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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: December 10, 1997 Commission File No. 001-13653
(Date of earliest event reported)
AMERICAN FINANCIAL GROUP, INC.
Incorporated under IRS Employer
the laws of Ohio Identification No. 31-1544320
One East Fourth Street
Cincinnati, Ohio 45202
Phone: (513) 579-2121
Former name or former address, if changed since last report - not applicable.
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AMERICAN FINANCIAL GROUP, INC.
FORM 8-K
Item 5. Other Events.
On December 10, 1997, American Financial Group, Inc., an Ohio
corporation (the "Company"), entered into an Underwriting Agreement relating to
the sale of $100,000,000 aggregate principal amount of its 7-1/8% Senior
Debentures due 2007 (the "Securities") under a registration statement on Form
S-3 (No. 333-21995), as amended.
This Current Report on Form 8-K is being filed for the purpose of
filing as exhibits the Underwriting Agreement, the Designation of Terms of the
Securities and the opinion of Keating, Muething & Klekamp, P.L.L.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
(1) Underwriting Agreement for 7-1/8% Senior
Debentures due 2007.
(4) Designation of Terms of 7-1/8% Senior Debentures
Due 2007.
(5) Opinion of Keating, Muething & Klekamp, P.L.L.
SIGNATURES
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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 thereunto duly authorized.
AMERICAN FINANCIAL GROUP, INC.
December 12, 1997 By: /s/James C. Kennedy
------------------------------------
James C. Kennedy
Deputy General Counsel & Secretary
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Exhibit 1
AMERICAN FINANCIAL GROUP, INC.
FORM OF UNDERWRITING AGREEMENT
FOR DEBT SECURITIES
Ladies and Gentlemen:
1. Introductory. American Financial Group, Inc., an Ohio corporation
(the "Company"), proposes to issue and sell from time to time certain of its
unsecured debt securities registered under the registration statement referred
to in Section 2(a) ("Registered Securities"). The Registered Securities will be
issued under an indenture, dated as of November 12, 1997 (the "Indenture"),
between the Company and Star Bank, N.A., a national banking association, as
Trustee, in one or more series, which series may vary as to interest rates,
maturities, redemption provisions, selling prices and other terms, with all such
terms for any particular series of the Registered Securities being determined at
the time of sale. Particular series of the Registered Securities will be sold
pursuant to a Terms Agreement referred to in Section 3, for resale in accordance
with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters. The term Lead Underwriter" as used herein shall refer to the
Representative first listed in the Terms Agreement.
2. Representations and Warranties of the Company. The Company, as of
the date of each Terms Agreement referred to in Section 3, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-21995) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("Commission") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to as
the "Registration Statement", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to
reflect the terms of the Offered Securities and the terms of offering
thereof, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act of
1933 ("Act"), including all material incorporated by reference therein,
is hereinafter referred to
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as the "Prospectus". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement
relating to the Registered Securities, the Registration Statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939 ("Trust Indenture Act") and the rules and
regulations of the Commission ("Rules and Regulations") and did not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all material respects to the requirements of
the Act, the Trust Indenture Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that the foregoing does not apply to statements in or omissions
from any of such documents based upon written information furnished to
the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Ohio, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company 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,
individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company listed on Schedule A
annexed hereto has been duly incorporated and is an existing
corporation in good standing (or the local law equivalent), to the
extent applicable, or licensed to do business 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 each such subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing (or
the local law equivalent), to the extent applicable, or licensed to do
business in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification or
licensing, except where the failure to so qualify or to be so licensed
will not, individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of
the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid
and nonassessable; and, except as disclosed in the Prospectus or as set
forth on Schedule B annexed hereto, the capital stock of each such
subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects.
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(e) All outstanding shares of capital stock of the Company
have been duly authorized; all outstanding shares of capital stock of
the Company have been validly issued, fully paid and nonassessable; and
the shareholders of the Company have no preemptive rights with respect
to the Registered Securities.
(f) The Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act; the Offered Securities have
been duly authorized; and when the Offered Securities are delivered and
paid for pursuant to the Terms Agreement on the Closing Date (as
defined below) or pursuant to Delayed Delivery Contracts (as
hereinafter defined), the Indenture will have been duly executed and
delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Prospectus and the Indenture and such Offered
Securities will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(g) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment with respect to the Offered Securities.
(h) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(i) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Offered Securities by
the Company, except such as have been obtained and made under the Act
and such as may be required under state securities laws.
(j) The execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company, or any of their properties, or any agreement or instrument to
which the Company, or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of
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the Company or any such subsidiary is subject, or the Articles of
Incorporation or the Code of Regulations of the Company or any such
subsidiary, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement).
(k) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
(l) Except as disclosed in the Prospectus or as listed on
Schedule B annexed hereto, the Company and its subsidiaries have good
and marketable title to all real properties and all other properties
and assets owned by them, and hold any leased real or personal property
under valid and enforceable leases, in each case free from liens,
encumbrances, defects and interferences that would have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(m) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the businesses now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(n) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) 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 on the
Company and its subsidiaries, taken as a whole.
(p) Except as disclosed in the Prospectus, 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
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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 on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.
(q) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
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 on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries, taken as a whole, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Offered Securities; and no
such actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated.
(r) The financial statements included in each Registration
Statement and the Prospectus present fairly, in all material respects,
the financial position of the Company and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows
for the periods shown, and, except as noted thereon, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis; and the schedules included in each Registration Statement
present fairly, in all material respects, the information required to
be stated therein.
(s) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries, taken as a whole, and, except as
disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(t) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
Ainvestment company@ as defined in the Investment Company Act of 1940.
(u) Except as set forth in the Prospectus, (i) all of the
outstanding shares of capital stock and other ownership interests of
the Company and any of its subsidiaries in Chiquita Brands
International, Inc. ("Chiquita") and American Financial Enterprises,
Inc. ("AFEI") (each of Chiquita and AFEI, an "AFG Affiliate" and,
collectively, the "AFG Affiliates") have been validly issued and are
fully paid and nonassessable and are beneficially owned by either the
Company or American Financial Corporation ("AFC") or by one of their
direct or indirect subsidiaries free and clear of all liens, charges,
claims or encumbrances except
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as set forth on Schedule B annexed hereto, (ii) except as disclosed in
the Affiliate SEC Filings (as defined in Section 2(v) hereof), there
are no outstanding subscriptions, options, warrants, calls, rights,
convertible securities or other agreements or commitments of any
character relating to the issued or unissued capital stock or other
ownership interest of any of the AFG Affiliates or securities
convertible into, exchangeable for or evidencing the right to subscribe
for any shares of such capital stock or other ownership interest, or
otherwise obligating any such AFG Affiliate to issue, transfer or sell
any such capital stock or other securities or other ownership interest
and (iii) there are no voting trusts or other arrangements or
understandings to which the Company, any subsidiary of the Company or
any of the AFG Affiliates is a party with respect to the voting of the
capital stock or other ownership interest of the AFG Affiliates.
(v) The Company has previously delivered to you true and
complete copies of each AFG Affiliate's (i) Annual Report on Form 10-K
for the year ended December 31, 1996, as filed with the Commission, and
all amendments thereto; (ii) Quarterly Reports on Form 10-Q for the
periods ended March 31, 1997, June 30, 1997 and September 30, 1997, as
filed with the SEC: (iii) proxy statements relating to all meetings of
its shareholders (whether annual or special) held or scheduled to be
held since January 1, 1997; and (iv) all other reports, statements and
registration statements (including Current Reports on Form 8-K) filed
by it with the Commission since December 31, 1996 (collectively, the
"Affiliate SEC Filings"). As of their respective dates, the Affiliate
SEC Filings did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of
each AFG Affiliate included in the Affiliate SEC Filings present
fairly, in all materials respects, the financial condition, results of
operations and changes in financial position of such AFG Affiliate as
at the dates or for the periods indicated therein in conformity with
generally accepted accounting principles applied on a consistent basis.
(y) Except as set forth in the Affiliate SEC Filings or the
Prospectus, since January 1, 1997, each AFG Affiliate and its
subsidiaries has conducted business only in the ordinary and usual
course and there has not occurred any adverse change in the financial
condition, business, results of operations, prospects, properties or
assets of the AFG Affiliates and their subsidiaries taken as a whole
that, in the aggregate, may reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the purchase price to be paid by
the Underwriters and the terms of the Offered Securities not already specified
in the Indenture, including, but not limited to, interest rate, maturity, any
redemption provisions and any sinking fund requirements
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and whether any of the Offered Securities may be sold to institutional investors
pursuant to Delayed Delivery Contracts (as defined below). The Terms Agreement
will also specify the time and date of delivery and payment (such time and date,
or such other time not later than seven full business days thereafter as the
Underwriter first named in the Terms Agreement (the "Lead Underwriter") and the
Company agree as the time for payment and delivery, being herein and in the
Terms Agreement referred to as the "Closing Date"), the place of delivery and
payment and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Offered Securities. For
purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the Closing
Date (if later than the otherwise applicable settlement date) shall be the date
for payment of funds and delivery of securities for all the Offered Securities
sold pursuant to the offering, other than Contract Securities for which payment
of funds and delivery of securities shall be as hereinafter provided. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Offered Securities pursuant to delayed delivery
contracts substantially in the form of Annex I attached hereto ("Delayed
Delivery Contracts") with such changes therein as the Company may authorize or
approve. Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. On the Closing
Date the Company will pay, as compensation, to the Representatives for the
accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the principal amount of Offered Securities to be sold pursuant to
Delayed Delivery Contracts ("Contract Securities"). The Underwriters will not
have any responsibility in respect of the validity or the performance of Delayed
Delivery Contracts. If the Company executes and delivers Delayed Delivery
Contracts, the Contract Securities will be deducted from the Offered Securities
to be purchased by the several Underwriters and the aggregate principal amount
of Offered Securities to be purchased by each Underwriter will be reduced pro
rata in proportion to the principal amount of Offered Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Lead Underwriter determines that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Lead Underwriter
not later than the business day prior to the Closing Date of the principal
amount.
If the Terms Agreement specifies "Book-Entry Only" settlement or
otherwise states that the provisions of this paragraph shall apply, the Company
will deliver against payment of the purchase price the Offered Securities in the
form of one or more permanent global securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the Underwriters
in Federal (same day) funds by official check or checks or wire transfer to an
account at a bank acceptable to the Lead Underwriter, drawn to the order of the
Company at the place of payment specified in the Terms Agreement on the Closing
Date, against delivery to the Trustee as custodian for DTC of the Global
Securities representing all of the Offered Securities.
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4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters, one
signed copy of the Registration Statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Lead Underwriter, subparagraph (5)) not
later than the second business day following the execution and delivery
of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of
any proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Registration Statement or the Prospectus and will not effect such
amendment or supplementation without the Lead Underwriter's consent;
and the Company will also advise the Lead Underwriter promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify the Lead Underwriter of such event and
will promptly prepare and file with the Commission, at its own expense,
an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the
Lead Underwriter's consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to holders of the Offered Securities an earnings statement
covering a period of at least 12 months beginning after the Effective
Date of the Registration Statement which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
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(e) The Company will furnish to the Representatives copies of
each Registration Statement, including all exhibits, each related
preliminary prospectus, and, so long as delivery of a prospectus
relating to the Offered Securities is required to be delivered under
the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in
each case in such quantities as the Lead Underwriter reasonably
requests. The Prospectus shall be so furnished on or prior to 3:00
P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the
Registration Statement. All other documents shall be so furnished as
soon as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the Lead
Underwriter designates and will continue such qualifications in effect
so long as required for the distribution; provided, however, that such
qualification will not require the Company to qualify to do business or
otherwise subject the Company to the general jurisdiction of such
state.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to shareholders for such year; and
the Company will furnish to the Representatives (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Securities Exchange Act
of 1934 or mailed to shareholders, and (ii) from time to time, such
other information concerning the Company as the Lead Underwriter may
reasonably request.
(h) The Company will pay all expenses incident to the
performance of its obligations under the Terms Agreement (including the
provisions of this Agreement), for any filing fees or other expenses
(including fees and disbursements of counsel) in connection with
qualification of the Registered Securities for sale and determination
of their eligibility for investment under the laws of such
jurisdictions as the Lead Underwriter may designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Offered Securities, for any applicable
filing fee incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, the review by the
National Association of Securities Dealers, Inc. of the Registered
Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of Registered
Securities and for reasonable expenses incurred in distributing the
Prospectus, any preliminary prospectuses, any preliminary prospectus
supplements or any other amendments or supplements to the Prospectus to
the Underwriters.
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(i) The Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to United
States dollar denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date at
issue, or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of the
Lead Underwriter for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities will
be subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Ernst & Young LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements and
schedules of the Company examined by them and included in the
Registration Statements comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the latest unaudited financial statements of
the Company included in the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the latest unaudited financial
statements, if any, and any unaudited summary
financial information included in the Prospectus do
not comply as to form in all material respects with
the applicable accounting requirements of the Act and
the related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements or summary financial
information for them to be in conformity with
generally accepted accounting principles;
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(B) the summary financial information
contained in the Prospectus does not agree with the
corresponding amounts set forth in the unaudited
consolidated financial statements or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
statements of earnings;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of the Terms
Agreement, there was any change in the capital stock
or any increase in short-term indebtedness or
long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any
decrease in consolidated net assets, as compared with
amounts shown on the latest balance sheet included in
the Prospectus; or
(D) for the period from the closing date of
the latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such accountants
there were any decreases, as compared with the
corresponding period of the previous year and with
the period of corresponding length ended the date of
the latest income statement included in the
Prospectus, in the ratio of earnings to fixed charges
or in consolidated net investment income,
consolidated total revenue, consolidated income
before taxes or consolidated net income,
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter;
(v) They have checked the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the capitalization table;
(vi) All financial statements and schedules included
in material incorporated by reference into the Prospectus
shall be deemed included in the Prospectus for purposes of
this subsection.
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<PAGE> 12
(b) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority in
interest of the Underwriters including the Representatives, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Keating, Muething & Klekamp, P.L.L. counsel for
the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Ohio, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and, to such counsel's knowledge, the Company is
duly qualified to do business as a foreign corporation in good
standing (or the local law equivalent) in all other
jurisdictions in which the failure to so qualify would have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(ii) Each subsidiary of the Company listed on
Schedule A annexed hereto (for purposes of this Section 6(d),
the "Subsidiaries") has been duly incorporated and is an
existing corporation in good standing (or the local law
equivalent), to the
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<PAGE> 13
extent applicable, or licensed to do business 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, to
such counsel's knowledge, each Subsidiary is duly qualified to
do business as a foreign corporation in good standing (or the
local law equivalent), to the extent applicable, or licensed
to do business in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification or licensing, except when the
failure to be so qualified or to be so licensed would not have
a material adverse effect on the condition (financial or
otherwise) of the Company and its subsidiaries taken as a
whole; all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued and is
fully paid and nonassessable; and, to such counsel's
knowledge, except as disclosed in the Prospectus or as set
forth on Schedule C annexed hereto, the capital stock of each
Subsidiary owned by the Company, directly or through
Subsidiaries, is owned free from liens, encumbrances and
defects.
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and has been duly
qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized; the Offered Securities
other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the
Offered Securities other than any Contract Securities
constitute, and any Contract Securities, when executed,
authenticated, issued and delivered in the manner provided in
the Indenture and sold pursuant to Delayed Delivery Contracts,
will constitute, valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles; and the Offered Securities other than any Contract
Securities conform, and any Contract Securities, when so
issued and delivered and sold will conform, to the description
thereof contained in the Prospectus;
(iv) The outstanding shares of the Common Stock of
the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the shareholders of
the Company have no preemptive rights with respect to the
Offered Securities;
(v) There are no contracts, agreements or
understandings known to such counsel between the Company and
any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act;
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<PAGE> 14
(vi) The Company and its subsidiaries possess
adequate certificates, authorizations or permits issued by
appropriate governmental agencies or bodies necessary to
conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company and its subsidiaries
taken as a whole.
(vii) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term
is defined in the Investment Company Act of 1940;
(viii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and the Rules and
Regulations and such as may be required under state securities
laws (as to which state securities laws counsel need express
no opinion);
(ix) The execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of
this Agreement) and any Delayed Delivery Contracts and the
issuance and sale of the Offered Securities and compliance
with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation
or order of any governmental agency or body or any court
having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or
instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound
or to which any of the properties of the Company or any such
subsidiary is subject, or the charter or by-laws of the
Company or any such subsidiary, and the Company has full power
and authority to authorize, issue and sell the Offered
Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement);
(x) Except as disclosed in the Prospectus, such
counsel knows of no actions, suits or proceedings pending
against or affecting the Company, the Subsidiaries or any of
their respective properties that, if determined adversely to
the Company or any of the Subsidiaries, would individually or
in the aggregate have a material adverse effect on the
condition (financial or other), business, prospects or results
of operations of the Company and its subsidiaries, taken as a
whole, or would materially and adversely affect the ability of
the Company to perform its obligations under this Agreement,
or which are otherwise material in the context of the sale of
the Offered Securities; and no such actions, suits or
proceedings are, to such counsel's knowledge, threatened or
contemplated.
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<PAGE> 15
(xi) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration
Statement and the Prospectus, as of the date of the Terms
Agreement, and any amendment or supplement thereto, as of its
date, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules
and Regulations; such counsel have no reason to believe that
such registration statement, as of its effective date, the
Registration Statement, as of the date of the Terms Agreement
or as of the Closing Date, or any amendment thereto, as of its
date or as of the Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as
of the date of the Terms Agreement or as of such Closing Date,
or any amendment or supplement thereto, as of its date or as
of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the
information required to be shown; and such counsel do not know
of any legal or governmental proceedings required to be
described in the Prospectus which are not described as
required or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it
being understood that such counsel need express no opinion as
to the financial statements or other financial data contained
in the Registration Statement or the Prospectus;
(xii) The Terms Agreement (including the provisions
of this Agreement) and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
and
(xiii) To the best of such counsel's knowledge after
due inquiry, except as set forth in the Prospectus or as
listed in Schedule B annexed hereto, (i) all of the
outstanding shares of capital stock and other ownership
interests of the Company and any of its subsidiaries in
Chiquita and AFEI have been validly issued and are fully paid
and nonassessable and are beneficially owned by either the
Company or AFC or one of its directly or indirectly wholly
owned subsidiaries free and clear of all liens, charges,
claims or encumbrances, (ii) except as disclosed in the
Affiliate SEC Filings, there are no outstanding subscriptions,
options, warrants, calls, rights, convertible securities or
other agreements or commitments of any character relating
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<PAGE> 16
to the issued or unissued capital stock or other ownership
interest of any of the AFG Affiliates or securities
convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock or other
ownership interest, or otherwise obligating any such AFG
Affiliate to issue, transfer or sell any such capital stock or
other securities or other ownership interest and (iii) there
are no voting trusts or other arrangements or understandings
to which the Company, any subsidiary of the Company or any of
the AFG Affiliates is a party with respect to the voting of
the capital stock or other ownership interest of the AFG
Affiliates.
In rendering the foregoing opinion, such counsel may rely, to
the extent they deem such reliance proper, on the opinions (in form and
substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to Underwriters' counsel as to matters
governed by the laws of jurisdictions other than the United States, the
State of Ohio or the General Corporation Law of the State of Delaware
and, as to matters of fact, upon certificates of officers of the
Company and of government officials; provided that such counsel shall
state that the opinion of any other counsel is in form satisfactory to
such counsel and, in such counsel's opinion, such counsel and the
Representatives are justified in relying on such opinions of other
counsel. Copies of all such opinions and certificates shall be
furnished to counsel to the Underwriters on each Closing Date. Such
counsel may state that they are not passing on matters relating to
patents and trademarks.
(e) The Representatives shall have received from Taft,
Stettinius & Hollister, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the sufficiency of all corporate proceedings, the validity
of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(f) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice-President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date, that no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission; the
Additional Registration Statement (if any) satisfying the requirements
of subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter; and, subsequent to the
date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a
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<PAGE> 17
whole except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(g) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to such Closing Date for the purposes of this subsection.
(h) At Closing Date the Offered Securities shall be rated as
indicated in the Terms Agreement or higher by Standard & Poor's
Corporation ("S&P") and Moody's Investors Services ("Moody's") and the
Company shall have delivered to the Representatives a letter, dated the
Closing Date from S&P or Moody's, or other evidence satisfactory to the
Representatives, confirming that the Offered Securities have such
ratings; and there shall not have occurred any decrease in the ratings
of any of the debt securities of the Company or of the Offered
Securities by either S&P or Moody's and neither S&P nor Moody's shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the debt
securities of the Company.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below; and provided, further, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased the Offered Securities
concerned, to the extent
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<PAGE> 18
that a prospectus relating to such Offered Securities was required to be
delivered by such Underwriter under the Act in connection with such purchase and
any such loss, claim, damage or liability of such Underwriter results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus (exclusive of material incorporated by reference) if the Company
had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above or to the extent the indemnifying party is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. An
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<PAGE> 19
indemnifying party will not be liable for any settlement of any action or claim
effected without its prior written consent, provided that such consent shall not
be unreasonably withheld.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 from the offering of the Securities
or (ii) if the allocation provided by clause (i) above 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 the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities 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 shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), 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
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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities under the Terms Agreement
and the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase
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<PAGE> 20
does not exceed 10% of the total principal amount of Offered Securities, the
Lead Underwriter may make arrangements satisfactory to the Company for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments under the Terms Agreement (including the provisions of
this Agreement), to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of Offered Securities with respect
to which such default occurs exceeds 10% of the total principal amount of
Offered Securities that the Underwriters are obligated to purchase on the
Closing Date and arrangements satisfactory to the Lead Underwriter and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, the Terms Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 9. As used in this Agreement, the term
AUnderwriter@ includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default. The respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the principal amounts of the
Offered Securities set forth opposite their names in the Terms Agreement as a
result of Delayed Delivery Contracts entered into by the Company.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and of the several Underwriters set forth in or made pursuant to the
Terms Agreement (including the provisions of this Agreement) will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Company or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Securities. If
the Terms Agreement is terminated pursuant to Section 7 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the purchase of
the Offered Securities by the Underwriters is not consummated for any reason
other than solely because of the termination of the Terms Agreement pursuant to
Section 7 or the occurrence of any event specified in clause (iii), (iv) or (v)
of Section 5(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o the Lead Underwriter, at their address furnished to
the Company in writing for the purpose of communications hereunder, or, if sent
to the Company, will be mailed, delivered or telegraphed and confirmed to it at
American Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio 45202,
Attention: James C. Kennedy, Corporate Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 6 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
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10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 6, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by the Lead Underwriter
will be binding upon all the Underwriters.
13. 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.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
-21-
<PAGE> 22
SCHEDULE A
<TABLE>
<CAPTION>
Percentage of
State of Common Equity
Name of Company Incorporation Ownership
- --------------- ------------- ---------
<S> <C> <C>
AMERICAN FINANCIAL CORPORATION Ohio 100%
American Financial Enterprises, Inc. Connecticut 100%
Great American Holding Corporation Ohio 100%
Great American Insurance Company Ohio 100%
American Annuity Group, Inc. Delaware 81%
Great American Life Insurance Company Ohio 100%
American Empire Surplus Lines
Insurance Company Delaware 100%
American National Fire Insurance Company New York 100%
Great American Management Services, Inc. Ohio 100%
Mid-Continent Casualty Company Oklahoma 100%
Stonewall Insurance Company Alabama 100%
Transport Insurance Company Ohio 100%
AMERICAN PREMIER UNDERWRITERS, INC Pennsylvania 100%
Pennsylvania Company Delaware 100%
Atlanta Casualty Company Illinois 100%
Buckeye Management Company Delaware 100%
Infinity Insurance Company Florida 100%
Leader National Insurance Company Ohio 100%
Penn Central UK Limited United Kingdom 100%
Insurance (GB) Limited United Kingdom 100%
Republic Indemnity Company of America California 100%
Windsor Insurance Company Indiana 100%
The New York and Harlem Railroad Company New York 97%
</TABLE>
-22-
<PAGE> 23
SCHEDULE B
I. American Financial Corporation ("AFC") has pledged 50% of its shares
of Great American Holding Corporation ("GAHC") pursuant to the terms of a Credit
Agreement dated as of December 7, 1993 among GAHC and The First National Bank of
Boston and Continental Bank, as Agent.
2. American Annuity Group, Inc. ("AAG") has pledged 25% of its interest
in all of the issued and outstanding shares of Great American Life Insurance
Company to certain banks pursuant to the terms of a Credit Agreement dated as of
January 31, 1994, as amended and restated as of November 10, 1995, between AAG
and The First National Bank of Boston, as Agent.
3. American Financial Enterprises, Inc. ("AFEI") has pledged 1,500,000
shares of American Financial Group, Inc. (the "Company") common stock pursuant
to the terms of a Credit Agreement dated as of September 30, 1993 between AFEI
and The First National Bank of Boston, as Agent.
4. AFC has pledged 2,500,000 shares of Company common stock pursuant to
the terms of a revolving credit agreement between AFC and Great American
Insurance Company ("GAIC").
5. AFC has pledged 750,000 shares of Chiquita Brands International,
Inc. ("Chiquita") common stock as collateral for State of New York tax
obligations.
6. AFC has placed 100,000 shares of Chiquita common stock and 673,000
shares of AFEI common stock for the benefit of GAIC in an escrow with The
Provident Bank as escrow agent to meet collateral requirements for certain
reinsurance obligations.
7. Pennsylvania Company has pledged all of the common stock for Public
Indemnity Company of America to certain banks pursuant to the terms of a Credit
Agreement dated as of December 29, 1995, between Pennsylvania Company, American
Premier Underwriters, Inc., and the First National Bank of Boston, as Agent.
-23-
<PAGE> 24
AMERICAN FINANCIAL GROUP, INC.
("COMPANY")
DEBT SECURITIES
TERMS AGREEMENT
December 10, 1997
TO: The Representative of the Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named in
Schedule A hereto for their respective accounts on and subject to the terms and
conditions of the Underwriting Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 333-21995) ("Underwriting Agreement"),
the following securities ("Offered Securities") on the following terms:
TITLE: 7.125% Senior Debentures Due 2007.
PRINCIPAL AMOUNT: $100,000,000
INTEREST: 7.125% per annum, from December 15, 1997, payable
semiannually on June 15 and December 15, commencing June 15, 1998, to
holders of record on the preceding June 1 or December 1, as the case
may be.
MATURITY: December 15, 2007
OPTIONAL REDEMPTION: As set forth on Schedule B attached hereto.
SINKING FUND: None
-1-
<PAGE> 25
LISTING: None
RATING: The Company has been informed that the Offered Securities have
been assigned the following ratings: S&P, "BBB"; Moody's, "Baa3."
DELAYED DELIVERY CONTRACTS: Not Applicable.
PURCHASE PRICE: 99.166% of principal amount.
EXPECTED REOFFERING PRICE: 99.816% of principal amount, subject to
change by the Representative.
CLOSING: 9:00 A.M. on December 15, 1997, at Taft, Stettinius &
Hollister, Cincinnati, Ohio, in Federal (same day) funds.
SETTLEMENT AND TRADING: Book-Entry Only via DTC. Securities will trade
in DTC's Same Day Funds Settlement System.
BLACKOUT: Through the Closing Date.
The respective principal amounts of the Offered Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Offered Securities will be made available for checking and
packaging at the office of the Representative at least 24 hours prior to the
Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the last paragraph at the bottom of the prospectus
supplement cover page concerning the terms of the offering by the Underwriters,
the legend stabilizing on the inside front cover page of the prospectus
supplement and, the concession and reallowance figures appearing under the
caption "Underwriting" in the prospectus supplement and the information
contained in the paragraphs under the caption "Underwriting" in the prospectus
supplement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will
-2-
<PAGE> 26
become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By: /s/ James E. Evans
-------------------------
James E. Evans
Senior Vice President
The foregoing Terms Agreement is hereby confirmed and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Joseph E. Consolino
--------------------------
Joseph E. Consolino
Vice President
[Acting on behalf of itself and as the
Representative of the several Underwriters.]
-3-
<PAGE> 27
SCHEDULE A
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
Credit Suisse First Boston Corporation $33,400,000
Bear, Stearns & Co. Inc. $33,300,000
Donaldson, Lufkin & Securities Corp. $33,300,000
Total.................... $100,000,000
-4-
<PAGE> 28
SCHEDULE B
Optional Redemption
The Senior Debentures will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to the sum of (i) the principal amount of
the Senior Debentures being redeemed plus accrued interest thereon to the
redemption date, and (ii) the Make-Whole Amount (as defined below), if any, with
respect to such Senior Debentures.
"Make-Whole Amount" means, in connection with any optional redemption
of any Senior Debentures, the excess, if any, of (i) the sum, as determined by a
Quotation Agent (as defined herein) of the present values of the principal
amount of such Senior Debentures, together with scheduled payments of interest
from the redemption date to the Stated Maturity of the Senior Debentures, in
each case discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined herein) over (ii) 100% of the principal amount of the Senior
Debentures to be redeemed.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, calculated on the third
Business Day preceding the redemption date, plus in each case .20%. (20 basis
points).
"Comparable Treasury Issue" means the U. S. Treasury 6.125% Note due
August 15, 2007. If such security shall cease to be outstanding then Comparable
Treasury Issue shall mean the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the
redemption date to the Stated Maturity Date of the Senior Debentures that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Senior Debentures.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Indenture Trustee after consultation with the Company. "Reference Treasury
Dealer" means a primary U.S. Government securities dealer.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer
-5-
<PAGE> 29
Quotations, or (B) if the Indenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Indenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Indenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such redemption date.
-6-
<PAGE> 1
EXHIBIT 4
WHEREAS, on February 18, 1997, AFC Holding Company (formerly American Financial
Group, Inc.) filed a Registration Statement Number 333-21995 on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission ("SEC")
for the purpose, among others, of registering unsecured debt securities to be
issued by AFC Holding Company ("Debt Securities"); and
WHEREAS, on December 2, 1997, the shareholders of AFC Holding Company approved a
reorganization pursuant to which AFC Holding Company became a wholly-owned
subsidiary of the Corporation; and
WHEREAS, on or about December 3, 1997, the Corporation, AFC Holding Company and
Star Bank, N.A., as parties to an Indenture dated November 12, 1997 with respect
to the Debt Securities, executed and delivered a Supplemental Indenture pursuant
to which the Corporation has been substituted as obligor for all purposes under
the Debt Securities; and
WHEREAS, this Board of Directors has, after due deliberation, determined that it
is in the best interests of the Corporation and all its shareholders that the
Corporation issue a series of Debt Securities to be known as the "7-1/8% Senior
Debentures Due 2007" (the "Senior Debentures"); and
NOW, THEREFORE, BE IT
RESOLVED, that the Corporation be, and it hereby is, authorized to issue and to
sell up to One Hundred Million Dollars ($100,000,000) in aggregate principal
amount of 7-1/8% Senior Debentures Due December 15, 2007, which Senior
Debentures shall bear interest from the date of the issuance thereof at the rate
of 7-1/8% per annum and with interest payable semiannually on June 15 and
December 15 of each year, commencing June 15, 1998; and, BE IT
RESOLVED FURTHER, that the Senior Debentures will initially be issued in the
form of one global note (the "Global Note") held in book entry form and
deposited on the date of the closing of the sale of the Senior Debentures with,
on or behalf of, The Depository Trust Company ("DTC") and registered in the name
of Cede & Co., as nominee of DTC (such nominee being referred to as the "Global
Debenture Holder"); and, BE IT
RESOLVED FURTHER, that so long as the Global Note holder is the registered owner
of the Global Note, the Global Note holder will be considered the sole holder
under the Indenture of the Senior Debentures; and, BE IT
RESOLVED FURTHER, that One East Fourth Street, Cincinnati, Ohio 45202 shall be
the place where: (i) the principal, interest and premium (if any) are payable on
the Senior Debentures; (ii) Senior Debentures may be surrendered for
registration or transfer; (iii)
<PAGE> 2
Senior Debentures may be surrendered for exchange; and (iv) notices and demands
to or upon the Corporation in respect of Senior Debentures may be served; and,
BE IT
RESOLVED FURTHER, that the Senior Debentures shall be redeemable, in whole or in
part, at the option of the Corporation at any time, on not less than 30 nor more
than 60 days' notice, at a redemption price equal to the sum of (i) the
principal amount of Senior Debentures being redeemed plus interest thereon to
the redemption date; and (ii) the Make-Whole Amount (as defined in the
Prospectus Supplement dated December 10, 1997), if any, but shall not be subject
to any sinking fund; and, BE IT
RESOLVED FURTHER, that the Senior Debentures shall have such other terms and
conditions, consistent with the foregoing, as are set forth in the Terms
Agreement (attached hereto) and the Prospectus Supplement dated December 10,
1997, as the same may be amended, modified or supplemented from time to time by
or under the direction of the officers of the Corporation (as so amended,
modified or supplemented, the "Prospectus Supplement"); and, BE IT
RESOLVED FURTHER, that any one (1) or more of the officers of the Corporation
be, and they hereby are, authorized and directed, on behalf of the Corporation,
to execute and to deliver any and all documents, including (without limitation)
an Indenture with respect to the Senior Debentures, certificates evidencing the
Senior Debentures, agreements with underwriters or others for the marketing and
sale of the Senior Debentures and other certificates, ancillary agreements or
other documents that such officer or officers may deem necessary or appropriate
in connection with the issuance and sale of the Senior Debentures or to give
full force and effect to the purposes of the foregoing resolutions; and, BE IT
RESOLVED FURTHER, that any one (1) or more of the officers of the Corporation
be, and they hereby are, authorized to take (or to cause to be taken), on behalf
of the Corporation, any and all actions, including (without limitation)
completing and filing with the SEC the Prospectus Supplement, that such officer
or officers may deem necessary or appropriate in connection with the issuance
and sale of the Senior Debentures or to give full force and effect to the
purposes of the foregoing resolutions.
2
<PAGE> 3
AMERICAN FINANCIAL GROUP, INC.
("COMPANY")
DEBT SECURITIES
TERMS AGREEMENT
---------------
December 10, 1997
TO: The Representative of the Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named in
Schedule A hereto for their respective accounts on and subject to the terms and
conditions of the Underwriting Agreement filed as an exhibit to the Company's
registration statement on Form S-3 (No. 333-21995) ("Underwriting Agreement"),
the following securities ("Offered Securities") on the following terms:
TITLE: 7.125% Senior Debentures Due 2007.
PRINCIPAL AMOUNT: $100,000,000
INTEREST: 7.125% per annum, from December 15, 1997, payable
semiannually on June 15 and December 15, commencing June 15, 1998, to
holders of record on the preceding June 1 or December 1, as the case
may be.
MATURITY: December 15, 2007
OPTIONAL REDEMPTION: As set forth on Schedule B attached hereto.
SINKING FUND: None
<PAGE> 4
LISTING: None
RATING: The Company has been informed that the Offered Securities have
been assigned the following ratings: S&P, "BBB"; Moody's, "Baa3."
DELAYED DELIVERY CONTRACTS: Not Applicable.
PURCHASE PRICE: 99.166% of principal amount.
EXPECTED REOFFERING PRICE: 99.816% of principal amount, subject to
change by the Representative.
CLOSING: 9:00 A.M. on December 15, 1997, at Taft, Stettinius &
Hollister, Cincinnati, Ohio, in Federal (same day) funds.
SETTLEMENT AND TRADING: Book-Entry Only via DTC. Securities will trade
in DTC's Same Day Funds Settlement System.
BLACKOUT: Through the Closing Date.
The respective principal amounts of the Offered Securities to be
purchased by each of the Underwriters are set forth opposite their names in
Schedule A hereto.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Offered Securities will be made available for checking and
packaging at the office of the Representative at least 24 hours prior to the
Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the last paragraph at the bottom of the prospectus
supplement cover page concerning the terms of the offering by the Underwriters,
the legend stabilizing on the inside front cover page of the prospectus
supplement and, the concession and reallowance figures appearing under the
caption "Underwriting" in the prospectus supplement and the information
contained in the paragraphs under the caption "Underwriting" in the prospectus
supplement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will
2
<PAGE> 5
become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By:
-----------------------------------
James E. Evans
Senior Vice President
The foregoing Terms Agreement is hereby confirmed and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
-----------------------------------------
[Insert title]
[Acting on behalf of itself and as the
Representative of the several Underwriters.]
3
<PAGE> 6
SCHEDULE A
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Credit Suisse First Boston Corporation $ 33,400,000
Bear, Stearns & Co. Inc. $ 33,300,000
Donaldson, Lufkin & Securities Corp. $ 33,300,000
Total................................$100,000,000
============
</TABLE>
4
<PAGE> 7
SCHEDULE B
Optional Redemption
- -------------------
The Senior Debentures will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to the sum of (i) the principal amount of
the Senior Debentures being redeemed plus accrued interest thereon to the
redemption date, and (ii) the Make-Whole Amount (as defined below), if any, with
respect to such Senior Debentures.
"Make-Whole Amount" means, in connection with any optional redemption
of any Senior Debentures, the excess, if any, of (i) the sum, as determined by a
Quotation Agent (as defined herein) of the present values of the principal
amount of such Senior Debentures, together with scheduled payments of interest
from the redemption date to the Stated Maturity of the Senior Debentures, in
each case discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined herein) over (ii) 100% of the principal amount of the Senior
Debentures to be redeemed.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, calculated on the third
Business Day preceding the redemption date, plus in each case .20%. (20 basis
points).
"Comparable Treasury Issue" means the U. S. Treasury 6.125% Note due
August 15, 2007. If such security shall cease to be outstanding then Comparable
Treasury Issue shall mean the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the
redemption date to the Stated Maturity Date of the Senior Debentures that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Senior Debentures.
"Quotation Agent" means the Reference Treasury Dealer selected by the
Indenture Trustee after consultation with the Company. "Reference Treasury
Dealer" means a primary U.S. Government securities dealer.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the
5
<PAGE> 8
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Indenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Indenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Indenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such redemption date.
6
<PAGE> 1
[Keating, Muething & Klekamp, P.L.L. Letterhead]
EXHIBIT 5
FACSIMILE (513) 579-6957
December 12, 1997
Direct Dial: (513) 579-6517
E-Mail: [email protected]
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Ladies and Gentlemen:
We have acted as counsel to American Financial Group, Inc. (the
"Company"), in connection with the Registration Statement on Form S-3
(Registration No. 333-21995) filed with the Securities and Exchange Commission
on February 18, 1997 and Post-Effective Amendment No. 1 to such Registration
Statement filed on December 5, 1997, as supplemented by the Prospectus
Supplement dated December 10, 1997 (Post-Effective Amendment No. 1 to such
registration statement as so supplemented is hereafter referred to as the
"Registration Statement") relating to the public offering of an aggregate
principal amount of $100,000,000 of its 7-1/8% Senior Debentures due 2007 (the
"Securities").
In reaching the conclusions expressed herein, we have examined and
relied upon the original or copies, certified to our satisfaction, of (i) the
Amended and Restated Articles of Incorporation and the Code of Regulations of
the Company; (ii) copies of resolutions of the Board of Directors of the
Company, or committees thereof, authorizing the issuance of the Securities and
related matters; (iii) the Registration Statement and all exhibits thereto; 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 the Company and upon documents, records and instruments
furnished to us by the Company, without independent check or verification of
their accuracy.
<PAGE> 2
American Financial Group, Inc.
Page 2
December 12, 1997
Based on the foregoing, we are of the opinion that when, and if,
issued, delivered and paid for, the Securities will be duly authorized, validly
issued and binding obligations of the Company.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In providing this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Commission promulgated thereunder.
Yours truly,
KEATING, MUETHING & KLEKAMP, P.L.L.
By: /S/ Paul V. Muething
-------------------------------------
Paul V. Muething
