<PAGE> 1
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: April 9, 1999 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.
<PAGE> 2
AMERICAN FINANCIAL GROUP, INC.
FORM 8-K
Item 5. OTHER EVENTS.
On April 9, 1999, American Financial Group, Inc., an Ohio corporation
(the "Company"), entered into an Underwriting Agreement relating to the sale of
$350,000,000 aggregate principal amount of its 7-1/8% Senior Debentures due 2009
(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 2009.
(4) Resolutions of the Company Designating the Terms of
7-1/8% Senior Debentures Due 2009.
(5) Opinion of Keating, Muething & Klekamp, P.L.L.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN FINANCIAL GROUP, INC.
April 13, 1999 By: /s/James C. Kennedy
------------------------------------
James C. Kennedy
Vice President, Deputy General
Counsel & Secretary
<PAGE> 1
Exhibit 1
$350,000,000
AMERICAN FINANCIAL GROUP, INC.
7.125% SENIOR DEBENTURES DUE 2009
UNDERWRITING AGREEMENT
April 9, 1999
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
CORPORATION
MERRILL, LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
As representative of the several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
American Financial Group, Inc., an Ohio corporation (the "COMPANY")
proposes to issue and sell $350,000,000 principal amount of its 7.125% Senior
Debentures due 2009 (the "SECURITIES") to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS"). The Securities are to be issued pursuant
to the provisions of an Indenture dated as of November 12, 1997, as
supplemented, (the "INDENTURE") between the Company and Firstar Bank, N.A., a
national banking association, as Trustee (the "TRUSTEE").
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement (No. 333-21995), including a
form of prospectus, which has become effective, relating to the issuance and
<PAGE> 2
sale from time to time of certain of its unsecured debt securities. The
Securities represent a portion of the unsecured debt securities registered
pursuant to such registration statement. Such registration statement, as amended
at the time of this Agreement, is hereinafter referred to as the "REGISTRATION
STATEMENT", and the prospectus included in such Registration Statement, as
supplemented to reflect the terms of the Securities and the terms of the
offering thereof, as filed with the Commission pursuant to and in accordance
with Rule 424(b) ("RULE 424(B)") under the Act, is hereinafter referred to as
the "PROSPECTUS". All references to the Registration Statement and the
Prospectus include all documents incorporated by reference therein. No document
has been or will be prepared or distributed in reliance on Rule 434 under the
Act. The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as used in this Agreement
with respect to the Registration Statement or the Prospectus shall include all
documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "EXCHANGE ACT") that are deemed to
be incorporated by reference in the Prospectus.
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at 98.632% of the principal amount thereof (the "PURCHASE PRICE").
SECTION 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose and, subject to the terms and conditions hereof,
severally and not jointly agree (i) to make a public offering of their
respective portions of the Securities as soon after the execution and delivery
of this Agreement as in your judgment is advisable and (ii) initially to offer
the Securities upon the terms set forth in the Prospectus. Subject to the terms
and conditions hereof, the Underwriters severally and not jointly also agree
that (i) they will offer and sell the Securities to the public only in those
jurisdictions, and in such amounts, where due qualification and/or registration
has been effected or an exemption from such qualification and/or registration is
available under the applicable securities or blue sky laws of such jurisdiction,
and (ii) the Securities will be offered and sold only in those jurisdictions
where broker/dealer licensing has been obtained or where there is an exemption
from such licensing; it being understood, however, that such agreement only
covers the initial sale of the Securities by the Underwriters and not any
subsequent sale of such Securities in any trading market.
-2-
<PAGE> 3
SECTION 4. Delivery and Payment. The Company will deliver, against
payment of the Purchase Price, the 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
Securities shall be made by the Underwriters in Federal (same day) funds by wire
transfer to an account at a bank acceptable to the Donaldson, Lufkin & Jenrette
Securities Corporation, drawn to the order of the Company. The time and date of
delivery and payment for the Securities shall be 9:00 A.M., New York City time,
on April 14, 1999 or such other time on the same or such other date as
Donaldson, Lufkin & Jenrette Securities Corporation and the Company shall agree
in writing. The time and date of such delivery and payment are hereinafter
referred to as the "CLOSING Date".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at the
offices of Taft, Stettinius & Hollister LLP, 425 Walnut Street, Cincinnati, Ohio
on the Closing Date.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, and (iv) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish to you a signed copy of the Registration Statement as
first filed with the Commission and of each amendment to it, including all
exhibits and documents incorporated therein by reference, and to furnish to you
-3-
<PAGE> 4
and each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without exhibits
but including documents incorporated therein by reference, as you may reasonably
request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and, during such period, to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Securities by you, and to use its best efforts to cause any
such amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated therein by reference as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and
-4-
<PAGE> 5
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue any such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Securities,
in any jurisdiction in which it is not now so subject to general consent to
service of process or taxation.
(g) To mail and make generally available to the holders of the
Securities as soon as practicable an earnings statement of the Company covering
the twelve-month period ending June 30, 1999 that shall satisfy the provisions
of Section 11(a) of the Act, and to advise you in writing when such statement
has been so made available.
(h) So long as the Securities are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Securities a financial report of the Company, such
financial report to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by independent public accountants and (ii) to mail and
make generally available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to such
holders, a consolidated balance sheet, a consolidated statement of operations
and a consolidated statement of cash flows as of the end of and for such period,
and for the period from the beginning of such year to the close of such
quarterly period, together with comparable information for the corresponding
periods of the preceding year.
(i) So long as the Securities are outstanding, to furnish to you as
soon as available copies of all reports or other communications furnished to
their security holders or furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company is
listed and such other publicly available information concerning the Company and
its subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
-5-
<PAGE> 6
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel and the Company's accountants in connection with the registration and
delivery of the Securities under the Act and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
costs of printing or producing this Agreement and any other agreements or
documents in connection with the offering, purchase, sale or delivery of the
Securities, (iv) all expenses in connection with any registration or
qualification of the Securities for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees (which shall not exceed Fifteen Thousand
Dollars ($15,000.00) in the aggregate) and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) any filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Securities by the National Association of Securities Dealers, Inc., (vi) the
cost of printing any certificates representing the Securities, (vii) the costs
and charges of any transfer agent, registrar and/or depositary (including DTC),
(viii) all fees charged by rating agencies for the rating of the Securities,
(ix) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture and the Securities and (x) all other costs and
expenses incident to the performance of their obligations hereunder for which
provision is not otherwise made in this Section.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Company substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
(l) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of the Securities.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
-6-
<PAGE> 7
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
SECTION 6. Representations and Warranties. The Company represents and
warrants to each Underwriter that:
(a) The Registration Statement has become effective; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge,
threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act; (ii) the Registration
Statement, when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business as described
in the Prospectus and to own, lease and operate its properties, and is duly
-7-
<PAGE> 8
qualified and is in good standing (or the local law equivalent) as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified or to be in good
standing would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(e) Each of the Company's subsidiaries listed on Schedule II
("Designated Subsidiaries") has been duly incorporated and is validly existing
as a 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, has the corporate power and authority to own, lease and operate
its properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign corporation to
transact business and is in good standing (or the local law equivalent) in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the
Company's Designated Subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and, except as set forth on Schedule III
annexed hereto, are owned by the Company, directly or indirectly, through one or
more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "LIEN").
(h) The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Securities have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
-8-
<PAGE> 9
accordance with the terms of this Agreement, the Securities will be entitled to
the benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(j) The Securities conform as to legal matters to the description
thereof contained in the Prospectus.
(k) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or Code of Regulations or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(l) The execution, delivery and performance of this Agreement, the
Indenture, and the Securities by the Company, the compliance by the Company with
all the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
Code of Regulations or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property, (iv) result
in the imposition or creation of (or the obligation to create or impose) a Lien
under any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound or (v) result in the suspension, termination
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
(m) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
-9-
<PAGE> 10
subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(n) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
material adverse effect on the business, prospects, financial condition or
results of operation of the Company and its subsidiaries, taken as a whole.
(o) Except as disclosed in the Prospectus, each of the Company and its
subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "AUTHORIZATION") of, and has made
all filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws, as are necessary to
own, lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
-10-
<PAGE> 11
(p) Except as disclosed in the Prospectus, there are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(q) This Agreement has been duly authorized, executed and delivered by
the Company.
(r) Ernst & Young LLP are independent public accountants with respect
to the Company and its subsidiaries as required by the Act.
(s) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly in all material respects the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in all material respects
in accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(t) The Company is not and, after giving effect to the offering and
sale of the 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, as amended.
(u) 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 or to require the Company to include such securities with the
Securities registered pursuant to the Registration Statement.
(v) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act has indicated to
-11-
<PAGE> 12
the Company that it is considering (i) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating assigned to the Company or any securities of
the Company or (ii) any change in the outlook for any rating of the Company or
any securities of the Company.
(w) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(x) Each subsidiary of the Company which is engaged in the business of
insurance or reinsurance (collectively, the "INSURANCE SUBSIDIARIES") holds such
insurance licenses, certificates and permits from governmental authorities
(including, without limitation, from the insurance regulatory agencies of the
various jurisdictions where it conducts business (the "INSURANCE LICENSES")) as
are necessary to the conduct of its business as described in the Prospectus; the
Company and each Insurance Subsidiary have fulfilled and performed all
obligations necessary to maintain the Insurance Licenses; except as disclosed in
the Prospectus, there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or investigation that could reasonably be
expected to result in the revocation, termination or suspension of any Insurance
License which would have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole; and except as disclosed in the Prospectus, no
insurance regulatory agency or body has issued, or commenced any proceeding for
the issuance of, any order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its parent.
(y) Except as disclosed in the Prospectus, the Company and its
Insurance Subsidiaries have made no material change in their insurance reserving
practices since the most recent audited financial statements included in the
Prospectus.
(z) All reinsurance treaties and arrangements to which any Insurance
Subsidiary is a party are in full force and effect and no Insurance Subsidiary
is in violation of or in default in the performance, observance or fulfillment
of,
-12-
<PAGE> 13
any obligation, agreement, covenant or condition contained therein; no Insurance
Subsidiary has received any notice from any of the other parties to such
treaties, contracts or agreements that such other party intends not to perform
such treaty and, to the best knowledge of the Company and the Insurance
Subsidiaries, the Company and the Insurance Subsidiaries have no reason to
believe that any of the other parties to such treaties or arrangements will be
unable to perform such treaty or arrangement except to the extent adequately and
properly reserved for in the consolidated financial statements of the Company
included in the Prospectus, except where such default or inability to perform
would not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole.
(aa) The statutory financial statements of the Insurance Subsidiaries,
from which certain ratios and other statistical data included in the
Registration Statement and the Prospectus have been derived, have been prepared
for each relevant period in conformity with statutory accounting principles or
practices required or permitted by the National Association of Insurance
Commissioners and by the appropriate Insurance Department of the jurisdiction of
domicile of each Insurance Subsidiary, and such statutory accounting practices
have been applied on a consistent basis throughout the periods involved, except
as may otherwise be indicated therein or in the notes thereto, and present
fairly in all material respects the statutory financial position of the
Insurance Subsidiaries as of the dates thereof, and the statutory basis results
of operations of the Insurance Subsidiaries for the periods covered thereby.
(bb) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby (but, in the absence of bad faith, no such certificate
shall impose any personal, as opposed to corporate, liability).
(cc) Except as set forth in the Prospectus, 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") 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 as set forth on Schedule III annexed hereto.
(dd) The Company has previously delivered to you true and complete
copies of Chiquita's (i) Annual Report on Form 10-K for the year ended December
31, 1998, as filed with the Commission, and all amendments thereto; (ii) proxy
statements relating to all meetings of its shareholders (whether annual or
special) held or scheduled to be held since January 1, 1998;
-13-
<PAGE> 14
and (iii) all other reports, statements and registration statements (including
Current Reports on Form 8-K) filed by it with the Commission since December 31,
1998 (collectively, the "Chiquita Filings"). As of their respective dates, the
Chiquita 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 Chiquita included in the
Chiquita Filings present fairly, in all materials respects, the financial
condition, results of operations and changes in financial position of Chiquita
as at the dates or for the periods indicated therein in conformity with
generally accepted accounting principles applied on a consistent basis.
(ee) Except as set forth in the Chiquita Filings or the Prospectus,
since January 1, 1998, Chiquita and its subsidiaries have 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 Chiquita and its subsidiaries that would have a material
adverse effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
SECTION 7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by or on behalf of such
Underwriter through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter who failed to deliver a Prospectus,
as then amended or supplemented, (so long as the Prospectus and any amendment or
supplement thereto was provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgements caused by any untrue statement or alleged untrue
statement of a material fact contained in the
-14-
<PAGE> 15
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity in Section 7(a) from the Company to such
Underwriter but only with reference to information relating to such Underwriter
furnished in writing to the Company by such Underwriter through you for use in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the
-15-
<PAGE> 16
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all indemnified parties and all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in
the case of parties indemnified pursuant to Section 7(a), and by the Company, in
the case of parties indemnified pursuant to Section 7(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(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 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses)
-16-
<PAGE> 17
received by the Company, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Securities, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether 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
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of 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 to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects on the
-17-
<PAGE> 18
Closing Date with the same force and effect as if made on and as of the Closing
Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
to the Company of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Company or any securities
of the Company by any such rating organization and (iii) no such rating
organization shall have given notice to the Company that it has assigned (or is
considering assigning) a lower rating to the Securities than that on which the
Securities were marketed.
(c) You shall have received on the Closing Date certificates, dated the
Closing Date, signed by the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers confirm
the matters set forth in Sections 6(w), 8(a) and 8(b) and state that the Company
has complied with all of the agreements and satisfied all of the conditions
herein contained and required to be complied with or satisfied by the Company on
or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of either Company and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term debt of
either Company or any of its subsidiaries and (iii) neither the Company nor any
of its subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(d)(i),
8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
-18-
<PAGE> 19
of Keating, Muething & Klekamp, P.L.L., counsel for the Company, to the effect
that:
(i) the Company has been incorporated, is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate
its properties, and is duly qualified and is in good standing (or the
local law equivalent) as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole;
(ii) each of the Designated Subsidiaries has been incorporated
and is validly existing as a corporation in good standing (or the local
law requirement), to the extent applicable, or licensed to do business
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in
the Prospectus, and is duly qualified as a foreign corporation to
transact business and is in good standing (or the local law equivalent)
in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not have a material adverse effect on the business, prospects,
financial condition or results of operations of either Company and its
respective subsidiaries taken as a whole;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar
rights;
(iv) to the best knowledge of such counsel, all of the
outstanding shares of capital stock of each of the Designated
Subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable, and are owned by the respective Company,
directly or indirectly through one or more subsidiaries, free and clear
of any Lien;
(v) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
-19-
<PAGE> 20
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vi) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Registration Statement has become effective under
the Act, no stop order suspending its effectiveness has been issued and
no proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before or contemplated by the
Commission;
(ix) the statements under the captions "Description of Senior
Debentures," "Description of Debt Securities" and "Underwriting" in the
Prospectus and Item 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present in all
material respects the information called for with respect to such legal
matters, documents and proceedings;
(x) neither the Company nor any of its subsidiaries is in
violation of its respective charter or Code of Regulations or by-laws
and, to the best of such counsel's knowledge after due inquiry, neither
the Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound;
-20-
<PAGE> 21
(xi) the execution, delivery and performance of this
Agreement, the Indenture, and the Securities by the Company, the
compliance by the Company with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and
thereby will not (A) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities or Blue
Sky laws of the various states), (B) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
charter or Code of Regulations or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, (C) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property that is material to the Company and its
subsidiaries, taken as a whole, (D) result in the imposition or
creation of (or the obligation to create or impose) a Lien under any
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or their
respective property is bound, that is material to the Company and its
subsidiaries, taken as a whole, or (E) result in the suspension,
termination or revocation of any Authorization of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of
any such Authorization that is material to the Company and its
subsidiaries, taken as a whole;
(xii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which either
the Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
(xiii) such counsel does not know of any violation by the
Company or any of its subsidiaries of any Environmental Law, any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or any provisions of the Foreign Corrupt Practices Act or the
rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a material
adverse
-21-
<PAGE> 22
effect on the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole;
(xiv) to the best knowledge of such counsel, the Company and
its subsidiaries have such Authorizations of, and have made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole; each such
Authorization is valid and in full force and effect and the Company and
its subsidiaries are in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or
lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to either the Company or
any of its subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or
in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(xv) the Company is not and, after giving effect to the
offering and sale of the 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,
as amended;
(xvi) to the best of such counsel's knowledge after due
inquiry, 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 or to require the Company to include
such securities with the Securities registered pursuant to the
Registration Statement;
-22-
<PAGE> 23
(xvii) to the best knowledge of such counsel (which has not
conducted any investigation), each Insurance Subsidiary holds such
insurance licenses, certificates and permits from governmental
authorities (including, without limitation, Insurance Licenses) which
are necessary to the conduct of its business as described in the
Prospectus; to the best knowledge of such counsel, there is no pending
or threatened action, suit, proceeding or investigation that could
reasonably be expected to result in the revocation, termination or
suspension of any Insurance License; and, except as disclosed in the
Prospectus, to the knowledge of such counsel, no insurance regulatory
agency or body has issued, or commenced any proceeding for the issuance
of, any order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its parent;
(xviii) to the best knowledge of such counsel, all reinsurance
treaties and arrangements to which any Insurance Subsidiary is a party
are in full force and effect and such counsel is not aware of any
violation of or default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein
by any Insurance Subsidiary;
(xix) To the best of such counsel's knowledge after due
inquiry, except as set forth in the Prospectus or as listed in Schedule
II annexed hereto, all of the outstanding shares of capital stock and
other ownership interests of the Company and any of its subsidiaries in
Chiquita 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; and
(xx) (A) each document, if any, filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus (except for
financial statements and other financial data included therein as to
which no opinion need be expressed) complied when so filed as to form
with the Exchange Act, (B) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for the
financial statements and other financial data included therein as to
which no opinion need be expressed) comply as to form with the Act, (C)
such counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein (except for
the financial statements and other financial data as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act) contained any untrue
statement of a
-23-
<PAGE> 24
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading and (D) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable
(except for the financial statements and other financial data,
as aforesaid) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
The opinion of Keating, Muething & Klekamp, P.L.L. described
in Section 8(e) above shall be rendered to you at the request of the
Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Taft, Stettinius & Hollister LLP, counsel
for the Underwriters, as to the matters referred to in Sections
8(e)(v), 8(e)(vi), 8(e)(vii) and 8(e)(ix) and clauses 8(e)(xx)(B)
(insofar as it relates to the Prospectus), 8(e)(xx)(C) and 8(e)(xx)(D).
In giving such opinions with respect to the matters covered by
Section 8(e)(xx), Keating, Muething & Klekamp, P.L.L. may state that
their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is
without independent check or verification except as specified. In
giving such opinions with respect to the matters covered by clauses
8(e)(xx)(B), 8(e)(xx)(C) and 8(e)(xx)(D) above, Taft, Stettinius &
Hollister LLP may state that their opinion and belief are based upon
their participation in the preparation of the Prospectus and any
amendments or supplements thereto (other than the documents
incorporated therein by reference) and review and discussion of the
contents thereof (including the documents incorporated therein by
reference), but are without independent check or verification except as
specified.
(g) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Ernst & Young LLP, independent public accountants, containing the
information and statements of the type ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus.
(h) The Company shall not have failed on or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and
-24-
<PAGE> 25
required to be performed or complied with by them on or prior to the
Closing Date.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the proportion which the principal
amount of Securities set forth opposite its name in Schedule I bears to the
aggregate principal amount of Securities which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of
-25-
<PAGE> 26
Securities which any Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Underwriter. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Securities and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased by all Underwriters
and arrangements satisfactory to you and the Company for purchase of such
Securities are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter and
the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of any such Underwriter under this Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to American
Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio 45202, Attention
James C. Kennedy, Corporate Secretary and (ii) if to any Underwriter or to you,
to you c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue,
New York, New York 10172, Attention: Syndicate Department, or in any case to
such other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Company agrees to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which they
-26-
<PAGE> 27
have agreed to pay pursuant to Section 5(j) hereof. The Company also agrees to
reimburse the several Underwriters, their directors and officers and any persons
controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the fees disbursements of counsel) incurred by
them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement, including the indemnity
agreements contained in Section 7 hereof, has been and is made solely for the
benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and any person controlling the Company and its respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from any of the several Underwriters merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-27-
<PAGE> 28
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By:
-----------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
Acting on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By
-----------------------------
Name:
Title:
-28-
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
Underwriters Principal Amount of
- ------------ Securities
to be Purchased
--------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities $213,500,000
Corporation
Bear, Stearns & Co., Inc. 45,500,000
Credit Suisse First Boston Corporation 45,500,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 45,500,000
------------
$350,000,000
============
</TABLE>
<PAGE> 30
SCHEDULE II
<TABLE>
<CAPTION>
State of Percentage of
Name of Company Incorporation Common Equity
- --------------- ------------- Ownership
---------
<S> <C> <C>
AFC Holding Company Ohio 100
American Financial Capital Trust I Delaware 100
American Financial Corporation Ohio 100
American Premier Underwriters, Inc. Pennsylvania 100
Pennsylvania Company Delaware 100
Atlanta Casualty Company Ohio 100
Infinity Insurance Company Indiana 100
Leader Insurance Company Ohio 100
Republic Indemnity Company of America California 100
Windsor Insurance Company Indiana 100
Great American Insurance Company Ohio 100
American Annuity Group, Inc. Delaware 82
AAG Holding Company, Inc. Ohio 100
Great American Life Insurance Company Ohio 100
Loyal American Life Insurance Company Alabama 100
Prairie National Life Insurance Company South Dakota 100
American Annuity Group Capital Trust I Delaware 100
American Annuity Group Capital Trust II Delaware 100
American Annuity Group Capital Trust III Delaware 100
American Empire Surplus Lines Insurance Company Delaware 100
American National Fire Insurance Company New York 100
Brothers Property Corporation Ohio 80
Mid-Continent Casualty Company Oklahoma 100
Stonewall Insurance Company Alabama 100
Transport Insurance Company Ohio 100
</TABLE>
-2-
<PAGE> 31
SCHEDULE III
1. AFC has pledged 580,000 shares of Chiquita Brands
International, Inc. ("Chiquita") common stock and 150,000
shares of Marsh Supermarkets CIB Common as collateral for
State of New York tax obligations.
2. AFC has placed 300,000 shares of Chiquita common stock and
608,402 shares of AAG 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.
<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 of registering $500,000,000
in aggregate offering prices of debt and equity securities to be issued
by AFC Holding Company; and
WHEREAS, on December 3, 1997, the Corporation and AFC Holding Company
filed a post-effective amendment to the Registration Statement to the
effect that the Corporation is the issuer of securities offered
thereunder; 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 unsecured debt securities (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, the prospectus relating to the Registration Statement stated
that Debt Securities offered thereunder would not exceed an initial
offering price of $300,000,000; and
WHEREAS, on or about December 10, 1997, the Corporation issued
$100,000,000 in aggregate principal amount of a series of Debt
Securities known as the "7-1/8% Senior Debentures due 2007";
WHEREAS, this Board of Directors has, after due deliberation,
determined that in light of prevailing market conditions and to afford
the Corporation the greatest degree of financial flexibility, it is in
the best interests of the Corporation that the aggregate offering price
of Debt Securities not be limited to $300,000,000; and that the
Corporation issue a new series of Debt Securities to be know as the
"7-1/8% Senior Debentures due 2009" (the "7-1/8% Debentures"); and
NOW, THEREFORE, BE IT
RESOLVED, that the Corporation be, and it hereby is, authorized to
issue and sell Three Hundred Fifty Million Dollars ($350,000,000) in
aggregate amount of the 7-1/8% Senior Debentures, which Debentures
shall bear interest from the date of issuance at the rate of 7-1/8% per
annum and with interest payable semiannually on April 15 and October 15
of each year, commencing October 15, 1999; and, BE IT
RESOLVED FURTHER, that in light of prevailing market conditions
and to afford the Corporation the greatest degree of financial
flexibility, it is in the best interest of the Corporation that
the aggregate offering price of the Debt Securities not be limited
to $300,000,000; and
RESOLVED FURTHER, that the Corporation will evidence the increase
in the maximum amount of Debt Securities issuable pursuant to the
Registration Statement on its Form 8-K to be filed in connection
with the offering of 7-1/8% Debentures; and
RESOLVED FURTHER, that the 7-1/8% 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
7-1/8% Senior Debentures with, on or
<PAGE> 2
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 the 7-1/8% Senior Debentures shall have such
other terms and conditions, consistent with the foregoing, as are set
forth in the Prospectus Supplement dated April 12, 1999, 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) certificates evidencing the 7-1/8%
Senior Debentures, agreements with underwriters or others for the
marketing and sale of the 7-1/8% 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 7-1/8% 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.
<PAGE> 1
[Keating, Muething & Klekamp, P.L.L. Letterhead]
Exhibit 5
PAUL V. MUETHING
DIRECT DIAL: (513)579-6517
FACSIMILE: (513)579-6578
E-MAIL: [email protected]
April 13, 1999
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 April 12, 1999 (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 $350,000,000 of its 7-1/8% Senior Debentures due 2009 (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.
Based on the foregoing, we are of the opinion that when, and if,
issued, delivered and paid
<PAGE> 2
American Financial Group, Inc.
Page 2
April 13, 1999
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
