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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): | January 28, 2004 |
AMERICAN FINANCIAL
GROUP, INC.
(Exact
name of registrant as specified in its charter)
| Ohio |
1-13653 |
31-0624874 |
|---|---|---|
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| One East Fourth Street, Cincinnati, Ohio |
45202 |
|---|---|
| (Address of principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code | (513) 579-2121 |
| |
|---|
| (Former name or former address, if changed since last report.) |
Item 5. Other Events.
On January 28, 2004, American Financial Group, Inc., an Ohio corporation (“AFG”), entered into a Purchase Agreement relating to the sale of $115,000,000 principal amount of 8-1/2% Senior Debentures due 2034 (the “Senior Debentures”) to be issued by AFG under a registration statement on Form S-3 (No. 333-106657). This Current Report on Form 8-K is being filed in connection with the issuance of the Senior Debentures.
The prospectus supplement dated January 28, 2004 relating to the issuance of the Senior Debentures (the “Prospectus Supplement”) is amended to add the following sentence on the cover page:
“Investing in the debentures involves risks. See ‘Risk Factors’ beginning on page 4 of the accompanying prospectus.”
The base prospectus dated January 28, 2004 delivered with the Prospectus Supplement is amended to add the following sentence on the cover page:
“Investing in the securities described in this prospectus involves risks that are described in the “Risk Factors” section beginning on page 4 of this prospectus.”
Item 7. Financial Statements and Exhibits.
| (c) | Exhibits. |
| 1 | Purchase Agreement |
| 4 | Form of Second Supplemental Indenture (including form of Senior Debentures) (filed as Exhibit 4.3 to the Form 8-A Registration Statement filed by AFG on January 30, 2004) |
| 5 | Opinion of Keating, Muething & Klekamp, P.L.L. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Date: January 29, 2004 |
AMERICAN FINANCIAL GROUP, INC. BY: /s/James C. Kennedy —————————————— James C. Kennedy Deputy General Counsel, Vice President and Secretary |
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AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
Senior Debentures
PURCHASE AGREEMENT
Dated January 28, 2004
AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
$100,000,000
Senior Debentures
PURCHASE AGREEMENT
January 28, 2004
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representative of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
American Financial Group, Inc., an Ohio corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch is acting as representative (in such capacity,
the "Representative"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $100,000,000
aggregate principal amount of the Company's [___]% Senior Debentures due 2034
(the "Debentures"), and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of the $15,000,000 principal
amount of Debentures to cover overallotments, if any. The aforesaid $100,000,000
principal amount of Debentures (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the $15,000,000 principal amount of
Debentures subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively the "Securities." The
Securities are to be issued pursuant to an indenture dated as of November 12,
1987 (the "Original Indenture"), as supplemented by a supplemental indenture
dated as of December 3, 1997 (the "First Supplemental Indenture"), as further
supplemented by a second supplemental indenture dated as of February [__], 2004
(the "Second Supplemental Indenture" together with the Original Indenture and
the First Supplemental Indenture, the "Indenture") among the Company, as issuer,
and U.S. Bank, N.A., as trustee (the "Trustee"). The term "Indenture," as used
herein, includes the Board Resolution (as defined in the Indenture) establishing
the form and terms of the Securities pursuant to Sections 2.1 and 3.1 of the
Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-106657), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. Each prospectus used
before such registration statement became effective, and any prospectus that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, as supplemented by any preliminary prospectus supplement, is herein
called a "preliminary prospectus." Such registration statement, including the
exhibits and any schedules thereto, at the time it became effective, and
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act at such time is herein called the "Registration
Statement." The final prospectus, as supplemented by any prospectus supplement,
in the form first furnished to the Underwriters for use in connection with the
offering of the Securities, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the
execution of this Agreement, is herein called the "Prospectus." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, any prospectus supplement, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "stated" or "given" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any post-effective amendment thereto has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto has
been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the Closing Time,
(and, if any Option Securities are purchased, at the Date of Delivery), the
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or to the Prospectus (or any amendment
or supplement thereto).
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes thereto, present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis (except to the extent otherwise noted in such financial statements or
the notes thereto) throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by either of the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) except as disclosed in or contemplated by the
Registration Statement, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its respective
capital stock.
(vi) Good Standing of the Company. The Company has been duly
incorporated and is a validly existing corporation in good standing under
the laws of the State of Ohio, and has power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified to do business as a foreign
corporation and is in good standing (or local law equivalent) in all other
jurisdictions in which its ownership or lease of property or the conduct of
business, requires such qualification except where such failure to qualify
would not, individually or in the aggregate, result in a Material Adverse
Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated and is an existing corporation in good standing (or local law
equivalent) under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus and is duly qualified to do
business as a foreign corporation in good standing (or local law
equivalent) in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification; except
as otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free from liens, encumbrances
and defects; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or other similar
rights of any securityholder of such Subsidiary. The only Subsidiaries of
the Company are the subsidiaries listed on Schedule C hereto.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the financial statements, including
the schedules and notes thereto, included in the Registration Statement and
Prospectus. The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized executed and delivered by the Company and duly qualified under
the 1939 Act and, assuming due execution and delivery by the Trustee
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xi) Authorization of the Securities. The Securities have been duly
authorized and, at Closing Time, will have been duly executed by the
Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(xii) Description of the Securities and the Indenture. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as
the case may be, as exhibits to the Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any
of its Subsidiaries is in violation of its charter, regulations or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its Subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults that
would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the Indenture and the Securities and any
other agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder and under the Indenture and the Securities and such
other agreements or instruments have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or Repayment Events or liens, charges or encumbrances
that, singly or in the aggregate, would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or
any of their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its Subsidiaries.
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
either of the Company or any of its Subsidiaries that might have a Material
Adverse Effect exists or, to the knowledge of the Company, is imminent.
(xv) Absence of Proceedings. Except as disclosed in the Prospectus,
there are no pending actions, suits or proceedings against or affecting the
Company, or any of its Subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of its Subsidiaries,
would individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to perform
its obligations under this Agreement, the Indenture or the Securities, or
which are otherwise material in the context of the sale of the Securities;
and no such actions, suits or proceedings are threatened or, to the
Company's knowledge, contemplated.
(xvi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xvii) Possession of Intellectual Property. The Company and its
Subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its Subsidiaries, would individually or
in the aggregate have a Material Adverse Effect.
(xviii) Absence of Manipulation. Neither the Company nor any affiliate
of the Company has taken, nor will the Company or any affiliate take,
directly or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(xix) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or for the due execution, delivery or
performance of the Indenture and the Securities by the Company, except such
as have been already obtained or as may be required under state securities
laws.
(xx) Possession of Licenses and Permits. Each subsidiary of the
Company which is engaged in the business of insurance or reinsurance
(collectively, the "Insurance Subsidiaries") holds such insurance licenses,
certificates and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various
jurisdictions where it conducts business (the "Insurance Licenses")) as are
necessary to the conduct of its business as described in the Registration
Statement; the Company and each Insurance Subsidiary have fulfilled and
performed all obligations necessary to maintain the Insurance Licenses;
except as disclosed in the Registration Statement, there is no pending or,
to the knowledge of the Company, threatened action, suit, proceeding or
investigation that could reasonably be expected to result in the
revocation, termination or suspension of any Insurance License which would,
individually or in the aggregate, have a Material Adverse Effect; and
except as disclosed in the Registration Statement, no insurance regulatory
agency or body has issued, or, to the knowledge of the Company, commenced
any proceeding for the issuance of, any order or decree impairing,
restricting or prohibiting the payment of dividends by any Insurance
Subsidiary to its parent.
(xxi) Title to Property. Except as disclosed in the Registration
Statement, the Company and its Subsidiaries have good and marketable title
to all real properties and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects that would,
individually or in the aggregate, materially affect the value of such
properties and assets, taken as a whole, or materially interfere with the
use made or to be made thereof by them; and except as disclosed in the
Registration Statement, the Company and its Subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be made
of the leased property, taken as a whole, by them.
(xxii) Environmental Laws. Except as disclosed in the Registration
Statement, neither the Company nor any of its Subsidiaries is in violation
of any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead to
such a claim.
(xxiii) Investment Company Act. The Company is not required, and upon
the issuance and sale of the offered Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Registration Statement will not be required, to register as an "investment
company" under the Investment Company Act of 1940, as amended (the "1940
Act").
(xxiv) Insurance Reserving. Except as disclosed in the Registration
Statement, the Company and the Insurance Subsidiaries have made no material
change in their insurance reserving practices since December 31, 2002.
(xxv) Reinsurance. All reinsurance treaties and arrangements to which
any Insurance Subsidiary is a party are in full force and effect and no
Insurance Subsidiary is in violation of, or in default in the performance,
observance or fulfillment of, any obligation, agreement, covenant or
condition contained therein; no Insurance Subsidiary has received any
notice from any of the other parties to such treaties, contracts or
agreements that such other party intends not to perform such treaty and,
the Company and the Insurance Subsidiaries have no reason to believe that
any of the other parties to such treaties or arrangements will be unable to
perform such treaty or arrangement except to the extent adequately and
properly reserved for in the consolidated financial statements of the
Company included in the Registration Statement or Prospectus, except where
such default or inability to perform would not, individually or in the
aggregate, have a Material Adverse Effect.
(xxvi) Statutory Financial Statements. The statutory financial
statements of the Insurance Subsidiaries, from which certain ratios and
other statistical data included or incorporated by reference in the
Registration Statement and Prospectus have been derived, have been prepared
for each relevant period in conformity with statutory accounting principles
or practices required or permitted by the National Association of Insurance
Commissioners and by the appropriate Insurance Department of the
jurisdiction of domicile of each Insurance Subsidiary, and such statutory
accounting practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated therein or in the
notes thereto, and present fairly in all material respects the statutory
financial position of the Insurance Subsidiaries as of the dates thereof,
and the statutory basis results of operations of the Insurance Subsidiaries
for the periods covered thereby.
(xxvii) SFAS No. 131. The Company's reporting of financial information
about its operating segments in its audited financial statements for the
year ended December 31, 2002 and its unaudited financial statements for the
three months ended March 31, 2003, the six months ended June 30, 2003 and
the nine months ended September 30, 2003 complies with the Financial
Accounting Standards Board's Statement of Financial Accounting Standards
No. 131.
(xxviii) Certifications under the Sarbanes-Oxley Act. Each of the
principal executive officer and the principal financial officer of the
Company (or each former principal executive officer of the Company and each
former principal financial officer of the Company as applicable) has made
all certifications required by Sections 302 and 906 of the Sarbanes-Oxley
Act of 2002 and the rules and regulations of the Commission promulgated
thereunder (the "Sarbanes-Oxley Act") with respect to all reports,
schedules, forms, statements and other documents required to be filed by it
or furnished by it to the Commission. For purposes of the preceding
sentence, "principal executive officer" and "principal financial officer"
shall have the meanings given to such terms in the Sarbanes-Oxley Act.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representative or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter, severally and
not jointly, agrees to purchase from the Company, at the price set forth in
Schedule B, the aggregate principal amount of Initial Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional principal
amount of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional $15,000,000 principal amount of
Securities at the same price set forth in Schedule B for the Initial Securities,
plus accrued interest, if any, from the Closing Date to the Date of Delivery (as
defined below). The option hereby granted will expire 30 days after the Closing
Date and may be exercised in whole or in part from time to time upon notice by
the Representative to the Company setting forth the number of Option Securities
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the aggregate principal amount of Option
Securities then being purchased which the principal amount of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the
aggregate principal amount of Initial Securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York, or at such
other place as shall be agreed upon by the Representative and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery being
herein called "Closing Time"). In addition, in the event that any or all of the
Option Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates for, such Option Securities shall be
made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Representative and the Company, on each Date of Delivery as
specified in the notice from the Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated in writing by the Company, against
delivery to the Representative for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representative, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Securities shall be
in such denominations ($25.00 or integral multiples thereof) and registered in
such names as the Representative may request in writing at least one full
business day before Closing Time or the relevant Date of Delivery, as the case
may be. The certificates for the Initial Securities and the Option Securities,
if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Representative immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or any document incorporated by reference therein or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representative notice
of their intention to file or prepare any amendment to the Registration
Statement or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representative with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Representative or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representative and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Representative may designate and to maintain such qualifications in
effect for a period of not less than one year from the effective date of the
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or so subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will also supply the Underwriters with such information as is necessary
for the determination of the legality of the Securities for investment under the
laws of such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing of
the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectus, the Company will not without the prior written consent
of Merrill Lynch, directly or indirectly, issue, sell, offer or contract to
sell, grant any option for the sale of, or otherwise transfer or dispose of, any
debt securities of the Company.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of their respective obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters (not to exceed $25,000)
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities, (ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x) any fees payable in connection with the
rating of the Securities and (xi) the fees and expenses incurred in connection
with the listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement has
become effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for the Company. At Closing Time, the Representative
shall have received the favorable opinion, dated as of Closing Time, of Keating,
Muething & Klekamp, P.L.L., counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request. Keating, Muething & Klekamp, P.L.L., in rendering such
opinion, may rely as to all matters governed by New York law upon the opinion of
Dewey Ballantine LLP referred to below.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Dewey Ballantine LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (v) through (x),
inclusive, and the penultimate paragraph of Exhibit A hereto. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials. In rendering
such opinion, Dewey Ballantine LLP may rely as to all matters governed by Ohio
law upon the opinion of Keating, Muething & Klekamp, P.L.L. referred to above.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise whether or not arising
in the ordinary course of business, and the Representative shall have received a
certificate (as to which there shall be no personal, as opposed to corporate
liability) of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
pending or, to their knowledge, contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be rated
at least [Baa3] by Moody's Investor's Service Inc. and [BBB (Stable)] by
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and the
Company shall have delivered to the Representative a letter dated the Closing
Time, from each such rating agency, or other evidence satisfactory to the
Representative, confirming that the Securities have such ratings; and since the
date of this Agreement, there shall not have occurred a downgrading in the (i)
rating assigned to the Securities or any other securities of either of the
Company or the financial strength of the Company or any Subsidiaries or any
Insurance Subsidiary's claims paying ability or similar rating by any
"nationally recognized statistical rating agency", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the 1933 Act, or (ii) the
financial strength or claims paying ability of any Insurance Subsidiary by A.M.
Best Company, and no such securities rating agency shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of the Securities or any other securities of the Company or the
financial strength or claims paying ability of any Subsidiary or Insurance
Subsidiary.
(h) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery, none of the events set forth in clauses (i)
through (v) of Section 9(a) shall have occurred and, at the relevant Date of
Delivery, the Representative shall have received:
(1) Officers' Certificate. A certificate (as to which there shall be
no personal, as opposed to corporate, liability), dated such Date
of Delivery, of any President or a Vice President of the Company
and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the Closing
Time pursuant to Section 5(c) hereof remains true and correct as
of such Date of Delivery.
(2) Opinion of Counsel for the Company. The favorable opinion of
Keating, Muething & Klekamp, P.L.L., counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to
be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for the Underwriters. The favorable opinion of
Dewey Ballantine LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(4) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
form and substance satisfactory to the Representative and dated
such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representative pursuant
to Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date not
more than three days prior to such Date of Delivery.
(5) No Downgrading. Subsequent to the date of this Agreement, no
downgrading shall have occurred in the (i) rating assigned to the
Securities or any other securities of the Company or the
financial strength of the Company or any Subsidiaries or any
Insurance Subsidiary's claims paying ability or similar rating by
any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, or (ii) financial strength or
claims paying ability of any Insurance Subsidiary by A.M. Best
Company, and no such organization shall have publicly announced
that it has under surveillance or review its ratings of any
securities of the Company or the financial strength or claims
paying ability of any Subsidiary or Insurance Subsidiary.
(i) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(j) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto) or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company;
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on the cover of the
Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the principal
amount of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company, and (ii) delivery
of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus (exclusive of any
supplement thereto), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority or (iv) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(v) if a banking moratorium has been declared by either Federal, Ohio, Delaware
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder, each of
the non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting Underwriter
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representative or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. For purposes of the foregoing, the term "tax
treatment" is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term "tax structure" includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at 4 World Financial
Center, New York, New York 10080, attention of Sabina Cheddia; and notices to
the Company shall be directed to it at One East Fourth Street, Suite 919,
Cincinnati, Ohio 45202, attention of James C. Kennedy, Esq., Vice President,
Deputy General Counsel and Secretary of American Financial Group, Inc.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By ___________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By________________________________________
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
Merrill Lynch, Pierce, Fenner & Smith $
Incorporated..................................
Bear, Stearns & Co. Inc.......................................
A.G. Edwards & Sons, Inc......................................
UBS Securities LLC............................................
Banc of America Securities LLC................................
Lehman Brothers Inc...........................................
McDonald Investments, Inc., a KeyCorp Company.................
Morgan Keegan & Company, Inc..................................
Piper Jaffray & Co............................................
Total......................................................... $100,000,000
===================================================================================================================
SCHEDULE B
AMERICAN FINANCIAL GROUP, INC.
$100,000,000 Senior Debentures due 2034
1. The initial public offering price of the Securities shall be 100% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be [__] % of the principal amount thereof.
3. The interest rate on the Securities shall be[__] % per annum.
4. On or after February [__], 2009 the Company may redeem the Securities,
at 100% of their principal amount, plus accrued interest to the date of
redemption.
SCHEDULE C
List of Subsidiaries
Exhibit A
FORM OF OPINION OF COMPANY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Ohio.
(ii) The Company has power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified to do business as a foreign corporation and is
in good standing (or the local law equivalent) in all other jurisdictions in
which its ownership or lease of property or the conduct of business, requires
such qualification except where the failure to so qualify will not, individually
or in the aggregate have a Material Adverse Effect.
(iii) The authorized, issued and outstanding capital stock of the Company
is as set forth in the financial statements, including the schedules and notes
thereto, included in the Registration Statement and Prospectus. The shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
(iv) Each "significant subsidiary" of the Company (as such term is defined
in Rule 1-02 of Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly incorporated and is an existing corporation in
good standing (or local law equivalent) under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and is duly
qualified to do business as a foreign corporation in good standing (or the local
law equivalent) in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification except where
the failure to so qualify will not have a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free from liens, encumbrances and defects;
None of the outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or other similar rights of any securityholder of
such Subsidiary.
(v) The Purchase Agreement has been duly authorized, executed and delivered
by the Company.
(vi) The Indenture has been duly authorized, executed and delivered by the
Company and duly qualified under the 1939 Act and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(vii) The Securities have been duly authorized and, at Closing Time, will
have been duly executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be in
the form contemplated by, and entitled to the benefits of, the Indenture.
(viii) The Securities and the Indenture conform as to legal matters in all
material respects to the descriptions thereof contained in the Prospectus.
(ix) The Registration Statement has been declared effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules and notes included therein or
omitted therefrom, and the Trustee's Statement of Eligibility on Form T-1 (the
"Form T-1"), as to which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules and notes included therein or
omitted therefrom, as to which we need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the 1933 Act or the 1934
Act, as applicable, and the rules and regulations of the Commission thereunder.
(xii) To the best of our knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
of its subsidiaries is a party, or to which the property of either of the
Company or any of its subsidiaries is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which would reasonably be
expected to result in a Material Adverse Effect, or which would reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder.
(xiii) The information in the Prospectus under "Description of Debt
Securities", and "Description of Debentures" and in the Registration Statement
under Item 15, to the extent that it constitutes matters of law, summaries of
legal matters, the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xiv) All descriptions in the Registration Statement of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits to the Registration Statement other than
those described or referred to therein or filed or incorporated by reference as
exhibits thereto.
(xv) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than under the 1933 Act and the 1933 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states as to which we need express no
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or the due execution, delivery
or performance of the Indenture by the Company or for the offering, issuance,
sale or delivery of the Securities.
(xvi) The execution, delivery and performance of the Purchase Agreement,
the Indenture and the Securities and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in connection with
the consummation of the transactions contemplated herein and in the Registration
Statement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under the Purchase Agreement, the Indenture and the Securities and
such other agreements or instruments do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xiv) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (except for such conflicts, breaches, defaults or Repayment Events or
liens, charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of its
respective properties, assets or operations.
(xvii) The Company is not required, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be required, to register as an
"investment company" under the 1940 Act.
(xviii) To the knowledge of such counsel (after reasonable investigation),
each Insurance Subsidiary holds such insurance licenses, certificates and
permits from governmental authorities (including, without limitation, Insurance
Licenses) as are necessary to the conduct of its business as described in the
Prospectus; to the knowledge of such counsel, there is no pending or threatened
action, suit, proceeding or investigation that could reasonably be expected to
result in the revocation, termination or suspension of any Insurance License
which would have a Material Adverse Effect; and except as disclosed in the
Prospectus, to the knowledge of such counsel, no insurance regulatory agency or
body has issued, or commenced any proceeding for the issuance of, any order or
decree impairing, restricting or prohibiting the payment of dividends by any
Insurance Subsidiary to its parent.
(xix) To the knowledge of such counsel, all reinsurance treaties and
arrangements to which any Insurance Subsidiary is a party are in full force and
effect and such counsel is not aware of any violation of, or default in the
performance, observance or fulfillment of, any obligation, agreement, covenant
or condition contained therein by any Insurance Subsidiary.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Form T-1, as to which we need
make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and notes thereto and other financial data included or incorporated by reference
therein or omitted therefrom and the Form T-1, as to which we need make no
statement), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
[Stationery of Keating, Muething & Klekamp, P.L.L.]
MARK A. WEISS
DIRECT DIAL: (513) 579-6599
FACSIMILE: (513) 579-6457
E-MAIL: MWEISS@KMKLAW.COM
January 30, 2004
American Financial Group,
Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Ladies and Gentlemen:
We have acted as counsel to American Financial Group, Inc., an Ohio corporation (“AFG”), and American Financial Capital Trust II, American Financial Capital Trust III, and American Financial Capital Trust IV, each a statutory trust organized under the laws of the State of Delaware, of Registration Statement No. 333-106657 on Form S-3 (the “Registration Statement”) with the Securities and Exchange Commission, including a preliminary prospectus (the “Base Prospectus”) relating to the public offering of up to $600,000,000 in aggregate principal amount of various securities, including senior debt securities issued by AFG (“Senior Debt Securities”). This opinion relates to the issuance of a series of Senior Debt Securities to be known as the “7-1/8% Senior Debentures due 2034” (the “Debentures”).
In reaching the conclusions expressed herein, we have examined and relied upon the original or copies, certified to our satisfaction, of (i) the form of Amended and Restated Articles of Incorporation and the Code of Regulations of AFG; (ii) copies of resolutions of the Board of Directors of AFG, or committees thereof, authorizing the issuance of the Debentures and related matters; (iii) the Registration Statement and all exhibits thereto, including the Form T-1, Statement of Eligibility of Trustee of U.S. Bank National Association; (iv) the Indenture dated as of November 12, 1997 (the “Original Indenture”) as supplemented by the First Supplemental Indenture dated as of December 3, 1997 (the “First Supplemental Indenture”) as proposed to be further supplemented by a Second Supplemental Indenture to be dated as of February 3, 2004 (the “Second Supplemental Indenture,” and with the Original Indenture and First Supplemental Indenture, the “Indenture”); and (iv) such other documents and instruments as we have deemed necessary for the expression of opinion herein contained. In making the foregoing examinations, we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies. As to various questions of fact material to this opinion, we have relied, to the extent we deem reasonably appropriate, upon representations or certificates of officers or directors of AFG and upon documents, records and instruments furnished to us by AFG, without independent check or verification of their accuracy.
Based upon and subject to the foregoing, we are of the opinion that upon the execution and delivery of the Second Supplemental Indenture, when the Debentures have been duly executed and authenticated in accordance with the terms of the Indenture and paid for in accordance with the terms of the Purchase Agreement dated as of January 28, 2004, between AFG and the underwriters named therein, the Debentures will be valid and binding obligations of AFG.
We hereby consent to be named in the Registration Statement and the Prospectus part thereof as the attorneys who have passed upon legal matters in connection with the issuance of the Debentures and to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission thereunder.
| Sincerely yours, KEATING, MUETHING & KLEKAMP, P.L.L. BY: /s/Mark A. Weiss —————————————— Mark A. Weiss |