Trustee,
its agents,  attorneys and counsel,  and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith.

            In case the Company  shall fail  forthwith  to pay such amounts upon
such demand,  the Trustee,  in its own name and as trustee of an express  trust,
shall be entitled and empowered to institute any actions or  proceedings  at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding  to judgment or final decree,  and may enforce any
such  judgment or final decree  against the Company or any other  obligor on the
Securities and collect in the manner  provided by law out of the property of the
Company or any other  obligor on the  Securities  wherever  situated  the moneys
adjudged or decreed to be payable.

            In case there shall be pending proceedings for the bankruptcy or for
the  reorganization  of the Company or any other obligor on the Securities under
Title 11, United States Code, or any other applicable law, or in case a receiver
or trustee  shall have been  appointed  for the  property of the Company or such
other obligor, or in the case of any other similar judicial proceedings relative
to the Company or other  obligor  upon the  Securities,  or to the  creditors or
property of the Company or such other  obligor,  the  Trustee,  irrespective  of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand  pursuant to the  provisions  of this  Section  5.02,
shall  be  entitled  and  empowered,  by  intervention  in such  proceedings  or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the  Securities  and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be  necessary  or  advisable  in order to have the claims of the  Trustee
(including  any  claim  for  reasonable  compensation  to the  Trustee  and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities  incurred,  and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad  faith) and of the  Securityholders  allowed  in such  judicial  proceedings
relative  to the  Company  or any other  obligor  on the  Securities,  or to the
creditors or property of the Company or such other obligor, unless prohibited by
applicable  law and  regulations,  to  vote  on  behalf  of the  holders  of the
Securities  in any  election of a trustee or a standby  trustee in  arrangement,
reorganization,  liquidation  or other  bankruptcy or insolvency  proceedings or
person performing  similar functions in comparable  proceedings,  and to collect
and  receive any moneys or other  property  payable or  deliverable  on any such
claims,  and to  distribute  the same after the  deduction  of its  charges  and
expenses; and any receiver,  assignee or trustee in bankruptcy or reorganization
is hereby authorized by each of the Securityholders to make such payments to the
Trustee,  and, in the event that the Trustee shall consent to the making of such
payments directly to the Securityholders,  to pay to the Trustee such amounts as
shall be  sufficient  to cover  reasonable  compensation  to the  Trustee,  each
predecessor Trustee and their respective agents,  attorneys and counsel, and all
other expenses and liabilities  incurred,  and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence or bad faith.

            Nothing herein contained shall be construed to authorize the Trustee
to  authorize  or consent to or accept or adopt on behalf of any  Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities  or the rights of any holder  thereof or to authorize  the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.

            All rights of action and of asserting  claims under this  Indenture,
or under any of the  Securities,  may be  enforced  by the  Trustee  without the
possession of any of the Securities,  or the production  thereof in any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable  benefit of the holders of the
Securities.

            In any proceedings  brought by the Trustee (and also any proceedings
involving the  interpretation  of any  provision of this  Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the  Securities,  and it shall not be  necessary  to make any  holders of the
Securities parties to any such proceedings.

SECTION 5.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE.

            Any moneys  collected  by the Trustee  shall be applied in the order
following,  at the date or dates fixed by the Trustee  for the  distribution  of
such moneys, upon presentation of the Securities in respect of which moneys have
been collected,  and stamping  thereon the payment,  if only partially paid, and
upon surrender thereof if fully paid:

            First:  To the  payment  of all  amounts  due to the  Trustee  under
Section 6.06,  including the costs and expenses of collection  applicable to the
Securities and reasonable compensation to the Trustee, its agents, attorneys and
counsel,  and of all other expenses and liabilities  incurred,  and all advances
made, by the Trustee except as a result of its negligence or bad faith;

            Second: To the payment of all Senior  Indebtedness of the Company if
and to the extent required by Article XV;

            Third:  In case  the  principal  of the  outstanding  Securities  in
respect of which  moneys  have been  collected  shall not have become due and be
unpaid,  to the payment of the amounts then due and unpaid upon  Securities  for
principal of (and premium, if any) and interest on the Securities, in respect of
which or for the benefit of which  money has been  collected,  ratably,  without
preference  of  priority  of any  kind,  according  to the  amounts  due on such
Securities for principal (and premium, if any) and interest, respectively; and

            Fourth:  To the Company.

SECTION 5.04. PROCEEDINGS BY SECURITYHOLDERS.

            No holder of any  Security  shall  have any right by virtue of or by
availing of any  provision of this  Indenture to institute  any suit,  action or
proceeding  in equity or at law upon or under or with respect to this  Indenture
or for the  appointment  of a  receiver  or  trustee,  or for any  other  remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the
Securities  specifying  such Event of Default,  as  hereinbefore  provided,  and
unless  also  the  holders  of not  less  than 25% in  principal  amount  of the
Securities  at the time  outstanding  shall have made  written  request upon the
Trustee to institute such action,  suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable  indemnity as it
may require against the costs,  expenses and liabilities to be incurred  therein
or  thereby,  and the  Trustee  for 60 days after its  receipt  of such  notice,
request and offer of indemnity  shall have failed to institute  any such action,
suit or  proceeding,  and  during  such 60 days the  holders  of a  majority  in
principal  amount  of the  Securities  at the  time  outstanding  do not  give a
direction to the Trustee  inconsistent with the request, it being understood and
intended,  and being  expressly  covenanted  by the  taker  and  holder of every
Security with every other taker and holder and the Trustee,  that no one or more
holders of Securities  shall have any right in any manner  whatever by virtue of
or by  availing  of any  provision  of this  Indenture  to  affect,  disturb  or
prejudice the rights of any other holder of Securities,  or to obtain or seek to
obtain  priority over or preference to any other such holder,  or to enforce any
right under this  Indenture,  except in the manner  herein  provided and for the
equal, ratable and common benefit of all holders of Securities.

            Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any  Security  to receive  payment  of the  principal  of
(premium, if any) and interest on such Security, on or after the same shall have
become due and payable,  or to institute  suit for the  enforcement  of any such
payment,  shall not be impaired  or affected  without the consent of such holder
and by accepting a Security hereunder it is expressly  understood,  intended and
covenanted by the taker and holder of every Security with every other such taker
and holder and the Trustee, that no one or more holders of Securities shall have
any right in any manner  whatsoever by virtue or by availing of any provision of
this Indenture to affect,  disturb or prejudice the rights of the holders of any
other Securities,  or to obtain or seek to obtain priority over or preference to
any other such holder,  or to enforce any right under this Indenture,  except in
the manner herein provided and for the equal,  ratable and common benefit of all
holders of Securities.  For the protection and  enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

            The  Company  and  the  Trustee  acknowledge  that  pursuant  to the
Declaration,   the  holders  of  Capital   Securities   are  entitled,   in  the
circumstances  and subject to the limitations  set forth therein,  to commence a
Direct Action with respect to any Event of Default under this  Indenture and the
Securities.

SECTION 5.05. PROCEEDINGS BY TRUSTEE.

            In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate  judicial  proceedings
as the  Trustee  shall deem most  effectual  to protect  and enforce any of such
rights,  either  by suit in  equity  or by  action  at law or by  proceeding  in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement  contained  in this  Indenture  or in aid of the exercise of any power
granted in this  Indenture,  or to enforce  any other legal or  equitable  right
vested in the Trustee by this Indenture or by law.

SECTION 5.06. REMEDIES CUMULATIVE AND CONTINUING.

            Except as provided in the last paragraph of Section 2.08, all powers
and remedies  given by this  Article V to the Trustee or to the  Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any other  powers and  remedies  available  to the Trustee or the holders of the
Securities,  by judicial proceedings or otherwise, to enforce the performance or
observance  of the  covenants  and  agreements  contained  in this  Indenture or
otherwise  established with respect to the Securities,  and no delay or omission
of the Trustee or of any holder of any of the  Securities  to exercise any right
or power  accruing  upon any  Event  of  Default  occurring  and  continuing  as
aforesaid  shall  impair any such right or power,  or shall be construed to be a
waiver of any such  default  or an  acquiescence  therein;  and,  subject to the
provisions of Section 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and  as  often  as  shall  be  deemed  expedient,  by  the  Trustee  or  by  the
Securityholders.

SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
              MAJORITY OF SECURITYHOLDERS.

            The holders of a majority in principal  amount of the  Securities at
the time outstanding shall have the right to direct the time,  method, and place
of  conducting  any  proceeding  for any remedy  available  to the  Trustee,  or
exercising any trust or power conferred on the Trustee; provided,  however, that
(subject to the  provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such  direction if the Trustee  shall  determine  that the
action so directed would be unjustly  prejudicial to the holders not taking part
in such direction or if the Trustee being advised by counsel determines that the
action or  proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of  directors  or trustees,  executive  committee,  or a
trust  committee of directors or trustees  and/or  Responsible  Officers,  shall
determine  that the action or  proceedings so directed would involve the Trustee
in personal liability. Prior to any declaration accelerating the Stated Maturity
of the  Securities,  the  holders  of a  majority  in  principal  amount  of the
Securities  at the time  outstanding  may on behalf of the holders of all of the
Securities  waive any past  Default  or Event of  Default  and its  consequences
except a Default  (a) in the  payment of  principal  of or  premium,  if any, or
interest on any of the  Securities  or (b) in respect of covenants or provisions
hereof which cannot be modified or amended  without the consent of the holder of
each Security affected;  provided,  however,  that if the Securities are held by
the Property  Trustee,  such waiver or  modification to such waiver shall not be
effective  until the holders of a majority in  aggregate  liquidation  amount of
Trust  Securities  shall have consented to such waiver or  modification  to such
waiver; provided, further, that if the consent of the holder of each outstanding
Security is required,  such waiver  shall not be effective  until each holder of
the Trust Securities shall have consented to such waiver.  Upon any such waiver,
the Default covered thereby shall be deemed to be cured for all purposes of this
Indenture and the Company,  the Trustee and the holders of the Securities  shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any  subsequent or other Default or impair any right
consequent  thereon.  Whenever any Default or Event of Default  hereunder  shall
have been waived as  permitted by this  Section  5.07,  said Default or Event of
Default shall for all purposes of the Securities and this Indenture be deemed to
have been cured and to be not continuing.

SECTION 5.08. NOTICE OF DEFAULTS.

            The Trustee shall,  within 90 days after the occurrence of a Default
with respect to the  Securities  mail to all  Securityholders,  as the names and
addresses  of such  holders  appear upon the  Security  register,  notice of all
Defaults known to the Trustee, unless such Defaults shall have been cured before
the giving of such notice (the term  "Defaults"  for the purpose of this Section
5.08 being hereby  defined to be the events  specified in clauses (a), (b), (c),
(d) and (e) of Section 5.01, not including  periods of grace,  if any,  provided
for  therein,  and  irrespective  of the giving of written  notice  specified in
clause (c) of Section 5.01); and provided that, except in the case of Default in
the payment of the  principal  of or premium,  if any, or interest on any of the
Securities,  the Trustee shall be protected in withholding such notice if and so
long as the board of directors of the Trustee,  the executive committee thereof,
or a trust committee of directors and/or Responsible  Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the  Securityholders;  and provided further,  that in the case of any Default of
the character  specified in Section 5.01(c),  no such notice to  Securityholders
shall be given until at least 60 days after the occurrence  thereof but shall be
given within 90 days after such occurrence.

SECTION 5.09. UNDERTAKING TO PAY COSTS.

            All parties to this Indenture agree, and each holder of any Security
by his acceptance thereof shall be deemed to have agreed,  that any court may in
its discretion  require,  in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as  Trustee,  the filing by any party  litigant in such suit of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess reasonable costs,  including  reasonable  attorneys' fees and
expenses,  against  any party  litigant  in such suit,  having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the  provisions  of this Section 5.09 shall not apply to any suit  instituted by
the  Trustee,  to  any  suit  instituted  by  any  Securityholder  or  group  of
Securityholders  holding in the aggregate  more than 10% in principal  amount of
the Securities outstanding at the time outstanding, or to any suit instituted by
any  Securityholder  for the  enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after the
same shall have become due and payable.

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE

SECTION 6.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE.

            With respect to the holders of the Securities issued hereunder,  the
Trustee,  prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Indenture,  and use the same degree of care and skill in their exercise, as
a prudent man would  exercise or use under the  circumstances  in the conduct of
his own affairs.

            No  provision  of this  Indenture  shall be construed to relieve the
Trustee from liability for its own negligent  action,  its own negligent failure
to act or its own willful misconduct, except that

            (a)...prior  to the  occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:

 ..................(i)  the  duties  and  obligations  of the  Trustee  shall  be
determined solely by the express  provisions of this Indenture,  and the Trustee
shall not be liable except for the performance of such duties and obligations as
are  specifically  set forth in this  Indenture,  and no  implied  covenants  or
obligations shall be read into this Indenture against the Trustee; and

 ..................(ii)  in the absence of bad faith on the part of the  Trustee,
the Trustee may  conclusively  rely, as to the truth of the  statements  and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the  requirements  of this Indenture;
but, in the case of any such  certificates  or opinions  which by any  provision
hereof are  specifically  required to be furnished  to the Trustee,  the Trustee
shall  be under a duty to  examine  the same to  determine  whether  or not they
conform to the requirements of this Indenture;

            (b)...the Trustee shall not be liable for any error of judgment made
in good faith by a  Responsible  Officer or Officers of the  Trustee,  unless it
shall be proved that the Trustee was  negligent in  ascertaining  the  pertinent
facts; and

            (c)...the  Trustee  shall not be liable  with  respect to any action
taken or  omitted  to be  taken  by it in good  faith,  in  accordance  with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture.

            None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise  incur  personal  financial
liability in the  performance  of any of its duties or in the exercise of any of
its rights or powers,  if there is  reasonable  ground  for  believing  that the
repayment of such funds or liability is not  reasonably  assured to it under the
terms  of  this  Indenture  or  adequate  indemnity  against  such  risk  is not
reasonably assured to it.

SECTION 6.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC.

            Except as otherwise provided in Section 6.01:

            (a)...the  Trustee  may rely and  shall be  protected  in  acting or
refraining from acting upon any resolution,  certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, note, debenture or other
paper or  document  believed  by it to be  genuine  and to have  been  signed or
presented by the proper party or parties;

            (b)...any  request,  direction,  order  or  demand  of  the  Company
mentioned  herein may be  sufficiently  evidenced  by an  Officers'  Certificate
(unless other evidence in respect  thereof be herein  specifically  prescribed);
and any Board  Resolution  may be  evidenced  to the  Trustee by a copy  thereof
certified by the Secretary or an Assistant Secretary of the Company;

            (c)...the  Trustee may consult with counsel of its selection and any
advice or  Opinion  of  Counsel  shall be full and  complete  authorization  and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;

            (d)...the  Trustee  shall be under no  obligation to exercise any of
the rights or powers  vested in it by this  Indenture at the  request,  order or
direction  of any of the  Securityholders,  pursuant to the  provisions  of this
Indenture,  unless  such  Securityholders  shall  have  offered  to the  Trustee
reasonable  security or indemnity  against the costs,  expenses and  liabilities
which may be incurred therein or thereby;

            (e)...the  Trustee  shall  not be  liable  for any  action  taken or
omitted by it in good faith and  believed by it to be  authorized  or within the
discretion  or rights or powers  conferred  upon it by this  Indenture;  nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence  of an Event of  Default  (that  has not been  cured or  waived),  to
exercise  such of the rights and powers vested in it by this  Indenture,  and to
use the same degree of care and skill in their exercise,  as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;

            (f)...the Trustee shall not be bound to make any investigation  into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion,  report, notice, request,  consent, order, approval, bond,
debenture,  coupon or other paper or document, unless requested in writing to do
so by the holders of a majority in  principal  amount of the  Securities  at the
time  outstanding;  provided,  however,  that if the payment within a reasonable
time to the Trustee of the costs,  expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this  Indenture,  the Trustee  may require  reasonable  indemnity  against  such
expense or liability as a condition to so proceeding; and

            (g)...the  Trustee may execute any of the trusts or powers hereunder
or  perform  any  duties  hereunder  either  directly  or by or  through  agents
(including any Authenticating Agent) or attorneys,  and the Trustee shall not be
responsible  for any  misconduct  or negligence on the part of any such agent or
attorney appointed by it with due care.

SECTION 6.03. NO RESPONSIBILITY FOR RECITALS, ETC.

            The recitals  contained herein and in the Securities  (except in the
certificate of authentication of the Trustee or the Authenticating  Agent) shall
be  taken  as  the   statements  of  the  Company,   and  the  Trustee  and  the
Authenticating  Agent assume no responsibility  for the correctness of the same.
The  Trustee  and the  Authenticating  Agent make no  representations  as to the
validity or sufficiency of this Indenture or of the Securities.  The Trustee and
the Authenticating  Agent shall not be accountable for the use or application by
the Company of any  Securities or the proceeds of any  Securities  authenticated
and delivered by the Trustee or the Authenticating  Agent in conformity with the
provisions of this Indenture.

SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
              REGISTRAR MAY OWN SECURITIES.

            The Trustee or any  Authenticating  Agent or any paying agent or any
transfer  agent  or any  Security  registrar,  in its  individual  or any  other
capacity,  may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee,  Authenticating Agent, paying agent, transfer
agent or Security registrar.

SECTION 6.05. MONEYS TO BE HELD IN TRUST.

            Subject to the provisions of Section 11.04,  all moneys  received by
the Trustee or any paying agent shall, until used or applied as herein provided,
be held in trust for the purpose for which they were  received,  but need not be
segregated  from other funds  except to the extent  required by law. The Trustee
and any paying  agent  shall be under no  liability  for  interest  on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of  Default  shall  have  occurred  and be  continuing,  all
interest  allowed  on any such  moneys  shall be paid from time to time upon the
written order of the Company,  signed by the Chairman of the Board of Directors,
the President or a Vice President or the Treasurer or an Assistant  Treasurer of
the Company.

SECTION 6.06. COMPENSATION AND EXPENSES OF TRUSTEE.

            The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time,  and the Trustee shall be entitled to, such  compensation  as
shall be agreed to in writing  between the Company and the Trustee  (which shall
not be  limited  by any  provision  of law in  regard to the  compensation  of a
trustee of an express trust),  and the Company will pay or reimburse the Trustee
upon  its  request  for all  reasonable  expenses,  disbursements  and  advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture   (including  the  reasonable   compensation   and  the  expenses  and
disbursements  of its counsel and of all  persons not  regularly  in its employ)
except  any  such  expense,  disbursement  or  advance  as may  arise  from  its
negligence  or bad faith.  The Company also  covenants to indemnify  each of the
Trustee or any  predecessor  Trustee (and its  officers,  agents,  directors and
employees)  for,  and to hold it  harmless  against,  any and all loss,  damage,
claim,  liability  or expense  including  taxes  (other  than taxes based on the
income of the Trustee)  incurred without  negligence or bad faith on the part of
the  Trustee  and  arising  out  of or in  connection  with  the  acceptance  or
administration  of this trust,  including  the costs and  expenses of  defending
itself  against any claim of liability in the premises.  The  obligations of the
Company under this Section 6.06 to  compensate  and indemnify the Trustee and to
pay or reimburse  the Trustee for  expenses,  disbursements  and advances  shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Securities upon all property and funds
held or collected  by the Trustee in its capacity as such,  except funds held in
trust for the benefit of the holders of particular Securities.

            Without prejudice to any other rights available to the Trustee under
applicable  law,  when the  Trustee  incurs  expenses  or  renders  services  in
connection  with an Event of Default  specified  in  Section  5.01(d) or Section
5.01(e),  the expenses  (including  the  reasonable  charges and expenses of its
counsel)  and the  compensation  for the services of the Trustee as provided for
herein  are  intended  to  constitute  expenses  of  administration   under  any
applicable federal or state bankruptcy, insolvency or other similar law.

            The provisions of this Section shall survive the termination of this
Indenture.

SECTION 6.07. OFFICERS' CERTIFICATE AS EVIDENCE.

            Except as otherwise provided in Sections 6.01 and 6.02,  whenever in
the administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action  hereunder,  such matter  (unless other  evidence in respect
thereof is herein specifically  prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee,  be deemed to be  conclusively  proved and
established  by an Officers'  Certificate  delivered  to the  Trustee,  and such
certificate,  in the  absence  of  negligence  or bad  faith  on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.

SECTION 6.08. CONFLICTING INTEREST OF TRUSTEE.

            If the  Trustee  has or shall  acquire  any  "conflicting  interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
the Company shall in all respects  comply with the  provisions of Section 310(b)
of the Trust Indenture Act.

SECTION 6.09. ELIGIBILITY OF TRUSTEE.

            The Trustee hereunder shall at all times be a corporation  organized
and doing  business  under the laws of the United States of America or any state
or territory  thereof or of the District of Columbia or a  corporation  or other
Person permitted to act as trustee by the Commission  authorized under such laws
to exercise corporate trust powers,  having a combined capital and surplus of at
least 50 million  U.S.  dollars  ($50,000,000)  and  subject to  supervision  or
examination by federal, state,  territorial,  or District of Columbia authority.
If such corporation  publishes reports of condition at least annually,  pursuant
to  law  or to  the  requirements  of the  aforesaid  supervising  or  examining
authority,  then for the purposes of this Section 6.09 the combined  capital and
surplus  of such  corporation  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent report of condition so published.

            The  Company  may not,  nor may any Person  directly  or  indirectly
controlling,  controlled by, or under common control with the Company,  serve as
Trustee.

            In case at any time  the  Trustee  shall  cease  to be  eligible  in
accordance  with the  provisions of this Section 6.09,  the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.

SECTION 6.10. RESIGNATION OR REMOVAL OF TRUSTEE.

            (a)...The Trustee,  or any trustee or trustees hereafter  appointed,
may at any time  resign by giving  written  notice  of such  resignation  to the
Company and by mailing  notice thereof to the holders of the Securities at their
addresses as they shall appear on the Security  register.  Upon  receiving  such
notice of resignation, the Company shall promptly appoint a successor trustee or
trustees by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee.  If
no successor trustee shall have been so appointed and have accepted  appointment
within 60 days after the mailing of such notice of  resignation  to the affected
Securityholders,  the  resigning  Trustee may  petition  any court of  competent
jurisdiction for the appointment of a successor  trustee,  or any Securityholder
who has been a bona fide  holder of a  Security  for at least  six  months  may,
subject to the  provisions  of Section 5.09, on behalf of himself and all others
similarly  situated,  petition any such court for the appointment of a successor
trustee.  Such court may  thereupon,  after such notice,  if any, as it may deem
proper and prescribe, appoint a successor trustee.

            (b)...In case at any time any of the following shall occur:

 ..................(i)  the Trustee  shall fail to comply with the  provisions of
Section  6.08  after  written  request   therefor  by  the  Company  or  by  any
Securityholder  who has been a bona fide holder of a Security or Securities  for
at least six months, or

 ..................(ii) the Trustee shall cease to be eligible in accordance with
the  provisions of Section 6.09 and shall fail to resign after  written  request
therefor by the Company or by any such Securityholder, or

 ..................(iii)  the Trustee shall become incapable of acting,  or shall
be  adjudged a bankrupt  or  insolvent,  or a receiver  of the Trustee or of its
property shall be appointed,  or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of  rehabilitation,
conservation or liquidation,

then,  in any such  case,  the  Company  may remove the  Trustee  and  appoint a
successor  trustee  by  written  instrument,  in  duplicate,  one  copy of which
instrument  shall be  delivered  to the  Trustee so removed  and one copy to the
successor  trustee,   or,  subject  to  the  provisions  of  Section  5.09,  any
Securityholder  who has been a bona fide  holder of a Security  for at least six
months may, on behalf of himself and all others similarly situated, petition any
court  of  competent  jurisdiction  for  the  removal  of the  Trustee  and  the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any,  as it may deem proper and  prescribe,  remove the Trustee and appoint a
successor trustee.

            (c)...The   holders  of  a  majority  in  principal  amount  of  the
Securities  at the time  outstanding  may at any time  remove  the  Trustee  and
nominate a successor  trustee,  which  shall be deemed  appointed  as  successor
trustee unless within 10 days after such  nomination the Company objects thereto
or if no successor  trustee shall have been so appointed and shall have accepted
appointment  within 30 days after  such  removal,  in which case the  Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as in
subsection  (a) of this  Section  6.10  provided,  may  petition  any  court  of
competent jurisdiction for an appointment of a successor trustee.

            (d)...Any resignation or removal of the Trustee and appointment of a
successor  trustee  pursuant to any of the provisions of this Section 6.10 shall
become  effective upon  acceptance of  appointment  by the successor  trustee as
provided in Section 6.11.

SECTION 6.11. ACCEPTANCE BY SUCCESSOR TRUSTEE.

            Any  successor  trustee  appointed as provided in Section 6.10 shall
execute,  acknowledge and deliver to the Company and to its predecessor  trustee
an  instrument   accepting  such  appointment   hereunder,   and  thereupon  the
resignation or removal of the retiring  trustee shall become  effective and such
successor  trustee,  without any further act, deed or  conveyance,  shall become
vested with all the rights,  powers,  duties and  obligations of its predecessor
hereunder,  with like  effect as if  originally  named as trustee  herein;  but,
nevertheless, on the written request of the Company or of the successor trustee,
the  trustee  ceasing to act shall,  upon  payment  of any  amounts  then due it
pursuant to the  provisions of Section  6.06,  execute and deliver an instrument
transferring to such successor  trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign,  transfer and deliver to such successor
trustee all property and money held by such retiring  trustee  thereunder.  Upon
request of any such  successor  trustee,  the Company  shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor  trustee all such rights and powers.  Any trustee  ceasing to act
shall, nevertheless,  retain a lien upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the  provisions of
Section 6.06.

            No successor  trustee shall accept  appointment  as provided in this
Section 6.11 unless at the time of such acceptance such successor  trustee shall
be  qualified  under the  provisions  of  Section  6.08 and  eligible  under the
provisions of Section 6.09.

            Upon acceptance of appointment by a successor trustee as provided in
this  Section  6.11,  the Company  shall mail notice of the  succession  of such
trustee  hereunder to the holders of Securities at their addresses as they shall
appear on the Security register. If the Company fails to mail such notice within
10 Business Days after the acceptance of  appointment by the successor  trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.

SECTION 6.12. SUCCESSION BY MERGER, ETC.

            Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the  execution  or filing of any paper or any  further act on the part of any of
the parties hereto.

            In case at the time such  successor to the Trustee  shall succeed to
the  trusts  created  by  this   Indenture  any   Securities   shall  have  been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate  of  authentication  of any  predecessor  trustee,  and deliver such
Securities  so  authenticated;  and in case at that  time any of the  Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities  either in the name of any predecessor  hereunder or in the name
of the successor trustee; and in all such cases such certificates shall have the
full force which the  Securities or this Indenture  elsewhere  provides that the
certificate  of the Trustee  shall have;  provided,  however,  that the right to
adopt  the  certificate  of  authentication   of  any  predecessor   Trustee  or
authenticate  Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.

SECTION 6.13. LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR.

            The Trustee shall comply with Section 311(a) of the Trust  Indenture
Act,  excluding  any creditor  relationship  described in Section  311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.

SECTION 6.14. AUTHENTICATING AGENTS.

            There  may be one or more  Authenticating  Agents  appointed  by the
Trustee  upon the  request  of the  Company  with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities issued
upon exchange or  registration  of transfer  thereof as fully to all intents and
purposes as though any such Authenticating  Agent had been expressly  authorized
to authenticate and deliver Securities; provided, that the Trustee shall have no
liability to the Company for any acts or omissions of the  Authenticating  Agent
with  respect  to the  authentication  and  delivery  of  Securities.  Any  such
Authenticating  Agent shall at all times be a  corporation  organized  and doing
business  under  the laws of the  United  States  or of any  state or  territory
thereof or of the  District  of  Columbia  authorized  under such laws to act as
Authenticating  Agent,  having  a  combined  capital  and  surplus  of at  least
$50,000,000  and being subject to supervision or examination by federal,  state,
territorial or District of Columbia  authority.  If such  corporation  publishes
reports of condition at least annually  pursuant to law or the  requirements  of
such authority,  then for the purposes of this Section 6.14 the combined capital
and surplus of such  corporation  shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.  If at
any time an  Authenticating  Agent shall cease to be eligible in accordance with
the  provisions of this Section,  it shall resign  immediately in the manner and
with the effect herein specified in this Section.

            Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  consolidation or conversion to which any Authenticating  Agent
shall be a party, or any corporation  succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder,  if such  successor  corporation  is  otherwise  eligible  under this
Section 6.14 without the  execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.

            Any  Authenticating  Agent may at any time resign by giving  written
notice of resignation to the Trustee and to the Company.  The Trustee may at any
time terminate the agency of any  Authenticating  Agent by giving written notice
of termination to such Authenticating  Agent and to the Company.  Upon receiving
such a notice of resignation or upon such a termination,  or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee  may,  and upon the request of the  Company  shall,  promptly  appoint a
successor  Authenticating  Agent  eligible  under this Section 6.14,  shall give
written notice of such  appointment to the Company and shall mail notice of such
appointment  to all  Securityholders  as the names and addresses of such holders
appear  on the  Security  Register.  Any  successor  Authenticating  Agent  upon
acceptance  of its  appointment  hereunder  shall become vested with all rights,
powers,  duties and  responsibilities  of its predecessor  hereunder,  with like
effect as if originally named as Authenticating Agent herein.

            The Company, as borrower,  agrees to pay to any Authenticating Agent
from time to time reasonable  compensation for its services.  Any Authenticating
Agent shall have no  responsibility  or liability  for any action taken by it as
such in accordance with the directions of the Trustee.

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

SECTION 7.01. ACTION BY SECURITYHOLDERS.

            Whenever  in this  Indenture  it is  provided  that the holders of a
specified  percentage  in  principal  amount  of  the  Securities  at  the  time
outstanding may take any action  (including the making of any demand or request,
the giving of any notice,  consent or waiver or the taking of any other  action)
the fact  that at the  time of  taking  any  such  action  the  holders  of such
specified  percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments  of similar tenor executed by such  Securityholders
in person or by agent or proxy  appointed  in  writing,  or (b) by the record of
such  holders  of  Securities  voting in favor  thereof  at any  meeting of such
Securityholders  duly  called  and held in  accordance  with the  provisions  of
Article VIII, or (c) by a combination of such  instrument or instruments and any
such record of such a meeting of such Securityholders.

            If the Company shall solicit from the  Securityholders  any request,
demand,  authorization,  direction, notice, consent, waiver or other action, the
Company may, at its option,  as evidenced  by an Officers'  Certificate,  fix in
advance a record date for the determination of Securityholders  entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company shall have no obligation to do so. If such a record date
is fixed,  such request,  demand,  authorization,  direction,  notice,  consent,
waiver or other action may be given  before or after the record  date,  but only
the  Securityholders of record at the close of business on the record date shall
be  deemed  to be  Securityholders  for  the  purposes  of  determining  whether
Securityholders  of the requisite  proportion  of  outstanding  Securities  have
authorized  or agreed  or  consented  to such  request,  demand,  authorization,
direction,  notice,  consent,  waiver or other action,  and for that purpose the
outstanding  Securities  shall be  computed  as of the  record  date;  provided,
however,   that  no  such   authorization,   agreement   or   consent   by  such
Securityholders  on the record  date shall be deemed  effective  unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

SECTION 7.02. PROOF OF EXECUTION BY SECURITYHOLDERS.

            Subject to the provisions of Section 6.01,  6.02 and 8.05,  proof of
the execution of any instrument by a Securityholder  or his agent or proxy shall
be sufficient if made in accordance with such  reasonable  rules and regulations
as may be prescribed  by the Trustee or in such manner as shall be  satisfactory
to the  Trustee.  The  ownership of  Securities  shall be proved by the Security
Register or by a certificate of the Security registrar.  The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.

            The record of any  Securityholders'  meeting  shall be proved in the
manner provided in Section 8.06.

SECTION 7.03. WHO ARE DEEMED ABSOLUTE OWNERS.

            Prior  to  due  presentment  for  registration  of  transfer  of any
Security,  the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Security  registrar may deem the person in whose name
such  Security  shall be  registered  upon the Security  Register to be, and may
treat him as, the absolute owner of such Security  (whether or not such Security
shall be overdue) for the purpose of  receiving  payment of or on account of the
principal of and premium, if any, and, subject to Section 2.06, interest on such
Security and for all other purposes; and neither the Company nor the Trustee nor
any  Authenticating  Agent nor any paying agent nor any  transfer  agent nor any
Security  registrar  shall be affected by any notice to the  contrary.  All such
payments  so made to any holder  for the time  being or upon his order  shall be
valid,  and, to the extent of the sum or sums so paid,  effectual to satisfy and
discharge the liability for moneys payable upon any such Security.

SECTION 7.04. SECURITIES OWNED BY COMPANY DEEMED NOT OUTSTANDING.

            In determining whether the holders of the requisite principal amount
of Securities at the time outstanding  have concurred in any direction,  consent
or waiver under this Indenture, Securities which are owned by the Company or any
other  obligor  on  the  Securities  or by any  person  directly  or  indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities  shall be disregarded  and deemed
not to be outstanding for the purpose of any such  determination;  provided that
for the  purposes  of  determining  whether the Trustee  shall be  protected  in
relying on any such  direction,  consent or waiver,  only  Securities  which the
Trustee actually knows are so owned shall be so disregarded. Securities so owned
which have been  pledged in good faith may be  regarded as  outstanding  for the
purposes of this Section 7.04 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's  right to vote such Securities and that the pledgee
is not the Company or any such other  obligor or person  directly or  indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other  obligor.  In the case of a dispute as to such  right,
any  decision  by the  Trustee  taken upon the  advice of counsel  shall be full
protection to the Trustee.

SECTION 7.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND.

            At any time prior to (but not after) the  evidencing to the Trustee,
as provided in Section  7.01,  of the taking of any action by the holders of the
percentage  in  principal  amount  of the  Securities  at the  time  outstanding
specified in this  Indenture  in  connection  with such action,  any holder of a
Security (or any Security issued in whole or in part in exchange or substitution
therefor)  the serial number of which is shown by the evidence to be included in
the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee at the principal  office of the Trustee and upon
proof of holding as  provided  in Section  7.02,  revoke  such  action so far as
concerns such Security (or so far as concerns the principal  amount  represented
by any exchanged or substituted  Security).  Except as aforesaid any such action
taken by the holder of any Security  shall be  conclusive  and binding upon such
holder  and upon all future  holders  and  owners of such  Security,  and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any  notation in regard  thereto is made upon such  Security or any Security
issued in exchange or substitution therefor.

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

SECTION 8.01. PURPOSE OF MEETINGS.

            A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the following
purposes:

            (a)...to  give any notice to the  Company or to the  Trustee,  or to
give any directions to the Trustee,  or to consent to the waiving of any Default
hereunder  and its  consequences,  or to take any other action  authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;

            (b)...to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VI;

            (c)...to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or

            (d)...to  take  any  other  action  authorized  to be taken by or on
behalf of the holders of any specified  principal  amount of such  Securities at
the time  outstanding  under  any other  provision  of this  Indenture  or under
applicable law.

SECTION 8.02. CALL OF MEETINGS BY TRUSTEE.

            The  Trustee  may at any time call a meeting of  Securityholders  to
take any action  specified in Section  8.01, to be held at such time and at such
place in the Borough of  Manhattan,  The City of New York,  as the Trustee shall
determine.  Notice of every  meeting of the  Securityholders,  setting forth the
time and the place of such meeting and in general  terms the action  proposed to
be taken at such  meeting,  shall be mailed to  holders of  Securities  at their
addresses as they shall appear on the Securities Register.  Such notice shall be
mailed  not less than 20 nor more than 180 days  prior to the date fixed for the
meeting.

SECTION 8.03. CALL OF MEETINGS BY COMPANY OR SECURITYHOLDERS.

            In case at any time the  Company  pursuant  to a  resolution  of the
Board of  Directors,  or the holders of at least 10% in principal  amount of the
Securities at the time  outstanding,  shall have requested the Trustee to call a
meeting of  Securityholders,  by written  request  setting  forth in  reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have  mailed the  notice of such  meeting  within 20 days after  receipt of such
request, then the Company or such Securityholders may determine the time and the
place in the Borough of Manhattan, The City of New York for such meeting and may
call such  meeting to take any action  authorized  in Section  8.01,  by mailing
notice thereof as provided in Section 8.02.

SECTION 8.04. QUALIFICATIONS FOR VOTING.

            To be entitled to vote at any  meeting of  Securityholders  a Person
shall (a) be a holder of one or more Securities or (b) a Person  appointed by an
instrument in writing as proxy by a holder of one or more  Securities.  The only
Persons  who shall be  entitled  to be  present  or to speak at any  meeting  of
Securityholders  shall be the Persons entitled to vote at such meeting and their
counsel  and  any  representatives  of the  Trustee  and  its  counsel  and  any
representatives of the Company and its counsel.

SECTION 8.05. REGULATIONS.

            (a)...Notwithstanding  any other  provisions of this Indenture,  the
Trustee may make such  reasonable  regulations  as it may deem advisable for any
meeting of Securityholders,  in regard to proof of the holding of Securities and
of the  appointment of proxies,  and in regard to the  appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other  evidence  of the right to vote,  and such other  matters  concerning  the
conduct of the meeting as it shall think fit.

            (b)...The  Trustee  shall,  by an instrument  in writing,  appoint a
temporary chairman of the meeting,  unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary  chairman.  A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

            (c)...Subject to the provisions of Section 8.04, at any meeting each
holder of  Securities or proxy  therefor  shall be entitled to one vote for each
$1,000  principal  amount of Securities  held or represented  by him;  provided,
however,  that no vote shall be cast or counted at any meeting in respect of any
Security  challenged as not outstanding and ruled by the chairman of the meeting
to be not  outstanding.  The chairman of the meeting shall have no right to vote
other  than by virtue of  Securities  held by him or  instruments  in writing as
aforesaid  duly  designating  him as the  Person  to vote  on  behalf  of  other
Securityholders.  Any meeting of  Securityholders  duly  called  pursuant to the
provisions  of  Section  8.02 or 8.03 may be  adjourned  from  time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

            (d)...The Persons entitled to vote a majority in principal amount of
the outstanding Securities shall constitute a quorum for a meeting of holders of
Securities; provided, however, that if any action is to be taken at such meeting
with  respect to a consent,  waiver,  request,  demand,  notice,  authorization,
direction  or other  action which may be given by the holders of not less than a
specified  percentage in principal  amount of the  outstanding  Securities,  the
Persons holding or representing such specified percentage in principal amount of
the outstanding  Securities will constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of holders of Securities,  be dissolved. In any other
case the  meeting  may be  adjourned  for a period  of not less  than 10 days as
determined  by the  chairman of the  meeting  prior to the  adjournment  of such
meeting.  In the  absence  of a  quorum  at any  such  adjourned  meeting,  such
adjourned meeting may be further adjourned for a period of not less than 10 days
as  determined  by the  chairman of the meeting  prior the  adjournment  of such
adjourned  meeting.  Notice of the reconvening of any adjourned meeting shall be
given as  provided in Section  8.02,  except that such notice need be given only
once not less than five days prior the date on which the meeting is scheduled to
be reconvened.  Notice of the  reconvening  of an adjourned  meeting shall state
expressly the  percentage,  as provided  above,  of the principal  amount of the
outstanding Securities which shall constitute a quorum.

            (e)...Except  as limited by the first proviso to the first paragraph
of Section 9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened  at which a quorum is  present  as  aforesaid  may be  adopted by the
affirmative  vote of the  holders  of a  majority  in  principal  amount  of the
outstanding Securities;  provided, however, that, except as limited by the first
proviso to the first  paragraph of Section 9.02, any resolution  with respect to
any consent, waiver, request, demand, notice, authorization,  direction or other
action which this  Indenture  expressly  provides may be given by the holders of
not less than a specified  percentage  in  principal  amount of the  outstanding
Securities may be adopted at a meeting or an adjourned  meeting duly  reconvened
and at which a quorum is present as aforesaid  only by the  affirmative  vote of
the holders of not less than such  specified  percentage in principal  amount of
the outstanding Securities.

            (f)...Any  resolution  passed or  decision  taken at any  meeting of
holders of Securities duly held in accordance with this Section shall be binding
on all the holders of Securities  whether or not present or  represented  at the
meeting.

SECTION 8.06. VOTING.

            The vote upon any resolution  submitted to any meeting of holders of
Securities  shall be by  written  ballots  on  which  shall  be  subscribed  the
signatures of such holders or of their  representatives  by proxy and the serial
number or numbers of the  Securities  held or represented by them. The permanent
chairman of the meeting  shall  appoint two  inspectors of votes who shall count
all votes cast at the meeting for or against any  resolution  and who shall make
and file with the secretary of the meeting  their  verified  written  reports in
triplicate  of all  votes  cast at the  meeting.  A record in  duplicate  of the
proceedings  of  each  meeting  of  Securityholders  shall  be  prepared  by the
secretary of the meeting and there shall be attached to said record the original
reports  of the  inspectors  of votes on any vote by ballot  taken  thereat  and
affidavits by one or more persons having  knowledge of the facts setting forth a
copy of the notice of the  meeting  and  showing  that said notice was mailed as
provided  in  Section  8.02.  The record  shall  show the serial  numbers of the
Securities  voting in favor of or against any  resolution.  The record  shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates  shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.  The holders of the Initial Securities
and the Exchange Securities shall vote for all purposes as a single class.

            Any record so signed and verified  shall be  conclusive  evidence of
the matters therein stated.

                                   ARTICLE IX

                                   AMENDMENTS

SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.

            The  Company  and the  Trustee may from time to time and at any time
amend this  Indenture,  without the consent of the  Securityholders,  for one or
more of the following purposes:

            (a)...to  evidence  the  succession  of another  corporation  to the
Company,  or  successive  successions,  and  the  assumption  by  the  successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article X hereof;

            (b)...to add to the covenants of the Company such further covenants,
restrictions  or conditions  for the  protection of the  Securityholders  as the
Board of Directors  and the Trustee shall  consider to be for the  protection of
the  Securityholders,  and  to  make  the  occurrence,  or  the  occurrence  and
continuance,  of a Default in any of such additional covenants,  restrictions or
conditions a Default or an Event of Default permitting the enforcement of all or
any of the remedies  provided in this  Indenture as herein set forth;  provided,
however,  that in  respect  of any  such  additional  covenant,  restriction  or
condition,  such  amendment  may provide for a particular  period of grace after
Default  (which period may be shorter or longer than that allowed in the case of
other Defaults) or may provide for an immediate enforcement upon such Default or
may limit the remedies available to the Trustee upon such Default;

            (c)...to provide for the issuance under this Indenture of Securities
in  coupon  form if  allowed  by law  (including  Securities  registrable  as to
principal only) and to provide for  exchangeability  of such Securities with the
Securities issued hereunder in fully registered form and to make all appropriate
changes for such purpose;

            (d)...to  cure  any  ambiguity  or  to  correct  or  supplement  any
provision  contained  herein  or in  any  supplemental  indenture  which  may be
defective or inconsistent  with any other provision  contained  herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture;  provided that any such action shall not
materially adversely affect the interests of the holders of the Securities;

            (e)...to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;

            (f)...to  make  provision  for transfer  procedures,  certification,
book-entry provisions,  the form of restricted securities legends, if any, to be
placed on Securities, and all other matters required pursuant to Section 2.07 or
otherwise necessary, desirable or appropriate in connection with the issuance of
Securities to holders of Capital  Securities in the event of a  distribution  of
Securities by Orion Capital Trust II following a Dissolution Event;

            (g)...to qualify or maintain qualification of this Indenture
under the Trust Indenture Act; or

            (h)...to make any change that does not  adversely  affect the rights
of any Securityholder in any material respect.

            The  Trustee is hereby  authorized  to join with the  Company in the
execution of any  supplemental  indenture to effect such amendment,  to make any
further  appropriate  agreements and stipulations which may be therein contained
and  to  accept  the  conveyance,   transfer  and  assignment  of  any  property
thereunder,  but  the  Trustee  shall  not  be  obligated  to,  but  may  in its
discretion,  enter  into any  such  supplemental  indenture  which  affects  the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

            Any amendment to this Indenture authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee  without the consent
of the holders of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 9.02.

SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS.

            (a)...With  the consent  (evidenced  as provided in Section 7.01) of
the  holders of a majority in  principal  amount of the  Securities  at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time amend this  Indenture  for the  purpose of
adding any  provisions  to or changing in any manner or  eliminating  any of the
provisions  of this  Indenture  or of  modifying in any manner the rights of the
holders of the  Securities;  provided,  however,  that no such  amendment  shall
without  the  consent  of the  holders of each  Security  then  outstanding  and
affected  hereby (i) extend the Stated  Maturity of any Security,  or reduce the
rate or extend the time of payment of interest  thereon  (except as contemplated
by Article XVI), or reduce the principal  amount  thereof,  or reduce any amount
payable on prepayment  thereof, or make the principal thereof or any interest or
premium  thereon payable in any coin or currency other than that provided in the
Securities,  or impair or affect the right of any  Securityholder  to  institute
suit for payment thereof, or (ii) reduce the aforesaid  percentage of Securities
the  holders of which are  required  to consent  to any such  amendment  to this
Indenture;  provided,  however, that if the Securities are held by Orion Capital
Trust II, such amendment  shall not be effective until the holders of a majority
in  liquidation  amount  of  Trust  Securities  shall  have  consented  to  such
amendment;  provided,  further,  that  if the  consent  of the  holder  of  each
outstanding  Security is required,  such amendment  shall not be effective until
each holder of the Trust Securities shall have consented to such amendment.

            (b)...Upon  the  request of the Company  accompanied  by a copy of a
resolution  of the Board of Directors  certified  by its  Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture affecting such
amendment,  and upon the filing  with the  Trustee of evidence of the consent of
Securityholders  as  aforesaid,  the Trustee  shall join with the Company in the
execution of such  supplemental  indenture  unless such  supplemental  indenture
affects the Trustee's own rights,  duties or immunities  under this Indenture or
otherwise,  in which case the  Trustee may in its  discretion,  but shall not be
obligated to, enter into such supplemental indenture.

            (c)...Promptly after the execution by the Company and the Trustee of
any  supplemental  indenture  pursuant to the  provisions of this  Section,  the
Trustee shall transmit by mail, first class postage prepaid, a notice,  prepared
by  the  Company,   setting  forth  in  general  terms  the  substance  of  such
supplemental  indenture,  to the  Securityholders  as their names and  addresses
appear  upon the  Security  Register.  Any  failure of the  Trustee to mail such
notice, or any defect therein,  shall not, however,  in any way impair or affect
the validity of any such supplemental indenture.

            (d)...It   shall  not  be   necessary   for  the   consent   of  the
Securityholders  under this Section 9.02 to approve the  particular  form of any
proposed  supplemental  indenture,  but it shall be  sufficient  if such consent
shall approve the substance thereof.

SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL
              INDENTURES.

            Any supplemental  indenture  executed  pursuant to the provisions of
this Article IX shall comply with the Trust Indenture Act. Upon the execution of
any supplemental  indenture  pursuant to the provisions of this Article IX, this
Indenture  shall be and be deemed  to be  modified  and  amended  in  accordance
therewith and the respective rights, limitations of rights, obligations,  duties
and immunities under this Indenture of the Trustee,  the Company and the holders
of Securities shall thereafter be determined,  exercised and enforced hereunder,
subject in all respects to such modifications and amendments,  and all the terms
and conditions of any such  supplemental  indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.04. NOTATION ON SECURITIES.

            Securities  authenticated  and delivered  after the execution of any
supplemental  indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form  approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine,  new  Securities so modified as to conform,  in the opinion of the
Trustee  and the  Board of  Directors,  to any  modification  of this  Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company,  authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.

SECTION 9.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
              FURNISHED TRUSTEE.

            (a)...The  Trustee,  subject to the  provisions of Sections 6.01 and
6.02,  may  receive  an  Officers'  Certificate  and an  Opinion  of  Counsel as
conclusive  evidence that any supplemental  indenture  executed  pursuant hereto
complies with the requirements of this Article IX.

            (b)...The  Trustee may  receive an Opinion of Counsel as  conclusive
evidence that any supplemental  indenture  executed  pursuant to this Article is
authorized  or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof.

                                    ARTICLE X

              CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 10.01.    COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.

            Nothing  contained  in this  Indenture  or in any of the  Securities
shall prevent any  consolidation or merger of the Company with or into any other
Person  (whether or not  affiliated  with the  Company,  as the case may be), or
successive  consolidations  or mergers in which the Company or its  successor or
successors shall be a party or parties,  or shall prevent any sale,  conveyance,
transfer or lease of the property of the Company or its  successor or successors
as an entirety, or substantially as an entirety, to any other Person (whether or
not affiliated  with the Company or its successor or  successors)  authorized to
acquire and operate the same;  provided,  that (a) the Company is the  surviving
Person or the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale,  conveyance,  transfer
or lease of property is made is a Person  organized and existing  under the laws
of the United States or any State  thereof or the District of Columbia,  and (b)
upon any such consolidation,  merger, sale,  conveyance,  transfer or lease, the
due and punctual payment of the principal of (and premium,  if any) and interest
on the Securities  according to their tenor and the due and punctual performance
and  observance of all the covenants and conditions of this Indenture to be kept
or  performed  by the  Company  shall  be  expressly  assumed,  by  supplemental
indenture  (which shall conform to the provisions of the Trust Indenture Act, as
then in effect)  satisfactory  in form to the Trustee  executed and delivered to
the  Trustee  by the  Person  formed by such  consolidation,  or into  which the
Company shall have been merged,  or by the Person which shall have acquired such
property,  and (c) after  giving  effect to such  consolidation,  merger,  sale,
conveyance,  transfer  or lease,  no  Default  or Event of  Default  shall  have
occurred and be continuing.

SECTION 10.02.    SUCCESSOR CORPORATION TO BE SUBSTITUTED FOR COMPANY.

            In case of any such  consolidation,  merger,  conveyance or transfer
and upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and  satisfactory  in form to the Trustee,
of the due and punctual  payment of the principal of (and  premium,  if any) and
interest  on all of the  Securities  and the due and  punctual  performance  and
observance  of all of the  covenants  and  conditions  of this  Indenture  to be
performed or observed by the Company, such successor Person shall succeed to and
be  substituted  for the  Company,  with the same effect as if it had been named
herein  as the party of the  first  part,  and the  Company  thereupon  shall be
relieved  of  any  further  liability  or  obligation   hereunder  or  upon  the
Securities.  Such  successor  Person  thereupon may cause to be signed,  and may
issue either in its own name or in the name of Orion Capital Corporation, any or
all of the Securities  issuable  hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating  Agent;
and, upon the order of such successor  Person instead of the Company and subject
to all the terms,  conditions and limitations in this Indenture prescribed,  the
Trustee  or  the  Authenticating   Agent  shall  authenticate  and  deliver  any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee or the  Authenticating  Agent for  authentication,
and any Securities  which such  successor  Person  thereafter  shall cause to be
signed  and  delivered  to the  Trustee  or the  Authenticating  Agent  for that
purpose.  All the Securities so issued shall in all respects have the same legal
rank  and  benefit  under  this  Indenture  as  the  Securities  theretofore  or
thereafter  issued in accordance  with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.

SECTION 10.03.    OPINION OF COUNSEL TO BE GIVEN TRUSTEE.

            The Trustee,  subject to the  provisions  of Sections 6.01 and 6.02,
may receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale,  conveyance,  transfer or lease, and any assumption,  permitted or
required by the terms of this Article X,  complies  with the  provisions of this
Article X.

                                   ARTICLE XI

                   SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 11.01.    DISCHARGE OF INDENTURE.

            When (a) the Company shall  deliver to the Trustee for  cancellation
all Securities theretofore  authenticated (other than any Securities which shall
have been  destroyed,  lost or stolen and which shall have been replaced or paid
as  provided  in Section  2.08) and not  theretofore  cancelled,  or (b) all the
Securities   not   theretofore   cancelled  or  delivered  to  the  Trustee  for
cancellation shall have become due and payable,  or are by their terms to become
due and payable  within one year or are to be called for  prepayment  within one
year under arrangements  satisfactory to the Trustee for the giving of notice of
prepayment,  and the Company  shall  deposit with the Trustee,  in trust,  funds
sufficient  to  pay  on  the  Stated  Maturity  or  upon  prepayment  all of the
Securities  (other than any Securities which shall have been destroyed,  lost or
stolen and which shall have been  replaced or paid as provided in Section  2.08)
not  theretofore  cancelled  or  delivered  to  the  Trustee  for  cancellation,
including  principal (and premium,  if any) and interest due or to become due to
the Stated  Maturity  or  prepayment  date,  as the case may be, but  excluding,
however,  the amount of any moneys for the payment of principal (or premium,  if
any) or  interest on the  Securities  (1)  theretofore  repaid to the Company in
accordance  with the provisions of Section 11.04, or (2) paid to any State or to
the District of Columbia pursuant to its unclaimed property or similar laws, and
if in either case the Company  shall also pay or cause to be paid all other sums
payable  hereunder  by the  Company,  then this  Indenture  shall cease to be of
further  effect except for the provisions of Sections 2.02,  2.07,  2.08,  3.01,
3.02,  3.04,  6.06,  6.10 and 11.04  hereof,  which  shall  survive  until  such
Securities shall mature and be paid.  Thereafter,  Sections 6.06, 6.10 and 11.04
shall  survive,  and the Trustee,  on demand of the Company  accompanied  by any
Officers'  Certificate  and an  Opinion  of  Counsel,  to the  effect  that  all
conditions  to the  satisfaction  and  discharge  of this  Indenture  have  been
satisfied,  and at the cost and expense of the  Company,  shall  execute  proper
instruments  acknowledging  satisfaction of and discharging this Indenture,  the
Company,  however,  hereby  agreeing to  reimburse  the Trustee for any costs or
expenses  thereafter   reasonably  and  properly  incurred  by  the  Trustee  in
connection with this Indenture or the Securities.

SECTION 11.02. DEPOSITED MONEYS AND U.S. GOVERNMENT OBLIGATIONS TO BE
               HELD IN TRUST BY TRUSTEE.                      _

            Subject  to the  provisions  of Section  11.04,  all moneys and U.S.
Government  Obligations deposited with the Trustee pursuant to Sections 11.01 or
11.05 shall be held in trust and applied by it to the payment,  either  directly
or through any paying agent  (including  the Company if acting as its own paying
agent),  to the holders of the  particular  Securities  for the payment of which
such moneys or U.S. Government Obligations have been deposited with the Trustee,
of all sums due and to become due thereon for  principal  (premium,  if any) and
interest.

            The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S.  Government  Obligations
deposited  pursuant to Section 11.05 or the  principal and interest  received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.

SECTION 11.03.    PAYING AGENT TO REPAY MONEYS HELD.

            Upon the  satisfaction  and  discharge of this  Indenture all moneys
then held by any paying agent of the Securities  (other than the Trustee) shall,
upon written demand of the Company, be repaid to it or paid to the Trustee,  and
thereupon  such paying agent shall be released from all further  liability  with
respect to such moneys.

SECTION 11.04.    RETURN OF UNCLAIMED MONEYS.

            Any moneys deposited with or paid to the Trustee or any paying agent
for  payment  of the  principal  of (or  premium,  if any,  on) or  interest  on
Securities and not applied but remaining  unclaimed by the holders of Securities
for two years after the date upon which the  principal of (or  premium,  if any,
on) or interest on such  Securities,  as the case may be,  shall have become due
and payable,  shall be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
and all  liability  of the  Trustee or such  paying  agent with  respect to such
moneys shall thereupon cease.

SECTION 11.05.    DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S. GOVERNMENT
                  OBLIGATIONS.

            The  Company  shall be deemed to have been  Discharged  (as  defined
below) from its  obligations  with  respect to the  Securities  on the 123rd day
after the applicable conditions set forth below have been satisfied with respect
to the Securities:

            (a) The  Company  shall  have  deposited  or caused to be  deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as trust
funds in trust,  specifically  pledged as security for, and dedicated solely to,
the benefit of the  holders of the  Securities  (i) money in an amount,  or (ii)
U.S. Government  Obligations which through the payment of interest and principal
in respect thereof in accordance  with their terms will provide,  not later than
one  Business  Day before the due date of any  payment,  money in an amount,  or
(iii) a combination of (i) and (ii), sufficient, in the opinion (with respect to
(ii)  and  (iii))  of  a  nationally   recognized  firm  of  independent  public
accountants  expressed  in a  written  certification  thereof  delivered  to the
Trustee and the Defeasance  Agent, if any, to pay and discharge each installment
of principal of (and premium, if any) and interest on the outstanding Securities
on the dates such installments of principal, premium or interest are due;

            (b) if the  Securities  are then listed on any  national  securities
exchange,  the Company  shall have  delivered to the Trustee and the  Defeasance
Agent,  if any,  an Opinion of Counsel to the effect  that the  exercise  of the
option under this Section  11.05 would not cause such  Securities to be delisted
from such exchange;

            (c) no Default or Event of Default  with  respect to the  Securities
shall have occurred and be continuing on the date of such deposit; and

            (d)  the  Company  shall  have  delivered  to the  Trustee  and  the
Defeasance  Agent,  if any, an Opinion of Counsel to the effect that  holders of
the Securities will not recognize income, gain or loss for United States federal
income tax purposes as a result of the exercise of the option under this Section
11.05 and will be subject to United States federal income tax in the same amount
and in the same manner and at the same times as would have been the case if such
option  had not been  exercised,  and such  opinion  shall be  accompanied  by a
private  letter ruling to that effect  received from the United States  Internal
Revenue  Service  or a  revenue  ruling  pertaining  to  a  comparable  form  of
transaction  to that effect  published  by the United  States  Internal  Revenue
Service.

            "Discharged" means that the Company shall be deemed to have paid and
discharged  the entire  indebtedness  represented  by the Securities and to have
satisfied all the  obligations  under this Indenture  relating to the Securities
(and  the  Trustee,  at  the  expense  of  the  Company,  shall  execute  proper
instruments  acknowledging  the  same),  except  (A) the  rights of  holders  of
Securities  to  receive,  from the trust  fund  described  in clause  (1) above,
payment  of the  principal  of (and  premium,  if any) and the  interest  on the
Securities  when such  payments  are due;  (B) the  Company's  obligations  with
respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.

            "Defeasance  Agent" means  another  financial  institution  which is
eligible to act as Trustee hereunder and which assumes all of the obligations of
the Trustee necessary to enable the Trustee to act hereunder.  In the event such
a  Defeasance  Agent  is  appointed  pursuant  to this  Section,  the  following
conditions shall apply:

            (a) The  Trustee  shall  have  approval  rights  over  the  document
appointing such Defeasance  Agent and the document setting forth such Defeasance
Agent's rights and responsibilities; and

            (b) The Defeasance  Agent shall provide  verification to the Trustee
acknowledging receipt of sufficient money and/or U.S. Government  Obligations to
meet the applicable conditions set forth in this Section 11.05.

SECTION 11.06.    REINSTATEMENT.

            If the Trustee or any Defeasance  Agent is unable to apply any money
in accordance with Section 11.05 by reason of any legal  proceeding or by reason
of any order or  judgment  of any  court or  governmental  authority  enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this  Indenture  and the  Securities  shall be revived and  reinstated  as
though no deposit had occurred  pursuant to Section ll.05 until such time as the
Trustee  or any  Defeasance  Agent  is  permitted  to apply  all  such  money in
accordance with Section 11.05.

                                   ARTICLE XII

                   IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

SECTION 12.01.    INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS.

            No recourse for the payment of the principal of (or premium, if any)
or interest on any  Security,  or for any claim based  thereon or  otherwise  in
respect  thereof,  and no  recourse  under or upon any  obligation,  covenant or
agreement of the Company in this  Indenture,  or in any Security,  or because of
the creation of any indebtedness  represented thereby,  shall be had against any
incorporator,  stockholder,  officer  or  director,  as such,  past,  present or
future,  of the  Company  or of any  successor  Person  to the  Company,  either
directly or through the Company, any constitution, statute or rule of law, or by
the  enforcement of any assessment or penalty or otherwise;  it being  expressly
understood that all such liability is hereby  expressly waived and released as a
condition of, and as a  consideration  for, the execution of this  Indenture and
the issue of the Securities.

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

SECTION 13.01.    SUCCESSORS.

            All the  covenants,  stipulations,  promises and  agreements in this
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.

SECTION 13.02.    OFFICIAL ACTS BY SUCCESSOR CORPORATION.

            Any act or proceeding by any provision of this Indenture  authorized
or required to be done or  performed  by any board,  committee or officer of the
Company  shall and may be done and  performed  with like force and effect by the
like board,  committee or officer of any  corporation  that shall at the time be
the lawful sole successor of the Company.

SECTION 13.03.    SURRENDER OF COMPANY POWERS.

            The Company by  instrument  in writing  executed by authority of 2/3
(two-thirds)  of its  Board  of  Directors  and  delivered  to the  Trustee  may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered  shall  terminate  both as to the  Company  and as to any  successor
Person.

SECTION 13.04.    ADDRESS FOR NOTICES, ETC.

            Any notice or demand  which by any  provision  of this  Indenture is
required or  permitted to be given or served by the Trustee or by the holders of
Securities  on the  Company  may be given or served by being  deposited  postage
prepaid by  registered  or certified  mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, 9 Farm Springs Road, Farmington, CT 06032, Attention: Michael P.
Maloney, Esq., Senior Vice President, General Counsel and Secretary. Any notice,
direction,  request or demand by any Securityholder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the office of the Trustee,  The Bank of New York, 101 Barclay
Street,  Floor  21W,  New York,  New York,  10286,  Attention:  Corporate  Trust
Administration.

SECTION 13.05.    GOVERNING LAW.

            This  Indenture and each  Security  shall be deemed to be a contract
made  under  the laws of the State of New York,  and for all  purposes  shall be
governed by and  construed in  accordance  with the laws of said State,  without
regard to conflicts of laws principles thereof.

SECTION 13.06.    EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

            Upon any application or demand by the Company to the Trustee to take
any action under any of the  provisions  of this  Indenture,  the Company  shall
furnish to the Trustee an Officers'  Certificate  stating that in the opinion of
the signers all  conditions  precedent,  if any,  provided for in this Indenture
relating  to the  proposed  action  have been  complied  with and an  Opinion of
Counsel  stating  that,  in the  opinion of such  counsel,  all such  conditions
precedent have been complied with.

            Each  certificate  or opinion  provided  for in this  Indenture  and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this  Indenture  shall  include (1) a statement  that the Person
making such  certificate  or opinion has read such covenant or condition;  (2) a
brief statement as to the nature and scope of the  examination or  investigation
upon which the statements or opinions  contained in such  certificate or opinion
are based; (3) a statement that, in the opinion of such Person, he has made such
examination  or  investigation  as is  necessary  to enable  him to  express  an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
complied  with; and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.

SECTION 13.07.    BUSINESS DAYS.

            In any case where the date of payment of  principal  of (or premium,
if any) or interest on the Securities will not be a Business Day, the payment of
such principal of (or premium, if any) or interest on the Securities need not be
made on such date but may be made on the next succeeding  Business Day, with the
same force and effect as if made on the date of payment  and no  interest  shall
accrue for the period from and after such date.

SECTION 13.08.    TRUST INDENTURE ACT TO CONTROL.

            If and to the extent that any  provision of this  Indenture  limits,
qualifies or conflicts with another  provision  included in this Indenture which
is  required to be included  in this  Indenture  by any of Sections  310 to 317,
inclusive,  of the Trust  Indenture Act of 1939,  such required  provision shall
control.

SECTION 13.09.    TABLE OF CONTENTS, HEADINGS, ETC.

            The table of contents  and the titles and  headings of the  articles
and sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof,  and shall in no way modify or
restrict any of the terms or provisions hereof.

SECTION 13.10. EXECUTION IN COUNTERPARTS.

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

SECTION 13.11. SEPARABILITY.

            In  case  any  one or  more  of the  provisions  contained  in  this
Indenture  or in the  Securities  shall for any  reason  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other  provision of this  Indenture or of
the Securities,  but this Indenture and the Securities  shall be construed as if
such  invalid or illegal or  unenforceable  provision  had never been  contained
herein or therein.

SECTION 13.12. ASSIGNMENT.

            The  Company  will have the right at all times to assign  any of its
rights or obligations  under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company,  provided that, in the event of any such  assignment,
the  Company  will  remain  liable  for all  such  obligations.  Subject  to the
foregoing,  the  Indenture  is  binding  upon and  inures to the  benefit of the
parties thereto and their respective  successors and assigns. This Indenture may
not otherwise be assigned by the parties hereto.

SECTION 13.13. ACKNOWLEDGMENT OF RIGHTS.

            The Company  acknowledges  that, with respect to any Securities held
by Orion Capital Trust II or a trustee of such Trust, if the Property Trustee of
such Trust fails to enforce its rights under this Indenture as the holder of the
Securities  held as the assets of Orion  Capital Trust II, any holder of Capital
Securities  may  institute  legal  proceedings  directly  against the Company to
enforce such  Property  Trustee's  rights  under this  Indenture  without  first
instituting  any legal  proceedings  against such Property  Trustee or any other
person or entity.  Notwithstanding  the  foregoing,  if an Event of Default  has
occurred and is continuing and such event is  attributable to the failure of the
Company to pay principal of (or premium,  if any) or interest on the  Securities
when due,  the  Company  acknowledges  that a holder of Capital  Securities  may
directly institute a proceeding for enforcement of payment to such holder of the
principal  of (or  premium,  if any) or  interest  on the  Securities  having  a
principal  amount  equal to the  aggregate  liquidation  amount  of the  Capital
Securities of such holder on or after the  respective  due date specified in the
Securities.

                                   ARTICLE XIV

                     CONDITIONAL RIGHT TO SHORTEN MATURITY;
                 PREPAYMENT OF SECURITIES -- NO SINKING FUND

SECTION 14.01.    SPECIAL EVENT PREPAYMENT.

            If a Special Event has occurred and is continuing,  then the Company
shall  have the  right,  upon (i) not less  than 45 days  written  notice to the
Trustee and (ii) not less than 30 days nor more than 60 days  written  notice to
the  Securityholders,  to prepay the Securities,  in whole (but not in part), at
any time within 90 days following the  occurrence of such Special Event,  at the
Special Event  Prepayment  Price.  Following a Special Event,  the Company shall
take such  action as is  necessary  promptly  to  determine  the  Special  Event
Prepayment Price, including without limitation the appointment by the Company of
a Quotation  Agent.  The Special Event  Prepayment  Price shall be paid prior to
12:00 noon,  New York City time, on the date of such  prepayment or such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount  sufficient to pay the Special Event Prepayment Price by 10:00
a.m., New York City time, on the date such Special Event  Prepayment Price is to
be paid. 

SECTION 14.02. OPTIONAL PREPAYMENT BY COMPANY.

      Subject to the  provisions of this Article XIV, the Company shall have the
right to prepay the  Securities,  in whole or in part, at any time and from time
to time,  at the  optional  prepayment  price equal to the  Optional  Prepayment
Price.

            If the  Securities  are  only  partially  prepaid  pursuant  to this
Section 14.02, the Securities to be prepaid will be chosen PRO RATA or by lot or
by any other method  utilized by the Trustee;  provided  that,  as to Securities
registered as a Global Security at the time of prepayment,  the Depositary shall
determine,  in accordance  with its  procedures,  the  principal  amount of such
Securities  held by each  holder  of a  Security  to be  prepaid.  The  Optional
Prepayment  Price shall be paid prior to 12:00 noon,  New York City time, on the
date of such  prepayment  or at such  earlier  time as the  Company  determines,
provided that the Company shall deposit with the Trustee an amount sufficient to
pay the Optional Prepayment Price by 10:00 a.m., New York time, on the date such
Optional Prepayment Price is to be paid.

SECTION 14.03.    NO SINKING FUND.

            The Securities are not entitled to the benefit of any sinking fund.

SECTION 14.04.    NOTICE OF PREPAYMENT; SELECTION OF SECURITIES.

            In case the Company  shall  desire to  exercise  the right to prepay
all, or, as the case may be, any part of the Securities in accordance with their
terms,  it shall  fix a date for  prepayment  and  shall  mail a notice  of such
prepayment  at least 30 and not more  than 60 days  prior to the date  fixed for
prepayment  to the holders of  Securities so to be prepaid as a whole or in part
at their  last  addresses  as the same  appear on the  Security  Register.  Such
mailing shall be by first class mail.  The notice if mailed in the manner herein
provided shall be conclusively  presumed to have been duly given, whether or not
the holder  receives  such notice.  In any case,  failure to give such notice by
mail or any defect in the notice to the holder of any  Security  designated  for
prepayment  as a  whole  or in  part  shall  not  affect  the  validity  of  the
proceedings for the prepayment of any other Security.

            Each such notice of prepayment shall specify the CUSIP number of the
Securities to be prepaid, the date fixed for prepayment, the prepayment price at
which the Securities  are to be prepaid (or the method by which such  prepayment
price is to be calculated),  the place or places of payment that payment will be
made upon presentation and surrender of the Securities, that interest accrued to
the date fixed for prepayment will be paid as specified in said notice, and that
on and after said date interest thereon or on the portions thereof to be prepaid
will  cease to accrue.  If less than all the  Securities  are to be prepaid  the
notice of prepayment  shall specify the numbers of the Securities to be prepaid.
In case any  Security  is to be prepaid in part only,  the notice of  prepayment
shall state the portion of the principal  amount thereof to be prepaid and shall
state that on and after the date fixed for  prepayment,  upon  surrender of such
Security,  a new  Security  or  Securities  in  principal  amount  equal  to the
unprepaid portion thereof will be issued.

            Prior to 10:00  a.m.,  New York City time,  on the  prepayment  date
specified in the notice of  prepayment  given as provided in this  Section,  the
Company  will  deposit  with the  Trustee or with one or more  paying  agents an
amount of money  sufficient to prepay on the prepayment  date all the Securities
so called for  prepayment at the  appropriate  Prepayment  Price,  together with
accrued interest to the date fixed for prepayment.

            The Company will give the Trustee notice not less than 45 days prior
to the prepayment date as to the aggregate  principal amount of Securities to be
prepaid and the Trustee shall select,  in such manner as in its sole  discretion
it shall deem  appropriate  and fair,  the  Securities  or portions  thereof (in
integral  multiples of $1,000,  except as otherwise set forth in the  applicable
form of Security) to be prepaid.

SECTION 14.05.    PAYMENT OF SECURITIES CALLED FOR PREPAYMENT.

            If notice of prepayment has been given as provided in Section 14.04,
the  Securities or portions of Securities  with respect to which such notice has
been given  shall  become due and payable on the date and at the place or places
stated in such notice at the applicable Prepayment Price, together with interest
accrued to the date fixed for  prepayment  (subject  to the rights of holders of
Securities  on the close of business  on a Regular  Record Date in respect of an
Interest Payment Date occurring on or prior to the prepayment  date), and on and
after  said date  (unless  the  Company  shall  default  in the  payment of such
Securities at the Prepayment Price, together with interest accrued to said date)
interest on the  Securities or portions of  Securities so called for  prepayment
shall cease to accrue.  On  presentation  and surrender of such  Securities at a
place of payment specified in said notice,  the said Securities or the specified
portions  thereof  shall be paid and  prepaid by the  Company at the  applicable
Prepayment  Price,  together with interest accrued thereon to the date fixed for
prepayment  (subject  to the  rights of holders  of  Securities  on the close of
business  on a Regular  Record  Date in  respect  of an  Interest  Payment  Date
occurring on or prior to the prepayment date).

            Upon  presentation of any Security prepaid in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the  holder  thereof,  at the  expense  of the  Company,  a new  Security  or
Securities  of  authorized  denominations,  in  principal  amount  equal  to the
unprepaid portion of the Security so presented.

SECTION 14.06.    CONDITIONAL RIGHT TO SHORTEN MATURITY.

            If a Tax Event occurs,  then the Company will have the right,  prior
to the  termination of the Trust,  either (i) to shorten the Stated  Maturity of
the  Securities to the minimum extent  required,  but not to a date earlier than
April 15, 2018 such that, in the written opinion of counsel  experienced in such
matters delivered to the Company, after shortening the Stated Maturity, interest
paid on the Securities  shall be deductible for federal income tax purposes (the
action  referred  to above  being  referred  to herein as a "Tax Event  Maturity
Shortening") or (ii) to prepay the Securities. The circumstances under which the
Company has the right to prepay the Securities in connection with a Tax Event is
referred  to  herein  as a  "Conditional  Tax  Redemption  Event"  and,  since a
Conditional Tax Redemption Event is deemed to be a Special Event, the Securities
shall then be subject to prepayment in accordance with the provisions of Section
14.01.

                                   ARTICLE XV

                           SUBORDINATION OF SECURITIES

SECTION 15.01.    AGREEMENT TO SUBORDINATE.

            The  Company  covenants  and agrees,  and each holder of  Securities
issued  hereunder  likewise  covenants and agrees,  that the Securities shall be
issued  subject to the  provisions  of this  Article  XV;  and each  holder of a
Security,  whether upon original  issue or upon transfer or assignment  thereof,
accepts and agrees to be bound by such provisions.

            The payment by the Company of the principal of (and premium, if any)
and interest on all Securities  issued hereunder shall, to the extent and in the
manner  hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of the Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.

            No provision of this Article XV shall prevent the  occurrence of any
Default or Event of Default hereunder.

SECTION 15.02.    DEFAULT ON SENIOR INDEBTEDNESS.

            In the event and  during  the  continuation  of any  default  by the
Company in the payment of principal,  premium, interest or any other payment due
on any  Senior  Indebtedness,  or in the event that the  maturity  of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment  shall be made by the Company with respect to the  principal  (including
prepayment) of or premium, if any, or interest on the Securities.

            In the event of the  acceleration of the maturity of the Securities,
then no payment  shall be made by the  Company  with  respect  to the  principal
(including  prepayments)  of or premium,  if any, or interest on the  Securities
until the  holders of all Senior  Indebtedness  outstanding  at the time of such
acceleration shall receive payment in full of all amounts due in respect of such
Senior Indebtedness (including any amounts due upon acceleration).

            In the event that,  notwithstanding the foregoing, any payment shall
be received by the Trustee  when such  payment is  prohibited  by the  preceding
paragraph of this  Section  15.02,  such payment  shall be held in trust for the
benefit  of,  and shall be paid over or  delivered  to,  the  holders  of Senior
Indebtedness or their respective representatives,  or to the trustee or trustees
under any indenture  pursuant to which any of such Senior  Indebtedness may have
been issued, as their respective interests may appear, but only to the extent of
the amounts due in respect of such  Senior  Indebtedness  and only to the extent
that  the  holders  of the  Senior  Indebtedness  (or  their  representative  or
representatives  or a trustee) notify the Trustee in writing,  within 90 days of
such payment,  of the amounts then due and owing on such Senior Indebtedness and
only the amounts  specified  in such notice to the Trustee  shall be paid to the
holders of such Senior Indebtedness.

SECTION 15.03.    LIQUIDATION; DISSOLUTION; BANKRUPTCY.

            Upon any  payment by the  Company or  distribution  of assets of the
Company of any kind or character,  whether in cash,  property or securities,  to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company,  whether  voluntary or involuntary  or in  bankruptcy,  insolvency,
receivership or other proceedings,  all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment  thereof  provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal  (and premium,  if any) or interest on the  Securities;
and upon any such  dissolution or winding-up or  liquidation or  reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or  character,   whether  in  cash,   property  or  securities,   to  which  the
Securityholders  or the Trustee  would be entitled to receive  from the Company,
except for the provisions of this Article XV, shall be paid by the Company or by
any receiver, trustee in bankruptcy,  liquidating trustee, agent or other Person
making such payment or distribution, or by the Securityholders or by the Trustee
under this  Indenture  if  received  by them or it,  directly  to the holders of
Senior Indebtedness of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their  representative or  representatives,  or to the trustee or
trustees under any indenture  pursuant to which any instruments  evidencing such
Senior  Indebtedness  may have been issued,  as their  respective  interests may
appear,  to the extent  necessary to pay such Senior  Indebtedness  in full,  in
money or  money's  worth,  after  giving  effect to any  concurrent  payment  or
distribution  to or for the  holders  of such  Senior  Indebtedness,  before any
payment or distribution is made to the Securityholders or to the Trustee.

            In the event that,  notwithstanding  the  foregoing,  any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities,  prohibited by the  foregoing,  shall be received by the
Trustee before all amounts in respect of Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance  with its terms,  such
payment or  distribution  shall be held in trust for the benefit of and shall be
paid over or  delivered  to the  holders of such  Senior  Indebtedness  or their
representative  or  representatives,  or to the  trustee or  trustees  under any
indenture pursuant to which any instruments  evidencing such Senior Indebtedness
may have been issued,  and their respective  interests may appear, as calculated
by the  Company,  for  application  to the  payment of all  Senior  Indebtedness
remaining  unpaid to the extent  necessary  to pay all amounts due in respect of
such Senior  Indebtedness in full in money in accordance  with its terms,  after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.

            For  purposes  of this  Article  XV, the words  "cash,  property  or
securities"  shall not be deemed to  include  shares of stock of the  Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization  or readjustment,  the payment of which
is  subordinated at least to the extent provided in this Article XV with respect
to the Securities to the payment of Senior  Indebtedness that may at the time be
outstanding,  provided that (i) such Senior  Indebtedness  is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior  Indebtedness are not, without the
consent of such holders,  altered by such  reorganization  or readjustment.  The
consolidation  of the Company with,  or the merger of the Company into,  another
Person or the  liquidation  or  dissolution  of the Company  following the sale,
conveyance,  transfer or lease of its property as an entirety,  or substantially
as an entirety,  to another Person upon the terms and conditions provided for in
Article  X of this  Indenture  shall not be  deemed a  dissolution,  winding-up,
liquidation  or  reorganization  for the purposes of this Section  15.03 if such
other Person shall, as a part of such consolidation,  merger, sale,  conveyance,
transfer  or lease,  comply  with the  conditions  stated  in  Article X of this
Indenture.  Nothing in Section  15.02 or in this  Section  15.03  shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.05 of this
Indenture.

SECTION 15.04.    SUBROGATION.

            Subject  to the  payment  in full of all  amounts  due in respect of
Senior  Indebtedness,  the rights of the Securityholders  shall be subrogated to
the rights of the holders of such  Senior  Indebtedness  to receive  payments or
distributions  of cash,  property or securities of the Company,  as the case may
be, applicable to such Senior  Indebtedness until the principal of (and premium,
if any) and  interest  on the  Securities  shall be paid in full;  and,  for the
purposes of such  subrogation,  no payments or  distributions  to the holders of
such  Senior  Indebtedness  of any cash,  property  or  securities  to which the
Securityholders  or the Trustee would be entitled  except for the  provisions of
this Article XV, and no payment over pursuant to the  provisions of this Article
XV to or  for  the  benefit  of the  holders  of  such  Senior  Indebtedness  by
Securityholders  or the Trustee,  shall,  as between the Company,  its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Securities,  be deemed to be a payment  by the  Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV are
and are intended  solely for the purposes of defining the relative rights of the
holders of the  Securities,  on the one hand,  and the  holders  of such  Senior
Indebtedness, on the other hand.

            Nothing  contained in this Article XV or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company,  and the
holders of the Securities,  the obligation of the Company, which is absolute and
unconditional,  to pay to the holders of the  Securities  the  principal of (and
premium,  if any) and  interest  on the  Securities  as and when the same  shall
become due and  payable in  accordance  with their  terms,  or is intended to or
shall affect the relative  rights of the holders of the Securities and creditors
of the  Company,  as  the  case  may  be,  other  than  the  holders  of  Senior
Indebtedness  of the Company,  as the case may be, nor shall anything  herein or
therein  prevent the Trustee or the holder of any Security from  exercising  all
remedies  otherwise  permitted  by  applicable  law upon a  Default  under  this
Indenture,  subject to the rights,  if any, under this Article XV of the holders
of such Senior  Indebtedness  in respect of cash,  property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.

            Upon any payment or distribution  of assets of the Company  referred
to in this Article XV, the Trustee,  subject to the  provisions of Article VI of
this Indenture,  and the Securityholders  shall be entitled conclusively to rely
upon any order or decree made by any court of  competent  jurisdiction  in which
such  dissolution,  winding-up,  liquidation or  reorganization  proceedings are
pending,  or a certificate of the receiver,  trustee in bankruptcy,  liquidation
trustee, agent or other Person making such payment or distribution, delivered to
the Trustee or to the  Securityholders,  for the  purposes of  ascertaining  the
Persons  entitled to  participate  in such  distribution,  the holders of Senior
Indebtedness  and other  indebtedness  of the  Company,  as the case may be, the
amount  thereof or payable  thereon,  the amount or amounts paid or  distributed
thereon and all other facts pertinent thereto or to this Article XV.

SECTION 15.05.    TRUSTEE TO EFFECTUATE SUBORDINATION.

            Each  Securityholder  by such  Securityholder's  acceptance  thereof
authorizes and directs the Trustee on such Securityholder's  behalf to take such
action as may be  necessary  or  appropriate  to  effectuate  the  subordination
provided  in this  Article XV and  appoints  the Trustee  such  Securityholder's
attorney-in-fact for any and all such purposes.

SECTION 15.06.    NOTICE BY THE COMPANY.

            The  Company  shall  give  prompt  written  notice to a  Responsible
Officer of the Trustee of any fact known to the Company that would  prohibit the
making  of  any  payment  of  monies  to or by the  Trustee  in  respect  of the
Securities  pursuant to the provisions of this Article XV.  Notwithstanding  the
provisions  of this  Article XV or any other  provision of this  Indenture,  the
Trustee  shall not be charged with  knowledge of the existence of any facts that
would  prohibit  the  making of any  payment  of monies to or by the  Trustee in
respect of the Securities  pursuant to the provisions of this Article XV, unless
and until a  Responsible  Officer of the  Trustee  shall have  received  written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee  therefor;  and before the receipt of any such written  notice,
the Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided,  however,
that if the Trustee  shall not have  received  the notice  provided  for in this
Section  15.06 at least three  Business Days prior to the date upon which by the
terms hereof any money may become  payable for any purpose  (including,  without
limitation,  the payment of the principal of (or premium, if any) or interest on
any Security),  then, anything herein contained to the contrary notwithstanding,
the Trustee  shall have full power and  authority  to receive  such money and to
apply the same to the  purposes for which they were  received,  and shall not be
affected by any notice to the  contrary  that may be received by it within three
Business Days prior to such date.

            The  Trustee,  subject  to the  provisions  of  Article  VI of  this
Indenture,  shall be entitled  conclusively  to rely on the  delivery to it of a
written  notice  by a  Person  representing  himself  to be a holder  of  Senior
Indebtedness  of the  Company  (or a  trustee  on  behalf  of such  holder),  to
establish  that  such  notice  has  been  given  by  a  holder  of  such  Senior
Indebtedness or a trustee on behalf of any such holder or holders.  In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such  Senior  Indebtedness  to
participate  in any payment or  distribution  pursuant  to this  Article XV, the
Trustee  may  request  such  Person  to  furnish   evidence  to  the  reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person,  the extent to which such Person is entitled to participate in such
payment or  distribution  and any other  facts  pertinent  to the rights of such
Person  under this  Article  XV, and, if such  evidence  is not  furnished,  the
Trustee may defer any payment to such Person pending  judicial  determination as
to the right of such Person to receive such payment.

            Upon any payment or distribution  of assets of the Company  referred
to in this Article XV, the Trustee and the Securityholders  shall be entitled to
rely upon any order or decree entered by any court of competent  jurisdiction in
which such insolvency, bankruptcy,  receivership,  liquidation,  reorganization,
dissolution,  winding  up  or  similar  case  or  proceeding  is  pending,  or a
certificate  of the  trustee  in  bankruptcy,  liquidating  trustee,  custodian,
receiver,  assignee for the benefit of  creditors,  agent or other person making
such   payment   or   distribution,   delivered   to  the   Trustee  or  to  the
Securityholders,  for the  purpose  of  ascertaining  the  persons  entitled  to
participate in such payment or distribution,  the holders of Senior Indebtedness
and other  indebtedness of the Company,  the amount thereof or payable  thereon,
the amount or amounts paid or distributed  thereon and all other facts pertinent
thereto or to this Article XV.

SECTION 15.07.    RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

            The Trustee in its individual  capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior  Indebtedness,
and nothing in this Indenture  shall deprive the Trustee of any of its rights as
such holder.

            With respect to the holders of Senior  Indebtedness  of the Company,
the Trustee  undertakes  to perform or to observe only such of its covenants and
obligations  as are  specifically  set forth in this  Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee.  The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Article VI of this Indenture, the Trustee shall not
be liable  to any  holder of such  Senior  Indebtedness  if it shall pay over or
deliver to  Securityholders,  the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article XV or otherwise.

            Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.

SECTION 15.08.    SUBORDINATION MAY NOT BE IMPAIRED.

            No right of any present or future holder of any Senior  Indebtedness
of the Company to enforce  subordination as herein provided shall at any time in
any way be  prejudiced  or  impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith,  by any such holder,
or by any noncompliance by the Company with the terms,  provisions and covenants
of this Indenture,  regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.

            Without  in  any  way  limiting  the  generality  of  the  foregoing
paragraph,  the holders of Senior  Indebtedness  of the Company may, at any time
and from time to time,  without  the  consent of or notice to the Trustee or the
Securityholders,  without incurring  responsibility to the  Securityholders  and
without impairing or releasing the subordination  provided in this Article XV or
the  obligations  hereunder of the holders of the  Securities  to the holders of
such Senior  Indebtedness,  do any one or more of the following:  (i) change the
manner,  place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness,  or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument  evidencing the same or any agreement
under  which such  Senior  Indebtedness  is  outstanding;  (ii) sell,  exchange,
release or  otherwise  deal with any  property  pledged,  mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the  collection  of such Senior  Indebtedness;  and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.

                                   ARTICLE XVI

                      EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 16.01.    EXTENSION OF INTEREST PAYMENT PERIOD.

            (a) So long as no Event of Default has occurred  and is  continuing,
the Company  shall have the right,  at any time and from time to time during the
term of the Securities,  to defer payments of interest by extending the interest
payment  period of such  Securities  for a period not  exceeding 10  consecutive
semi-annual  periods,  including the first such  semi-annual  period during such
extension  period (as set forth in Section  16.02(c)) (the "Extension  Period"),
during which  Extension  Period no interest  shall be due and payable,  provided
that no Extension  Period may extend beyond the Stated  Maturity.  To the extent
permitted by applicable  law,  interest,  the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
16.01,  will bear interest  thereon at the Coupon Rate compounded  semi-annually
for each semi-annual period of the Extension Period ("Compounded Interest").  At
the end of the Extension Period,  the Company shall pay all interest accrued and
unpaid on the Securities,  including any Additional Sums and Compounded Interest
(together,  "Deferred  Interest")  that shall be  payable to the  holders of the
Securities in whose names the Securities are registered in the Security Register
on the first record date immediately preceding the end of the Extension Period.

            (b) During any such Extension  Period,  the Company may not, and may
not permit any Subsidiary to, (i) declare or pay any dividends or  distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's  capital stock (which includes common and preferred stock),
(ii) make any payment of  principal,  interest or premium,  if any, on or repay,
repurchase  or  redeem  any debt  securities  of the  Company  (including  Other
Debentures)  that rank pari  passu  with or  junior in right of  payment  to the
Securities or (iii) make any guarantee payments with respect to any guarantee by
the  Company of the debt  securities  of any  Subsidiary  of the Company if such
guarantee  ranks pari passu with or junior in right of payment to the Securities
(other than (a) dividends or distributions in shares of or options,  warrants or
rights to subscribe for or purchase shares of, common stock of the Company,  (b)
any  declaration  of a  dividend  in  connection  with the  implementation  of a
stockholders'  rights plan,  or the issuance of stock under any such plan in the
future, or the prepayment or repurchase of any such rights pursuant thereto, (c)
payments under the Capital Securities Guarantee,  (d) as a direct result of, and
only to the extent  necessary to avoid the issuance of fractional  shares of the
Company's capital stock following,  a reclassification  of the Company's capital
stock or the  exchange  or  conversion  of one class or series of the  Company's
capital stock for another class or series of the Company's  capital  stock,  (e)
the purchase of fractional  interests in shares of the  Company's  capital stock
pursuant to the  conversion or exchange  provisions of such capital stock or the
security being converted or exchanged, and (f) purchases of common stock related
to the  issuance of common stock or rights  under any of the  Company's  benefit
plans for its directors,  officers or employees or any of the Company's dividend
reinvestment plans). None of the Company's  Subsidiaries will be prohibited from
declaring  and paying cash  distributions  with respect to its capital  stock or
from making payments with respect to its debt securities.

            (c) Before the termination of any such Extension Period, the Company
may  further  defer  payments  of interest  by further  extending  such  period,
provided  that  such  period,  together  with  all  such  previous  and  further
extensions  within  such  Extension  Period,  shall not  exceed  10  consecutive
semi-annual  periods,  including the first such  semi-annual  period during such
Extension Period, or extend beyond the Stated Maturity.  Upon the termination of
any  Extension  Period and the payment of all  Deferred  Interest  then due, the
Company may elect to commence a new Extension  Period,  subject to the foregoing
requirements.  No interest shall be due and payable during an Extension  Period,
except at the end  thereof,  but the  Company  may prepay at any time all or any
portion of the interest accrued during an Extension Period.

SECTION 16.02.    NOTICE OF EXTENSION.

            (a) If the  Property  Trustee is the only  registered  holder of the
Securities  at the time the Company  selects an  Extension  Period,  the Company
shall give written notice to the Administrative  Trustees,  the Property Trustee
and the Trustee of its  selection of such  Extension  Period at least 5 Business
Days before the earlier of (i) the next succeeding  date on which  distributions
on the Trust  Securities  issued by Orion Capital Trust II are payable,  or (ii)
the date the Trust is required to give  notice of the record  date,  or the date
such  Distributions  are  payable,  to any  national  securities  exchange or to
holders of the Capital Securities issued by the Trust, but in any event at least
5 Business Days before such record date.

            (b) If the Property Trustee is not the only holder of the Securities
at the time the Company selects an Extension Period,  the Company shall give the
holders of the  Securities  and the Trustee  written  notice of its selection of
such  Extension  Period at least 10 Business  Days before the earlier of (i) the
next succeeding  Interest Payment Date, or (ii) the date the Company is required
to give  notice of the record or payment  date of such  interest  payment to any
national securities exchange.

            (c) The semi-annual  period in which any notice is given pursuant to
paragraphs  (a) or (b) of this  Section  16.02 shall be counted as one of the 10
semi-annual  periods  permitted in the maximum  Extension Period permitted under
Section  16.01.  There is no  limitation on the number of times that the Company
may elect to begin an Extension Period.

            The Bank of New York  hereby  accepts  the trusts in this  Indenture
declared and provided, upon the terms and conditions hereinabove set forth.

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective  officers thereunto duly authorized,  as of
the day and year first above written.

                                    ORION CAPITAL CORPORATION

                                    By:  /s/ Michael P. Maloney
                                         Name: Michael P. Maloney, Esq.
                                         Title:__Senior Vice President,
                                               General Counsel and Secretary

                                    THE BANK OF NEW YORK, as Trustee

                                    By: 
                                         Name:Walter N. Gitlin
                                         Title:Vice President



<PAGE>

                                    EXHIBIT A

            [IF THE SECURITY IS A GLOBAL  SECURITY,  INSERT:  THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE  HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED  CIRCUMSTANCES  DESCRIBED
IN THE  INDENTURE,  AND NO TRANSFER OF THIS  SECURITY  (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE  DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A  NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR  ANOTHER  NOMINEE  OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

            UNLESS   (A)  THIS   SECURITY   IS   PRESENTED   BY  AN   AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),
TO THE ISSUER OR ITS AGENT FOR  REGISTRATION  OF TRANSFER,  EXCHANGE OR PAYMENT,
AND (B) ANY SECURITY  ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS  REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE DTC (AND ANY
PAYMENT  HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED  REPRESENTATIVE OF DTC), ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF
FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  SINCE THE  REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

            THIS SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY
OTHER  APPLICABLE  SECURITIES  LAW.  NEITHER  THIS  SECURITY NOR ANY INTEREST OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

            THE HOLDER OF THIS SECURITY BY ITS  ACCEPTANCE  HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY,  PRIOR TO THE DATE (THE "RESALE
RESTRICTION  TERMINATION  DATE")  WHICH  IS TWO  YEARS  AFTER  THE  LATER OF THE
ORIGINAL  ISSUANCE  DATE  HEREOF  AND THE LAST DATE ON WHICH THE  COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS  SECURITY)  EXCEPT  (A) TO THE  COMPANY,  (B)  PURSUANT  TO A  REGISTRATION
STATEMENT  WHICH HAS BEEN DECLARED  EFFECTIVE  UNDER THE SECURITIES  ACT, (C) SO
LONG AS THIS  SECURITY  IS ELIGIBLE  FOR RESALE  PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL  BUYER"  (AS  DEFINED IN RULE  144A)  THAT  PURCHASES  FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED  INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,  (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE  SECURITIES  ACT, (E) TO AN  INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL  ACCREDITED  INVESTOR,  FOR
INVESTMENT  PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN  CONNECTION
WITH, ANY  DISTRIBUTION  IN VIOLATION OF THE SECURITIES  ACT, OR (F) PURSUANT TO
ANY OTHER  AVAILABLE  EXEMPTION  FROM THE  REGISTRATION  REQUIREMENTS  UNDER THE
SECURITIES  ACT,  SUBJECT TO THE RIGHT OF THE  COMPANY  PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER  (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL,  CERTIFICATIONS AND/OR OTHER INFORMATION  SATISFACTORY
TO THE COMPANY,  AND (ii)  PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM  APPEARING ON THE REVERSE OF THIS  SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEREE TO THE COMPANY.  SUCH HOLDER FURTHER AGREES THAT
IT WILL  DELIVER TO EACH PERSON TO WHOM THIS  SECURITY IS  TRANSFERRED  A NOTICE
SUBSTANTIALLY TO THE

            THIS SECURITY HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT AND
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT  OF, U.S.  PERSONS  UNLESS  REGISTERED  UNDER THE  SECURITIES  ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.



<PAGE>


No.                                                            CUSIP No.


                            ORION CAPITAL CORPORATION
           7.701% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
                               DUE APRIL 15, 2028

            Orion Capital  Corporation,  a Delaware  corporation (the "Company",
which  term  includes  any  successor  Person  under the  Indenture  hereinafter
referred  to),  for value  received,  hereby  promises to pay to The Bank of New
York,  as  Property  Trustee,  or  registered  assigns,  the  principal  sum  of
$129,000,000  on April 15,  2028 (the  "Stated  Maturity"),  unless  the  Stated
Maturity is  shortened  under  certain  circumstances  described  herein or this
Debenture  is  previously  prepaid,  and to  pay  interest  on  the  outstanding
principal  amount hereof from February 5, 1998, or from the most recent interest
payment date (each such date, an "Interest  Payment Date") to which interest has
been paid or duly provided for,  semi-annually (subject to deferral as set forth
herein) in arrears on April 15 and October 15 of each year, commencing April 15,
1998,  at the rate of 7.701% per annum  until the  principal  hereof  shall have
become due and payable,  and on any overdue  principal and premium,  if any, and
(without  duplication  and to the  extent  that  payment  of  such  interest  is
enforceable under applicable law) on any overdue  installment of interest at the
same rate per annum compounded semi-annually.  The amount of interest payable on
any  Interest  Payment  Date shall be computed on the basis of a 360-day year of
twelve 30-day  months and, for any period less than 6 months,  the actual months
elapsed and the actual days elapsed in a partial  month in such  period.  In the
event that any date on which the  principal of (or premium,  if any) or interest
on this Security is payable is not a Business Day, then payment  payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), with the same force
and effect as if made on such date.

            The interest  installment so payable,  and  punctually  paid or duly
provided for, on any Interest  Payment Date will, as provided in the  Indenture,
be paid to the Person in whose name this  Security  (or one or more  Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the Regular  Record Date for such  interest  installment,  which shall be the
15th day  preceding  the  relevant  interest  payment  date.  Any such  interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the holders on such Regular Record Date and may be paid to the Person
in  whose  name  this  Security  (or  one or  more  Predecessor  Securities)  is
registered at the close of business on a special  record date to be fixed by the
Trustee for the payment of such  defaulted  interest,  notice  whereof  shall be
given to the holders of  Securities  not less than 10 days prior to such special
record  date,  or may be  paid  at any  time  in any  other  lawful  manner  not
inconsistent  with the  requirements  of any  securities  exchange  on which the
Securities  may be  listed,  and upon  such  notice  as maybe  required  by such
exchange, all as more fully provided in the Indenture.

            The principal of (and premium, if any) and interest on this Security
shall be  payable  at the office or agency of the  Trustee  maintained  for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal  tender for payment of public and private  debts;  provided,
however,  that  payment of interest  may be made at the option of the Company by
(i) check  mailed to the holder at such  address as shall appear in the Security
Register  or (ii) by transfer to an account  maintained  by the Person  entitled
thereto,  provided that proper written transfer  instructions have been received
by the  relevant  record date.  Notwithstanding  the  foregoing,  so long as the
Holder of this Security is the Property Trustee, the payment of the principal of
(and  premium,  if any) and interest on this Security will be made at such place
and to such account as may be designated by the Property Trustee.

            The indebtedness evidenced by this Security is unsecured and, to the
extent provided in the Indenture,  subordinate and junior in right of payment to
the prior  payment in full of Senior  Indebtedness,  and this Security is issued
subject to the provisions of the Indenture with respect thereto.  Each holder of
this  Security,  by accepting the same, (a) agrees to and shall be bound by such
provisions,  (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or  appropriate to acknowledge or effectuate the
subordination   so   provided   and  (c)   appoints   the  Trustee  his  or  her
attorney-in-fact  for any and all such purposes.  Each holder hereof,  by his or
her  acceptance  hereof,  hereby  waives  all  notice of the  acceptance  of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness,  whether now outstanding or hereafter incurred,  and waives
reliance by each such holder upon said provisions.

            This  Security  shall  not be  entitled  to any  benefit  under  the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of  Authentication  hereon shall have been signed by or on
behalf of the Trustee.

            The  provisions  of this  Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as though
fully set forth at this place.

            IN WITNESS  WHEREOF,  the Company has caused this  instrument  to be
executed.

                                          ORION CAPITAL CORPORATION

                                          By:___________________________
                                             Name:
                                             Title:



                   (FORM OF CERTIFICATE OF AUTHENTICATION)
                          CERTIFICATE OF AUTHENTICATION

            This is one of the  Securities  referred to in the  within-mentioned
Indenture.



Dated:___________________________

THE BANK OF NEW YORK, as Trustee

By:/s/ Walter N. Gitlin
            Authorized Signatory


<PAGE>

                          (FORM OF REVERSE OF SECURITY)

            This  Security  is one  of the  Securities  of the  Company  (herein
sometimes  referred to as the  "Securities"),  specified in the  Indenture,  all
issued or to be issued under and pursuant to an Indenture,  dated as of February
5, 1998 (the  "Indenture"),  duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"),  to which Indenture  reference
is  hereby  made  for a  description  of  the  rights,  limitations  of  rights,
obligations,  duties and immunities  thereunder of the Trustee,  the Company and
the holders of the Securities.

            Upon the occurrence and continuation of a Special Event, the Company
shall have the right to prepay  this  Security in whole (but not in part) at the
Special Event Prepayment  Price.  "Special Event  Prepayment  Price" shall mean,
with respect to any prepayment of the Securities  following a Special Event,  an
amount in cash equal to the greater of (i) 100% of the principal  amount thereof
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  and,  for any period  less than 6 months,  the actual
months elapsed and the actual days elapsed in a partial month in such period) at
the Special Event Adjusted  Treasury  Rate,  plus, in each case, any accrued and
unpaid interest thereon, including Compounded Interest,  Additional Interest and
Additional Sums, if any, to the date of such prepayment.

            In  addition,  the  Company  shall  have the  right to  prepay  this
Security,  in whole or in part, at any time (an "Optional  Prepayment"),  at 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.

            The  Special  Event  Prepayment  Price and the  Optional  Prepayment
Price,  as the case requires,  shall be paid prior to 12:00 noon, New York time,
on the  date  of  such  prepayment  or at  such  earlier  time  as  the  Company
determines,  provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable  Prepayment  Price by 10:00 a.m., New York City
time, on the date such Prepayment  Price is to be paid. Any prepayment  pursuant
to this  paragraph will be made upon not less than 30 days nor more than 60 days
notice.  If the Securities are only partially prepaid by the Company pursuant to
an Optional Prepayment, the Securities to be prepaid will be chosen by lot or by
any other  method  utilized by the  Trustee;  provided  that,  as to  Securities
registered as a Global Security at the time of prepayment,  the Depositary shall
determine  the  particular  Securities  to be  prepaid  in  accordance  with its
procedures.

            In the event of  prepayment  of this  Security  in part only,  a new
Security or Securities  for the unprepaid  portion  hereof will be issued in the
name of the holder hereof upon the cancellation hereof.

            If a Tax Event occurs,  then the Company will have the right,  prior
to the  termination of the Trust,  either (i) to shorten the Stated  Maturity of
this Security to the minimum  extent,  but not earlier than April 15, 2018, such
that, in the written opinion of counsel experienced in such matters delivered to
the  Company,  after  shortening  the  Stated  Maturity,  interest  paid  on the
Securities shall be deductible for federal income tax purposes or (ii) to prepay
the Securities.

            In case an Event of Default, as defined in the Indenture, shall have
occurred  and be  continuing,  the  principal  of all of the  Securities  may be
declared,  and upon such  declaration  shall  become,  due and  payable,  in the
manner, with the effect and subject to the conditions provided in the Indenture.

            The Indenture  contains  provisions  permitting  the Company and the
Trustee,  with the consent of the holders of a majority in  principal  amount of
the Securities at the time outstanding,  as defined in the Indenture, to execute
supplemental  indentures for the purpose of adding any provisions to or changing
in any  manner or  eliminating  any of the  provisions  of the  Indenture  or of
modifying in any manner the rights of the holders of the  Securities;  provided,
however, that no such supplemental  indenture shall, without the consent of each
holder of  Securities  then  outstanding  and affected  thereby,  (i) extend the
Stated Maturity of any Securities,  or reduce the principal  amount thereof,  or
reduce any amount  payable on prepayment  thereof,  or reduce the rate or extend
the  time  of  payment  of  interest  thereon  (subject  to  Article  XVI of the
Indenture),  or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof,  or
(ii) reduce the  aforesaid  percentage of  Securities,  the holders of which are
required  to consent to any such  supplemental  indenture.  The  Indenture  also
contains provisions  permitting the holders of a majority in principal amount of
the Securities at the time outstanding affected thereby, on behalf of all of the
holders of the  Securities,  to waive any past default in the performance of any
of the covenants  contained in the  Indenture,  or  established  pursuant to the
Indenture,  and  its  consequences,  except  a  Default  in the  payment  of the
principal  of or premium,  if any, or  interest  on any of the  Securities  or a
Default in respect of any covenant or provision under which the Indenture cannot
be modified or amended  without  the consent of each holder of  Securities  then
outstanding.  Any such consent or waiver by the holder of this Security  (unless
revoked as provided in the Indenture)  shall be conclusive and binding upon such
Holder  and upon all  future  holders  and  owners of this  Security  and of any
Security  issued  in  exchange   heretofore  or  in  place  hereof  (whether  by
registration  of  transfer  or  otherwise),  irrespective  of whether or not any
notation of such consent or waiver is made upon this Security.

            No  reference  herein  to the  Indenture  and no  provision  of this
Security  or of the  Indenture  shall  alter or  impair  the  obligation  of the
Company,  which is  absolute  and  unconditional,  to pay the  principal  of and
premium,  if any, and interest on this Security at the time and place and at the
rate and in the money herein prescribed.

            As long as no Event of Default has occurred and is  continuing,  the
Company shall have the right,  at any time and from time to time during the term
of the  Securities,  to defer  payments of interest by  extending  the  interest
payment  period of such  Securities  for a period not  exceeding 10  consecutive
semi-annual  periods,  including the first such  semi-annual  period during such
extension  period (an  "Extension  Period"),  during which  Extension  Period no
interest shall be due and payable,  provided that no Extension Period may extend
beyond  the  Stated  Maturity  of the  Securities.  At the end of the  Extension
Period,  the Company  shall pay all interest  then accrued and unpaid,  together
with deferred  interest thereon at the rate specified for the Securities (to the
extent that  payment of such  interest is  enforceable  under  applicable  law).
Before the  termination  of any such Extension  Period,  the Company may further
defer payments of interest by further extending such Extension Period,  provided
that  such  Extension  Period,  together  with all  such  previous  and  further
extensions  within  such  Extension  Period,  shall not  exceed  10  consecutive
semi-annual  periods,   including  the  first  semi-annual  period  during  such
Extension Period,  or extend beyond the Stated Maturity of the Securities.  Upon
the termination of any such Extension  Period and the payment of all accrued and
unpaid interest and any additional  amounts then due, the Company may commence a
new Extension Period, subject to the foregoing requirements.

            The  Company  has agreed  that,  if at any time (i) there shall have
occurred  any event of which the  Company has actual  knowledge  that (a) is, or
with the giving of notice or the lapse of time,  or both,  would be, an Event of
Default and (b) in respect of which the Company shall not have taken  reasonable
steps to cure,  (ii) if such  Securities  are held by Orion Capital Trust I, the
Company shall be in default with respect to its payment of any obligations under
the Capital Securities  Guarantee,  or (iii) the Company shall have given notice
of its  election  of the  exercise of its right to extend the  interest  payment
period and any such extension  shall be  continuing,  then the Company will not,
and will not permit any Subsidiary to,

            (i) declare or pay any  dividends  or  distributions  on, or prepay,
purchase,  acquire,  or make a  liquidation  payment with respect to, any of the
Company's capital stock) (which includes common and preferred stock);

            (ii) make any payment of principal,  interest or premium, if any, on
or repay or  repurchase  or prepay any debt  securities of the Company that rank
pari passu with or junior in right of payment to the Securities; or

            (iii) make any  guarantee  payments with respect to any guarantee by
the  Company of the debt  securities  or any  Subsidiary  of the Company if such
guarantee  ranks pari passu or junior in right of payment to the Securities ther
than (a) dividends or distributions in shares of, or options, warrants or rights
to subscribe  for or purchase  shares of,  Common Stock of the Company,  (b) any
declaration of a dividend in connection with the implementation of a stockholder
rights plan, or the issuance of stock under any such plan in the future,  or the
prepayment or repurchase of any such rights pursuant thereto, (c) payments under
the Capital  Securities  Guarantee,  (d) as a direct  result of, and only to the
extent  necessary to avoid the issuance of  fractional  shares of the  Company's
capital stock following,  a  reclassification  of the Company's capital stock or
the exchange or the  conversion of one class or series of the Company's  capital
stock for  another  class or  series of the  Company's  capital  stock,  (e) the
purchase  of  fractional  interests  in shares of the  Company's  capital  stock
pursuant to the exchange or  conversion  of such  capital  stock or the security
being  exchanged or converted,  and (f) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's  benefit plans for
its  directors,   officers  or  employees  or  any  of  the  Company's  dividend
reinvestment  plans. None of the Company's  Subsidiaries will be prohibited from
declaring  and paying cash  distributions  with respect to its capital  stock or
from making payments with respect to its debt securities.

            The  Company  will  have the  right at any  time to  dissolve  Orion
Capital Trust II and cause the  Securities to be  distributed  to the holders of
the Trust Securities in liquidation of the Trust.

            The Securities are issuable only in registered  form without coupons
in denominations of $1,000.00 and any integral multiple thereof.  As provided in
the Indenture  and subject to the transfer  restrictions  limitations  as may be
contained herein and therein from time to time, this Security is transferable by
the holder  hereof on the Security  Register of the Company,  upon  surrender of
this  Security  for  registration  of  transfer  at the  office or agency of the
Trustee in the City and State of New York accompanied by a written instrument or
instruments of transfer in form  satisfactory to the Company or the Trustee duly
executed by the holder  hereof or his attorney duly  authorized in writing,  and
thereupon one or more new  Securities of  authorized  denominations  and for the
same  aggregate  principal  amount and series  will be issued to the  designated
transferee or transferees. No service charge will be made for any such transfer,
but the  Company  may require  payment of a sum  sufficient  to cover any tax or
other governmental charge payable in relation thereto.

            Prior  to due  presentment  for  registration  of  transfer  of this
Security,  the Company, the Trustee, any paying agent and the registrar may deem
and treat the holder  hereof as the absolute  owner hereof  (whether or not this
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon  made by anyone  other than the  Security  registrar)  for the purpose of
receiving payment of or on account of the principal hereof and premium,  if any,
and interest due hereon and for all other purposes,  and neither the Company nor
the  Trustee  nor any paying  agent nor any  registrar  shall be affected by any
notice to the contrary.

            No  recourse  shall be had for the  payment of the  principal  of or
premium, if any, or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator,  stockholder, officer or director, past, present or future, as
such,  of the Company or of any  predecessor  or  successor  Person,  whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise,  all such liability being, by the acceptance
hereof  and as part of the  consideration  for the  issuance  hereof,  expressly
waived and released.

            All terms used in this  Security  that are defined in the  Indenture
shall have the meanings assigned to them in the Indenture.

            THE INDENTURE AND THE SECURITIES  SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.