<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1996
REGISTRATION NO. 333-12537
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
OHIO
(State or other jurisdiction of incorporation or 31-1422526
organization) (IRS Employer Identification Number)
</TABLE>
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
(513) 579-2121
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
AMERICAN FINANCIAL CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE
(State or other jurisdiction of incorporation or 31-6538554
organization) (IRS Employer Identification Number)
</TABLE>
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
(513) 579-2121
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
------------------------
<TABLE>
<S> <C> <C>
JAMES C. KENNEDY, ESQ.
Deputy General Counsel and Secretary
with copies to: American Financial Group, Inc. with copies to:
One East Fourth Street
Gary P. Kreider, Esq. Cincinnati, Ohio 45202 Timothy E. Hoberg, Esq.
Keating, Muething & Klekamp, P.L.L. (513) 579-2538 Taft, Stettinius & Holliser
1800 Provident Tower (Name, address, including zip code, 1800 Star Bank Center
One East Fourth Street and telephone number, 425 Walnut Street
Cincinnati, Ohio 45202 including area code, of agent for Cincinnati, Ohio 45202
(513) 579-6411 service) (513) 357-9308
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the date this registration statement becomes effective.
------------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the offering
described in this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee*.............................. $ 39,655
NYSE listing fee.................................................................. 45,000
Legal fees and expenses........................................................... 175,000
Accounting fees and expenses...................................................... 40,000
Printing and engraving expenses................................................... 115,000
Trustee's fees and expenses....................................................... 12,000
Rating Agencies' fees............................................................. 95,000
Blue Sky fees and expenses........................................................ 15,000
Miscellaneous..................................................................... 13,345
--------
TOTAL........................................................................... $550,000
========
</TABLE>
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*Actual; other expenses are to be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Ohio Revised Code, Section 1701.13(E), allows indemnification by the
Company of any person made or threatened to be made a party to any proceedings,
other than a proceeding by or in the right of the Company, by reason of the fact
that he is or was a director, officer, employee or agent of the Company, against
expenses, including judgment and fines, if he acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to criminal actions, in which he had no reasonable
cause to believe that his conduct was unlawful. Similar provisions apply to
actions brought by or in the right of the Company, except that no
indemnification shall be made in such cases when the person shall have been
adjudged to be liable for negligence or misconduct to the Company unless deemed
otherwise by the court. Indemnifications are to be made by a majority vote of a
quorum of disinterested directors or the written opinion of independent counsel
or by the shareholders or by the court. The Company's Code of Regulations
extends such indemnification.
The Company maintains, at its expense, Directors and Officers Liability and
Company Reimbursement Liability Insurance. The Directors and Officers Liability
portion of such policy covers all directors and officers of the Company and of
the companies which are, directly or indirectly, more than 50% owned by the
Company. The policy provides for payment on behalf of the directors and
officers, up to the policy limits and after expenditure of a specified
deductible, of all Loss (as defined) from claims made against them during the
policy period for defined wrongful acts, which include errors, misstatements or
misleading statements, acts or omissions and neglect or breach of duty by
directors and officers in the discharge of their individual or collective duties
as such. The insurance includes the cost of investigations and defenses, appeals
and bonds and settlements and judgments, but not fines or penalties imposed by
law. The insurance does not cover any claims arising out of acts alleged to have
been committed prior to November 24, 1978. The insurer limit of liability under
the policy is $50,000,000 in the aggregate for all losses each year subject to
certain individual and aggregate deductibles. The policy contains various
exclusions and reporting requirements.
The Company also has entered into indemnification agreements with its
executive officers and directors providing for indemnification (and advancement
of expenses) against certain liabilities to the fullest extent provided by Ohio
law.
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<PAGE> 3
The Declaration provides that no Property Trustee or any of its Affiliates,
Delaware Trustee or any of its Affiliates, or any officer, director,
shareholder, member, partner, employee, representative, custodian, nominee or
agent of the Property Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any Regular Trustee,
or any officer, director, shareholder, member, partner, employee, representative
or agent of any regular Trustee or any Affiliate thereof, or any employee or
agent of the Trust or its Affiliates (each a "Company Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to the Trust or
any officer, director, shareholder, partner, member, representative, employee or
agent of the Trust or its Affiliates or to any holder of Preferred Securities
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Fiduciary Indemnified Person or Company Indemnified
Person in good faith on behalf of the Trust and in a manner such Fiduciary
Indemnified Person or Company Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Fiduciary Indemnified Person
or Company Indemnified Person by such Declaration or by law, except that a
Fiduciary Indemnified Person or Company Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Fiduciary Indemnified
Person's or Company Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
The Declaration also provides that to the full extent permitted by law, the
Company shall indemnify any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expense (including
attorneys' fees), judgements, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Declaration also provides that to the full extent permitted by
law, the Company shall indemnify and Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a judgement
in its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or manner as to
which such Company Indemnified Person shall have been adjudged to be liable to
the Trust unless and only to the extent that the Court of Chancery of Delaware
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which Court of Chancery or such other court shall
deem proper. The Declaration further provides that expenses (including
attorneys' fees) incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred to
in the immediately preceding two sentences shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Company as authorized in the Declaration.
The directors and officers of the Company and the Regular Trustees are
covered by insurance policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), which might be incurred by them in such
capacities and against which they cannot be indemnified by the Company or the
Trust. Any agents, dealers or underwriters who execute any of the agreements
filed as Exhibit 1 to this Registration Statement will agree to indemnify the
Company's directors and their officers and the Trustees who signed the
Registration Statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the Company or the Trust
by or on behalf of any such indemnifying party.
The Declaration also provides that the Company shall indemnify each
Fiduciary Indemnified Person against any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts under the Trust,
including the costs and
II-2
<PAGE> 4
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties thereunder.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
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<C> <S>
1.1 Form of Underwriting Agreement for Preferred Securities
4.1* Form of Indenture
4.2* Certificate of Trust of American Financial Capital Trust I
4.3 Amended and Restated Declaration of Trust of American Financial Capital Trust I
4.4* Form of Preferred Securities Guarantee Agreement
4.5* Form of Common Securities Guarantee Agreement
4.6* Form of Subordinated Debenture (contained in Exhibit 4.1)
4.7* Form of Preferred Security
4.8* Form of Common Security
5.1 Opinion of Keating, Muething & Klekamp, P.L.L.
5.2 Opinion of Morris, Nichols, Arsht & Tunnell
8.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 Consents of Independent Auditors.
23.2 Consent of Keating, Muething & Klekamp, P.L.L. (Contained on Exhibit 5.1)
23.3 Consent of Morris, Nichols, Arsht & Tunnell (Contained on Exhibit 5.2)
23.4 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (Contained on Exhibit
8.1)
24 * Powers of Attorney (contained on the signature page).
25.1* Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture
25.2* Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Declaration of American
Financial Capital Trust I
25.3* Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee of the Trust Preferred Securities
Guarantee for the benefit of the holders of Preferred Securities of American
Financial Capital Trust I
</TABLE>
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* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any
II-3
<PAGE> 5
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) The Company and the Trust hereby undertake that:
(1) for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company and the Trust pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(2) for the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Cincinnati, State of Ohio, as of the 15th day of
October, 1996
AMERICAN FINANCIAL GROUP, INC.
By: /s/ CARL H. LINDNER
-------------------------
Carl H. Lindner
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- -------------------------------------------- -------------------------------------- ---------------------
<S> <C> <C>
/s/ CARL H. LINDNER* Chairman of the Board and Chief October 15, 1996
- ---------------------------- Executive Officer and a Director
Carl H. Lindner (Principal Executive Officer)
/s/ CARL H. LINDNER III* Director October 15, 1996
- ----------------------------
Carl H. Lindner III
/s/ S. CRAIG LINDNER* Director October 15, 1996
- ----------------------------
S. Craig Lindner
/s/ KEITH E. LINDNER* Director October 15, 1996
- ----------------------------
Keith E. Lindner
/s/ JAMES E. EVANS* Director October 15, 1996
- ----------------------------
James E. Evans
/s/ Theodore H. Emmerich* Director October 15, 1996
- ----------------------------
Theodore H. Emmerich
/s/ THOMAS M. HUNT* Director October 15, 1996
- ----------------------------
Thomas M. Hunt
/s/ WILLIAM R. MARTIN* Director October 15, 1996
- ----------------------------
William R. Martin
/s/ FRED J. RUNK Senior Vice President and Treasurer October 15, 1996
- ---------------------------- (Principal Financial and Accounting
Fred J. Runk Officer)
*By: /s/ JAMES C. KENNEDY
----------------------
James C. Kennedy
Attorney-in-Fact
</TABLE>
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, American
Financial Capital Trust I certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Cincinnati, State of Ohio,
as of the 15th day of October, 1996
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
AMERICAN FINANCIAL CAPITAL TRUST I
By: /s/ JAMES E. EVANS*
--------------------------------
James E. Evans, as Trustee
By: /s/ THOMAS E. MISCHELL*
--------------------------------
Thomas E. Mischell, as Trustee
*By: /s/ JAMES C. KENNEDY
-------------------------------
James C. Kennedy
Attorney-in-Fact
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<PAGE> 1
EXHIBIT 1.1
UNDERWRITING AGREEMENT
4,000,000 PREFERRED SECURITIES
AMERICAN FINANCIAL CAPITAL TRUST I
(A DELAWARE TRUST)
_____% TRUST ORIGINATED PREFERRED SECURITIES ("TOPrS")
(LIQUIDATION AMOUNT OF $25 PER PREFERRED SECURITY)(SM)
UNDERWRITING AGREEMENT
____________, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CS FIRST BOSTON CORPORATION
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
as the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
5500 Sears Tower
Chicago, Illinois 60606
Ladies and Gentlemen:
American Financial Capital Trust I (the "Trust"), a statutory business
trust organized under the Business Trust Act (the "Delaware Act") of the State
of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sections
3801 et seq.), and American Financial Group, Inc., an Ohio corporation (the
"Company" and, together with the Trust, the "Offerors"), confirm their agreement
(the "Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), CS First Boston Corporation, Dean Witter
Reynolds Inc., Donaldson Lufkin & Jenrette Securities Corporation, PaineWebber
Incorporated and Prudential Securities Incorporated as representatives (in such
capacity, collectively, the "Representatives") of the several Underwriters named
in Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), with respect to the sale by the Trust and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
____% Trust Originated Preferred Securities (liquidation amount of $25 per
preferred security) of the Trust ("Preferred Securities") set forth in said
Schedule A and with respect to the grant by the Trust to the Underwriters,
- --------
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks
of Merrill Lynch & Co. Inc.
<PAGE> 2
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of additional Preferred Securities to cover
over-allotments, in each case except as may otherwise be provided in the Pricing
Agreement, as hereinafter defined. The aforesaid Preferred Securities (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the additional Preferred Securities subject to the option described in Section
2(b) hereof (the "Option Securities") are collectively hereinafter called the
"Designated Securities." The Preferred Securities will be guaranteed by the
Company, to the extent described in the Prospectus (as defined below), with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Preferred Securities Guarantee") pursuant to the Preferred Securities
Guarantee Agreement (the "Preferred Securities Guarantee Agreement"), dated as
of ______________, 1996, between the Company and The Bank of New York, as
trustee (the "Guarantee Trustee") and, in certain circumstances described in the
Prospectus, the Trust will distribute Subordinated Debentures (as defined
herein) to holders of Designated Securities. The Preferred Securities, together
with the related Preferred Securities Guarantee and the Subordinated Debentures,
are collectively referred to herein as the "Securities."
Prior to the purchase and public offering of the Preferred Securities
by the several Underwriters, the Offerors and the Representatives, acting on
behalf of the several Underwriters, shall enter into an agreement substantially
in the form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement
may take the form of an exchange of any standard form of written
telecommunication between the Offerors and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Securities will be governed by this Agreement, as supplemented by the
Pricing Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-12537) and
pre-effective amendment nos. 1 and 2 thereto covering the registration of
securities of the Company and the Trust, including up to a combination of
$115,000,000 of (i) the Preferred Securities, (ii) the Preferred Securities
Guarantees and (iii) the Subordinated Debentures, under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus,
and the offering thereof in accordance with the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and the Offerors have
filed such post-effective amendments thereto as may be required prior to the
execution of the Pricing Agreement. Such registration statement, as so amended,
including the exhibits and schedules thereto, if any, and the information, if
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<PAGE> 3
any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "Rule 430A Information"), is referred to herein as the
"Registration Statement"; and the final prospectus relating to the offering of
the Securities, in the form first furnished to the Underwriters by the Offerors
for use in connection with the offering of the Securities, is referred to herein
as the "Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Pricing Agreement. A "preliminary prospectus" shall be deemed to refer to any
prospectus used before the registration statement became effective and any
prospectus that omitted, as applicable, the Rule 430A Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of the
applicable Pricing Agreement. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered, and the Declaration (as
defined herein), the Indenture (as defined herein), and the Preferred Securities
Guarantee Agreement have been qualified under the Trust Indenture Act of 1939,
as amended (the "1939 Act"). The entire proceeds from the sale of the Designated
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities" and, together
with the Designated Securities, the "Trust Securities"), as guaranteed by the
Company, to the extent set forth in the Prospectus, with respect to
distributions and
- 3 -
<PAGE> 4
payments upon liquidation and redemption (the "Common Securities Guarantee" and,
together with the Preferred Securities Guarantee, the "Guarantees") pursuant to
the Common Securities Guarantee Agreement (the "Common Securities Guarantee
Agreement" and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), dated as of _____________, 1996, between the Company
and the Guarantee Trustee, as Trustee, and will be used by the Trust to purchase
$_______________ (up to $_______________ if the option described in Section 2(b)
hereof is exercised in full) of _____% Subordinated Debentures due
______________, 2026 (the "Subordinated Debentures") issued by the Company. The
Preferred Securities and the Common Securities will be issued pursuant to the
Declaration of Trust, dated as of September 13, 1996, as amended and restated on
_____________, 1996 (the "Declaration"), among the Company, as Sponsor, James E.
Evans and Thomas E. Mischell (the "Regular Trustees"), The Bank of New York, as
property trustee (the "Property Trustee"), and The Bank of New York (Delaware)
as Delaware Trustee (the "Delaware Trustee," and, together with the Property
Trustee and the Regular Trustees, the "Trustees"), for the benefit of the
holders from time to time of undivided beneficial interests in the assets of the
Trust. The Subordinated Debentures will be issued pursuant to an indenture,
dated as of ________________, 1996 (the "Indenture"), between the Company and
The Bank of New York, as trustee (the "Debt Trustee").
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to each
Underwriter as of the date hereof and as of the date of the Pricing Agreement
(such later date being hereinafter referred to as the "Representation Date")
that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) Each of the Offerors meets, and at the respective times
of commencement and consummation of the Offering of the Securities will meet,
the requirements for the use of Form S-3 under the 1933 Act.
(iii) At the time the Registration Statement becomes effective
and at the Representation Date, the Registration Statement will conform in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact and will
not omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus, at the time the
Registration Statement becomes effective (unless the term "Prospectus" refers to
a prospectus which has been provided to the Underwriters by the Company for
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<PAGE> 5
use in connection with the offering of the Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective, in which case at the time it is first provided to the
Underwriters for such use) and at the Representation Date and at the Closing
Time referred to in Section 2, will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and warranties
in this subsection shall not apply to statements contained in or omitted from
the Registration Statement or the Prospectus in reliance upon, and in conformity
with, (A) information furnished to the Offerors in writing by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement or the
Prospectus, or (B) that part of the Registration Statement which shall
constitute the Statement of Eligibility (Form T-1) under the 1939 Act.
(iv) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of the
time of any subsequent amendment, 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 the light of the circumstances
under which they were or are made, not misleading; and any additional documents
deemed to be incorporated by reference in the Registration Statement or the
Prospectus will, if and when such documents are filed with the Commission, or
when amended, as appropriate, comply in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the representations and warranties in this subsection
shall not apply to any statements contained in or omitted from such documents
made in reliance upon and in conformity with information furnished to the
Offerors in writing by any Underwriter through Merrill Lynch expressly for use
in such documents.
(v) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the Registration
Statement are, to the knowledge of the Offerors, independent public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(vi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with
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<PAGE> 6
management's authorization; and (ii) assets are safeguarded and transactions are
recorded to permit preparation of financial statements in conformity with
generally accepted accounting principles and, as of the Closing Time, the
Company will continue to maintain such a system.
(vii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no development
which could reasonably be expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its Subsidiaries (as defined
below) considered as one enterprise, whether or not arising in the ordinary
course of business or referred to in or contemplated by the Registration
Statement, (B) there have been no transactions entered into by the Trust or the
Company or any of the Subsidiaries which are material with respect to the Trust
or the Company and its Subsidiaries considered as one enterprise, other than
those in the ordinary course of business or those referred to in or contemplated
by the Registration Statement and (C) there has not been any material increase
in the long term debt of the Company.
(viii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of Ohio,
with 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 the Company is duly qualified as a foreign corporation to
transact business and is in good standing 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 condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its Subsidiaries considered as one enterprise.
(ix) Each of the corporations of which a majority of the
outstanding voting equity securities are owned, directly or indirectly, by the
Company ("Subsidiaries") and which is listed on Schedule I annexed hereto
("Designated Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing 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 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
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<PAGE> 7
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise.
(x) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus; since the date indicated in the
Prospectus there has been no change in the issued and outstanding capital stock
of the Company and the Designated Subsidiaries (other than changes in
outstanding Common Stock resulting from employee benefit plan or dividend
reinvestment and stock purchase plan transactions); and all of the issued and
outstanding capital stock of the Company has been duly authorized and validly
issued, is fully paid and non-assessable.
(xi) 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; 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.
(xii) Except as disclosed in the Prospectus, the Company and
the Insurance Subsidiaries have made no material changes in their insurance
reserving practices since the most recent audited financial statements included
or incorporated in the Prospectus.
(xiii) All reinsurance treaties and arrangements to which any
Insurance Subsidiary is a party are in full force and effect and no Insurance
Subsidiary is in violation of or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition contained
therein; no Insurance Subsidiary has received any notice from any of the other
parties to such treaties, contracts or agreements that such other party intends
not to perform such treaty and, 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
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<PAGE> 8
consolidated financial statements of the Company included in the
Prospectus.
(xiv) The statutory financial statements of the Insurance
Subsidiaries from which certain ratios and other statistical data filed as part
of the Registration Statement or included or incorporated in the Prospectus have
been derived have for each relevant period been prepared 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 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.
(xv) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the Preferred
Securities, the Common Securities and the Declaration; the Trust is not a party
to or otherwise bound by any agreement other than those described in the
Prospectus; the Trust is and will, under current law, be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
(xvi) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Registration Statement and Prospectus, will
be validly issued and will represent undivided beneficial interests in the
assets of the Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Common Securities is
not subject to preemptive or other similar rights; and at the Closing Time all
of the issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equitable right.
(xvii) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by each of the Offerors.
(xviii) The Declaration has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and delivered by
the Company and the Trustees, and assuming due authorization, execution and
delivery of the
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<PAGE> 9
Declaration by the Property Trustee and the Delaware Trustee, the Declaration
will, at the Closing Time, be a valid and binding obligation of the Company and
the Regular Trustees, enforceable against the Company and the Regular Trustees
in accordance with its terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general principles of
equity (regardless of whether enforcement is considered in a proceeding at law
or in equity) (the "Bankruptcy Exceptions") and will conform in all material
respects to the description thereof contained in the Prospectus.
(xix) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and, in the case of the Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Preferred Securities
Guarantee by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantees and the Guarantee Agreements
will conform in all material respects to the description thereof contained in
the Prospectus.
(xx) The Preferred Securities have been duly authorized and,
when issued and delivered against payment therefor as provided herein, will be
validly issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of the Designated
Securities is not subject to preemptive or other similar rights.
(xxi) The Indenture has been duly authorized and qualified
under the 1939 Act and, at the Closing Time, will have been duly executed and
delivered and will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions; the
Indenture will conform in all material respects to the description thereof
contained in the Prospectus.
(xxii) The Subordinated Debentures have been duly authorized
by the Company and, at the Closing Time, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and will be in the form
contemplated by, and entitled
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<PAGE> 10
to the benefits of, the Indenture and will conform in all
material respects to the description thereof in the Prospectus.
(xxiii) Each of the Regular Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Declaration.
(xxiv) None of the Offerors is an "investment company" or a
company "controlled" by an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
Act").
(xxv) The Trust is not in violation of the Declaration or its
certificate of trust filed with the State of Delaware on ______________, 1996
(the "Certificate of Trust"); none of the execution, delivery and performance of
this Agreement, the Pricing Agreement, the Declaration, the Designated
Securities, the Common Securities, the Indenture, the Subordinated Debentures,
the Guarantee Agreements and the Guarantees and the consummation of the
transactions contemplated herein and therein and compliance by the Offerors with
their respective obligations hereunder and thereunder did or will result in a
breach of any of the terms or provisions of, or constitute a default or require
the consent of any party under the Certificate of Trust or the Company's
Articles of Incorporation or Code of Regulations, any material agreement or
instrument to which either Offeror is a party, any existing applicable law, rule
or regulation or any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over either
Offeror or any of its properties or assets, or did or will result in the
creation or imposition of any lien on the properties or assets of either
Offeror.
(xxvi) No order, license, consent, authorization or approval
of, or exemption by, or the giving of notice to, or the registration with any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is now required in
connection with the issuance and sale of the Common Securities or the offering
of the Designated Securities, the Subordinated Debentures or the Guarantees
hereunder, except for such as may be required under the 1933 Act or state
securities laws and the qualification of the Declaration, the Preferred
Securities Guarantee Agreement and the Indenture under the 1939 Act.
(xxvii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a
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<PAGE> 11
material adverse effect on the consolidated position, shareholders' equity or
results of operations of the Company and its Subsidiaries considered as one
enterprise; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(xxviii) No "forward looking statement" (as defined in Rule
175 under the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable basis
or was disclosed other than in good faith.
(b) Any certificate signed by any Trustee of the Trust or any officer
of the Company and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Trust or the
Company, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the price per
security set forth in the Pricing Agreement, the number of Initial Securities
set forth in Schedule A hereto opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule 430A of
the 1933 Act Regulations, the initial public offering price per Preferred
Security and the purchase price per Initial Security to be paid by the several
Underwriters for the Initial Securities have each been determined and set forth
in the Pricing Agreement, dated the date hereof, and any necessary amendments to
the Registration Statement and the Prospectus will be filed before the
Registration Statement becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of the
1933 Act Regulations, the purchase price per Initial Security to be paid by the
several Underwriters shall be an amount equal to the initial public offering
price per Initial Security. The initial public offering price per Initial
Security shall be a fixed price to be determined by agreement between the
Underwriters and the Offerors. The initial public offering price and the
purchase price, when so determined, shall be set forth in the Pricing Agreement.
In the event that such prices have not been agreed upon and the Pricing
Agreement has not been executed and delivered by all parties thereto by the
close of business on the fourth business day following the date of this
Agreement,
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<PAGE> 12
this Agreement shall terminate forthwith, without liability of any party to any
other party, unless otherwise agreed to by the Offerors and the Underwriters.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 600,000 Option Securities at the price per security
set forth in the Pricing Agreement, less an amount per share equal to any
dividends declared by the Trust and payable on the Initial Securities but not
payable on the Option Securities. The option hereby granted will expire 30 days
after the Representation Date and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by the Representative to the Trust setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined, unless otherwise agreed by the Representative and the
Trust. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities (except as otherwise provided in the Pricing Agreement), subject in
each case to such adjustments as the Representative in its discretion shall make
to eliminate any sales or purchases of fractional securities.
(c) Delivery of certificates for the Securities shall be made at the
offices of the Underwriters in New York, and payment of the purchase price for
the Securities shall be made by wire transfer of funds contemporaneous with
closing at the offices of Taft, Stettinius & Hollister, 1800 Star Bank Center,
425 Walnut Street, Cincinnati, Ohio 45202, or at such other place as shall be
agreed upon by the Underwriters and the Offerors, at 10:00 a.m. (New York time)
on the third business day after the date the Registration Statement becomes
effective (or, if the Offerors have elected to rely upon Rule 430A, the third
full business day after execution of the Pricing Agreement (or, if pricing of
the Securities occurs after 4:30 p.m. Eastern time, on the fourth full business
day thereafter)), or such other time not later than ten business days after such
date as shall be agreed upon by the Underwriters and the Offerors (such time and
date of payment and delivery being herein called the "Closing Time"). In
addition, in the event that any or all of the Option Securities are
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<PAGE> 13
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made by wire transfer of
funds and by the delivery of certificates at the above mentioned offices of
Taft, Stettinius & Hollister, or at such other place as shall be agreed upon by
the Representative and the Trust, on each Date of Delivery as specified in the
notice from the Representative to the Trust. Payment for the Securities
purchased by the Underwriters shall be made to the Trust by wire transfer of
immediately available funds, payable to the order of the Trust, against delivery
to the respective accounts of the Underwriters of certificates for the Initial
Securities and the Option Securities, if any, to be purchased by them.
Certificates for the Initial Securities and the Option Securities, if any, shall
be in such denominations and registered in such names as the Underwriters may
request in writing at least two full business days before the Closing Time or
the relevant Date of Delivery, as the case may be. Merrill Lynch, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities, or the Option
Securities, if any, to be purchased by any Underwriter whose check has not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Securities, will be made available for
examination and packaging by the Underwriters no later than 10:00 a.m. (New York
City time) on the last business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
(d) As compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Designated
Securities will be used to purchase the Subordinated Debentures of the Company,
the Company hereby agrees to pay at the Closing Time, or the relevant Date of
Delivery, as the case may be, to the Representatives, for the accounts of the
several Underwriters, a commission per Designated Security determined by
agreement between the Representatives and the Company for the Designated
Securities to be delivered by the Trust hereunder at Closing Time, or the
relevant Date of Delivery, as the case may be. The commission, when so
determined, shall be set forth in the Pricing Agreement.
SECTION 3. Covenants of the Offerors. Each of the Offerors jointly and
severally agrees with each Underwriter as follows:
(a) The Offerors will comply with the requirements of Rule 430A of the
1933 Act Regulations if and as applicable, and will notify the Underwriters
immediately, and confirm the notice in writing, (i) of the effectiveness of the
Registration Statement and any amendment thereto (including any post-effective
amendment) or the filing of any supplement or amendment to the Prospectus, (ii)
of any request by the Commission for any
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<PAGE> 14
amendment to the Registration Statement and any amendment thereto (including any
post-effective amendment) or any amendment or supplement to the Prospectus or
for additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose and (iv) of the issuance by any
state securities commission or other regulatory authority of any order
suspending the qualification or the exemption from qualification of the
Preferred Securities under state securities or Blue Sky laws or the initiation
or threatening of any proceeding for such purpose. The Offerors will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment) or (ii) any amendment or supplement to
the Prospectus (including any revised prospectus which the Offerors propose for
use by the Underwriters in connection with the offering of the Preferred
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement became effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations); will furnish the Representatives with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing or use,
as the case may be; and will not file any such amendment or supplement or use
any such prospectus to which the Representatives or counsel for the Underwriters
shall reasonably object.
(c) The Offerors will deliver to each of the Representatives one signed
copy of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein)
and will also deliver to the Representatives, without charge, as many conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) as the Representatives may reasonably request. If
applicable, the copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) The Offerors will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Offerors hereby consent to the use of such copies for purposes
permitted by the 1933 Act. The Offerors will furnish to each Underwriter, from
time to time during the period when the Prospectus is required to
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<PAGE> 15
be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, any event shall occur
as a result of which it is necessary, in the opinion of counsel for the
Underwriters, to amend or supplement the Prospectus or to file under the 1934
Act any document incorporated by reference in the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, the Offerors will forthwith amend or
supplement the Prospectus or file such document (in form and substance
satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is delivered
to a purchaser, not misleading, and the Company will furnish to the Underwriters
a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriters,
to qualify the Preferred Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Underwriters may designate; provided, however, that the Offerors shall not
be obligated to qualify as a foreign corporation in any jurisdiction in which
they are not so qualified. In each jurisdiction in which the Preferred
Securities have been so qualified, the Offerors will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required in connection with
distribution of the Preferred Securities.
(g) The Company confirms as of the date hereof that it is in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba, and the Company further
agrees that if it commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever date is
later, or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will
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<PAGE> 16
provide the Department notice of such business or change, as appropriate, in a
form acceptable to the Department.
(h) The Company will make generally available to the holders of the
Preferred Securities as soon as practicable, but not later than 45 days (or 90
days, in the case of a period that is also the Company's fiscal year) after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the Trust's fiscal
quarter next following the "effective date" (as defined in said Rule 158 of the
Registration Statement.
(i) The Trust will use the proceeds received by it from the sale of the
Preferred Securities, and the Company will use the proceeds received by it from
the sale of the Subordinated Debentures, in the manners specified in the
Prospectus under "Use of Proceeds".
(j) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A of the 1933 Act
Regulations, then immediately following the execution of the Pricing Agreement,
the Offerors will prepare, and file or transmit for filing with the Commission
in accordance with such Rule 430A and Rule 424(b) of the 1933 Act Regulations,
copies of an amended Prospectus or, if required by such Rule 430A, a
post-effective amendment to the Registration Statement (including an amended
Prospectus), containing all information so omitted.
(k) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods required by the Exchange Act and the 1934 Act Regulations.
(l) The Company will use its best efforts to effect the listing of the
Designated Securities (including the Preferred Securities Guarantee with respect
thereto) on the New York Stock Exchange and to cause the Designated Securities
to be registered under the 1934 Act. If the Preferred Securities are exchanged
for Subordinated Debentures, the Company will use its best efforts to effect the
listing of the Subordinated Debentures on the exchange on which the Designated
Securities were then listed and to cause the Subordinated Debentures to be
registered under the 1934 Act.
(m) During a period of 90 days from the date of the Pricing Agreement,
neither the Trust nor the Company will, without the prior written consent of the
Underwriters, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, or enter into any agreement to sell,
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<PAGE> 17
any Preferred Securities, any security convertible into or exchangeable or
exercisable for Preferred Securities, or the Subordinated Debentures or any debt
securities substantially similar to the Subordinated Debentures or any equity
securities substantially similar to the Preferred Securities (except for the
Subordinated Debentures and the Preferred Securities issued pursuant to this
Agreement).
(n) During a period of two years from the Closing Time, the Company
will make generally available to the Underwriters copies of all reports and
other communications (financial or other) mailed to shareholders, and deliver to
the Underwriters promptly after they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and shall furnish such additional information concerning the business and
financial condition of the Company as the Underwriters may from time to time
reasonably request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally or to the Commission).
SECTION 4. Payment of Expenses. The Company agrees with the several
Underwriters to pay all expenses incident to the performance of each Offeror's
obligations under this Agreement and the Pricing Agreement, including, without
limitation, expenses related to the following, if incurred (i) the preparation,
delivery, printing and filing of the Registration Statement and Prospectus as
originally filed (including financial statements and exhibits) and of each
amendment thereto; (ii) the printing and delivery to the Underwriters of this
Agreement, the Pricing Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with offering, purchase, sale
and delivery of the Securities; (iii) the preparation, issuance and delivery of
the certificates for the Preferred Securities; (iv) the fees and disbursements
of the Company's counsel, accountants and other advisors or agents (including
the transfer agents and registrars); (v) the qualification of the Preferred
Securities under securities laws in accordance with the provisions of Section
3(f), including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any Legal Investment Survey; (vi) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
prospectus and of the Prospectus and any amendments thereto; (vii) the printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any Legal
Investment Survey; (viii) any fees payable in connection with the rating of the
Preferred Securities by nationally recognized statistical rating organizations;
(ix) the filing fees incident to, and the fees and
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<PAGE> 18
disbursements of counsel to the Underwriters in connection with, the review, if
any, by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Designated Securities; (x) any fees payable to the
Commission; (xi) the fees and expenses incurred in connection with the listing
of the Designated Securities (and the related Preferred Securities Guarantee)
and, if applicable, the Subordinated Debentures on the New York Stock Exchange;
(xii) the fees and expenses of the Debt Trustee, the Property Trustee and the
Guarantee Trustee, including fees and disbursements of counsel for such
trustees, in connection with the Indenture and the Subordinated Debentures, the
Declaration, the Certificate of Trust and the Guarantee; and (xiii) the cost of
qualifying the Designated Securities with the Depository Trust Company.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of Taft, Stettinius & Hollister and
Skadden, Arps, Meagher & Flom, counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Offerors herein contained, to the performance by the
Offerors of their obligations hereunder, and to the following further
conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 p.m., New York City time, on the date hereof, and on the date hereof
and at the Closing Time, no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued under the 1933
Act or proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have been
complied with to the satisfaction of counsel to the Underwriters. A prospectus,
if required, shall have been filed with the Commission in accordance with Rule
424(b), as applicable (or any required post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Keating, Muething & Klekamp, PLL, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) Each of the Company and the Designated
Subsidiaries has been duly incorporated and is validly existing under
the laws of the state of its incorporation, in each case with
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<PAGE> 19
corporate power and authority to carry on the business in which it is
engaged and to own, lease and operate its properties and conduct its
business as described in the Prospectus, and is duly qualified as a
foreign corporation to transact business and is in good standing 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 condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its Subsidiaries considered as one enterprise.
(ii) The Preferred Securities conform in all material
respects to the description thereof in the Prospectus.
(iii) The Trust is not required to be qualified and
in good standing as a foreign company in Ohio, unless the failure to so
qualify or be in good standing would not have a material adverse effect
on the Trust; and the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(iv) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and is a valid
and binding obligation of the Company, enforceable against the Company
and each of the Regular Trustees in accordance with its terms, except
as enforcement thereof may be limited by the Bankruptcy Exceptions; and
the Declaration has been duly qualified under the 1939 Act.
(v) All legally required proceedings in connection
with the authorization, issuance and validity of the Securities and the
sale of the Securities in accordance with this Agreement (other than
the filing of post-issuance reports, the non-filing of which would not
render the Securities invalid) have been taken and all legally required
orders, consents or other authorizations or approvals of any other
public boards or bodies in connection with the authorization, issuance
and validity of the Securities and the sale of the Securities in
accordance with this Agreement (other than in connection with or in
compliance with the provisions of the securities or Blue Sky laws of
any jurisdictions, as to which no opinion need be expressed) have been
obtained and are in full force and effect.
(vi) The Registration Statement is effective under
the 1933 Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
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<PAGE> 20
(vii) The Registration Statement as of its effective
date and the Prospectus and each amendment thereto as of its issue date
(in each case, other than the operating statistics, the financial
statements and the notes thereto, the financial schedules, and any
other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; and the Declaration, the Indenture, the Preferred
Securities Guarantee Agreement and the Statements of Eligibility on
Forms T-1 with respect to each of the Property Trustee, the Debt
Trustee, and the Guarantee Trustee filed with the Commission as part of
the Registration Statement complied as to form in all material respects
with the requirements of the 1939 Act and the 1939 Act Regulations.
(viii) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the time
they were filed or last amended (other than the financial statements
and the notes thereto, the financial schedules, and any other financial
or statistical data included or incorporated by reference therein, as
to which such counsel need express no belief) complied as to form in
all material respects with the requirements of the 1934 Act, and the
1934 Act Regulations, as applicable.
(ix) Each of the Offerors meets the registrant
requirements for use of Form S-3 under the 1933 Act Regulations.
(x) The Common Securities, the Preferred Securities,
the Subordinated Debentures, each of the Guarantees, the Declaration,
the Indenture and each of the Guarantee Agreements conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(xi) The descriptions in the Registration Statement
and the Prospectus and each amendment or supplement thereto of
regulations, statutes, legal and governmental proceedings and contracts
and other documents are accurate in all material respects and fairly
present the information required to be shown and such counsel does not
know of any legal or governmental proceedings required to be described
in the Registration Statement or the Prospectus or any amendment or
supplement thereto that are not so described (or the descriptions of
which are not incorporated by reference) or of any contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or any amendment or supplement thereto or
to be filed as exhibits to the Registration Statement or any amendment
thereto that are not so described
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<PAGE> 21
(or the descriptions of which are not incorporated by
reference) or so filed.
(xii) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(xiii) This Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by each of the Trust and
the Company.
(xiv) Each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company; the Preferred
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforcement
thereof may be limited by Bankruptcy Exceptions; and the Preferred
Securities Guarantee Agreement has been duly qualified under the 1939
Act.
(xv) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution,
and delivery thereof by the Debt Trustee, is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; and the Indenture
has been duly qualified under the 1939 Act.
(xvi) The Subordinated Debentures are in the form
contemplated by the Indenture, have been duly authorized, executed and
delivered by the Company and, when authenticated by the Debt Trustee in
the manner provided for in the Indenture and delivered against payment
therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xvii) Neither the Company nor the Trust is an
"investment company" or a company "controlled" by an "investment
company" which is required to be registered under the 1940 Act.
(xviii) The execution, delivery and performance of
this Agreement, the Pricing Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Debentures, the Guarantee Agreements, and the Guarantees; the
consummation of the
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<PAGE> 22
transactions contemplated herein and therein; and the compliance by
each of the Offerors with their respective obligations hereunder and
thereunder do not and will not conflict with, result in a breach of, or
constitute a default under the Articles or the Code of Regulations of
the Company or the governing documents of any of its Subsidiaries or
the terms of any indenture or other agreement or instrument known to
such counsel and to which the Company or any of its Subsidiaries is a
party or bound, or result in a violation of any statute or regulation,
or any order or decree known to such counsel to be applicable to the
Company or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its Subsidiaries;
(xix) 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; and
(xx) 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 no Insurance Subsidiary is
in violation of or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition
contained therein.
Moreover, such counsel shall confirm that nothing has come to
such counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to Rule 430A
(except for financial statements and related schedules and other financial data
included or incorporated by reference therein or in the related Forms T-1, as to
which counsel need express no opinion), at the time it became effective or at
the Representation Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (except for
financial statements and related schedules and other financial data included or
incorporated by reference therein or in the related Forms T-1, as to which
counsel need express no
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<PAGE> 23
opinion), at the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs from the Prospectus
on file at the Commission at the time the Registration Statement became
effective, in which case at the time it is first provided to the Underwriters
for such use) or at the Closing Time, included (or includes) an untrue statement
of a material fact or omitted 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.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of Delaware, Ohio
and the federal law of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of Delaware Law, upon the opinion of Morris,
Nichols, Arsht & Tunnell, special Delaware counsel to the Offerors, in which
case the opinion shall state that such counsel believes that you and such
counsel are entitled to so rely. Further, 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,
including counsel employed by the Company, 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 Underwriters 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 to the Underwriters on each
Closing Date. Such counsel may state that they are not passing on matters
relating to patents and trademarks.
(2) The favorable opinion, dated as of Closing Time, of
Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Offerors, in
form and substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act,
and all filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a business
trust have been made.
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<PAGE> 24
(ii) Under the Delaware Act and the Declaration, the
Trust has the business trust power and authority to own property and
conduct its business, all as described in the Prospectus.
(iii) The Declaration constitutes a valid and binding
obligation of the Company and the Trustees and is enforceable against
the Company and the Trustees in accordance with its terms, subject, as
to enforcement, to (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and
other similar laws relating to or affecting the rights and remedies of
creditors generally, (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law), and (iii)
considerations of public policy or the effect of applicable law
relating to fiduciary duties.
(iv) Under the Delaware Act and the Declaration, the
Trust has the business trust power and authority to (i) execute and
deliver, and to perform its obligations under, this Agreement and the
Pricing Agreement and (ii) issue, and perform its obligations under,
the Trust Securities.
(v) Under the Delaware Act and the Declaration, the
execution and delivery by the Trust of this Agreement and the Pricing
Agreement, and the performance by the Trust of its obligations
hereunder and under the Pricing Agreement, have been duly authorized by
all necessary action on the part of the Trust.
(vi) The certificates for the Preferred Securities
are in due and proper form; the Preferred Securities have been duly
authorized by the Declaration and are duly and validly issued and,
subject to qualifications hereinafter expressed in this paragraph (vi),
fully paid and nonassessable undivided beneficial interests in the
assets of the Trust; the holders of the Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same limitation
of personal liability extended to shareholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; said counsel may note that the holders of the Preferred
Securities may be obligated to make payments as set forth in the
Declaration.
(vii) The Common Securities have been duly authorized
by the Declaration and are duly and validly issued and represent
undivided beneficial interests in the assets of the Trust.
(viii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is not
subject to Preemptive rights.
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<PAGE> 25
(ix) The issuance and sale by the Trust of the Trust
Securities, the purchase by the Trust of the Subordinated Debentures,
the execution, delivery and performance by the Trust of this Agreement
and the Pricing Agreement, the consummation by the Trust of the
transactions contemplated hereby and by the Pricing Agreement and
compliance by the Trust with its obligations hereunder and thereunder
will not violate (i) any of the provisions of the Certificate of Trust
or the Declaration or (ii) any applicable Delaware law or
administrative regulation.
(3) The favorable opinion, dated as of Closing Time, of Emmet, Marvin &
Martin, LLP, counsel of The Bank of New York, as Property Trustee under the
Declaration, and Guarantee Trustee under the Preferred Securities Guarantee
Agreements, in form and substance satisfactory to counsel for the Underwriters,
to the effect that:
(i) The Bank of New York is a national banking
association with trust powers, duly organized, validly existing and in
good standing under the laws of the United States with all necessary
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of the Declaration and the
Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the
Property Trustee of the Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Preferred Securities
Guarantee Agreement have been duly authorized by all necessary
corporation action on the part of the Property Trustee and the
Guarantee Trustee, respectively. The Declaration and the Preferred
Securities Guarantee Agreement have been duly executed and delivered by
the Property Trustee and the Guarantee Trustee, respectively, and
constitute the legal, valid and binding obligations of the Property
Trustee and the Guarantee Trustee, respectively, enforceable against
the Property Trustee and the Guarantee Trustee, respectively, in
accordance with their terms, except to the extent the enforcement
thereof may be limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Preferred Securities Guarantee Agreement by the
Property Trustee and the Guarantee Trustee, respectively, do not
conflict with or constitute a breach of the Articles of Organization or
Bylaws of the Property Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority
is required for the execution, delivery or
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<PAGE> 26
performance by the Property Trustee and the Guarantee
Trustee of the Declaration and the Preferred Securities
Guarantee Agreement.
(4) The opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
special tax counsel to the Offerors, on the status of the Subordinated
Debentures as indebtedness for United States federal income tax purposes, on the
status of the Trust as a grantor trust for United States federal income tax
purposes, and on the status of the Subordinated Debentures as instruments that
are not OID instruments prior to an election by the Company to defer payments of
interest thereon. Such opinion may be conditioned on, among other things, the
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and the Trust and other documents deemed necessary for such opinion.
With regard to the balance of the discussion set forth in the Prospectus under
the heading "United States Federal Income Taxation," special tax counsel shall
have reviewed such discussion and shall have concluded, subject to the
qualifications set forth in the preceding sentence hereof, that such discussion
accurately summarizes the specific tax matters addressed therein.
(5) The favorable opinion, dated as of Closing Time, of Taft,
Stettinius & Hollister, counsel for the Underwriters, in form and substance
satisfactory to the Underwriters with respect to the incorporation and legal
existence of the Company, the Preferred Securities, the Indenture, the Preferred
Securities Guarantee Agreement, this Agreement, the Pricing Agreement, the
Registration Statement, the Prospectus and other related matters as the
Representative may require. In giving its opinion, Taft, Stettinius & Hollister
may rely upon the opinions of Keating, Muething & Klekamp, PLL and Morris,
Nichols, Arsht & Tunnell, counsel for the Offerors, which shall be delivered in
accordance with Section 5(b)(1) and 5(b)(2) hereto.
(c) Between the date of this Agreement and prior to the Closing Time,
no material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its Subsidiaries considered as one enterprise, whether
or not in the ordinary course of business.
(d) At Closing Time, the Representatives shall have received a
certificate of an executive officer of the Company and a certificate of a
Regular Trustee of the Trust, and dated as of Closing Time, to the effect that
to the best of such person's knowledge, information and belief (i) there has
been no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Trust or the Company
and its Subsidiaries considered as one enterprise, whether or not in the
ordinary course of business, (ii) the
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<PAGE> 27
representations and warranties in Section 1 hereof are true and correct as
though expressly made at and as of Closing Time, (iii) the Trust and the Company
have complied with all agreements and satisfied all conditions on their part to
be performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At the time of the execution of this Agreement and at the Closing
Time, Ernst & Young LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the date of this Agreement and as of the
Closing Time, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules incorporated in the Registration
Statement and the Prospectus and reported on by them comply in form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company and its
subsidiaries; their limited review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited interim financial information; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
shareholders, directors and executive and audit committees of the
Company; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to the date
of the most recent audited financial statements included or
incorporated into the Registration Statement, nothing came to their
attention which caused them to believe that:
(1) the unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus do not
comply in form in all material respects with applicable accounting
requirements of the Act and the Exchange Act and with the published
rules and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form 10-Q
under the
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<PAGE> 28
Exchange Act; or any material modifications should be made to said
unaudited financial statements for them to be in conformity with
generally accepted accounting principles; or
(2) with respect to the period subsequent to the date
of the most recent financial statements, audited or unaudited, in or
incorporated in the Registration Statement and the Prospectus, there
were any changes, at a specified date not more than five business days
prior to the date of the letter, or any net increases in the long-term
debt or short-term debt (defined for this purpose as amounts payable
within twelve months to banks, factors or other financial institutions
and holders of commercial paper) of the Company and its subsidiaries or
capital stock of the Company or decreases in the shareholders' equity
of the Company as compared with the amounts shown on the most recent
consolidated balance sheet incorporated in the Registration Statement
and the Prospectus, or for the period from the date of the most recent
financial statements incorporated in the Prospectus to such specified
date there were any decreases, as compared with the corresponding
period in the preceding year, in net investment income, total revenues,
income before income taxes or net income of the Company and its
subsidiaries, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the
Prospectus, including, without limitation, the information set forth
under the caption "Ratio of Earnings to Fixed Charges" and such other
materials set forth under such other captions as the Representatives
may reasonably request in the Prospectus, the Registration Statement
and the documents incorporated by reference therein, agrees with the
accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Preferred
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Offerors in connection with the issuance
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<PAGE> 29
and sale of the Preferred Securities as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
(g) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Offerors contained herein and the
statements in any certificates furnished by the Offerors hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representative shall have received:
(1) The certificates, each dated such Date of Delivery, of the
relevant officer of the respective Offeror confirming that the respective
certificates delivered at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Keating, Muething & Klekamp, PLL,
counsel for the Offerors, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, related to the Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Sections 5(b)(1).
(3) The favorable opinion of Morris, Nichols, Arsht & Tunnell,
Special Delaware counsel for the Offerors, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(2).
(4) The favorable opinion of the Law Department of The Bank of
New York, counsel for The Bank of New York, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(3).
(5) The favorable opinion of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., special tax counsel to the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Sections 5(b)(4).
(6) The favorable opinion of Taft, Stettinius & Hollister,
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(5).
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<PAGE> 30
(7) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to the
Representatives pursuant to Section 5(e) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(g)(7) shall be a date
not more than five days prior to such Date of Delivery.
(h) At Closing Time, and at the relevant Date of Delivery, as the case
may be, the Preferred Securities shall be rated "BBB-" or higher by Standard &
Poor's Corporation ("S&P") or "ba1" or higher by Moody's Investors Services
("Moody's") and the Trust shall have delivered to the Representatives a letter,
dated the Closing Time, and at the relevant Date of Delivery, as the case may
be, from S&P or Moody's, or other evidence satisfactory to the Representatives,
confirming that the Preferred 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 Preferred 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 or of the Preferred Securities.
(i) At Closing Time, and at the relevant Date of Delivery, as the case
may be, the Preferred Securities shall have been approved for listing on the New
York Stock Exchange upon notice of issuance.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Offerors at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto) or the omission
or alleged omission
- 30 -
<PAGE> 31
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
Merrill Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that the foregoing indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430(A)
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). The
foregoing indemnity with respect to any untrue statement contained in or
omission from a preliminary prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, liability, claim, damage or expense purchased any of
the Securities that are the subject thereof if such person was not sent or given
a copy of the Prospectus (or the Prospectus as amended or supplemented) (in each
case exclusive of the documents from which information is incorporated by
reference) at or prior to the written confirmation of the sale of such
Securities to such person and the untrue statement contained in or omission from
such
- 31 -
<PAGE> 32
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section , as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430(A) Information deemed to be a
part thereof, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Offerors by such Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, provided, however, that such counsel shall be
reasonably satisfactory to the Offerors. In the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Offerors, provided, however, such counsel shall be reasonably
satisfactory to Merrill Lynch. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this
- 32 -
<PAGE> 33
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on the one
hand and the Underwriters on the other hand from offering of the Designated
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Offerors on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Designated
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Designated Securities pursuant to this Agreement (before deducting expenses)
received by the Offerors and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
- 33 -
<PAGE> 34
aggregate initial public offering price of the Designated Securities as set
forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the
- 34 -
<PAGE> 35
principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company or trustees of the Trust submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Trust or the Company, and shall survive delivery of the Designated Securities to
the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to the
Offerors at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change or any
development which could reasonably be expected to result in a prospective
material adverse change in the business or the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or Company and its Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation of hostilities or other calamity or
crisis, or any change or development involving a prospective change in national
or international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of the Underwriters, impracticable to
market the Preferred Securities or to enforce contracts for the sale of the
Preferred Securities, or (iii) if trading in the Preferred Securities or any
securities of the Company has been suspended or limited by the Commission, NASD
or the New York Stock Exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New York or Ohio
authorities.
(b) If this Agreement and the Pricing Agreement are terminated pursuant
to this Section , such termination shall be without liability of any party to
any other party except as provided in Section 4, and provided, further, that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
- 35 -
<PAGE> 36
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Securities
which it or they are obligated to enter into under this Agreement and the
Pricing Agreement (the "Defaulted Securities"), the Representatives shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of such Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives shall
not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of Securities, the non-defaulting Underwriters shall be obligated
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Securities, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to c/o Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated at 5500 Sears Tower, Chicago, Illinois
60606, Attention of David C. Sherwood, Director, with a copy to Taft, Stettinius
& Hollister, 1800 Star Bank Center, 425 Walnut Street, Cincinnati, Ohio 45202,
Attention of Timothy E. Hoberg, Esq.; notices to the Offerors shall be directed
to American Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio
45202, Attention of James C. Kennedy, Esq., Deputy General Counsel and
Secretary, with a copy to Keating, Muething & Klekamp, PLL, 1800 Provident
Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention of Gary P.
Kreider, Esq.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriters and the
Offerors and their respective
- 36 -
<PAGE> 37
successors. Nothing expressed or mentioned in this Agreement or the Pricing
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Offerors and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Offerors and their respective successors and legal representatives, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time unless otherwise
indicated.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Underwriters and the Offerors in accordance with its terms.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By: ______________________________
Name:
Title:
AMERICAN FINANCIAL CAPITAL TRUST I
By: _____________________________
Title: Regular Trustee
By: _____________________________
Title: Regular Trustee
- 37 -
<PAGE> 38
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
CS FIRST BOSTON CORPORATION
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory
For themselves and as the Representatives of the several Underwriters
named in Schedule A hereto.
- 38 -
<PAGE> 39
SCHEDULE A
Name of Underwriter Number of Shares
------------------- ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................
CS First Boston Corporation........................
Dean Witter Reynolds Inc...........................
Donaldson Lufkin & Jenrette Securities
Corporation...............................
PaineWebber Incorporated...........................
Prudential Securities Incorporated.................
Total.............................................. 4,000,000
- 39 -
<PAGE> 40
EXHIBIT A
4,000,000 Preferred Securities
AMERICAN FINANCIAL CAPITAL TRUST I
(a Delaware business trust)
____% Trust Originated Preferred Securities ("TOPrS")
(Liquidation Amount of $25 Per Security)(SM)
PRICING AGREEMENT
MERRILL LYNCH & CO. ___________, 1996
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
CS FIRST BOSTON CORPORATION
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
as Representative of the several
Underwriters named in the
within-mentioned Underwriting
Agreement
Merrill Lynch World Headquarters
5500 Sears Tower
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated
___________________, 1996 (the "Underwriting Agreement"), relating to the
purchase by the several Underwriters named in Schedule A thereto, for whom
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS
First Boston Corporation, Dean Witter Reynolds Inc., Donaldson Lufkin & Jenrette
Securities Corporation, PaineWebber Incorporated and Prudential Securities
Incorporated are acting as representatives (the "Representatives"), of the above
___% Trust Originated Preferred Securities (the "Preferred Securities"), of
American Financial Capital Trust I, a Delaware business trust (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the
Trust and American Financial Group, Inc. (the "Company"), an Ohio
corporation, agree with each Underwriter as follows:
1. The initial public offering price per security for the Preferred
Securities, determined as provided in said Section 2, shall be $_____.
2. The purchase price per security for the Preferred Securities to be
paid by the several Underwriters shall be $ , being an amount equal to the
initial public offering price set forth above; provided that the purchase price
per Preferred Security for any Option Securities (as defined in the Purchase
Agreement) purchased upon exercise of the over-allotment option described in
Section 2(b) of the Purchase Agreement shall be reduced by an amount per share
equal to any distribution declared by the Trust and payable on the Initial
Securities (as defined in the Purchase Agreement) but not payable on the Option
Securities.
<PAGE> 41
3. The compensation per Preferred Security to be paid by the Company to
the several Underwriters in respect of their commitments hereunder shall be
$______; provided, however, that the compensation per Preferred Security for
sales of 10,000 or more Preferred Securities to a single purchaser shall be $
_______.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By: ______________________________
Name:
Title:
AMERICAN FINANCIAL GROUP CAPITAL
TRUST I
By: _____________________________
Title: Regular Trustee
By: _____________________________
Title: Regular Trustee
- --------------------------
(SM) "Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co. Inc.
A-2
<PAGE> 42
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CS FIRST BOSTON CORPORATION
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory
For themselves and as the Representatives of the several Underwriters
named in Schedule A to the Underwriting Agreement.
<PAGE> 1
EXHIBIT 4.3
======================================
AMENDED AND RESTATED DECLARATION OF TRUST
AMERICAN FINANCIAL CAPITAL TRUST I
Dated as of October , 1996
======================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 INTERPRETATION AND DEFINITIONS................................................... 1
Section 1.1 Interpretation and Definitions....................................... 1
ARTICLE 2 TRUST INDENTURE ACT.............................................................. 8
Section 2.1 Trust Indenture Act; Application..................................... 8
Section 2.2 Lists of Holders of Securities....................................... 9
Section 2.3 Reports by the Property Trustee...................................... 9
Section 2.4 Periodic Reports to the Property Trustee............................. 10
Section 2.5 Evidence of Compliance with Conditions Precedent..................... 10
Section 2.6 Events of Default; Waiver............................................ 10
Section 2.7 Event of Default; Notice............................................. 12
ARTICLE 3 ORGANIZATION..................................................................... 12
Section 3.1 Name and Organization................................................ 12
Section 3.2 Office............................................................... 13
Section 3.3 Purpose.............................................................. 13
Section 3.4 Authority............................................................ 13
Section 3.5 Title to Property of the Trust....................................... 14
Section 3.6 Powers and Duties of the Regular Trustees............................ 14
Section 3.7 Prohibition of Actions by the Trust and the Trustees................. 17
Section 3.8 Powers and Duties of the Property Trustee............................ 18
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.......... 20
Section 3.10 Certain Rights of Property Trustee................................... 22
Section 3.11 Delaware Trustee..................................................... 25
Section 3.12 Execution of Documents............................................... 25
Section 3.13 Not Responsible for Recitals or Issuance of Securities............... 25
Section 3.14 Duration of Trust.................................................... 25
Section 3.15 Mergers.............................................................. 26
Section 3.16 Property Trustee May File Proofs of Claim............................ 28
ARTICLE 4 SPONSOR.......................................................................... 29
Section 4.1 Sponsor's Purchase of Common Securities.............................. 29
Section 4.2 Responsibilities of the Sponsor...................................... 29
ARTICLE 5 TRUSTEES......................................................................... 29
Section 5.1 Number of Trustees................................................... 29
Section 5.2 Delaware Trustee..................................................... 30
Section 5.3 Property Trustee; Eligibility........................................ 30
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.... 31
Section 5.5 Initial Trustees..................................................... 31
Section 5.6 Appointment, Removal and Resignation of Trustees..................... 32
Section 5.7 Vacancies among Trustees............................................. 33
Section 5.8 Effect of Vacancies.................................................. 33
Section 5.9 Meetings............................................................. 34
Section 5.10 Delegation of Power.................................................. 34
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.......... 35
ARTICLE 6 DISTRIBUTIONS.................................................................... 35
Section 6.1 Distributions........................................................ 35
ARTICLE 7 ISSUANCE OF SECURITIES........................................................... 35
Section 7.1 General Provisions Regarding Securities.............................. 35
ARTICLE 8 DISSOLUTION AND TERMINATION OF TRUST............................................. 36
Section 8.1 Dissolution and Termination of Trust................................. 36
ARTICLE 9 TRANSFER OF INTERESTS ........................................................... 37
Section 9.1 Transfer of Securities............................................... 37
Section 9.2 Transfer and Exchange of Certificates................................ 38
Section 9.3 Deemed Security Holders.............................................. 39
Section 9.4 Book Entry Interests................................................. 39
Section 9.5 Notices to Clearing Agency........................................... 40
Section 9.6 Appointment of Successor Clearing Agency............................. 40
Section 9.7 Definitive Preferred Security Certificates........................... 40
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.................... 41
ARTICLE 10 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES
OR OTHERS ..................................................................... 41
Section 10.1 Liability............................................................ 41
Section 10.2 Exculpation.......................................................... 42
Section 10.3 Fiduciary Duty....................................................... 42
Section 10.4 Indemnification...................................................... 43
Section 10.5 Outside Businesses................................................... 46
ARTICLE 11 ACCOUNTING....................................................................... 47
Section 11.1 Fiscal Year.......................................................... 47
Section 11.2 Certain Accounting Matters........................................... 47
Section 11.3 Banking.............................................................. 48
Section 11.4 Withholding.......................................................... 48
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 12 AMENDMENTS AND MEETINGS.......................................................... 48
Section 12.1 Amendments........................................................... 48
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent..... 51
ARTICLE 13 REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE........................................................... 52
Section 13.1 Representations and Warranties of the Property Trustee............... 52
Section 13.2 Representations and Warranties of the Delaware Trustee............... 53
ARTICLE 14 MISCELLANEOUS.................................................................... 54
Section 14.1 Notices.............................................................. 54
Section 14.2 Governing Law........................................................ 55
Section 14.3 Intention of the Parties............................................. 55
Section 14.4 Headings............................................................. 55
Section 14.5 Successors and Assigns............................................... 55
Section 14.6 Partial Enforceability............................................... 55
Section 14.7 Counterparts......................................................... 56
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated as
of October , 1996 between American Financial Group, Inc., an Ohio
corporation, as Sponsor, and James E. Evans and Thomas E. Mischell as the
initial Regular Trustees, The Bank of New York as the initial Property Trustee
and The Bank of New York (Delaware) as the initial Delaware Trustee, not in
their individual capacities but solely as Trustees, and the holders, from time
to time, of undivided beneficial interests in the Trust to be issued pursuant to
this Declaration.
WHEREAS, the Sponsor desires to establish a statutory business trust
(the "Trust") under the Business Trust Act (as hereinafter defined); and
WHEREAS, the Trustees and the Sponsor established American Financial
Capital Trust I (the "Trust"), a trust under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated as of September 13, 1996, (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on September 13, 1996, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interest in the assets of the Trust and investing the proceeds thereof in
certain Debentures (as defined herein) of the Debenture Issuer; and
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such sales in the Debentures issued by
the Debenture Issuer (as those terms are hereinafter defined) and to engage in
only those activities necessary or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Act, the Trustees
hereby declare that all assets contributed to the Trust be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
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(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or in Wilmington, Delaware are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Certificate of Trust" has the meaning specified in Section 3.1.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the date on which the Preferred Securities are
sold pursuant to the terms of the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement of the
Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee
or any Affiliate thereof; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 101 Barclay Street, Floor 21W, New
York, New York 10086, Attention: Corporate Trust Trustee Administration;
telecopy no. _______________.
"Covered Person" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means American Financial Group, Inc. in its capacity
as issuer of the Debentures under the Indenture.
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"Debenture Trustee" means The Bank of New York, in its capacity as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee.
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act; provided, however, that in determining whether the
Holders of the requisite liquidation amount of Preferred Securities have voted
on any matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Preferred
Securities remain in the form of one or more Global Certificates, the term
"Holders" shall mean the holder of the Global Certificate acting at the
direction of the Preferred Security Beneficial Owners.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of September __, 1996, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Investment Company" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the terms
of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Officers' Certificate" means, with respect to any Person (other than
Regular Trustees who are natural persons), a certificate signed by two
Authorized Officers of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with;
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provided, that the term "Officers' Certificate" when used with reference to
Regular Trustees who are natural persons shall mean a certificate signed by two
of the Regular Trustees which otherwise satisfies the foregoing requirements.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement of the
Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee and
the Delaware Trustee.
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"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
officer within the Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Sponsor" means American Financial Group, Inc., a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.6(b).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section
5.6(b).
"Successor Security" has the meaning specified in Section 3.15(b)(i)b.
"Super Majority has the meaning set forth in Section 2.6(a)(ii).
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"10% in Liquidation Amount" means, except as provided in the terms of
the Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities, voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trustees' Authorization Certificate" means a written certificate
signed by two of the Regular Trustees for the purpose of establishing the terms
and form of the Preferred Securities and the Common Securities as determined by
the Regular Trustees.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities between the Trust, the Debenture
Issuer and the underwriters designated by the Regular Trustees.
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
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(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect Trust's classification as a grantor trust
for United States Federal income tax purposes and shall not affect the
nature of the Securities as equity securities representing undivided
beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee with a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders"), (i) within one Business Day after January 1 and
June 30 of each year and current as of such date, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request from the Property
Trustee for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee; provided that neither the Sponsor
nor the Regular Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust. The Property Trustee shall preserve, in
as current a form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year(commencing with the year of
the first anniversary of the issuance of the Preferred Securities), the Property
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
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Section 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 (if any) of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote
of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration and the Preferred Securities, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Preferred Securities
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of a Declaration Event of Default with respect to the Preferred Securities shall
also be deemed to constitute a waiver by the Holders of the Common Securities of
any such Declaration Event of Default with respect to the Common Securities for
all purposes of this Declaration without any further act, vote, or consent of
the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default in respect of the Common Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration
shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived
under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion
in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and the consequences thereof until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default with respect to the Preferred Securities have been
so cured, waived or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the Holders of the Preferred Securities and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee in accordance with the terms of the Securities. The foregoing
provisions of this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
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(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default with respect to the Preferred
Securities under this Declaration. The foregoing provisions of this Section
2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall
have received written notice or of which a
Responsible Officer of the Property Trustee charged
with the administration of this Declaration shall
have actual knowledge.
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization.
The Trust hereby created is named "American Financial Capital Trust I"
as such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
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Section 3.2 Office.
The address of the principal office of the Trust is c/o American
Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio 45202. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such owners will include directly in their gross income the
income, deductions and credits of the Trust as if the Trust did not exist. By
the acceptance of this Trust, none of the Trustees, the Sponsor, the Holders of
the Preferred Securities or Common Securities or the Preferred Securities
Beneficial Owners will take any position for United States federal income tax
purposes which is contrary to the classification of the Trust as a grantor
trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
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(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6(b)(i), provided, that the registration statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to establish the terms and form of the Preferred Securities and the
Common Securities in the manner specified in Section 7.1 and issue and sell the
Preferred Securities and the Common Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Preferred Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor,
including any amendments thereto, pertaining to the
Preferred Securities, the Preferred Securities
Guarantee and the Debentures;
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(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the
Sponsor to be necessary, in order to qualify or
register all or part of the Preferred Securities in
any State in which the Sponsor has determined to
qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any
other national stock exchange or the Nasdaq Stock
Market's National Market System for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor, relating to the
registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement and other related agreements
providing for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of certain events (as may be specified in the terms of the
Securities) arising from a change in law or a change in legal interpretation or
other circumstances specified in the terms of the Securities provided that the
Regular Trustees shall consult with the Sponsor and the Property Trustee before
taking or refraining from taking any action in relation to any such event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holder of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
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(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election (i) to defer
payments of interest on the Debentures by extending the interest payment period
under the Debentures as authorized by the Indenture, or (ii) to extend the
maturity date of the Debentures if so authorized by the Indenture, provided that
any such extension of the maturity date will not adversely affect the federal
income tax status of the Trust;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with applicable law, that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set out in Section 3.3
or the activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes.
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall have no power to, and
shall not, take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than the Debentures (and any interest
or proceeds received thereon);
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets (except to the extent expressly authorized in
this Declaration or by the terms of the Securities);
(vi) possess any power or otherwise act in such a way as to vary
the terms of the Securities in any way whatsoever (except to
the extent expressly authorized in this Declaration or by the
terms of the Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than
the Securities; or
(viii) other than as provided in this Declaration or by the terms of
the Securities, (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any
right to rescind or annul any declaration that the principal
of all the Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that the Trust will be deemed an Investment
Company required to be registered under the Investment Company
Act, or the Trust will not be classified as a grantor trust
for United States federal income tax purposes; or
(ix) take any action inconsistent with the status of the Trust as a
grantor trust for United States federal income tax purposes.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
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(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf
of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by
the Property Trustee, deposit such funds into the Property
Trustee Account and make payments to the Holders of the
Preferred Securities and Holders of the Common Securities from
the Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The
Property Trustee Account shall be an account that is
maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the
rating assigned to the Preferred Securities by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the distribution
of the Debentures to Holders of Securities upon the occurrence
of certain special events (as may be defined in the terms of
the Securities) arising from a change in law or a change in
legal interpretation or other specified circumstances pursuant
to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which a Responsible Officer of
the Property Trustee has actual knowledge or the Property Trustee's duties and
obligations under this Declaration or the Trust Indenture Act.
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(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) Subject to such limitations as are necessary to insure compliance
with Section 3.3, the Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Property Trustee occurs and is continuing, the Property Trustee shall, for
the benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee. In the event the Preferred Securities do not remain in the
form of one or more Global Certificates, the Property Trustee will act as Paying
Agent and may designate an additional or substitute Paying Agent at any time.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall have no power to, and
shall not, take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) of which a Responsible Officer of
the Property Trustee has actual knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and use the same
degree of care and skill in their
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exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
a. the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Declaration, and no implied covenants or
obligations shall be read into this Declaration
against the Property Trustee; and
b. in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than
a Majority in Liquidation Amount of the Securities relating to
the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers,
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if it shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured
to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and
the Property Trustee Account shall be to deal with such
property in a similar manner as the Property Trustee deals
with similar property for its own account, subject to the
protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with
the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to
the Property Trustee Account maintained by the Property
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of
the Regular Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall
be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers'
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Certificate (or, with respect to the establishment of
the terms and form of the Securities by the Regular
Trustees, by a Trustees' Authorization Certificate);
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon
an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor
or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument
(including any financing or continuation statement or
any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of
such counsel and experts with respect to legal
matters or advice within the scope of such experts'
area of expertise shall be full and complete
authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion,
such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees.
The Property Trustee shall have the right at any time
to seek instructions concerning the administration of
this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and
expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such
request or direction, including such reasonable
advances as may be requested by the Property Trustee;
provided that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers
vested in it by this Declaration;
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(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians,
nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with
due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders
of the Securities, and the signature of the Property
Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third
party shall be required to inquire as to the
authority of the Property Trustee to so act or as to
its compliance with any of the terms and provisions
of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or
its agent's taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder,
the Property Trustee (i) may request instructions
from the Holders of the Securities which instructions
may only be given by the Holders of the same
proportion in liquidation amount of the Securities as
would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such
remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and
(iii) shall be protected in conclusively relying on
or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is
discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it
in good faith and reasonably believed by it to be
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authorized or within the discretion, rights or powers
conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of the Regular Trustees
or, if there are only two, both Regular Trustees or, if there is only one, such
Regular Trustee is authorized to execute on behalf of the Trust any documents
that the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Regular Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities or the Debentures or the Indenture.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article 8
hereof, shall have existence for fifty-five (55) years from the Closing Date.
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Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that:
(i) if the Trust is not the successor, such successor entity
(the "Successor Entity") either:
a. expressly assumes all of the obligations of
the Trust under the Securities; or
b. substitutes for the Securities other
securities having substantially the same
terms as the Securities (the "Successor
Securities") so long as the Successor
Securities rank the same as the Securities
rank with respect to Distributions and
payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee
Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the
Debentures;
(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be
listed upon notification of issuance, on any national
securities exchange or with any other organization on
which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities
(including any Successor Securities with respect to
the Preferred Securities) to be downgraded by any
nationally recognized statistical rating organization
then rating the Preferred Securities at the request
of the Sponsor;
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(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to any
dilution of such Holders' interests in the Successor
Entity);
(vi) such Successor Entity has a purpose identical to that
of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of
qualified independent counsel to the Trust
experienced in such matters to the effect that:
a. such merger, consolidation, amalgamation or
replacement does not adversely affect the
rights, preferences and privileges of the
Holders of the Securities (including any
Successor Securities) in any material
respect (other than with respect to any
dilution of such Holders' interests in the
Successor Entity's);
b. following such merger, consolidation,
amalgamation or replacement, neither the
Trust nor the Successor Entity will be
required to register as an Investment
Company; and
c. following such merger, consolidation,
amalgamation or replacement, the Trust (or
the Successor Entity) will continue to be
classified as a grantor trust for United
States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at
least to the extent provided by the Securities
Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes and each Holder of the
Securities not to be treated as owning an undivided interest in the Debentures.
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Section 3.16 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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ARTICLE 4
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Preferred Securities are sold.
Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 pertaining to the Preferred Securities,
including any amendments thereto (which registration statement may also include
other securities of the Sponsor);
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange, Inc. or any other national stock exchange or the Nasdaq Stock
Market's National Market System for listing upon notice of issuance of any
Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
ARTICLE 5
TRUSTEES
Section 5.1 Number of Trustees.
The number of Trustees initially shall be four (4), and:
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(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent in lieu of such meeting.
provided that, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least three (3); and provided further that
(1) the Delaware Trustee, in the case of a natural person, shall be a person who
is a resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware; (2)
at least one Regular Trustee is an employee or officer of, or is affiliated with
the Sponsor; and (3) one Trustee shall be the Property Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets
the applicable requirements.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or other Person permitted by the
Commission to act as an institutional trustee under
the Trust Indenture
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Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the
requirements of the supervising or examining
authority referred to above, then for the purposes of
this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and
to the extent Rule 3a-7 requires a trustee having
certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
Obliger referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 5.5 Initial Trustees.
The initial Regular Trustees shall be:
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James E. Evans and Thomas E. Mischell, the business
address of both of whom is One East Fourth Street,
Cincinnati, Ohio 45202
Section 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the
Common Securities voting as a class at a meeting of
the Holders of the Common Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 3.8(h) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee
shall not be removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2 and
5.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his or its
successor shall have been appointed, until his death or its dissolution or until
his or its removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
a. until a Successor Property Trustee has been
appointed and has accepted such appointment
by instrument executed by such Successor
Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property
Trustee; or
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b. until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation or removal, the resigning or removed Property
Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
Section 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
Section 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy
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is filled by the appointment of a Regular Trustee in accordance with Section
5.6, the Regular Trustees in office, regardless of their number, shall have all
the powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
Section 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Regular Trustees may be taken at a meeting
by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
Section 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any natural person over the age of 21 his, her or
its power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
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Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE 6
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Property Trustee (the amount of any such payment being a "Payment Amount"),
the Property Trustee shall and is directed, to the extent funds are available
for that purpose, to make a distribution (a "Distribution") of the Payment
Amount to Holders.
ARTICLE 7
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms and in such form as shall be established
by the Regular Trustees (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust having such terms and in such form as shall be established by the Regular
Trustees (the "Common Securities"). The terms and form of the Preferred
Securities and the Common Securities as established by the Regular Trustees
shall be set forth in a Trustees' Authorization Certificate prepared prior to
issuance of the Securities. The Trust shall issue no securities or
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other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Certificates shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Certificate, shall be the Regular Trustees of
the Trust, although at the date of the execution and delivery of the Declaration
any such person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration and the terms of the Securities, the Securities
Guarantees, the Indenture and the Debentures.
(f) The Securities shall have no preemptive rights.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve upon the earlier of:
(i) the bankruptcy of the Sponsor;
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(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of
a certificate of cancellation with respect to the
Trust after obtaining the consent of the Holders of
at least a Majority in Liquidation Amount of the
Securities to the filing of a certificate of
cancellation with respect to the Trust or the
revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) the time when all of the Securities shall have been
called for redemption and the amounts necessary for
redemption thereof shall have been paid to the
Holders in accordance with the terms of the
Securities;
(v) upon satisfaction of the liabilities of creditors of
the Trust as provided by applicable law, provided all
of the Debentures shall have been distributed to the
Holders of the Preferred Securities in liquidation of
the Trust;
(vi) the time when all of the Regular Trustees and the
Sponsor shall have consented to termination of the
Trust provided such action is taken before the
issuance of any Securities; or
(vii) the expiration of the term of the Trust as set forth
in Section 3.14.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding up of the Trust, the
Trustees shall terminate by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article 10 shall survive the
termination of the Trust.
ARTICLE 9
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
(c) Subject to this Article 9, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; PROVIDED THAT, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of qualified independent counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(d) The Trust shall not be required to issue Preferred Securities
during a period beginning at the opening of business 15 days before the day of
any selection of Preferred Securities for redemption set forth in the Terms and
ending at the close of business on the day of selection.
Section 9.2 Transfer and Exchange of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers or exchanges of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Upon surrender
for exchange of any Certificate, the Regular Trustees shall cause one or more
new Certificates in the same aggregate liquidation amount as the Certificate
surrendered for exchange to be issued in the name of the Holder of the
Certificate so surrendered. Every Certificate surrendered for registration of
transfer or for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer or for exchange shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
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Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will
make book entry transfers among the Clearing Agency Participants and receive and
transmit payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
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Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
Section 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:
(i) Definitive Preferred Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to
such Preferred Securities; and
(ii) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration
instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be
delivered to the Preferred Security Beneficial Owners
in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions
and each of them may conclusively rely on, and shall
be protected in relying on, said instructions of the
Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have
such letters, numbers or other marks of
identification or designation and such legends or
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endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any
law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed,
or to conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them, the Sponsor and the
Trust harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE 10
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor:
(i) shall not be personally liable for the return of any
portion of the capital contributions (or any return
thereon) of the Holders of the Securities which shall
be made solely from assets of the Trust; and
(ii) shall not be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
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(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any
other or different standard imposed by this
Declaration or by applicable law.
Section 10.4 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust,
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and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of this Section
10.4(a) (unless ordered by a court) shall be made by the Debenture Issuer only
as authorized in the specific case upon a determination that indemnification of
the Company Indemnified Person is proper in the circumstances because he has met
the applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Regular Trustees
by a
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majority vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written opinion
or (iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Preferred Security Holders.
(v) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vi) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Debenture
Issuer would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to
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the benefit of the heirs, executors and administrators of such a person. The
obligation to indemnify as set forth in this Section 10.4(a) shall survive the
satisfaction and discharge of this Declaration.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the activities of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the activities of the Trust, shall not be deemed
wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee or
the Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
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<PAGE> 51
ARTICLE 11
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles. The
Trust shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the signatories for the Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE 12
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by the Regular Trustees (or, if there
are more than two Regular Trustees, a majority of the Regular Trustees) and:
(i) by the Property Trustee if the amendment affects the
rights, powers, duties, obligations or immunities of
the Property Trustee; and (ii) by the Delaware
Trustee if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware
Trustee;
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(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property
Trustee shall have first received:
a. an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of
this Declaration (including the terms of the
Securities); and
b. an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such
amendment is permitted by, and conforms to,
the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
a. cause the Trust to be classified other than
a grantor trust for United States federal
income tax purposes;
b. reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
c. cause the Trust to be deemed to be an
Investment Company required to be registered
under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would (i) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise or (ii) the dissolution, winding-up or termination
of the Trust other than pursuant to the terms of the Declaration, then the
holders of the Securities voting together as a single class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of at least a Majority in Liquidation Amount
of the Securities affected thereby; provided that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will
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<PAGE> 54
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in Liquidation
Amount of such class of Securities.;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article 4 shall not be amended without the consent of the Holders
of a Majority in Liquidation Amount of the Common Securities;
(f) the rights of the Holders of the Common Securities under Article 5
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in Liquidation
Amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent
with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5
by any legislative body, court, government agency or
regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or
privileges of the Holders; and
(v) to modify, eliminate and add to any provision of this
Declaration, provided such modification, elimination
or addition would not adversely affect the rights,
privileges or preferences of any Holder of the
Securities.
(h) The issuance of a Trustees' Authorization Certificate by the
Regular Trustees for purposes of establishing the terms and form of the
Securities as contemplated by Section 7.1 shall not be deemed an amendment of
this Declaration subject to the provisions of this Section 12.1.
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<PAGE> 55
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10% in
Liquidation Amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Certificates held
by the Holders of Securities exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat
at least 7 days and not more than 60 days before the
date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are
listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting
of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the
action so taken is signed by the Holders of
Securities owning not less than the minimum amount of
Securities in liquidation amount that would be
necessary to authorize or take such action at a
meeting at which all Holders of Securities having a
right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting
shall be given to the Holders of Securities entitled
to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot
submitted to the Security Holders for the purpose of
taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including
waiving notice of any meeting, or voting or
participating at a
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meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable
at the pleasure of the Holder of Securities executing
such proxy. Except as otherwise provided herein, all
matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or
the listing rules of any stock exchange on which the
Preferred Securities are then listed for trading,
otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions
relating to meetings of Holders of Securities,
including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice,
action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE 13
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of the Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
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(b) the Property Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Declaration.
Section 13.2 Representations and Warranties of the Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 5.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law); and
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<PAGE> 58
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 14
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Property Trustee, the Delaware Trustee and the Holders of
the Securities):
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
(c) if given to the Property Trustee, at its Corporate Trust Office (or
such other address as the Property Trustee may give notice of to the Regular
Trustees, the Delaware Trustee and the Holders of the Securities).
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage prepaid
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
54
<PAGE> 59
Section 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws of the State of Delaware or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees or this Declaration any provision of the
laws (statutory or common) of the State of Delaware pertaining to trusts that
relate to or regulate, in a manner inconsistent with the terms hereof (a) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (b) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (c) the necessity
for obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to the trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted in a manner consistent with such
classification.
Section 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
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<PAGE> 60
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
AMERICAN FINANCIAL GROUP, INC.,
as Sponsor and Debenture Issuer
BY:__________________________________
Name:________________________________
Title:_________________________________
THE BANK OF NEW YORK,
as Property Trustee
BY:__________________________________
Name:________________________________
Title:_________________________________
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
BY:__________________________________
Name:________________________________
Title:_________________________________
---------------------------------------
James E. Evans, as Regular Trustee
---------------------------------------
Thomas E. Mischell, as Regular Trustee
57
<PAGE> 1
Exhibit 5.1
[KEATING, MUETHING, & KLEKAMP, P.L.L. LETTERHEAD]
FACSIMILE (513) 579-6956
October 15, 1996
Direct Dial: (513) 579-6479
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
American Financial Capital Trust I
c/o American Financial Group, Inc. , Sponsor
One East Fourth Street
Cincinnati, Ohio 45202
Ladies and Gentlemen:
We have acted as counsel to American Financial Group, Inc., an Ohio
corporation (the "Company") and American Financial Capital Trust I, a Delaware
business trust (the "Trust"), in connection with the preparation of the
registration statement of the Company and the Trust on Form S-3 (333-12537),
filed with the Securities and Exchange Commission (the "Commission") on
September 24, 1996, as amended on October 11, 1996 and October 15, 1996 (the
"Registration Statement"), relating to the registration under the Securities Act
of 1933 (the "Securities Act"), of preferred securities of the Trust (the
"Preferred Securities") and subordinated debentures of the Company (the
"Subordinated Debentures"). The Subordinated Debentures will be issued in
accordance with the provisions of an indenture (the "Indenture") to be executed
by the the Company and The Bank of New York, as trustee (the "Trustee"), the
form of which is an exhibit to the Registration Statement. The Preferred
Securities will be guaranteed by the Company in the manner and to the extent set
forth in a Preferred Securities Guarantee Agreement (the "Preferred Securities
Guarantee"), the form of which is an exhibit to the Registration Statement.
In so acting, we have reviewed the Registration Statement, including
the prospectus (the "Prospectus") contained therein, the form of Indenture, form
of Subordinated Debenture and form of Preferred Securities Guarantee filed with
the Commission as exhibits to the Registration Statement. In addition, we have
examined originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the
<PAGE> 2
American Financial Group, Inc.
American Financial Capital Trust I
Page 2
October 15, 1996
Company, and have made such inquiries of such officers and representatives as we
have deemed relevant and necessary as a basis for the opinions set forth below.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Subordinated Debentures have been duly and validly authorized
by the Company and, when executed, authenticated, issued and delivered in the
manner contemplated in the Indenture, will constitute legal, valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and except
to the extent that rights to indemnification thereunder may be limited by
federal or state securities laws or public policy relating thereto.
2. The Preferred Securities Guarantee has been duly and validly
authorized by the Company and, when executed and delivered by the Company, will
constitute the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
The opinions expressed herein are rendered solely for your benefit
in connection with the transactions described herein. These opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" in the Prospectus, without admitting that we are "experts" under
the Securities Act of the rules and regulations of the
<PAGE> 3
American Financial Group, Inc.
American Financial Capital Trust I
Page 3
October 15, 1996
Commission issued thereunder with respect to any part of the Registration
Statement, including this exhibit thereto.
Yours truly,
KEATING, MUETHING & KLEKAMP, P.L.L.
BY: Gary P. Kreider
_____________________________
Gary P. Kreider
<PAGE> 1
Exhibit 5.2
[MORRIS, NICHOLS, ARSHT & TUNNELL LETTERHEAD]
October 15, 1996
American Financial Capital Trust I
c/o American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
RE: AMERICAN FINANCIAL CAPITAL TRUST I
Ladies and Gentlemen:
We have acted as special Delaware counsel to American Financial Capital
Trust I, a Delaware statutory business trust (the "Trust"), in connection with
certain matters relating to the organization of the Trust and the proposed
issuance of Preferred Securities to beneficial owners pursuant to and as
described in Registration Statement No. 333-12537 (and the Prospectus forming a
part thereof) on Form S-3 filed with the Securities and Exchange Commission on
September 24, 1996, as amended by Pre-Effective Amendment No. 1 thereto (as so
amended, the "Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust in the form attached as an exhibit to the
Registration Statement (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of the Trust as
filed in the Office of the Secretary of State of the State of Delaware (the
"State Office", on September 13, 1996 (the "Certificate"); a Declaration of
Trust of the Trust dated as of September 13, 1996 (the "Original Governing
Instrument"); the Governing Instrument; the Indenture to be entered into between
American Financial Group, Inc. ("AFG") and The Bank of New York, as Trustee; the
Preferred Securities Guarantee to be made by AFG, the Common Securities
Guarantee to be made by AFG; the Underwriting Agreement relating to the
Preferred Securities between AFG, the Trust, Merrill Lynch & Co. and the other
several Underwriters named on Schedule I thereto (the "Underwriting Agreement");
the Registration Statement; and a certificate of good standing of the Trust
obtained as of a recent date from the State Office. In such examinations, we
have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity that is a party to any of
<PAGE> 2
Page 2
the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization, (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due
authorization, execution and delivery of the Governing Instrument and the
Underwriting Agreement prior to the first issuance of Preferred Securities);
(iii) that no event has occurred subsequent to the filing of the Certificate
that would cause a dissolution or liquidation of the Trust under the Original
Governing Instrument or the Governing Instrument, as applicable; (iv) that the
activities of the Trust have been and will be conducted in accordance with the
Original Governing Instrument or the Governing Instrument, as applicable, and
the Delaware Business Trust Act, 12 DEL. C. Section 3801 ET SEQ. (the "Delaware
Act"); (v) that each Holder of Preferred Securities has made payment of the
required consideration therefor and received a Preferred Securities Certificate
in consideration thereof in accordance with the terms and conditions of the
Governing Instrument, Registration Statement and Underwriting Agreement and
that the Preferred Securities are otherwise issued and sold to the Preferred
Securities Holders in accordance with the terms, conditions, requirements and
procedures set forth in the Governing Instrument, Registration Statement and
Underwriting Agreement and (vi) that the documents examined by us are in full
force and effect, express the entire understanding of the parties thereto with
respect to the subject matter thereof and have not been modified, supplemented
or otherwise amended, except as herein referenced. No opinion is expressed with
respect to the requirements of, or compliance with, federal or state securities
or blue sky laws. We have not participated in the preparation of the
Registration Statement or any other offering materials relating to the
Preferred Securities and we assume no responsibility for their contents. As to
any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that, upon issuance, the Preferred
Securities, will constitute validly issued and, subject to the qualifications
set forth below, fully paid and nonassesable beneficial interests in the assets
of the Trust. We note that pursuant to Section 11.04 of the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
This opinion speaks only as of the date hereof and is based on our
understandings and assumptions as to present facts, and on our
<PAGE> 3
Page 3
review of the above referenced documents and the application of Delaware law as
the same exist as of the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of any person
or entity with respect to any facts or circumstances that may hereafter come to
our attention or any changes in facts or law that may hereafter occur or take
effect. This opinion is intended solely for the benefit of the addressee hereof
in connection with the matters contemplated hereby entity or may not be relied
on by any other person or entity or for any other purpose without our prior
written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE> 1
Exhibit 8.1
[AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. LETTERHEAD]
October 15, 1996
American Financial Group, Inc.
One East Fourth Street
Cincinnati, OH 45202
American Financial Capital Trust I
c\o American Financial Group, Inc.
One East Fourth Street
Cincinnati, OH 45202
Attn: Thomas E. Mischell
Re: American Financial Group, Inc./American
Financial Capital Trust I--Registration Statement
on Form S-3 Registration No. 333-12537 Relating
to 4,600,000 Trust Originated Preferred Securities
--------------------------------------------------
Gentlemen:
We have acted as tax counsel for American Financial Group, Inc. (the
"Company") and American Financial Capital Trust I (the "Trust") in connection
with the proposed issuance and sale by the Trust of its Trust Originated
Preferred Securities referred to above (the "Preferred Securities"). In
connection therewith, we have participated in the preparation of the discussion
set forth under the caption "United States Federal Income Taxation" (the "Tax
Discussion") in the Prospectus (the "Prospectus") that is part of Amendment No.
2 to the Registration Statement on Form S-3 filed by the Company and the Trust
with the Securities and Exchange Commission on October 15, 1996 (the
"Registration Statement"). Except as otherwise indicated, the terms utilized
herein have the same meaning as in the Registration Statement.
Our opinion is conditioned on the accuracy of the factual statements made
in the Registration Statement and the various documents filed therewith
(together the "Registration Documents"), and on timely and full compliance with
the terms of the Registration Documents by
<PAGE> 2
American Financial Group, Inc.
October 15, 1996
Page 2
all relevant parties to such documents. In particular, and without limiting the
scope of the preceding sentence, we have assumed for purposes of our opinion
that the Trustees will conduct the affairs of the Trust in accordance with the
Amended and Restated Declaration of Trust of American Financial Capital Trust I
dated October __, 1996 (the "Declaration"). In rendering our opinion, we also
have relied upon the representations made on behalf of the Company and the
Trust in letters to us dated October 15, 1996 (the "Representation Letters").
Our opinion is based on the Internal Revenue Code of 1986, as amended,
U.S. Treasury regulations promulgated thereunder, and administrative and
judicial interpretations thereof, all as of the date hereof and all of which
are subject to change, possibly on a retroactive basis. In this regard,
legislation has been proposed that could adversely affect the Company's ability
to deduct interest on the Subordinated Debentures.
Subject to the assumptions, qualifications, and conditions set forth
herein and in the Tax Discussion section of the Prospectus and in reliance on
the Representation Letters, it is our opinion that:
1. Although not entirely free from doubt, under current law and assuming
full compliance with the terms of the Indenture and the other Registration
Documents, the Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of the Company.
2. Under current law and assuming full compliance with the terms of the
Declaration and the other Registration Documents, the Trust will be classified
for United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, for United States federal
income tax purposes, each holder of Preferred Securities generally will be
considered the owner of an undivided interest in the Subordinated Debentures.
3. Although not entirely free from doubt, under current law and assuming
full compliance with the terms of the Registration Documents and based on the
Company's representation that the likelihood of its exercising its option to
defer payments of interest is remote, the Subordinated Debentures will not
include original issue discount ("OID") unless and until an election to defer
the payment of interest actually is made.
We have reviewed the balance of the discussion set forth in the Prospectus
under the heading "United States Federal Income Taxation," and have concluded,
subject to the qualifications set forth in the preceding paragraph, that such
discussion accurately summarizes the specific tax matters addressed therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the use of our name under the headings "United
States Federal Income Taxation"
<PAGE> 3
American Financial Group, Inc.
October 15, 1996
Page 3
and "Legal Matters" in the Prospectus. 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, as amended, or the
rules and regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof and we disclaim any undertaking to advise you
of any subsequent changes of the facts stated or assumed herein or any
subsequent changes in applicable law.
Very truly yours,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 2 to the Registration Statement (Form S-3) and related Prospectus of
American Financial Group, Inc. for the registration of 4,600,000 Preferred
Securities of American Financial Capital Trust I and to the incorporation by
reference therein of our report dated March 15, 1996, with respect to the
consolidated financial statements and schedules of American Financial Group,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31,
1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
October 15, 1996
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of American Financial Group, Inc. for the registration of 4,600,000
Preferred Securities of American Financial Capital Trust I of (a) the report of
Deloitte & Touche LLP dated February 15, 1995 (March 23, 1995 with respect to
the acquisition of American Financial Corporation as discussed in Note B to the
financial statements) relating to the consolidated financial statements of
American Premier Underwriters, Inc. and (b) the report of Deloitte & Touche
dated February 18, 1994 relating to the consolidated financial statements of
General Cable Corporation, both appearing in the American Financial Group, Inc.
Annual Report on Form 10-K for the year ended December 31, 1995, and to the
reference to Deloitte & Touche LLP and Deloitte & Touche under the heading
"Experts" in the Prospectus, which is part of such Registration Statement.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
October 10, 1996
