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LINCORP HOLDINGS ENTERS INTO AGREEMENT WITH OTS

 NEW YORK, Jan. 20 /PRNewswire/ -- Lincorp Holdings, Inc. (formerly known as Unicorp American Corporation) (the "Company") announced today that it, its parent company, Unicorp Energy Corporation ("UEC"), and certain other parties have entered into an agreement with the Office of Thrift Supervision (the "OTS") regarding the Lincoln Savings Bank, FSB (the "Bank"). As part of the agreement (i) all litigation between the company, the OTS and certain other parties was settled, (ii) the bank received an infusion of capital by the purchase of $15 million of convertible preferred shares and $15 million in the form of a senior secured note, which may be converted in whole or part, if necessary, to meet certain specific capital requirements at any time prior to May 1, 1995, (iii) the company filed divestiture notices with the OTS which divest it of all further involvement in the affairs and management of the bank, (iv) the company, as part of the agreement, has had the common stock of the bank contributed to a trust.
 The litigation among the parties arose out of an assertion by the OTS that the company and UEC had an obligation to maintain the capital of the bank. As part of the agreement, the company placed the shares of the bank's common stock owned by it into a trust.
 The trustee shall be Anthony Frank, a former Postmaster General of the United States. These shares were previously pledged to the company's lenders to secure the indebtedness of the company, which indebtedness has been in default since August 1991. The company had previously announced that it stood to lose its entire interest in the bank. While the trustee will eventually seek a purchaser for the shares of the bank, the timing of the sale will be determined by UEC. The existence of the trust was necessary in order to enable the company to de-register as a savings and loan holding company and obtain the necessary regulatory approval to sell the bank. Due to the level of the company's indebtedness and the requirement that such indebtedness be repaid prior to the company's receipt of any proceeds, it is highly unlikely that the company will receive any of the proceeds from a sale of the bank.
 The agreement involves an infusion of $30 million into the bank. Of this amount, $15 million has been invested in the bank by the purchase of preferred stock of Lincoln. If converted today, the preferred stock would represent 80 percent of the common equity interests of the bank. The remaining $15 million has been invested in a senior secured note of the bank, the principal of which may be reduced in order to acquire non- convertible preferred stock of the bank, if necessary, to meet certain specific capital requirements. These funds were invested by Union Holding Inc., a subsidiary of UEC ("UHI") which is the owner of the newly issued series of preferred stock.
 As part of this transaction, National Bank of Canada ("NBC") transferred to UHI approximately $77 million of indebtedness owed to it by the company, plus accrued and unpaid interest. In consideration for such transfer, NBC acquired just over 30 percent of the convertible preferred stock of the bank acquired by UHI. This results in NBC effectively owning approximately 25 percent of the bank and UHI effectively holding approximately 55 percent of the bank on a fully diluted basis. Half the remaining interest (10 percent) is effectively held indirectly by the company and half is held by the management of the bank under a new management incentive plan.
 As part of the transaction, UEC contributed back to the company $10 million of preferred stock of the company owned by it, plus its right to receive approximately $2 million in accrued and unpaid dividends. This stock is to be retired by the company.
 Further, as a result of the transactions, the company will be deconsolidating the operations of the bank from its operations for financial reporting purposes, and the Form 10-K to be filed by the company for the year ended Dec. 31, 1992 will reflect this fact. The company expects to meet shortly with UEC and Hees to discuss its future prospects.
 -0- 1/20/93
 /CONTACT: Edmund J. Becmer of Lincorp Holdings, Inc., 516-932-3441/


CO: Lincorp Holdings, Inc. ST: New York IN: FIN SU:

AH-OS -- NY058 -- 6978 01/20/93 14:33 EST
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Publication:PR Newswire
Date:Jan 20, 1993
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