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Form S-3

As filed with the Securities And Exchange Commission on June 30, 2004

Registration No. 333-____________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

American Financial Group, Inc. American Financial Capital Trust II American Financial Capital Trust III American Financial Capital Trust IV	Ohio Delaware Delaware Delaware	31-1544320 31-6549738 16-6543606 16-6543609
(Exact Name of Registrant as Specified in Its Charter)	(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2121
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants' Principal Executive Offices)

_________________

James C. Kennedy, Esq.
Vice President, Deputy General Counsel And Secretary
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538
Facsimile (513) 579-0108
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)

with copies to:
Mark A. Weiss, Esq.
Keating, Muething & Klekamp, P.L.L.
1400 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-6599
Facsimile (513) 579-6956

(Cover continued on next page)

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement as determined by market conditions and other factors.

_________________

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 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X]

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. [ ]

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered (1)				Proposed Maximum Aggregate Offering Price (2)(3)		Amount of Registration Fee
Debt Securities, Common Stock(4),
Preferred Stock, Warrants, Depositary
Shares, Stock Purchase Contracts
and Stock Purchase Units of
American Financial Group, Inc.
Preferred Securities of American
Financial Capital Trust II
Preferred Securities of American
Financial Capital Trust III
Preferred Securities of American
Financial Capital Trust IV
Guarantee of Preferred Securities
of American Financial Capital Trust II,
American Financial Capital Trust III
and American Financial Capital Trust IV
by American Financial Group, Inc.(5)

Total	$	115,000,000	100	%	$	115,000,000	$	14,570.50	(6)

(1)

Such indeterminate number or principal amount of Debt Securities, Common Stock, Preferred Stock, Warrants, Depositary Shares, Stock Purchase Contracts and Stock Purchase Units of American Financial Group, Inc., and Preferred Securities of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV as may from time to time be issued at indeterminate prices. Debt Securities of American Financial Group, Inc. may be issued and sold to American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV, in which event such Debt Securities may later be distributed to the holders of Preferred Securities of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV upon dissolution and the distribution of the assets thereof. The amount registered is in United States dollars or the equivalent thereof in any other currency, currency unit or units, or composite currency or currencies.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. The aggregate offering price of the Debt Securities, Common Stock, Preferred Stock, Warrants, Depositary Shares, Stock Purchase Contracts, Stock Purchase Units and Preferred Securities registered hereby will not exceed $600,000,000 (as described below).

(3)	Excluding accrued interest and distributions, if any.

(4)	Common Stock includes up to 1,361,711 shares of Common Stock that may be sold by the selling shareholder.

(5)

Includes back-up undertakings, consisting of obligations of American Financial Group, Inc. to provide certain indemnities in respect of, and pay and be responsible for certain expenses and debts of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV. No separate consideration will be received for the Guarantee or any back-up undertakings.

(6)

The Registrants’ previously paid a filing fee in connection with the Registration Statement on Form S-3 (No. 333-106657) (as discussed below) in connection with the registration of Debt Securities and Common Stock of American Financial Group, Inc., and Preferred Securities of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV. In connection with this Registration Statement, the Registrants are paying a fee based solely on the additional Debt Securities, Common Stock, Preferred Stock, Warrants, Depositary Shares, Stock Purchase Contracts, Stock Purchase Units and Preferred Securities being registered and having an aggregate initial public offering price of $115,000,000.

Pursuant to Rule 429 of the Securities Act of 1933, the Prospectus contained in this Registration Statement also relates to $485,000,000 of unissued Debt Securities and Common Stock of American Financial Group, Inc., and Preferred Securities of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV registered pursuant to the Registrants’ Registration Statement on Form S-3 (No. 333-106657). This Registration Statement, which is a new registration statement, also constitutes a post-effective amendment to Registration Statement No. 333-106657. Such post-effective amendment shall become effective concurrently with the effectiveness of this Registration Statement in accordance with Section 8(a) of the Securities Act of 1933.

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.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 30, 2004

Prospectus

$600,000,000

[American Financial Group Logo]

AMERICAN FINANCIAL GROUP, INC.

Debt Securities, Common Stock, Preferred Stock, Warrants,Depositary
Shares, Stock Purchase Contracts and Stock Purchase Units

_________________

AMERICAN FINANCIAL CAPITAL TRUST II
AMERICAN FINANCIAL CAPITAL TRUST III
AMERICAN FINANCIAL CAPITAL TRUST IV

Preferred Securities
Fully and unconditionally guaranteed, as described in this prospectus,
by American Financial Group, Inc.

_________________

and

1,361,711 Shares of American Financial Group, Inc. Common Stock offered by
American Premier Underwriters, Inc., As Selling Shareholder

American Financial Group, Inc., American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV may offer up to $600,000,000 of the securities listed above from time to time. In addition, American Premier Underwriters, Inc., the selling shareholder, may from time to time sell up to 1,361,711 shares of our common stock. While we will not directly receive any proceeds from the sale of common stock by the selling shareholder, the selling shareholder is one of our wholly-owned subsidiaries. This prospectus contains general information about these securities.

When American Financial Group, Inc., American Financial Capital Trust II, American Financial Capital Trust III or American Financial Capital Trust IV (or American Premier Underwriters, Inc., as selling shareholder) offers securities, we will provide a prospectus supplement containing the specific terms of that offering. You should read carefully this prospectus and any supplement before you invest. Our common stock is traded on the New York Stock Exchange and Nasdaq National Market under the symbol “AFG.” On _______, 2004, the last quoted price of the shares of common stock as reported on the NYSE and Nasdaq was $___ and $___, respectively.

This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.

Investing in the securities involves risks that are described in the “Risk Factors” section beginning on page __ of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is ______, 2004

	Page
ABOUT THIS PROSPECTUS	1
WHERE YOU CAN FIND MORE INFORMATION	2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	2
RISK FACTORS	4
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS	10
AMERICAN FINANCIAL GROUP, INC	11
THE AMERICAN FINANCIAL CAPITAL TRUSTS	11
USE OF PROCEEDS	13
DESCRIPTION OF THE SECURITIES WE MAY OFFER	13
DESCRIPTION OF DEBT SECURITIES	15
DESCRIPTION OF COMMON STOCK	22
DESCRIPTION OF PREFERRED STOCK	22
DESCRIPTION OF WARRANTS	25
DESCRIPTION OF DEPOSITARY SHARES	26
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND THE STOCK PURCHASE UNITS	30
DESCRIPTION OF THE TRUST PREFERRED SECURITIES	30
DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE	34
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE
AND THE JUNIOR SUBORDINATED DEBT SECURITIES HELD BY THE TRUST	37
SELLING SHAREHOLDER	38
PLAN OF DISTRIBUTION	38
LEGAL MATTERS	41
EXPERTS	41

_________________

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement filed with the Securities and Exchange Commission using a “shelf” registration process. Under this shelf process, American Financial Group, Inc., American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV may sell the securities described in this prospectus in one or more offerings up to a total dollar amount of $600,000,000. This prospectus provides you with a general description of the securities which may be offered. In addition, the selling shareholder may sell up to 1,361,711 shares of common stock in one or more offerings. Each time securities are offered for sale, we will provide a prospectus supplement that contains specific information about the terms of that offering. The prospectus supplement may also add or update information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described below under the following heading.

The registration statement that contains this prospectus (including the exhibits) contains additional important information about American Financial Group, Inc., American Premier Underwriters, Inc., American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV and the securities offered under this prospectus. Specifically, we have filed certain legal documents that control the terms of the securities offered by this prospectus as exhibits to the registration statement. We will file certain other legal documents that control the terms of the securities offered by this prospectus as exhibits to reports we file with the SEC. That registration statement and the other reports can be read at the SEC web site or at the SEC offices mentioned below under the following heading.

WHERE YOU CAN FIND MORE INFORMATION

American Financial Group is subject to the information and reporting requirements of the Securities Exchange Act of 1934, under which we file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy this information at the following location of the Securities and Exchange Commission:

Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549

You may also obtain copies of this information by mail from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Room 1024, Washington, DC 20549, at prescribed rates. Please call the Securities and Exchange Commission at (800) 732-0330 for further information about the Public Reference Room.

The Securities and Exchange Commission also maintains an Internet website that contains reports, proxy statements and other information about issuers that file electronically with the Securities and Exchange Commission. The address of that site is www.sec.gov.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We are “incorporating by reference” into this prospectus certain information that we file with the Securities and Exchange Commission, which means that we are disclosing important information to you by referring you to those documents. The information incorporated by reference is deemed to be part of this prospectus, except for any information superseded by information contained directly in this prospectus. This prospectus incorporates by reference the documents set forth below that we have previously filed with the Securities and Exchange Commission. These documents contain important information about us and our finances.

AFG SEC Filings (File No. 1-13653)	Period
Annual Report on Form 10-K	Year Ended December 31, 2003
Quarterly Report on Form 10-Q	Quarter ended March 31, 2004
Current Reports on Form 8-K	Dated January 28, 2004, as amended, February 12, 2004, February 17, 2004 and April 26, 2004
Form 8-A Registration Statement	Filed November 25, 1997

All documents that we file with the Securities and Exchange Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act from the date of this prospectus to the end of the offering of the securities under this document shall also be deemed to be incorporated herein by reference. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

You may access these filings free of charge through our Internet site at: www.afginc.com, or you may request a copy of these filings, at no cost, by writing or calling us at the following address or telephone number:

James C. Kennedy
Vice President, Deputy General Counsel and Secretary
American Financial Group, Inc.
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538

Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus. Except for documents specifically incorporated by reference in this prospectus, information contained on our website is not part of this prospectus. You should not consider the information on our website, except the documents specifically incorporated by reference, when determining whether to invest in our or the trusts’ securities.

No separate financial statements of the three trusts have been included and none are incorporated by reference in this prospectus. We do not believe that financial statements of the trusts would be useful because the trusts have had no historical operations and will not have any independent function other than to issue securities representing undivided interests in its assets and investing the proceeds in our debt securities. In addition, all obligations of the trusts are fully and unconditionally guaranteed by us.

You should rely only on the information incorporated by reference or provided in this prospectus and the prospectus supplement. No one else is authorized to provide you with any other information or any different information. Neither we nor the trusts are making an offer of securities in any state where an offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document.

RISK FACTORS

Intense competition could adversely affect our profitability.

The specialty insurance business is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. We compete with other individual insurers, state funds and insurance groups of varying sizes, some of which are mutual insurance companies possessing competitive advantages in that all their profits inure to their policyholders. We also compete with self-insurance plans, captive programs and risk retention groups. In some or all of our specialty lines, we compete with American International Group Inc., Chubb Corp., W.R. Berkley Corp., CNA Financial Corp., Philadelphia Consolidated Holdings Corp., Markel Corp. and The St. Paul Travelers Companies Inc. Because of the specialty nature of these coverages, competition is based primarily on service to policyholders and agents, specific characteristics of products offered and reputation for claims handling. Price, commissions and profit sharing terms are also important factors. Some of our competitors have more capital and greater resources than we have, and may offer a broader range of products and lower prices than we offer.

Our results may fluctuate as a result of cyclical changes in the specialty insurance industry.

The underwriting profitability of the property and casualty insurance industry has been historically cyclical in nature. During periods when excess capital has been available, there has generally been increased price competition among insurers, often resulting in inadequately priced products and underwriting losses. Prolonged periods of underwriting losses tend to force some insurers to withdraw from the markets, decreasing available capital.

Excess capital and intense premium rate competition caused a cyclical downturn, which began in the late 1980‘s and continued into 2000. Inadequate pricing during much of this period led to a significant inadequacy in carried loss reserves. In addition, the rise in asbestos and environmental liabilities, loss-cost inflation, catastrophe losses, unpredictable jury awards, losses related to September 11, declining equity markets and lower interest rates have reduced earnings and capital in many specialty lines and resulted in an increase in premium rates over the last few years to levels we consider to be more appropriate.

The trend of our underwriting results typically follows that of the industry. The statutory combined ratios of our property and casualty business were 100.3%, 101.5% and 108.8% in 2003, 2002 and 2001, respectively.

Other major factors contributing to fluctuations in our results include an arbitration decision in 2003 for a property, fire and business interruption claim, significant losses related to asbestos liabilities (2002 and 2001) and losses related to the terrorist attack on September 11, 2001. The improvement in underwriting results beginning in 2002 reflects the rise or hardening of prices in the upturn in the underwriting cycle for us and the industry. However, should capacity increase and price competition intensify, the cycle would reverse and negatively impact our revenues and operating results.

We rely upon independent agents to write our insurance policies, and if we are not able to attract and retain independent agents, our revenues could be negatively affected.

Our reliance on the independent agency market makes us vulnerable to a reduction in the amount of business written by agents. Many of our competitors, like us, rely significantly on the independent agency market. Accordingly, we must compete with other insurance carriers for independent agents’ business. Some of our competitors offer a wider variety of products, lower price for insurance coverage or higher commissions. While we believe that the products, pricing, commissions and services we offer are competitive, we may not be able to continue to attract and retain independent agents to sell our products, in which case, our revenues could be negatively affected.

We are subject to comprehensive regulation, and our ability to earn profits may be restricted by these regulations.

We are subject to comprehensive regulation by government agencies in the states where our insurance company subsidiaries are domiciled and where these subsidiaries issue policies and handle claims, and we must obtain prior approval for certain corporate actions. The regulations may have the effect of limiting our liquidity and may adversely affect our results of operations. We must comply with regulations involving:

•

transferring cash to the parent company of insurance companies through the payment of dividends or otherwise;

•

the acquisition or disposition of an insurance company or of any company controlling an insurance company;

•

approval or filing of premium rates and policy forms;

•

involuntary assignments of high-risk policies, participation in reinsurance facilities and underwriting associations, assessments and other governmental charges;

•

minimum amounts of capital and surplus that must be maintained;

•

limitations on types and amounts of investments;

•

limitation of the right to cancel or non-renew policies;

•

regulation of the right to withdraw from markets or terminate involvement with agencies;

•

licensing of insurers and agents;

•

reporting with respect to financial condition; and

•

transactions between an insurance company and any of its affiliates.

In addition, state insurance department examiners perform periodic financial and market conduct examinations of insurance companies. Such regulation is generally intended for the protection of policyholders rather than securityholders.

There can be no assurance that existing insurance-related laws and regulations will not become more restrictive in the future or that new restrictive laws will not be enacted and, therefore, it is not possible to predict the potential effects of these laws and regulations on us. The costs of compliance or the failure to comply with existing or future regulations could harm our financial results.

As a holding company, we are dependent on the results of operations of our insurance company subsidiaries to meet our obligations and pay future dividends.

We are a holding company and a legal entity separate and distinct from our insurance company subsidiaries. As a holding company without significant operations of our own, our principal sources of funds are dividends and other distributions from our insurance company subsidiaries. State insurance laws limit the ability of our insurance companies to pay dividends or other distributions and require our insurance companies to maintain specified levels of statutory capital and surplus. Some states require that we give notice to the relevant state insurance commissioner prior to its insurance subsidiaries declaring any dividends and distributions payable to us. During the notice period, the state insurance commissioner may disallow all or part of the proposed dividend if it determines that the insurer’s surplus as regards policyholders is not reasonable in relation to the insurer’s liabilities and adequate to meet its financial needs. In addition, for competitive reasons, our insurance companies need to maintain financial strength ratings, which requires us to sustain capital levels in those subsidiaries. These restrictions affect the ability of our insurance company subsidiaries to pay dividends and use their capital in other ways. Our rights to participate in any distribution of assets of our insurance company subsidiaries are subject to prior claims of policyholders and creditors (except to the extent that our rights, if any, as a creditor are recognized). Consequently, our ability to pay debts, expenses and cash dividends to our shareholders may be limited.

Our failure to maintain a commercially acceptable financial strength rating would significantly and negatively affect our ability to compete successfully.

Financial strength ratings are an important factor in establishing the competitive position of insurance companies and may be expected to have an effect on an insurance company’s sales. A.M. Best Company Inc. has currently assigned our insurance company subsidiaries ratings of “A (Excellent)” and “A- (Excellent)". According to A.M. Best, “A” and “A-” ratings are assigned to insurers which have, on balance, excellent balance sheet strength, operating performance and business profile when compared to the standards established by A.M. Best and, in A.M. Best’s opinion, have a strong ability to meet their ongoing obligations to

policyholders. A.M. Best bases its ratings on factors that concern policyholders and not upon factors concerning investor protection. Such ratings are subject to change and are not recommendations to buy, sell or hold securities. There can be no assurance that our rating or future changes to our rating will not affect our competitive position.

We may be adversely impacted by a change in our Standard & Poor’s or Moody’s ratings.

We are rated by Standard & Poor’s and Moody’s, both independent corporate credit rating agencies. AFG’s senior indebtedness is currently rated BBB by Standard & Poor’s and Baa3 by Moody’s. Securities ratings are subject to revision or withdrawal at any time by the assigning rating organization. A security rating is not a recommendation to buy, sell or hold securities. An unfavorable change in either of these ratings could make it more expensive for us to access the capital markets and may increase the interest rate charged to us under our current multi-bank credit line. We can give no assurance that we will maintain our current Standard & Poor’s or Moody’s ratings.

We are a party to litigation which, if decided adversely to us, could impact our financial results.

We and our subsidiaries are named as defendants in a number of lawsuits. Litigation, by its very nature, is unpredictable and the outcome of these cases is uncertain. Further, we are unable to predict the precise nature of the relief that may be sought or granted in any lawsuits or the effect that pending or future cases may have on our business, operations, profitability or financial condition.

Legal precedents regarding potential asbestos liabilities continue to evolve, and adverse developments could impact our financial results.

We, our insurance company subsidiaries and American Premier Underwriters, Inc. are parties to litigation and receive claims asserting alleged injuries and damages from asbestos and other hazardous and toxic substances and workplace hazards and have established loss accruals for such potential liabilities. The ultimate loss for these claims may vary materially from amounts currently recorded as the conditions surrounding resolution of these claims continue to change. We are unable to predict the precise nature of the relief that may be granted in any lawsuits or the effect that future cases may have on our business, operations, profitability or financial condition.

We are subject to asbestos, environmental and mass tort claims that may impact our financial results.

American Premier Underwriters, Inc. is a party or named as a potentially responsible party in a number of proceedings and claims by regulatory agencies and private parties under various environmental protection laws, including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), seeking to impose responsibility on American Premier for hazardous waste remediation costs at certain railroad sites formerly owned by its predecessor, Penn Central Transportation Company, and at certain other sites where hazardous waste allegedly generated by Penn Central’s railroad operations and American Premier’s former manufacturing operations is present. As of December 31, 2003, American Premier had approximately $75 million reserved for these environmental claims. It is difficult to estimate American Premier’s liability for remediation costs at these sites for a number of reasons, including the number and financial resources of other potentially responsible parties involved at a given site, the varying availability of evidence by which to allocate responsibility among such parties, the wide range of costs for possible remediation alternatives, changing technology and the period of time over which these matters develop.

In addition to our potential exposure for asbestos and environmental claims as discussed above, we are also subject to mass tort claims. Mass tort losses have included lead, silica and various chemical exposures. In 2002 and 2001, we increased property and casualty reserves relating to prior year’s asbestos and environmental claims by a total of $157 million. As of December 31, 2003, the aggregate net reserves held by our insurance company subsidiaries for asbestos, environmental and mass tort claims was $423 million.

Our property and casualty reserves may be inadequate, which could significantly affect our financial results.

We record reserve liabilities for the estimated payment of losses and loss adjustment expenses for both reported and unreported claims. Due to the inherent uncertainty of estimating reserves, it has been necessary in the past, and may continue to be necessary in the future, to revise estimated liabilities as reflected in our reserves for claims and related expenses. For example, in 2003, 2002 and 2001, we recorded charges of $167 million, $171 million and $163 million, respectively, to increase reserves relating to prior accident years. To the extent that reserves are inadequate and are strengthened, the amount of such increase is treated as a charge to earnings in the period in which the deficiency is recognized. The historic development of reserves for losses and loss adjustment expense may not necessarily reflect future trends in the development of these amounts. Accordingly, it is not appropriate to extrapolate redundancies or deficiencies based on historical information.

Variations from the actuarial assumptions used to establish certain assets and liabilities in our annuity, life, accident and health business could negatively impact AFG’s financial results.

The earnings on certain products offered by our annuity, life, accident and health business depend significantly upon the extent to which actual experience is consistent with the assumptions used in setting reserves and establishing and amortizing deferred policy acquisition costs (“DPAC”). These assumptions relate to investment yields (and spreads over fixed annuity crediting rates), mortality, surrenders and, on some policies, morbidity. Developing such assumptions is complex and involves information obtained from company-specific and industry-wide data, as well general economic information. These assumptions, and therefore our results of operations, could be negatively impacted by changes in any of the factors listed above. For example, we recorded a pretax charge of $12.5 million in 2003 in connection with a DPAC write-off due to the negative effect of lower interest rates on our fixed annuity operations.

Adverse securities market conditions can have significant and negative effects on our investment portfolio.

Our results of operations depend in part on the performance of our invested assets. As of December 31, 2003, 88% of our investment portfolio was invested in fixed maturity securities and 3% in equity securities. Certain risks are inherent in connection with fixed maturity securities including loss upon default and price volatility in reaction to changes in interest rates and general market factors. An increase in interest rates lowers prices on fixed maturity securities, and any sales we make during a period of increasing interest rates may result in losses. Conversely, investment income earned from future investments in fixed maturity securities will decrease if interest rates decrease.

We cannot predict at this time whether and the extent to which industry sectors in which we maintain investments may suffer losses as a result of potential decreased commercial and economic activity, or how any such decrease might impact the ability of companies within the affected industry sectors to pay interest or principal on their securities, or how the value of any underlying collateral might be affected.

The continued threat of terrorism and ongoing military and other actions may adversely affect our financial results.

AFG incurred a loss of $25 million related to the terrorist attack on the World Trade Center in 2001. The continued threat of terrorism, both within the United States and abroad, and the ongoing military and other actions and heightened security measures in response to these types of threats, may cause significant volatility and declines in the equity markets in the United States, Europe and elsewhere, loss of life, property damage, additional disruptions to commerce and reduced economic activity. Actual terrorist attacks could cause losses from insurance claims related to our property and casualty and life insurance operations with adverse financial consequences. The Terrorism Risk Insurance Act of 2002 requires that some coverage for terrorist acts be offered by primary property insurers such as our insurance subsidiaries and provides Federal assistance for recovery of claims through 2005. In addition, some of the assets in our insurance subsidiaries’ investment portfolios may be adversely affected by declines in the capital markets and economic activity caused by the continued threat of terrorism, ongoing military and other actions and heightened security measures.

We can offer no assurances that the threats of future terrorist-like events in the United States and abroad or military actions by the United States will not have a material adverse effect on our business, financial condition or results of operations.

The inability to obtain reinsurance could adversely impact our results.

We rely on the use of reinsurance to limit the amount of risk we retain. The following amounts of gross property and casualty premiums have been ceded to other insurers: 2003—$1.5 billion (43%); 2002—$1.5 billion (39%); and 2001—$938 million (27%). The availability and cost of reinsurance are subject to prevailing market conditions which are beyond our control and which may affect our level of business and profitability. We are also subject to credit risk with respect to our reinsurers, as the ceding of risk to reinsurers does not relieve us of our liability to insureds.

Certain shareholders exercise substantial control over our affairs and may have interests that differ from your interests.

As of December 31, 2003, Carl H. Lindner, S. Craig Lindner, Carl H. Lindner III, Keith E. Lindner and trusts for their benefit, which we refer to collectively as the Lindner family, were the beneficial owners of approximately 42% of our outstanding common stock. As a result, the Lindner family exercises substantial control over the election of our board of directors and significantly influences our corporate actions. In addition, the American Financial Group, Inc. Retirement and Savings Plan owned approximately 11% of our outstanding common stock at December 31, 2003. Our board of directors appoints an Administrative Plan Committee of the Retirement and Savings Plan which directs the voting of shares held by the Retirement and Savings Plan. The Administrative Plan Committee is currently composed solely of our executive officers and executives of AFC. The interests of the Lindner family, as well as the interests of the Retirement and Savings Plan, may differ from those of our other stockholders and they may take actions that advance their respective interests to the detriment of our other stockholders.

The price of our common stock may fluctuate significantly which may make it difficult for you to resell common stock when you want or at price you find attractive.

The price of our common stock as listed on the NYSE and Nasdaq National Market constantly changes. Since January 1, 2003, our common stock has traded at prices ranging between $18.00 and $31.00. We expect that the market price of our common stock will continue to fluctuate. Our common stock price can fluctuate as a result of a variety of factors, many of which are beyond our control. These factors include:

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actual or anticipated variations in our quarterly operating results;

•

actual or anticipated changes in the dividends we pay on our common stock;

•

recommendations by securities analysts;

•

significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;

•

operating and stock price performance of other companies that investors deem comparable to us;

•

news reports relating to trends, concerns and other issues in our industry; and

•

geopolitical conditions such as acts or threats of terrorism or military conflicts.

General market fluctuations, industry factors and general economic and political conditions and events, such as terrorist attacks, war, economic slowdowns or recessions, interest rate changes, credit loss trends or currency fluctuations, could also cause our stock price to decrease regardless of our operating results.

The stock market in general has experienced in the past, and may experience in the future, extreme volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the market price of our common stock.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This prospectus (including the information incorporated by reference) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are subject to numerous assumptions, risks or uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words such as “anticipates”, “believes”, “expects”, “estimates”, “intends”, “plans”, “seeks”, “could”, “may”, “should”, “will” or the negative version of those words or other comparable terminology. Examples of such forward-looking statements include statements relating to: expectations concerning market and other conditions and their effect on future premiums, revenues, earnings and investment activities; expected losses and the adequacy of reserves, including losses and reserves for asbestos, environmental pollution and mass tort claims, rate increases, improved loss experience and expected expense savings resulting from recent initiatives.

Actual results could differ materially from those contained in or implied by such forward-looking statements for a variety of factors including:

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changes in economic conditions, including interest rates, performance of securities markets and the availability of capital;

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regulatory actions;

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changes in legal environment;

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tax law changes;

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levels of natural catastrophes, terrorist events, incidents of war and other major losses;

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the ultimate amount of liabilities associated with certain asbestos and environmental-related claims;

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the unpredictability of possible future litigation if certain settlements do not become effective;

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adequacy of insurance reserves;

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trends in mortality and morbidity;

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availability of reinsurance and ability of reinsurers to pay their obligations;

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competitive pressures, including the ability to obtain rate increases; and

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changes in debt and claims paying ratings.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. Neither we nor any trust undertake any obligation to publicly update or review any forward-looking statement.

AMERICAN FINANCIAL GROUP, INC.

We are a holding company which, through subsidiaries, is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of retirement annuities, life, and supplemental health insurance products. We were incorporated as an Ohio corporation in 1997, and our predecessor holding company originated in 1955. Our insurance subsidiaries have been operating as far back as the 1800s. Our address is One East Fourth Street, Cincinnati, Ohio 45202; our phone number is (513) 579-2121. SEC filings, news releases and other information may be accessed free of charge through our Internet site at: www.afginc.com. Except for documents specifically incorporated by reference in this prospectus, information contained on our website is not part of this prospectus.

Over the years, we and our predecessors have owned, operated, and invested in businesses in a variety of industries and geographic areas, culminating in today’s group of insurance companies. Generally, our interests have been in the following areas: insurance, savings and loan, leasing, banking, real estate, communications/entertainment and food distribution. A small number of opportunistic investments have been made in troubled and other undervalued assets.

THE AMERICAN FINANCIAL CAPITAL TRUSTS

American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV are statutory business trusts formed under Delaware law pursuant to three separate declarations of trust executed by us, as sponsor, and the trustees (described below) for the trusts and the filing of three separate certificates of trust with the Delaware Secretary of State. Each trust’s declaration will be amended and restated as of the date the securities of such trust are initially issued. The amended declaration will be qualified as an indenture under the Trust Indenture Act of 1939. Unless the context otherwise indicates, all references to the “trust” or the “trusts” in this prospectus shall mean the American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV.

Each trust exists solely to:

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issue its preferred securities and common securities representing undivided beneficial interests in the assets of that trust;

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invest the proceeds from the issuance of those securities in our junior subordinated debt securities; and

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engage only in incidental activities.

The rights of the holders of each trust’s securities, including economic rights, rights to information and voting rights, are set forth in the trust’s amended declaration of the trust, the Delaware Business Trust Act and the Trust Indenture Act.

We will own, directly or indirectly, all of the common securities of each trust, which will have an aggregate liquidation amount equal to 3% of the total capital of each trust. The common securities will generally rank equally in right of payment with the preferred securities, and payments on both will be made pro rata. However, upon an event of default under a trust’s amended declaration, the rights of the holders of the common securities to payment of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the preferred securities. We will pay all fees and expenses related to the trusts and the offering of each trust’s securities.

We, as holder of all of the common securities, will be entitled to appoint, remove or replace any of, or increase or reduce the number of, the trustees of the trusts. The business and affairs of the trusts will be conducted by the trustees, and the duties and obligations of the trustees will be governed by the applicable amended declarations of the trusts.

At least two of the trustees of each trust will be persons who are employees or officers of, or otherwise affiliated with, us. These persons are sometimes referred to herein as “regular” trustees. One trustee of each trust will be a financial institution which will be unaffiliated with us and will act as property trustee and as indenture trustee for purposes of the Trust Indenture Act under the terms of the applicable amended declaration and as may be further described in a prospectus supplement. The property trustee will hold title to the junior subordinated debt securities for the benefit of the holders of each trust’s securities. In addition, unless the property trustee maintains a principal place of business in the state of Delaware and otherwise meets the requirements of applicable law, one trustee of each trust will be a legal entity having a principal place of business in, or an individual resident of, the state of Delaware.

Unless otherwise indicated in a prospectus supplement, The Bank of New York will be the property trustee and The Bank of New York (Delaware) will be the Delaware trustee. The address of the principal corporate trust office of The Bank of New York is 101 Barclay Street, New York, New York, 10286 and for The Bank of New York (Delaware) is 502 White Clay Center, Route 273, Newark, Delaware, 19711. The principal place of business of the trusts will be c/o American Financial Group, Inc., One East Fourth Street, Cincinnati, Ohio, 45202, telephone number (513) 579-2121.

USE OF PROCEEDS

Unless otherwise indicated in an accompanying prospectus supplement, we expect to use the net proceeds from the sale of any securities offered hereby for general corporate purposes, which may include investment in insurance businesses and the repayment of our outstanding debt and the debt of our subsidiaries. Until the net proceeds are used for these purposes, we may deposit them in interest-bearing accounts or invest them in short-term marketable securities. The specific allocations, if any, of the proceeds of any of the securities will be described in the prospectus supplement. The proceeds from any sale of preferred securities by any trust will be invested in our debt securities.

While we will not directly receive any proceeds from the sale of common stock by the selling shareholder, the selling shareholder is one of our wholly-owned subsidiaries. As the shares of common stock beneficially owned by the selling shareholder are held to satisfy certain historical expenses associated with litigation and claims asserting alleged injuries and damages from asbestos, environmental and other substances and workplace hazards, the selling shareholder intends to use the proceeds from any sale of common stock to pay amounts which may arise from such litigation and claims.

DESCRIPTION OF THE SECURITIES WE MAY OFFER

General

We may issue, in one or more offerings, any combination of senior or subordinated debt securities, common stock, preferred stock, warrants, depositary shares, stock purchase contracts and stock purchase units. The trusts may issue in one or more offerings, trust preferred securities that will be unconditionally guaranteed by us.

This prospectus contains a summary of the general terms of the various securities that we or the trusts may offer. The prospectus supplement relating to any particular securities offered will describe the specific terms of the securities. The summary in this prospectus and in any prospectus supplement does not describe every aspect of the securities and is subject to and qualified in its entirety by reference to all applicable provisions of the documents relating to the securities offered. These documents are or will be filed as exhibits to or incorporated by reference in the registration statement.

In addition, the prospectus supplement will set forth the terms of the offering, the initial public offering price and net proceeds to us or the trusts. Where applicable, the prospectus supplement will also describe any material United States federal income tax considerations relating to the securities offered and indicate whether the securities offered are or will be listed on any securities exchange.

Book-Entry System

Unless otherwise indicated in a prospectus supplement, the debt securities and preferred securities offered by us and the trusts will be issued in the form of one or more fully registered global securities. These global securities will be deposited with, or on behalf of, the Depository Trust Company and registered in the name of its nominee. Except as described below, the global securities may be transferred, in whole and not in part, only to DTC or to another nominee of DTC.

DTC has advised us that it is:

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a limited-purpose trust company organized under the New York Banking Law;

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a "banking organization" within the meaning of the New York Banking Law;

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a member of the Federal Reserve System;

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a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and

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a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.

DTC was created to hold securities for institutions that have accounts with DTC (“participants”) and to facilitate the clearance and settlement of securities transactions among its participants through electronic book-entry changes in participants’ accounts. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC’s book-entry system is also available to others that clear through or maintain a custodial relationship with a participant, either directly or indirectly. DTC administers its book-entry system in accordance with its rules and bylaws and legal requirements.

Upon issuance of a global security representing offered securities, DTC will credit on its book-entry registration and transfer system the principal amount to participants’ accounts. Ownership of beneficial interests in the global security will be limited to participants or to persons that hold interests through participants. Ownership of interests in the global security will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by DTC (with respect to participants’ interests) and the participants (with respect to the owners of beneficial interests in the global security). The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of those securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in a global security.

So long as DTC (or its nominee) is the registered holder and owner of a global security, DTC (or its nominee) will be considered, for all purposes under the applicable indenture, the sole owner and holder of the related offered securities. Except as described below, owners of beneficial interests in a global security will not:

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be entitled to have the offered securities registered in their names; or

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receive or be entitled to receive physical delivery of certificated offered securities in definitive form.

Each person owning a beneficial interest in a global security must rely on DTC’s procedures (and, if that person holds through a participant, on the participant’s procedures) to exercise any rights of a holder of offered securities under the global security or any applicable indenture, or otherwise. The indentures provide that DTC may grant proxies and otherwise authorize participants to take any action which it (as the holder of a global security) is entitled to take under the indentures or the global security. We understand that under existing industry practice, if we or a trust request any action of holders or an owner of a beneficial interest in a global security desires to take any action that DTC (as the holder of the global security) is entitled to take, DTC would authorize the participants to take that action and the participants would authorize their beneficial owners to take the action or would otherwise act upon the instructions of their beneficial owners.

We or the trusts will make payments with respect to offered securities represented by a global security to DTC. We expect that DTC, upon receipt of any payments, will immediately credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests. We also expect that payments by participants to owners of beneficial interests in a global security held

through them will be governed by standing instructions and customary practices (as is the case with securities held for customers’ accounts in “street name”) and will be the responsibility of the participants. None of us, the trusts or any trustee will have any responsibility or liability for:

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any aspect of the records relating to, or payments made on account of, beneficial ownership interests in a global security for any securities;

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maintaining, supervising, or reviewing any records relating to any beneficial ownership interests;

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any other aspect of the relationship between DTC and its participants; or

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the relationship between the participants and the owners of beneficial interests in a global security.

Unless and until they are exchanged in whole or in part for certificated securities in definitive form, the global securities may not be transferred except as a whole by DTC to its nominee or by its nominee to DTC or another nominee.

The securities of any series represented by a global security may be exchanged for certificated securities in definitive form if:

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DTC notifies us that it is unwilling or unable to continue as depositary for the global security or if at any time it ceases to be a clearing agency registered under the Securities Exchange Act of 1934;

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we decide at any time not to have the securities of that series represented by a global security and so notifies DTC; or

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in the case of debt securities, an event of default has occurred and is continuing with respect to the debt securities.

If there is such an exchange, we will issue certificated securities in authorized denominations and registered in such names as DTC directs. Subject to the foregoing, a global security is not exchangeable, except for a global security of the same aggregate denomination to be registered in DTC’s or its nominee’s name.

DESCRIPTION OF DEBT SECURITIES

General

The debt securities are governed by documents called “indentures.” An indenture is a contract between American Financial Group and the trustee named in the applicable prospectus supplement, which acts as trustee for the debt securities. There may be more than one trustee under each indenture for different series of debt securities. The trustee has two main roles. First, the trustee can enforce your rights against us if we default. There are some limitations on the extent to which the trustee acts on your behalf, described under “Remedies If An Event of Default Occurs.” Second, the trustee may perform administrative duties for us, such as sending you interest payments, transferring your debt securities to a new buyer if you sell, and sending you notices. We anticipate that we will perform these duties with respect to the debt securities.

The debt securities will be unsecured general obligations of us and may include:

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senior debt securities, to be issued under the senior indenture;

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subordinated debt securities, to be issued under the subordinated indenture; and

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junior subordinated debt securities, to be issued under the junior subordinated indenture in conjunction with the issuance of preferred securities of the trusts.

If issued, the junior subordinated debt securities will be purchased by a trust using proceeds from issuances of the preferred securities of such trust. When we refer to the indenture, we mean the senior indenture, the subordinated indenture and the junior subordinated indenture collectively, unless we indicate otherwise. When we refer to the trustee, we mean the senior trustee, the subordinated trustee and the junior subordinated trustee collectively, unless we indicate otherwise.

This section summarizes the general terms of the debt securities we may offer. The prospectus supplement relating to any particular debt securities offered will indicate whether the debt securities are senior debt securities, subordinated debt securities or junior subordinated debt securities and will describe the specific terms of the debt securities. The summary in this section and in any prospectus supplement does not describe every aspect of the senior, subordinated or junior subordinated indenture or the debt securities, and is subject to and qualified in its entirety by reference to all the provisions of the applicable indenture and the debt securities. The forms of the senior indenture, subordinated indenture and junior subordinated indenture and the forms of the debt securities are or will be filed as exhibits to or incorporated by reference in the registration statement. See “Where You Can Find More Information” for information on how to obtain a copy.

If we had issued senior debt securities on March 31, 2004, we would have had no outstanding debt senior to the senior debt securities, $677 million debt outstanding pari passu to the senior debt securities and no debt outstanding junior to the senior debt securities. If we had issued subordinated debt securities on March 31, 2004, we would have had $677 million debt outstanding senior to the subordinated or junior subordinated debt securities, no subordinated debt outstanding pari passu to the subordinated debt securities and no junior debt outstanding junior to the subordinated debt securities. We are structured as a holding company and we conduct most of our business operations through subsidiaries. Any notes issued would be effectively subordinated to all existing and future indebtedness and other liabilities and commitments of our subsidiaries.

The prospectus supplement relating to any series of debt securities will describe the following specific financial, legal and other terms particular to such series of debt securities:

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the title of the debt securities;

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any limit on the aggregate principal amount of the debt securities;

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the date or dates on which the debt securities will mature;

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the rate or rates (which may be fixed or variable) at which the debt securities will bear interest, if any, and the date or dates from which the interest will accrue;

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the dates on which interest on the debt securities will be payable and the regular record dates for those interest payment dates;

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the place or places where the principal of and premium, if any, and interest shall be payable, where the debt securities may be surrendered for transfer or exchange, and where notices may be served;

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the date, if any, after which and the price or prices at which the debt securities may, in accordance with any option or mandatory redemption provisions, be redeemed and the other detailed terms and provisions of any such optional or mandatory redemption provision;

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any mandatory or optional sinking funds or analogous provisions or provisions for redemption at the holder’s option;

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if other than denominations of $1,000 and any integral multiple thereof, the denomination in which the debt securities will be issuable;

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if other than the principal amount thereof, the portion of the principal amount of the debt securities which will be payable upon the declaration of acceleration of the maturity of those debt securities;

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any addition to any events of default or covenants with respect to the securities;

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any index or formula used to determine the amount of payment of principal of, premium, if any, and interest on the debt securities;

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any provision relating to the defeasance of our obligations in connection with the debt securities;

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any provision regarding exchangeability or conversion of the debt securities into our common stock or other securities;

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whether any debt securities will be issued in the form of a global security, and, if different than described above under “Description of the Securities We May Offer—Book Entry System,” any circumstances under which a global security may be exchanged for debt securities registered in the names of persons other than the depositary for the global security or its nominee;

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whether the debt securities are senior, subordinated or junior subordinated debt securities;

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the subordination provisions applicable to the subordinated debt securities or junior subordinated debt securities; and

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any other material terms of the debt securities.

The terms of any series of debt securities may vary from the terms described here. Thus, this summary also is subject to and qualified by reference to the description of the particular terms of your debt securities to be described in the prospectus supplement. The prospectus supplement relating to the debt securities will be attached to the front of this prospectus.

The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities are governed by Ohio law.

Events Of Default

General

You will have special rights if an “event of default” occurs, with respect to any series, and is not cured, as described later in this subsection. Under the indenture, the term “event of default” means any of the following:

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we do not pay interest on a debt security, in the case of senior debt securities or subordinated debt securities, within 30 days of its due date and, in the case of junior subordinated debt securities, within 60 days of its due date;

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we do not pay the principal or any premium on a debt security on its due date;

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we remain in breach of any covenant or warranty described in the indenture for 60 days after we receive a notice stating we are in breach. In the case of senior debt securities or subordinated debt securities, the notice must be sent by either the trustee or direct holders of at least 25% of the principal amount of outstanding debt securities, and in the case of the junior subordinated debt securities, the notice must be sent by the trustee;

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we fail to pay an amount of debt (other than the debt securities) totaling more than $10,000,000 ($15,000,000 in the case of junior subordinated debt securities), our obligation to repay is accelerated by our lenders, and this payment obligation remains accelerated for 10 days after we receive notice of default as described in the previous paragraph;

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we become subject to final, non-appealable judgments, orders or decrees requiring payments of more than $10,000,000 ($15,000,000 in the case of junior subordinated debt securities) and such judgment, order or decree remains unsatisfied for 60 days (30 days in the case of junior subordinated debt securities) during which a stay of enforcement has not been in effect after we receive notice as described two paragraphs above; or

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certain events of bankruptcy, insolvency or reorganization of us.

Remedies if an Event of Default Occurs

If an event of default not involving certain events in bankruptcy, insolvency or reorganization has occurred and has not been cured, the trustee or the direct holders of 25% in principal amount of the outstanding debt securities of the affected series, or any holder of preferred securities in the case of an event of default with respect to the junior subordinated debt securities, may declare the entire principal amount of all the debt securities of that series to be due and immediately payable. Upon an event of default involving certain events in bankruptcy, insolvency or reorganization, the entire principal amount of that series of debt securities will automatically become due and payable without any action by the trustee or any holder. This is called a “declaration of acceleration of maturity.”

Except in cases of default, whereby a trustee has some special duties, a trustee is not required to take any action under the indenture at the request of any direct holders unless the direct holders offer the trustee reasonable protection from expenses and liability (called an “indemnity”). If reasonable indemnity is provided, the direct holders of a majority in principal amount of the outstanding debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority direct holders may also direct the trustee in performing any other action under the indenture.

In general, before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the debt securities, the following must occur:

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you must give the trustee written notice that an event of default has occurred and remains uncured;

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the direct holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action;

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the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity; and

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the trustee must not have received from direct holders of a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with the written notice during the 60 day period after receipt of the above notice.

However, you are entitled at any time to bring a lawsuit for the payment of money due on your debt security on or after its due date.

Modification

There are three types of changes we can make to the indentures and the debt securities.

Changes Requiring Your Approval

First, there are changes that cannot be made to the indentures or your debt securities without your specific approval. Following is a list of those types of changes:

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change the payment due date of the principal or interest on a debt security;

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reduce any amounts due on a debt security;

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reduce the amount of principal payable upon acceleration of the maturity of a debt security following a default;

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change the place of payment on a debt security;

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impair your right to sue for payment;

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reduce the percentage in principal amount of debt securities, the consent of whose holders is required to modify or amend the indenture;

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reduce the percentage in principal amount of debt securities, the consent of whose holders is required to waive compliance with certain provisions of the indenture or to waive certain defaults; and

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modify any other aspect of the provisions dealing with modification and waiver of the indenture.

Changes Requiring a Majority Vote

The second type of change to the indentures and the debt securities is the kind that requires consent of the holders of a majority in principal amount of the outstanding debt securities of the particular series affected. With a majority vote, the holders may waive past defaults, provided that such defaults are not of the type described previously under “Changes Requiring Your Approval.”

Changes Not Requiring Approval

The third type of change does not require any vote by direct holders of debt securities. This type is limited to clarifications and certain other changes that would not adversely affect holders of the debt securities.

Consolidation, Merger And Sale Of Assets

We may consolidate or merge with or into another entity, and we may sell or lease substantially all of our assets to another corporation if the following conditions, among others, are met:

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where we merge out of existence or sell or lease substantially all our assets, the other entity must be a corporation, partnership or trust organized under the laws of a state or the District of Columbia or under federal law, and it must agree to be legally responsible for the debt securities; and

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the merger, sale of assets or other transaction must not cause a default or an event of default on the debt securities.

Form, Exchange, Registration And Transfer

Generally, we will issue debt securities only in registered global form. However, if specified in the prospectus supplement or in the certain instances described in “Description of the Securities We May Offer — Book-Entry System,” we may issue certificated securities in definitive form.

You may have your debt securities broken into more debt securities of smaller denominations or combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. This is called an “exchange.”

You may exchange or transfer debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and transferring debt securities. We may appoint another entity or perform this role ourselves. The entity performing the role of maintaining the list of registered direct holders is called the “security registrar.” It will also perform transfers. You will not be required to pay a service charge to transfer or exchange debt securities, but you may be required to pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange will only be made if the security registrar is satisfied with your proof of ownership.

If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to freeze the list of holders to prepare the mailing. We may also refuse to register transfers or exchanges of debt securities selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt security being partially redeemed.

Payment And Paying Agents

We will pay interest to you if you are a direct holder listed in the trustee’s records at the close of business on a particular day in advance of each due date for interest, even if you no longer own the debt security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the “regular record date” and will be stated in the prospectus supplement. Holders buying and selling debt securities must work out between them how to compensate for the fact that we will pay all the interest for an interest period to the one who is the registered holder on the regular record date. The most common manner is to adjust the sales price of the debt securities to prorate interest fairly between buyer and seller. This prorated interest amount is called “accrued interest.”

In the past, we have chosen to pay interest by mailing checks. We may also choose to pay interest, principal and any other money due on the debt securities at the corporate trust office of the trustee. You must make arrangements to have your payments picked up at or wired from the trust office.

We may also arrange for additional payment offices, and may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called “paying agents.” We may also choose to act as our own paying agent. We must notify you of changes in the paying agents for any particular series of debt securities.

Notices

Notices to holders of debt securities will be given by mail to the addresses of such holders as they appear in the security register.

Provisions Applicable To Junior Subordinated Debt Securities

The following provisions will apply solely to junior subordinated debt securities.

Events of Default

In addition to the events described above under “Description of Debt Securities — Events of Default” applicable to all debt securities, the voluntary or involuntary dissolution, winding up or termination of a trust that owns the series of junior subordinated debt securities will constitute an event of default for any series of junior subordinated debt securities, except in connection with:

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the distribution of such junior subordinated debt securities to holders of the trust’s securities;

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the redemption of all of the trust's securities; and

•

mergers, consolidations or similar events permitted by the amended declaration of the trust.

The holders of at least a majority in aggregate liquidation amount of the trust preferred securities of a trust may waive any default or event of default with respect to such series and its consequences, except defaults or events of default that are not waivable under the junior subordinated indenture (such as defaults regarding payment of principal, premium, if any, or interest).

Any waiver will cure the default or event of default. If, under the amended declaration of the trust, an event of default has occurred and is attributable to the failure of us to pay principal, premium, if any, or interest on, such junior subordinated debt securities, then each holder of the preferred securities of the trust may sue us or seek other remedies, to force payment to such holder of the principal of, premium, if any, or interest on, such junior subordinated debt securities having a principal amount equal to the aggregate liquidation amount of the preferred securities held by such holder.

Subordination of Junior Subordinated Debt Securities

The junior subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent described in a prospectus supplement. The junior subordinated indenture will not limit the amount of junior subordinated debt securities which we may issue, nor does it limit us from issuing any other secured or unsecured debt.

DESCRIPTION OF COMMON STOCK

This section summarizes the general terms of the common stock that we or American Premier Underwriters, Inc., as selling shareholder, may offer. The prospectus supplement relating to the common stock offered will set forth the number of shares offered, the initial offering price and recent market prices, dividend information and any other relevant information. The summary in this section and in the prospectus supplement does not describe every aspect of the common stock and is subject to and qualified in its entirety by reference to all the provisions of our Amended and Restated Articles of Incorporation and Code of Regulations and to the provisions of the Ohio General Corporation Law.

The total number of authorized shares of common stock is 200,000,000. Holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. Holders of common stock have the right to cumulate their votes in the election of directors but are not entitled to any preemptive rights.

Subject to restrictions under agreements related to our indebtedness and to preferences that may be granted to holders of preferred stock, holders of common stock are entitled to the share of such dividends as our board of directors, in its discretion, may validly declare from funds legally available. In the event of liquidation, each outstanding share of common stock entitles its holder to participate ratably in the assets remaining after the payment of liabilities and any preferred stock liquidation preferences.

As of June 1, 2004, we had 72,040,004 shares of common stock outstanding and eligible to vote, which does not include 11,315,103 shares held by our subsidiaries, including the selling shareholder. Under Ohio law, shares held by subsidiaries are not entitled to vote at meetings of shareholders or by written consent. Shares of common stock carry no conversion subscription rights and are not subject to redemption. All outstanding shares of common stock are, and any shares of common stock issued upon conversion of any convertible securities will be, fully paid and nonassessable.

The outstanding shares of our common stock are listed on the New York Stock Exchange and Nasdaq National Market and trade under the symbol “AFG.” We act as our own transfer agent and registrar.

DESCRIPTION OF PREFERRED STOCK

The following briefly summarizes the material terms of the preferred stock that we may offer, other than pricing and related terms disclosed in a prospectus supplement. You should read the particular terms of any series of preferred stock that we offer, which we will describe in more detail in any

prospectus supplement relating to such series. You should also read the more detailed provisions of our Amended and Restated Articles of Incorporation and the statement with respect to shares relating to each particular series of preferred stock for provisions that may be important to you. The statement with respect to shares relating to each particular series of preferred stock offered by the accompanying prospectus supplement and this prospectus will be filed as an exhibit to a document incorporated by reference in the registration statement. The prospectus supplement will also state whether any of the terms summarized below do not apply to the series of preferred stock being offered.

General

Our board of directors is authorized to issue up to 12,500,000 shares of voting preferred stock and up to 12,500,000 shares of non-voting preferred stock. Our board of directors can issue shares of preferred stock in one or more series and can specify the following terms for each series:

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the number of shares;

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the designation, powers, preferences and rights of the shares; and

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the qualifications, limitations or restrictions, except as otherwise stated in the articles of incorporation.

Before issuing any series of preferred stock, our board of directors will adopt resolutions creating and designating the series as a series of preferred stock, and the resolutions will be filed in a statement with respect to shares as an amendment to the articles of incorporation.

The rights of holders of the preferred stock offered may be adversely affected by the rights of holders of any shares of preferred stock that may be issued in the future. Our board of directors may cause shares of preferred stock to be issued in public or private transactions for any proper corporate purpose. Examples include issuances to obtain additional financing in connection with acquisitions or otherwise, and issuances to our officers, directors and employees and our subsidiaries pursuant to benefit plans or otherwise. The preferred stock could have the effect of acting as an anti-takeover device to prevent a change in control of us.

Unless the particular prospectus supplement states otherwise, holders of each series of preferred stock will not have any preemptive or subscription rights to acquire more of our stock.

The transfer agent, registrar, dividend disbursing agent and redemption agent for shares of each series of preferred stock will be named in the prospectus supplement relating to such series.

Rank

Unless otherwise specified in the prospectus supplement relating to the shares of any series of preferred stock, the shares will rank on an equal basis with each other series of preferred stock and prior to the common stock as to dividends and distributions of assets.

Dividends

Unless the particular prospectus supplement states otherwise, holders of each series of preferred stock will be entitled to receive cash dividends, when, as and if declared by our board of directors out of funds legally available for dividends. The rates and dates of payment of dividends will be set forth in the prospectus supplement relating to each series of preferred stock. Dividends will be payable to holders of record of preferred stock as they appear on our books. Dividends on any series of preferred stock may be cumulative or noncumulative.

We may not declare, pay or set apart for payment dividends on the preferred stock unless full dividends on any other series of preferred stock that ranks on an equal or senior basis have been paid or sufficient funds have been set apart for payment for:

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all prior dividend periods of the other series of preferred stock that pay dividends on a cumulative basis; or

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the immediately preceding dividend period of the other series of preferred stock that pay dividends on a noncumulative basis.

Partial dividends declared on shares of preferred stock and any other series of preferred stock ranking on an equal basis as to dividends will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued dividends per share will be the same for all such series of preferred stock.

Similarly, we may not declare, pay or set apart for payment non-stock dividends or make other payments on the common stock or any other stock of ours ranking junior to the preferred stock unless full dividends on all series of preferred stock have been paid or set apart for payment for:

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all prior dividend periods if the preferred stock pays dividends on a cumulative basis; or

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the immediately preceding dividend period if the preferred stock pays dividends on a noncumulative basis.

Conversion and Exchange

The prospectus supplement for any series of preferred stock will state the terms, if any, on which shares of that series are convertible into or exchangeable for shares of our common stock.

Redemption

If so specified in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our option or at the option of the holders, or may be mandatorily redeemed.

Any partial redemptions of preferred stock will be made in a way that our board of directors decides is equitable.

Unless we default in the payment of the redemption price, dividends will cease to accrue after the redemption date on shares of preferred stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price.

Liquidation Preference

Upon our voluntary or involuntary liquidation, dissolution or winding up, holders of each series of preferred stock will be entitled to receive distributions upon liquidation in the amount set forth in the prospectus supplement relating to such series of preferred stock, plus an amount equal to any accrued and

unpaid dividends. Such distributions will be made before any distribution is made on any securities ranking junior to the preferred stock with respect to liquidation, including common stock.

If the liquidation amounts payable relating to the preferred stock of any series and any other securities ranking on a parity regarding liquidation rights are not paid in full, the holders of the preferred stock of such series and such other securities will share in any such distribution of our available assets on a ratable basis in proportion to the full liquidation preferences. Holders of such series of preferred stock will not be entitled to any other amounts from us after they have received their full liquidation preference.

Voting Rights

If we issue voting preferred stock, holders of preferred stock will be entitled to one vote per share on each matter submitted to our shareholders. If we issue non-voting preferred stock, holders of preferred stock will have no voting rights, except as required by applicable law. The prospectus supplement will state the voting rights, if any, applicable to any particular series of preferred stock.

DESCRIPTION OF WARRANTS

We may issue warrants for the purchase of common stock, debt securities or other securities registered pursuant to this registration statement and described in this prospectus. We may issue warrants independently or together with other securities that may be attached to or separate from the warrants. We will issue each series of warrants under a separate warrant agreement that will be entered into between us and a bank or trust company, as warrant agent, and will be described in the prospectus supplement relating to the particular issue of warrants. The warrant agent will act solely as our agent in connection with the warrant of such series and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants. The following describes certain general terms and provisions of debt warrants or common stock warrants we may offer. We will set forth further terms of the debt warrants, common stock warrants or warrants to purchase other securities and the applicable warrant agreement in the applicable prospectus supplement.

Common Stock Warrants

The applicable prospectus supplement will describe the terms of any common stock warrants, including the following:

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the title of such warrants;

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the offering price of such warrants, which we may distribute proportionately free of charge to our shareholders (in the applicable prospectus supplement, we may refer to warrants distributed proportionately free of charge to our shareholders as rights to purchase our common stock);

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the aggregate number of such warrants;

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the designation and terms of the common stock issued by us purchasable upon exercise of such warrants;

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if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;

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if applicable, the date from and after which such warrants and any securities issued therewith will be separately transferable;

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the number of shares of common stock issued by us purchasable upon exercise of the warrants and the price at which such shares may be purchased upon exercise;

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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

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if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;

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the currency, currencies or currency units in which the offering price, if any, and the exercise price are payable;

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if applicable, a discussion of certain United States federal income tax considerations;

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the identity of the warrant agent for the warrants; and

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the antidilution provisions of the warrants, if any.

Debt Warrants

The applicable prospectus supplement will describe the terms of any debt warrants, including the following:

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the title of the debt warrants;

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the offering price for the debt warrants;

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the aggregate number of the debt warrants;

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the designation and terms of the debt securities purchasable upon exercise of such debt warrants;

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if applicable, the designation and terms of the securities with which such debt warrants are issued and the number of such debt warrants issued with each security;

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if applicable, the date from and after which such debt warrants and any securities issued therewith will be separately transferable;

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the principal amount of debt securities purchasable upon exercise of a debt warrant and the price at which such principal amount of debt securities may be purchased upon exercise;

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the date on which the right to exercise such debt warrants shall commence and the date on which such right shall expire;

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if applicable, the minimum or maximum amount of such debt warrants which may be exercised at any one time;

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whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered form;

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information with respect to book-entry procedures, if any;

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the currency, currencies or currency units in which the offering price, if any, and the exercise price are payable;

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if applicable, a discussion of certain United States federal income tax considerations;

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the identity of the warrant agent for the warrants;

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the antidilution provisions of such debt warrants, if any;

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the redemption or call provisions, if any, applicable to such debt warrant; and

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any additional terms of the debt warrants, including terms, procedures and limitations relating to the exchange and exercise of such debt warrants.

DESCRIPTION OF DEPOSITARY SHARES

The following briefly summarizes the provisions of the depositary shares and depositary receipts that we may issue from time to time and which would be important to holders of depositary receipts, other than pricing and related terms, which will be disclosed in the applicable prospectus supplement. The prospectus supplement will also state whether any of the general provisions summarized below do not apply to the depositary shares or depositary receipts being offered and provide any additional provisions applicable to the depositary shares or depositary receipts being offered. The following description and any

description in a prospectus supplement may not be complete and is subject to, and qualified in its entirety by reference to the terms and provisions of the form of deposit agreement filed as an exhibit to the registration statement which contains this prospectus.

Depositary Shares

We may offer depositary shares evidenced by depositary receipts. Each depositary share represents a fraction or a multiple of a share of a particular series of preferred stock that we issue and deposit with a depositary. The fraction or the multiple of a share of preferred stock, which each depositary share represents, will be set forth in the applicable prospectus supplement.

We will deposit the shares of any series of preferred stock represented by depositary shares according to the provisions of a deposit agreement to be entered into between us and a bank or trust company, which we will select as our preferred stock depositary. We will name the depositary in the applicable prospectus supplement. Each holder of a depositary share will be entitled to all the rights and preferences of the underlying preferred stock in proportion to the applicable fraction or multiple of a share of preferred stock represented by the depositary share. These rights include any applicable dividend, voting, redemption, conversion and liquidation rights. The depositary will send the holders of depositary shares all reports and communications that we deliver to the depositary and which we are required to furnish to the holders of depositary shares.

Depositary Receipts

The depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Depositary receipts will be distributed to anyone who is buying the fractional shares of preferred stock in accordance with the terms of the applicable prospectus supplement.

Withdrawal of Preferred Stock

Unless the related depositary shares have previously been called for redemption, a holder of depositary shares may receive the number of whole shares of the related series of preferred stock and any money or other property represented by the holder’s depositary receipts after surrendering the depositary receipts at the corporate trust office of the depositary, paying any taxes, charges and fees provided for in the deposit agreement and complying with any other requirement of the deposit agreement. Partial shares of preferred stock will not be issued. If the surrendered depositary shares exceed the number of depositary shares that represent the number of whole shares of preferred stock the holder wishes to withdraw, then the depositary will deliver to the holder at the same time a new depositary receipt evidencing the excess number of depositary shares. Once the holder has withdrawn the preferred stock, the holder will not be entitled to re-deposit that preferred stock under the deposit agreement or to receive depositary shares in exchange for such preferred stock.

Dividends and Other Distributions

The depositary will distribute to record holders of depositary shares any cash dividends or other cash distributions it receives on preferred stock. Each holder will receive these distributions in proportion to the number of depositary shares owned by the holder. The depositary will distribute only whole U.S. dollars and cents. The depositary will add any fractional cents not distributed to the next sum received for distribution to record holders of depositary shares.

In the event of a non-cash distribution, the depositary will distribute property to the record holders of depositary shares, unless the depositary determines that it is not feasible to make such a

distribution. If this occurs, the depositary may, with our approval, sell the property and distribute the net proceeds from the sale to the holders.

The amounts distributed to holders of depositary shares will be reduced by any amounts required to be withheld by the preferred stock depositary or by us on account of taxes or other governmental charges.

Redemption of Depositary Shares

If the series of preferred stock represented by depositary shares is subject to redemption, then we will give the necessary proceeds to the depositary. The depositary will then redeem the depositary shares using the funds they received from us for the preferred stock. The redemption price per depositary share will be equal to the redemption price payable per share for the applicable series of the preferred stock and any other amounts per share payable with respect to the preferred stock multiplied by the fraction of a share of preferred stock represented by one depositary share. Whenever we redeem shares of preferred stock held by the depositary, the depositary will redeem the depositary shares representing the shares of preferred stock on the same day, provided we have paid in full to the depositary the redemption price of the preferred stock to be redeemed and any accrued and unpaid dividends. If fewer than all the depositary shares of a series are to be redeemed, the depositary shares will be selected by lot or ratably or by any other equitable method as the depositary will decide.

After the date fixed for redemption, the depositary shares called for redemption will no longer be considered outstanding. Therefore, all rights of holders of the depositary shares will cease, except that the holders will still be entitled to receive any cash payable upon the redemption and any money or other property to which the holder was entitled at the time of redemption. To receive this amount or other property, the holders must surrender the depositary receipts evidencing their depositary shares to the preferred stock depositary. Any funds that we deposit with the preferred stock depositary for any depositary shares that the holders fail to redeem will be returned to us after a period of two years from the date we deposit the funds.

Voting the Preferred Stock

Upon receipt of notice of any meeting at which the holders of preferred stock are entitled to vote, the depositary will notify holders of depositary shares of the upcoming vote and arrange to deliver our voting materials to the holders. The record date for determining holders of depositary shares that are entitled to vote will be the same as the record date for the preferred stock. The materials the holders will receive will describe the matters to be voted on and explain how the holders, on a certain date, may instruct the depositary to vote the shares of preferred stock underlying the depositary shares. For instructions to be valid, the depositary must receive them on or before the date specified. To the extent possible, the depositary will vote the shares as instructed by the holder. We agree to take all reasonable actions that the depositary determines are necessary to enable it to vote as a holder has instructed. The depositary will abstain from voting shares of preferred stock deposited under a deposit agreement if it has not received specific instructions from the holder of the depositary shares representing those shares.

Amendment and Termination of the Deposit Agreement

We may agree with the depositary to amend the deposit agreement and the form of depositary receipt at any time. However, any amendment that materially and adversely alters the rights of the holders of depositary receipts will not be effective unless it has been approved by the holders of at least a majority of the affected depositary shares then outstanding. We will make no amendment that impairs the right of any holder of depositary shares, as described above under “– Withdrawal of Preferred Stock,” to receive shares of preferred stock

and any money or other property represented by those depositary shares, except in order to comply with mandatory provisions of applicable law. If an amendment becomes effective, holders are deemed to agree to the amendment and to be bound by the amended deposit agreement if they continue to hold their depositary receipts.

The deposit agreement automatically terminates if a final distribution in respect of the preferred stock has been made to the holders of depositary receipts in connection with our liquidation, dissolution or winding-up. We may also terminate the deposit agreement at any time we wish with at least 60 days prior written notice to the depositary. If we do so, the depositary will give notice of termination to the record holders not less than 30 days before the termination date. Once depositary receipts are surrendered to the depositary, it will send to each holder the number of whole or fractional shares of the series of preferred stock underlying that holder’s depositary receipts.

Charges of Depositary and Expenses

We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay all charges of the depositary in connection with the initial deposit of the related series of offered preferred stock, the initial issuance of the depositary shares, all withdrawals of shares of the related series of offered preferred stock by holders of the depositary shares and the registration of transfers of title to any depositary shares. However, holders of depositary receipts will pay other taxes and governmental charges and any other charges provided in the deposit agreement to be payable by them.

Limitations on Our Obligations and Liability to Holders of Depositary Receipts

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary as follows:

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we and the depositary are only liable to the holders of depositary receipts for negligence or willful misconduct; and

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we and the depositary have no obligation to become involved in any legal or other proceeding related to the depositary receipts or the deposit agreement on your behalf or on behalf of any other party, unless you provide us with satisfactory indemnity.

Resignation and Removal of Depositary

The depositary may resign at any time by notifying us of its election to do so. In addition, we may remove the depositary at any time. Within 60 days after the delivery of the notice of resignation or removal of the depositary, we will appoint a successor depositary.

Reports to Holders

We will deliver all required reports and communications to holders of the offered preferred stock to the depositary, and it will forward those reports and communications to the holders of depositary shares.

DESCRIPTION OF THE STOCK PURCHASE CONTRACTS
AND THE STOCK PURCHASE UNITS

We may issue stock purchase contracts, representing contracts obligating holders to purchase from us, and obligating us to sell to the holders, a specified number of shares of our common stock at a future date or dates. The price per share and the number of shares of our common stock may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula set forth in the stock purchase contracts. The stock purchase contracts may be issued separately or as a part of stock purchase units consisting of a stock purchase contract and, as security for the holder’s obligations to purchase the shares under the stock purchase contracts, either:

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senior debt securities or subordinated debt securities;

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shares of preferred stock;

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preferred securities of American Financial Capital Trust II, American Financial Capital Trust III or American Financial Capital Trust IV; or

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debt obligations of third parties, including U.S. Treasury securities.

The stock purchase contracts may require us to make periodic payments to the holders thereof or vice versa, and such payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holders to secure their obligations in a specified manner and, in certain circumstances, we may deliver newly issued prepaid stock purchase contracts upon release to a holder of any collateral securing such holder’s obligations under the original stock purchase contract.

The applicable prospectus supplement will describe the terms of any stock purchase contracts or stock purchase units and, if applicable, prepaid stock purchase contracts. The description in the prospectus supplement will not purport to be complete and will be qualified in its entirety by reference to:

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the stock purchase contracts;

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the collateral arrangements and depositary arrangements, if applicable, relating to such stock purchase contracts or stock purchase units; and

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if applicable, the prepaid stock purchase contracts and the document pursuant to which such prepaid stock purchase contracts will be issued.

DESCRIPTION OF THE TRUST PREFERRED SECURITIES

General

The amended declarations of American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV authorize each trust to issue one series of trust preferred securities and one series of trust common securities, the terms of which will be described in a prospectus supplement. The trusts will use the proceeds from the sale of the trust preferred securities and trust common securities to purchase a series of junior subordinated debt securities issued by us. The property trustee will hold the junior subordinated debt securities in trust for the benefit of the holders of the trust preferred securities. We, as sponsor of the trusts, will purchase all of the common securities of each trust.

This section summarizes the general terms of the preferred securities that the trusts may offer. The prospectus supplement relating to any particular preferred securities offered by the trusts will describe the specific terms of the trust preferred securities. The summary in this section and in any prospectus supplement does not describe every aspect of the trust preferred securities offered and is subject to and qualified in its entirety by reference to all the provisions of the amended declaration and the trust preferred securities. The forms of the amended declarations and the trust preferred securities are or will be filed as exhibits to or incorporated by reference in the registration statement.

We will guarantee the payments of distributions and payments on redemption or liquidation with respect to the trust preferred securities, but only to the extent the applicable trust has funds available to make those payments and has not made the payments. The trust preferred securities guarantee by us is described in more detail below under “Description of the Trust Preferred Securities Guarantee.”

The assets of each trust available for distribution to the holders of its trust preferred securities will be limited to payments from us under the series of junior subordinated debt securities held by such trust. If we fail to make a payment on the junior subordinated debt securities, the trust will not have sufficient funds to make related payments, including distributions, on their respective trust preferred securities.

The trust preferred securities guarantee, when taken together with our obligations under the series of junior subordinated debt securities, the junior subordinated indenture and the amended declaration of trusts, will provide a full and unconditional guarantee of amounts due on the trust preferred securities issued by such trust.

The prospectus supplement relating to any particular trust preferred securities will describe the specific terms of the trust preferred securities. In particular, the prospectus supplement will describe:

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the name of the trust preferred securities;

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the designation of the trust preferred securities;

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the dollar amount and number of trust preferred securities issued by such trust;

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the annual distribution rate(s) or method of determining such rate(s), the payment date(s) and the record dates used to determine the holders who are to receive distributions;

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the date(s) or the method to determine the date(s) from which distributions shall be cumulative;

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the optional redemption provisions, if any, including the prices, time periods and other terms and conditions for which such trust preferred securities shall be purchased or redeemed, in whole or in part;

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the optional right of the trust to defer quarterly distributions on the preferred securities;

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the terms and conditions, if any, upon which the applicable series of junior subordinated debt securities and the related trust preferred securities guarantee may be distributed to holders of the trust preferred securities upon liquidation, dissolution, termination or winding up of the trust;

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any voting rights of the trust preferred securities other than those described in this section;

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any securities exchange on which the trust preferred securities will be listed;

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whether the trust preferred securities are to be issued in book-entry form and represented by one or more global certificates, and if so, the depositary for the global certificates and the specific terms of the depositary arrangements;

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any other relevant rights, preferences, privileges, limitations or restrictions of such trust preferred securities; and

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any applicable United States federal income tax considerations.

Liquidation Distribution Upon Dissolution

The amended declaration of each trust will state that such trust shall be dissolved:

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on the expiration of the term of the trust;

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upon the bankruptcy, dissolution or liquidation of us;

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upon a change in law requiring the trust to register as an investment company under the Investment Company Act of 1940;

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unless we take certain actions, upon a change in the law resulting in the trust being subject to United States federal income tax on income received from the junior subordinated debt securities held by the trust, the interest payable by us on the junior subordinated debt securities not being deductible for United State federal income tax purposes, or the trust being subject to more than a de minimus amount of other taxes;

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upon the redemption, conversion or exchange of all of the trust securities of the trust;

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upon the repayment of all of the junior subordinated debt securities held by the trust or at the time that no such junior subordinated debt securities are outstanding;

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upon entry of a court order for the dissolution of the trust; or

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upon our election to terminate the trust and distribute the related junior subordinated debt securities directly to the holders of the trust securities.

Upon dissolution, after the applicable trust pays all amounts owed to creditors, the holders of the trust securities will be entitled to receive:

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cash equal to the aggregate liquidation amount of each trust security specified in an accompanying prospectus supplement, plus accumulated and unpaid distributions to the date of payment; or

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junior subordinated debt securities in an aggregate principal amount equal to the aggregate liquidation amount of the trust securities.

If the trust cannot pay the full amount due on its trust securities because insufficient assets are available for payment, then the amounts payable by the trust on its trust securities shall be paid pro rata. However, if an event of default under the related indenture has occurred, the total amounts due on the trust preferred securities will be paid before any distribution on the trust common securities.

Events Of Default

An event of default under the junior subordinated indenture relating to a series of junior subordinated debt securities is an event of default under the amended declaration of the trust. We have described these events of default under the sections entitled “Description of Debt Securities – Provisions Applicable to All Debt Securities – Events of Default” and “– Provisions Applicable to Junior Subordinated Debt Securities Events of Default.”

We and the regular trustees of each trust must file annually with the property trustee for each trust a certificate stating whether or not they are in compliance with all the applicable conditions and covenants under the related amended declaration.

Upon the occurrence of an event of default, the property trustee of the trust, as the sole holder of the junior subordinated debt securities held by the trust, will have the right under the junior subordinated indenture to declare the principal of, premium, if any, and interest on such junior subordinated debt securities to be immediately due and payable.

If a property trustee fails to enforce its rights under the amended declaration or the junior subordinated indenture then, to the fullest extent permitted by law, and subject to the terms of the amended declaration and the junior subordinated indenture, any holder of trust preferred securities may sue us, or seek other remedies, to enforce the property trustee’s rights under the amended declaration or the junior subordinated indenture without first instituting a legal proceeding against such property trustee or any other person.

If we fail to pay principal, premium, if any, or interest on a series of junior subordinated debt securities when payable, then a holder of such trust preferred securities may directly sue us or seek other remedies, to collect its pro rata share of payments owned.

Removal And Replacement Of Trustees

Only the holders of trust common securities may remove or replace the trustees of any trust. The resignation or removal of any trustee and the appointment of a successor trustee will be effective only on the acceptance of appointment by the successor trustee in accordance with the provisions of the amended declaration for the trust.

Mergers, Consolidations, Conversions Or Amalgamations Of The Trusts

No trust may consolidate, amalgamate, merge with or into, or be converted into or replaced by or convey, transfer or lease their properties and assets substantially as an entirety to any other corporation or other body, except as described below. Each trust may, with the consent of a majority of its regular trustees and without the consent of the holders of its trust securities or the other trustees, engage in any of the merger events referred to above under the conditions set forth in the amended declaration and described in a prospectus supplement.

In addition, unless all of the holders of the trust preferred securities and trust common securities approve otherwise, a trust may not consent to or engage in a merger event if that event would cause the trust or the successor entity to be classified other than as a grantor trust for United States Federal income tax purposes.

Information Concerning Duties Of The Property Trustee

For matters relating to compliance with the Trust Indenture Act, the property trustee of each trust will have all of the duties and responsibilities of an indenture trustee under the Trust Indenture Act. The property trustee undertakes to perform only such duties as are specifically set forth in the amended declaration and, upon an event of default, must use the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the property trustee is under no obligation to exercise any of the powers given it by the applicable amended declaration at the request of any holder of trust preferred securities unless it is offered reasonable security or indemnity against the costs, expenses and liabilities that it might incur. However, the holders of the trust preferred securities will not be required to offer such an indemnity where the holders, by exercising their voting rights, direct the property trustee to take any action following an event of default under the junior subordinated indenture.

Miscellaneous

The regular trustees of each trust are authorized and directed to conduct the affairs of each trust and to operate each trust in such a way that:

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it will not be deemed to be an “investment company” required to be registered under the Investment Company Act of 1940;

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it will be classified as a grantor trust for United States Federal income tax purposes; and

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the junior subordinated debt securities held by it will be treated as indebtedness of us for United States Federal income tax purposes.

We and the regular trustees of each trust are authorized to take any action (so long as it is consistent with applicable law or the applicable certificate of trust or amended declaration) that we and the regular trustees of the trust determine to be necessary or desirable for such purposes.

Holders of trust preferred securities have no preemptive or similar rights.

No trust may borrow money, issue debt, execute mortgages or pledge any of its assets.

Governing Law

The amended declaration and the related trust preferred securities will be governed by and construed in accordance with the laws of the state of Delaware and the Trust Indenture Act.

DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE

General

We will execute a trust preferred securities guarantee, which benefits the holders of trust preferred securities, at the time that the trust issues the trust preferred securities. The trust preferred securities guarantee will be qualified as an indenture under the Trust Indenture Act and will be held for the benefit of holders of trust preferred securities by a guarantee trustee meeting the requirements of the Trust Indenture Act. Unless otherwise indicated in a prospectus supplement, Bank of New York (Delaware) will be the guarantee trustee.

Guarantee Payment

This section summarizes the general terms of the guarantees that we will provide in respect of the preferred securities that the trusts may offer. The summary in this section does not describe every aspect of the guarantee and is subject to and qualified in its entirety by reference to the description in the related prospectus supplement and to all the provisions of the guarantee agreements. The form of the guarantee agreement is filed as an exhibit to the registration statement.

We will irrevocably agree, as described in the trust preferred securities guarantee, to pay in full, to the holders of the trust preferred securities issued by the trusts, the following trust preferred securities guarantee payments when due to the extent not paid by the trusts, regardless of any defense, right of set-off or counterclaim, which the trusts may have or assert:

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any accrued and unpaid distributions required to be paid on the trust preferred securities, to the extent that the trust has funds available to make the payment;

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the redemption price, to the extent that the trust has funds available to make the payment; and

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upon a voluntary or involuntary dissolution and liquidation of the trust (other than in connection with a distribution of junior subordinated debt securities to holders of such trust preferred securities or the redemption of all such trust preferred securities), the lesser of

(1) the aggregate of the liquidation amount specified in the prospectus supplement for each trust preferred security plus all accrued and unpaid distributions on the trust preferred securities to the date of payment, to the extent the trust has funds available to make the payment; and

(2) the amount of assets of the trust remaining available for distribution to holders of its trust preferred securities upon a dissolution and liquidation of the trust.

Our obligation to make a trust preferred securities guarantee payment may be satisfied by directly paying the required amounts to the holders of the trust preferred securities or by causing the trust to pay the amounts to the holders.

The combined operation of our obligations under the junior subordinated indenture and the trust preferred securities guarantee and amended declaration has the effect of providing a full, irrevocable and unconditional guarantee of the trust’s obligations under its trust preferred securities.

Status Of The Trust Preferred Securities Guarantee

The trust preferred securities guarantee will constitute an unsecured obligation of us and will rank:

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subordinated and junior in right of payment to all our other liabilities except those liabilities made equal or subordinate to the guarantee by their terms; and

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senior to the following:

(1) all capital stock (other than the most senior preferred shares issued, from time to time, by us, which will rank equally with the guarantee) issued by us; and

(2) any guarantee entered into by us relating to its capital stock (other than the most senior preferred shares issued, from time to time, by us).

The trust preferred securities guarantee will rank equally with obligations under other guarantee agreements that we may enter into from time to time if both:

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the agreements are in substantially the form of the preferred securities guarantee and provide for comparable guarantees by us of payment on preferred securities issued by our other trusts or financing vehicles; and

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the debt relating to those preferred securities are our subordinated, unsecured indebtedness.

By acceptance of the trust preferred securities, holders accept the subordination provisions and other terms of the trust preferred securities guarantee. The trust preferred securities guarantee will constitute a guarantee of payment and not of collection. In other words, the holder of the guaranteed security may sue us, or seek other remedies, to enforce its rights under the trust preferred securities guarantee without first suing any other person or entity. The trust preferred securities guarantee will not be discharged except by payment of the guarantee payments in full to the extent not previously paid or upon distribution of the corresponding series of junior subordinated debt securities to the holders of trust preferred securities pursuant to the amended declaration.

Amendments And Assignment

Except with respect to any changes which do not adversely affect the rights of holders of trust preferred securities in any material respect (in which case no consent of such holders will be required), a trust preferred securities guarantee may only be amended with the prior approval of the holders of a majority in aggregate liquidation amount of such trust preferred securities. All guarantees and agreements contained in the trust preferred securities guarantee will be binding on our successors, assigns, receivers, trustees and representatives and are for the benefit of the holders of the applicable trust preferred securities.

Trust Preferred Securities Guarantee Events Of Default

An event of default under the trust preferred securities guarantee occurs if we fail to make any of our required payments or perform its obligations under the trust preferred securities guarantee.

The holders of at least a majority in aggregate liquidation amount of the trust preferred securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee or to direct the exercise of any trust or power given to the guarantee trustee under the trust preferred securities guarantee.

Information Concerning Duties Of The Trust Preferred Guarantee Trustee

The guarantee trustee under the trust preferred securities guarantee, other than during the occurrence and continuance of an event of default under the trust preferred securities guarantee, will only perform the duties that are specifically described in the trust preferred securities guarantee. After such a default, the trust preferred guarantee trustee will exercise the same degree of care and skill as a prudent

person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the guarantee trustee is under no obligation to exercise any of its powers as described in the trust preferred securities guarantee at the request of any holder of covered trust preferred securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that it might incur.

Termination Of The Trust Preferred Securities Guarantee

The trust preferred securities guarantee will terminate once the trust preferred securities are paid in full or upon distribution of the corresponding series of junior subordinated debt securities to the holders of the trust preferred securities. The trust preferred securities guarantee will continue to be effective or will be reinstated if at any time any holder of trust preferred securities must restore payment of any sums paid under such trust preferred securities or such trust preferred securities guarantee.

Governing Law

The trust preferred securities guarantee will be governed by and construed in accordance with the laws of the state of Ohio and the Trust Indenture Act.

RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE AND THE
JUNIOR SUBORDINATED DEBT SECURITIES HELD BY THE TRUST

Payments of distributions and redemption and liquidation payments due on the trust preferred securities, to the extent the trust has funds available for the payments, will be guaranteed by us to the extent described above under “Description of the Trust Preferred Securities Guarantee.” The combined operation of our obligations under the trust preferred securities guarantee, amended declaration and the junior subordinated indenture has the effect of providing a full, irrevocable and unconditional guarantee of the trust’s obligations under its trust preferred securities.

As long as we make payments of interest and other payments when due on the junior subordinated debt securities held by the trust, the payments will be sufficient to cover the payment of distributions and redemption and liquidation payments due on the trust preferred securities issued by the trust because:

•

the aggregate principal amount of the junior subordinated debt securities will be equal to the sum of the aggregate liquidation amount of the trust securities;

•

the interest rate and interest and other payment dates on the junior subordinated debt securities will match the distribution rate and distribution and other payment dates for the trust preferred securities;

•

we will pay for any and all costs, expenses and liabilities of the trust except the trust’s obligations under its trust preferred securities; and

•

the amended declaration provides that the trust will not engage in any activity that is not consistent with the limited purposes of the trust.

If and to the extent that we do not make payments on the junior subordinated debt securities, the trust will not have funds available to make payments of distributions or other amounts due on its trust preferred securities. In those circumstances, you will not be able to rely upon the trust preferred securities guarantee for payment of these amounts. Instead, you may directly sue us or seek other remedies to

collect your pro rata share of payments owed. If you sue us to collect payment, then we will assume your rights as a holder of trust preferred securities under the amended declaration to the extent we make a payment to you in any such legal action.

A holder of any trust preferred security may sue us, or seek other remedies, to enforce its rights under the trust preferred securities guarantee without first suing the guarantee trustee, the trust or any other person or entity.

SELLING SHAREHOLDER

The following table sets forth information about the selling shareholder’s ownership of our common stock as of June 1, 2004 and after the sale of the common stock offered by the selling shareholder under this prospectus and the applicable prospectus supplement, assuming all such shares are sold. The selling shareholder is a wholly-owned subsidiary of ours. The selling shareholder has not committed to sell any shares under this prospectus. The numbers presented under “Shares Beneficially Owned After Offering” assumes that all of the shares offered by the selling shareholder are sold and that the selling shareholder acquires no additional shares of our common stock before the completion of this offering. The selling shareholder may offer all, some or none of the shares of our common stock beneficially owned by it, and there are currently no agreements, arrangements or understandings with respect to the sale or distribution of any of our common stock by the selling shareholder. We will pay all expenses incurred with respect to the registration and sale of the common stock except that the selling shareholder will pay all underwriting discounts and commissions related to any shares sold.

	Shares Beneficially Owned Before Offering			Shares Beneficially Owned After Offering
Name	No.	Percentage of Our Common Stock Outstanding	Shares Offered	No.	Percentage of Our Common Stock Outstanding
American Premier Underwriters, Inc.	1,361,711	*	1,361,711	0	--

*	Under Ohio law, shares held by subsidiaries are not entitled to vote at meetings of shareholders or by written consent and are therefore not considered to be outstanding for purposes of meetings of shareholders.

PLAN OF DISTRIBUTION

We, each trust and the selling shareholder may sell the securities through underwriters or dealers, directly to one or more purchasers or through agents. The prospectus supplement will include the names of underwriters, dealers or agents that we retain. Underwriters and agents in any distribution contemplated by this prospectus and any prospectus supplement, including but not limited to at-the-market equity offerings, may from time to time include UBS Securities LLC. The prospectus supplement also will include the purchase price of the securities; our, each trust’s and the selling shareholder’s proceeds from the sale; any underwriting discounts or commissions and other items constituting underwriters’ compensation; and any securities exchanges on which the securities may be listed.

Because the National Association of Securities Dealers, Inc. (“NASD”) views securities such as the preferred securities as interest in a direct participation program, any offering of preferred securities by any trust will be made in compliance with Rule 2810 of the NASD’s Conduct Rules.

In some cases, we and the trusts may also repurchase the securities and reoffer them to the public by one or more of the methods described above. This prospectus may be used in connection with any offering of securities through any of these methods or other methods described in the applicable prospectus supplement.

The securities we, the trusts and the selling shareholder distribute by any of these methods may be sold to the public, in one or more transactions, either:

•

at a fixed price or prices, which may be changed;

•

at market prices prevailing at the time of sale;

•

at prices related to prevailing market prices; or

•

at negotiated prices.

We, the trusts and the selling shareholder may solicit offers to purchase securities directly from the public from time to time. We, the trusts and the selling shareholder may also designate agents from time to time to solicit offers to purchase securities from the public on our, the trusts’ or the selling shareholder’s behalf. The prospectus supplement relating to any particular offering of securities will name any agents designated to solicit offers, and will include information about any commissions we, the trusts or the selling shareholder may pay the agents, in that offering. Agents may be deemed to be “underwriters” as that term is defined in the Securities Act of 1933.

In connection with the sale of securities, underwriters may receive compensation from us, the trusts or the selling shareholder or from purchasers of the securities, for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities may be deemed to be underwriters, and any discounts or commissions they receive from us, the trusts or the selling shareholder, and any profit on the resale of the securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act. Any such underwriter, dealer or agent will be identified, and any such compensation received will be described, in the applicable prospectus supplement.

Securities may also be sold in one or more of the following transactions:

•

block transactions (which may involve crosses) in which a broker-dealer may sell all or a portion of the securities as agent but may position and resell all or a portion of the block as principal to facilitate the transaction;

•

purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;

•

a special offering, an exchange distribution or a secondary distribution in accordance with applicable NYSE or other stock exchange rules;

•

ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;

•

sales "at the market" to or through a market maker or into an existing trading market, on an exchange or otherwise; and

•

sales in other ways not involving market makers or established trading markets, including direct sales to purchasers.

Unless otherwise specified in the related prospectus supplement, each series of the securities will be a new issue with no established trading market, other than the common stock. Any common stock sold pursuant to a prospectus supplement will be listed on the NYSE and Nasdaq National Market, subject to official notice of issuance. We and the trusts may elect to list any of the other securities on an exchange, but are not obligated to do so. It is possible that one or more underwriters may make a market in a series of the securities, but will not be obligated to do so and may discontinue any market making at any time without notice. Therefore, no assurance can be given as to the liquidity of the trading market for the securities.

If dealers are utilized in the sale of the securities, we, the trusts and the selling shareholder will sell the securities to the dealers as principals. The dealers may then resell the securities to the public at varying prices to be determined by such dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the applicable prospectus supplement.

We, the trusts and the selling shareholder may enter into agreements with underwriters, dealers and agents who participate in the distribution of the securities, which may entitle these persons to indemnification by us, the trusts and the selling shareholder against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Any agreement in which we, the trusts or the selling shareholder agree to indemnify underwriters, dealers and agents against civil liabilities will be described in the applicable prospectus supplement.

In connection with an offering, the underwriters may purchase and sell securities in the open market. In a firm commitment underwriting (as opposed to an “at-the-market” offering), these transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of securities than they are required to purchase in an offering. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the securities while an offering is in progress.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the underwriters have repurchased securities sold by or for the account of that underwriter in stabilizing or short-covering transactions.

These activities by the underwriters may stabilize, maintain or otherwise affect the market price of the securities. As a result, the price of the securities may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. These transactions may be effected on an exchange or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated quotation system, or in the over-the-counter market or otherwise.

We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus. You must not rely on any unauthorized information. This prospectus does not constitute an offer to sell or buy any securities in any jurisdiction where it is unlawful.

Underwriters, dealers and agents may engage and may in the past have engaged in transactions with or perform or have performed services for us, our affiliates, the trusts or the selling shareholder, or be or have been customers of ours, our affiliates, the trusts or the selling shareholder, or otherwise engage or have engaged in commercial activities with us, our affiliates, the trusts or the selling shareholder, in the ordinary course of business.

After effectiveness of the registration statement of which this prospectus is a part, we and the selling shareholder will enter into an Equity Distribution Agreement with UBS Securities LLC. In accordance with the Equitiy Distribution Agreement, we and the selling shareholder may offer and sell up to $600,000,000 and 1,361,711 shares, respectively, of our common stock from time to time through UBS Securities LLC. Sales of the shares, if any, will be made by means of ordinary brokers’ transactions on the NYSE. UBS Securities LLC will be entitiled to a commission equal to 2.0% of the gross sales price per share of shares sold under the Equity Distribution Agreement.

LEGAL MATTERS

The validity of the securities offered hereby other than the preferred securities will be passed upon for us and each trust by Keating, Muething & Klekamp, P.L.L., Cincinnati, Ohio. Certain matters of Delaware law relating to the validity of the preferred securities will be passed upon for the trusts by Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware.

EXPERTS

Ernst & Young LLP, registered public accounting firm, have audited our consolidated financial statements and schedules included in our Annual Report on Form 10-K for the year ended December 31, 2003, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements and schedules are incorporated by reference in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

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:

	Securities and Exchange Commission registration fee*	$ 14,570.50
	Legal fees and expenses	15,000.00
	Accounting fees and expenses	50,000.00
	New York Stock Exchange and Nasdaq listing fees	10,000.00
	Miscellaneous	55,429.50

	Total	$ 145,000.00

* Actual; other expenses are estimated

Item 15. Indemnification Of Directors And Officers.

Ohio Revised Code, Section 1701.13(E), allows indemnification by us to any person made or threatened to be made a party to any proceedings, other than a proceeding by or in the right of us, by reason of the fact that he is or was a director, officer, employee or agent of ours, 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 our best interests 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 us, 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 us 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. Our Code of Regulations extends such indemnification.

We maintain, at our expense, Directors and Officers Liability and Company Reimbursement Liability Insurance. The Directors and Officers Liability portion of such policy covers all of our directors and officers and of the companies which are, directly or indirectly, more than 50% owned by us. 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 October 24, 1978. The insurer limit of liability under the policy is $175,000,000 in the aggregate for all losses each year subject to certain individual and aggregate deductibles. The policy contains various exclusions and reporting requirements.

We also have entered into indemnification agreements with our executive officers and directors providing for indemnification against certain liabilities to the fullest extent permitted under Ohio law.

The Declarations will provide 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 Amended and Restated Declaration of the Trusts (the “Declarations”) will also provide that to the full extent permitted by law, we 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), 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 interest of the trusts, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The Declarations will also provide that to the full extent permitted by law, we 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 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 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 Declarations will further provide 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 us 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 us as authorized in the Declarations.

Our directors and officers and the Regular Trustees are covered by insurance policies indemnifying them against certain liabilities, including certain liabilities arising under the Securities Act of 1933, which might be incurred by them in such capacities and against which they cannot be indemnified by us or the trusts. Any agents, dealers or underwriters who execute any of the agreements filed as or incorporated by reference as Exhibit 1 to this Registration Statement will agree to indemnify our directors and their officers and the Trustees who signed the Registration Statement against certain

liabilities that may arise under the Securities Act of 1933 with respect to information furnished to us or the trust by or on behalf of any such indemnifying party.

The Declarations will also provide that we 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, 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 thereunder.

Item 16. Exhibits And Financial Statement Schedules.

Exhibit No.	Description Of Document
1.1(1)	Form of Underwriting Agreement
1.2	Form of Equity Distribution Agreement among American Financial Group, Inc., American Premier Underwriters, Inc. and UBS Securities LLC
4.1(2)	Amended and Restated Articles of Incorporation of American Financial Group, Inc. (incorporated by reference to Exhibit 3(a) of American Financial Group, Inc.'s Annual Report on Form 10-K for 1997)
4.2(2)	Code of Regulations of American Financial Group, Inc. (incorporated by reference to Exhibit 3(b) of American Financial Group, Inc.'s Annual Report on Form 10-K for 1997)
4.3(2)	Form of Senior Indenture (incorporated by reference to Exhibit 4.3 to the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
4.4(2)	Form of Junior Subordinated Indenture (incorporated by reference to Exhibit 4.4 to the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
4.5(2)	Form of Subordinated Indenture (incorporated by reference to Exhibit 4.5 to the Registrants' Registration Statement on Form S-3, Registration No. 333-81903)
4.6(1)	Form of Preferred Securities Guarantee Agreement by American Financial Group, Inc. with respect to American Financial Capital Trust II
4.7(1)	Form of Preferred Securities Guarantee Agreement by American Financial Group, Inc. with respect to American Financial Capital Trust III
4.8(1)	Form of Preferred Securities Guarantee Agreement by American Financial Group, Inc. with respect to American Financial Capital Trust IV
4.9(1)	Form of Debt Security
4.10(1)	Form of Preferred Security
4.11(2)	Certificate of Trust of American Financial Capital Trust II (incorporated by reference to Exhibit 4.9 to the Registrants' Registration Statement on Form S-3, Registration No. 333-81903)
4.12(2)	Certificate of Trust of American Financial Capital Trust III (incorporated by reference to Exhibit 4.12 to the Registrants' Registration Statement on Form S-3, Registration No. 333-106657)
4.13(2)	Certificate of Trust of American Financial Capital Trust IV (incorporated by reference to Exhibit 4.13 to the Registrants' Registration Statement on Form S-3, Registration No. 333-106657)
4.14(2)	Declaration of Trust of American Financial Capital Trust II (incorporated by reference to Exhibit 4.10 to the Registrants' Registration Statement on Form S-3, Registration No. 333-81903)
4.15(2)	Declaration of Trust of American Financial Capital Trust III (incorporated by reference to Exhibit 4.15 to the Registrants' Registration Statement on Form S-3, Registration No. 333-106657)
4.16(2)	Declaration of Trust of American Financial Capital Trust IV (incorporated by reference to Exhibit 4.16 to the Registrants' Registration Statement on Form S-3, Registration No. 333-106657)
4.17(1)	Form of Deposit Agreement
4.18(1)	Form of Depositary Receipt
4.19(1)	Form of Warrant Agreement
4.20(1)	Form of Amended and restated Declaration of Trust of American Financial Capital Trust II
4.21(1)	Form of Amended and restated Declaration of Trust of American Financial Capital Trust III
4.22(1)	Form of Amended and restated Declaration of Trust of American Financial Capital Trust IV
5.1	Opinion of Keating, Muething & Klekamp, P.L.L.
5.2	Opinion of Morris, Nichols, Arsht & Tunnell
8(1)	Opinion of tax counsel
23.1	Consent of Independent Registered Public Accounting Firm
23.2	Consent of Keating, Muething & Klekamp, P.L.L. (contained in Exhibit 5.1)
23.3	Consent of Morris, Nichols, Arsht & Tunnell (contained in Exhibit 5.2)
24	Powers of Attorney (contained on the signature pages)
25.1(2)	Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of U.S. Bank National Association (formerly known as Firstar Bank, N.A.), as Trustee under the Senior Indenture (incorporated by reference to Exhibit 25.1 of the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
25.2(2)	Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of Bank of New York, as Trustee under the Junior Subordinated Indenture (incorporated by reference to Exhibit 25.2 of the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
25.3(2)	Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of Bank of New York, as Trustee under the Declaration of American Financial Capital Trust II (incorporated by reference to Exhibit 25.3 of the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
25.4(2)	Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of 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 II (incorporated by reference to Exhibit 25.4 of the Registrants' Registration Statement on Form S-3, Registration No. 333-21995)
25.5(2)	Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of U.S. Bank National Association (formerly known as Firstar Bank, N.A.), as Trustee under the Subordinated Indenture (incorporated by reference to Exhibit 25.5 to the Registrants' Registration Statement on Form S-3, Registration No. 333-81903)

(1)	To be filed as an exhibit to a Current Report on Form 8-K.

(2)	Incorporated by reference from other documents filed with the Commission as indicated.

Item 17. Undertakings.

(a) The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment 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.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants’ 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.

(c) If the securities to be registered are to be offered at competitive bidding, the undersigned registrants hereby undertake: (1) to use their best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters, and dealers, a reasonable number of copies of a prospectus which at that time meets the requirements of Section 10(a) of the Act, and relating to the securities offered at competitive bidding, as contained in the Registration Statement, together with any supplements thereto, and (2) to file an amendment to the Registration Statement reflecting the results of bidding, the terms of the reoffering and related matters to the extent required by the applicable form, not later than the first use, authorized by the issuer after the opening of bids, of a prospectus relating to the securities offered at competitive bidding, unless no further public offering of such securities by the issuer and no reoffering of such securities by the purchasers is proposed to be made.

(d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have 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 registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants 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.

(e) The undersigned registrants hereby undertakes 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 registrants 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.

(f) The undersigned registrants hereby undertake to file, if necessary, an application for the purpose of determining the eligibility of the Trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of such Act.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, American Financial Group, Inc. 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 Post-Effective 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 30th day of June, 2004.

AMERICAN FINANCIAL GROUP, INC.

BY: /s/Carl H. Lindner
      ——————————————
      Carl H. Lindner
      Chairman of the Board
      (Principal Executive Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below whose name is preceded by an (*) hereby constitutes and appoints James C. Kennedy and Karl J. Grafe, and each of them acting individually, his or her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to sign any and all registration statements relating to the same offering of securities as this Registration Statement that are filed pursuant to Rule 462(b) promulgated under of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/Carl H. Lindner	Chairman of the Board of Directors	June 30, 2004
*Carl H. Lindner	(Principal Executive Officer)

/s/Carl H. Lindner III	Director	June 30, 2004
*Carl H. Lindner III

/s/S. Craig Lindner	Director	June 30, 2004
*S. Craig Lindner

/s/James E. Evans	Director	June 30, 2004
*James E. Evans

/s/Theodore H. Emmerich	Director	June 30, 2004
*Theodore H. Emmerich

/s/Terry S. Jacobs	Director	June 30, 2004
*Terry S. Jacobs

/s/William R. Martin	Director	June 30, 2004
*William R. Martin

/s/William A. Shutzer	Director	June 30, 2004
*William A. Shutzer

/s/William W. Verity	Director	June 30, 2004
*William W. Verity

/s/Fred J. Runk	Senior Vice President and Treasurer	June 30, 2004
Fred J. Runk	(Principal Financial and Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, American Financial Capital Trust II 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 Post-Effective 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 June 30, 2004.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints James C. Kennedy and Karl J. Grafe, and each of them acting individually, his or her true and lawful attorney-in-fact and agent, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to sign any and all registration statements relating to the same offering of securities as this Registration Statement that are filed pursuant to Rule 462(b) promulgated under of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

AMERICAN FINANCIAL CAPITAL TRUST II

BY: /s/ James C. Kennedy
       ——————————————————
      James C. Kennedy, as Trustee

BY: /s/ Thomas E. Mischell
       ——————————————————
      Thomas E. Mischell, as Trustee

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, American Financial Capital Trust III 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 Post-Effective 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 June 30, 2004.

AMERICAN FINANCIAL CAPITAL TRUST III

BY: /s/ James C. Kennedy
       ——————————————————
      James C. Kennedy, as Trustee

BY: /s/ Thomas E. Mischell
       ——————————————————
      Thomas E. Mischell, as Trustee

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, American Financial Capital Trust IV 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 Post-Effective 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 June 30, 2004.

AMERICAN FINANCIAL CAPITAL TRUST IV

BY: /s/ James C. Kennedy
       ——————————————————
      James C. Kennedy, as Trustee

BY: /s/ Thomas E. Mischell
       ——————————————————
      Thomas E. Mischell, as Trustee

Exhibit 1.2

                                                                     Exhibit 1.2


                         AMERICAN FINANCIAL GROUP, INC.

         $600,000,000 of Common Stock of American Financial Group, Inc.
                                 (no par value)

                       AMERICAN PREMIER UNDERWRITERS, INC.

       1,361,711 Shares of Common Stock of American Financial Group, Inc.
                                 (no par value)

                          EQUITY DISTRIBUTION AGREEMENT

[ ], 2004

UBS Securities LLC
299 Park Avenue
New York, New York 10171

Ladies and Gentlemen:

     American Financial Group, Inc. ("AFG" or the "Company") and American
Premier Underwriters, Inc. (the "Selling Stockholder") each confirms its
agreement with UBS Securities LLC (the "Manager"), as follows:

     SECTION 1. Description of Securities. The Company proposes to issue and
sell through or to the Manager, as non-exclusive sales agent and/or principal,
up to $600,000,000 in value of shares (the "Primary Shares") and the Selling
Stockholder proposes to issue and sell through or to the Manager, as sales agent
and/or principal, up to 1,361,711 shares (the "Secondary Shares") (the Primary
Shares and the Secondary Shares being referred to collectively herein as the
"Shares") of the AFG's common stock, no par value (the "Common Stock"), on the
terms set forth in Section 3 of this Agreement. The Company and the Selling
Stockholder each agree that whenever either determines to sell Shares directly
to the Manager as principal, both will enter into a separate agreement (each, a
"Terms Agreement") substantially in the form of Annex I hereto, relating to such
sale in accordance with Section 3 of this Agreement.

     SECTION 2. Representations and Warranties of the Company. (i) The Company
represents and warrants to the Manager that:

          (a) The Company meets the requirements for use of Form S-3 under the
     Securities Act of 1933, as amended, and the rules and regulations
     thereunder (collectively called the "Act"). A registration statement on
     Form S-3 (Registration No. [ ]) with respect to the Shares as well as other
     securities that may be issued and sold by the Company and its subsidiaries,
     including a form of prospectus and such amendments or supplements to such
     registration statement as may have been required prior to the date of this
     Agreement, has been prepared by the Company under the provisions of the
     Act, has been filed with the Securities and Exchange Commission (the
     "Commission"), and has become effective and which incorporates by reference
     documents which the Company has filed and will file in accordance with the
     provisions of the Securities Exchange Act of 1934, as amended, and the
     rules and regulations thereunder (collectively called the "Exchange Act").
     The Company has prepared a prospectus supplement (the "Prospectus
     Supplement"), including the prospectus included in the registration
     statement referred to above and the documents incorporated by reference
     therein, setting forth the terms of the offering, sale and plan of
     distribution of the Shares and additional information concerning the
     Company and its business. No stop order suspending the effectiveness of the
     registration statement or any post-effective amendment thereto has been
     issued and served on the Company, and no proceedings for that purpose are
     pending or, to the knowledge of the Company, threatened by the Commission.
     Copies of such registration statement and prospectus, any such amendment or
     supplement and all documents incorporated by reference therein that were
     filed with the Commission on or prior to the date of this Agreement have
     been made available or delivered to the Manager. Such registration
     statement, as it may have heretofore been amended, is referred to herein as
     the "Registration Statement," and the final form of prospectus included in
     the Registration Statement, as amended or supplemented from time to time,
     is referred to herein as the "Prospectus." Any reference herein to the
     Registration Statement, the Prospectus or any amendment or supplement
     thereto shall be deemed to refer to and include the documents incorporated
     (or deemed to be incorporated) by reference therein, and any reference
     herein to the terms "amend," "amendment" or "supplement" with respect to
     the Registration Statement or Prospectus shall be deemed to refer to and
     include the filing after the execution hereof of any document with the
     Commission deemed to be incorporated by reference therein. As of the close
     of business on [ ], 2004, up to $600,000,000 in value of securities,
     including Primary Shares, of the Company and its subsidiaries and 1,361,711
     Secondary Shares were available for issuance pursuant to the Registration
     Statement, which permits the sale of Shares in the manner contemplated by
     this Agreement;

          (b) Each part of the Registration Statement, when such part became or
     becomes effective, and the Prospectus and any amendment or supplement
     thereto, on the date of filing thereof with the Commission and at each
     Filing Date (as defined below), did or will in all material respects comply
     with all applicable provisions of the Act and the Exchange Act. Each part
     of the Registration Statement, when such part became or becomes effective,
     did not or will not contain any untrue statement of a material fact or omit
     to state a material fact required to be stated therein or necessary in
     order to make the statements therein not misleading. The Prospectus and any
     amendment or supplement thereto, on the date of filing thereof with the
     Commission, did not or will not contain any untrue statement of a material
     fact or omit to state a material fact necessary to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading; and any statutes, regulations, contracts or other documents
     that are required to be described in the Registration Statement or the
     Prospectus or to be filed as exhibits to the Registration Statement have
     been so described or filed. The foregoing representations and warranties in
     this Section 2(b) do not apply to any statements or omissions made in
     reliance on and in conformity with information relating to the Manager
     furnished in writing to the Company by the Manager specifically for
     inclusion in the Registration Statement or Prospectus or any amendment or
     supplement thereto, which the parties agree consists of the name of UBS
     Securities LLC in the first paragraph under the heading "Plan of
     Distribution" in the Prospectus. The Company has not distributed any
     offering material in connection with the offering or sale of the Shares
     other than the Registration Statement, the Prospectus or any other
     materials, if any, permitted by the Act;

          (c) The documents which are incorporated by reference in the
     Registration Statement or the Prospectus, or any amendment or supplement
     thereto, or from which information is so incorporated by reference, when
     they become effective or were filed with the Commission, as the case may
     be, complied in all material respects with the requirements of the Act or
     the Exchange Act, as applicable, and none of such documents 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 omitted 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 and any further documents so filed and
     incorporated by reference shall, when they became or become effective under
     the Act or when they were or are filed with the Commission, conform in all
     material respects with the requirements of the Act or the Exchange Act, as
     applicable;

          (d) The Company has been duly incorporated and is a validly existing
     corporation in good standing under the laws of the State of Ohio, and has
     power and authority (corporate and other) to own its properties and conduct
     its business as described in the Prospectus and to enter into and perform
     its obligations under this Agreement; and the Company is duly qualified to
     do business as a foreign corporation and is in good standing (or local law
     equivalent) in all other jurisdictions in which its ownership or lease of
     property or the conduct of business, requires such qualification except
     where such failure to qualify would not, individually or in the aggregate,
     result in a material adverse effect on the Company or any of its
     subsidiaries or their respective business, properties, business prospects,
     condition (financial or otherwise) or results of operations or on the
     transactions contemplated hereby, or would materially and adversely affect
     the ability of the Company or the Selling Stockholder to perform its
     obligations under this Agreement, any Terms Agreement or the Shares (a
     "Material Adverse Effect");

          (e) Each "significant subsidiary" of the Company (as such term is
     defined in Rule 1-02 of Regulation S-X) (each a "Subsidiary" and,
     collectively, the "Subsidiaries") has been duly incorporated and is an
     existing corporation in good standing (or local law equivalent) under the
     laws of the jurisdiction of its incorporation, with power and authority
     (corporate and other) to own its properties and conduct its business as
     described in the Prospectus and the Prospectus Supplement and is duly
     qualified to do business as a foreign corporation in good standing (or
     local law equivalent) in all other jurisdictions in which its ownership or
     lease of property or the conduct of its business requires such
     qualification; except as otherwise disclosed in the Prospectus, all of the
     issued and outstanding capital stock of each such Subsidiary has been duly
     authorized and validly issued, is fully paid and non-assessable and is
     owned by the Company, directly or through subsidiaries, free from liens,
     encumbrances and defects; none of the outstanding shares of capital stock
     of any Subsidiary was issued in violation of the preemptive or other
     similar rights of any securityholder of such Subsidiary. The only
     Subsidiaries of the Company are the subsidiaries listed on Schedule A
     hereto;

          (f) The financial statements included or incorporated by reference in
     the Registration Statement and the Prospectus as amended or supplemented,
     together with the related schedules and notes thereto, present fairly in
     all material respects the financial position of the Company and its
     consolidated subsidiaries at the dates indicated and the statement of
     operations, stockholders' equity and cash flows of the Company and its
     consolidated subsidiaries for the periods specified; said financial
     statements have been prepared in conformity with generally accepted
     accounting principles ("GAAP") applied on a consistent basis (except to the
     extent otherwise noted in such financial statements or the notes thereto)
     throughout the periods involved. The supporting schedules, if any, included
     or incorporated by reference in the Registration Statement present fairly
     in accordance with GAAP the information required to be stated therein. The
     selected financial data and the summary financial information included in
     the Prospectus as amended or supplemented present fairly the information
     shown therein and have been compiled on a basis consistent with that of the
     audited financial statements included or incorporated by reference in the
     Registration Statement;

          (g) The accounting firm that certified the financial statements and
     supporting schedules included or incorporated by reference in the
     Registration Statement and the Prospectus is an independent registered
     public accounting firm as required by the Act;

          (h) All of the outstanding shares of Common Stock have been duly
     authorized and validly issued, are fully paid and non-assessable, have been
     issued in compliance with all federal and state securities laws and were
     not issued in violation of any preemptive right, resale right, right of
     first refusal or similar right; the Shares to be issued and sold by the
     Company and the Selling Stockholder pursuant to this Agreement and any
     Terms Agreement have been duly authorized and upon such issuance will be
     validly issued, fully paid and nonassessable and are not subject to any
     preemptive right, resale right, right of first refusal or similar right and
     the certificates for the Shares are in due and proper form and the holders
     of the Shares will not be subject to personal liability by reason of being
     such holders. The description of the Common Stock in the Prospectus is
     complete and accurate in all material respects. Except as set forth in the
     Prospectus, there are no options to purchase, or any rights or warrants to
     subscribe for, or any securities or obligations convertible or exchangeable
     into or exercisable for, or any contracts, commitments, plans or
     arrangements to issue or sell, any shares of capital stock of the Company,
     and except with respect to Great American Financial Resources, Inc. and
     National Interstate Corporation, any shares of capital stock of any
     Subsidiary or any such warrants, convertible, exercisable or exchangeable
     securities or obligations. The descriptions of the Company's stock option
     and other stock plans or arrangements, and the options or other rights
     granted and exercised thereunder, set forth or incorporated by reference in
     the Prospectus, accurately present the information required to be shown
     with respect to such plans, arrangements, options and rights;

          (i) Since the respective dates as of which information is given in the
     Registration Statement and the Prospectus, except as otherwise stated
     therein, (A) there has been no Material Adverse Effect, (B) there have been
     no transactions entered into by either of the Company or any of its
     subsidiaries, other than those in the ordinary course of business, which
     are material with respect to the Company and its subsidiaries considered as
     one enterprise, and (C) other than regular quarterly dividends declared and
     paid consistent with past practice and described in the Prospectus, there
     has been no dividend or distribution of any kind declared, paid or made by
     the Company on any class of its respective capital stock;

          (j) Except as disclosed in the Prospectus, there are no pending
     actions, suits or proceedings against or affecting the Company, or any of
     its Subsidiaries or any of their respective properties that, if determined
     adversely to the Company or any of its Subsidiaries, would individually or
     in the aggregate have a Material Adverse Effect or which are otherwise
     material in the context of the sale of the Shares; and no such actions,
     suits or proceedings are threatened or, to the Company's knowledge,
     contemplated;

          (k) Neither the Company nor any of its Subsidiaries is in violation of
     its articles of incorporation or code of regulations (or similar corporate
     documents). Neither the Company nor any of its Subsidiaries is in default
     in the performance or observance of any obligation, agreement, covenant or
     condition contained in any contract, indenture, mortgage, deed of trust,
     loan or credit agreement, note, lease or other agreement or instrument to
     which the Company or any of its Subsidiaries is a party or by which it or
     any of them may be bound, or to which any of the property or assets of the
     Company or any of its Subsidiaries is subject (collectively, "Agreements
     and Instruments") except for such defaults that would not result in a
     Material Adverse Effect; and the execution, delivery and performance of
     this Agreement, any Terms Agreement and the Shares and any other agreement
     or instrument entered into or issued or to be entered into or issued by the
     Company and the Selling Stockholder in connection with the consummation of
     the transactions contemplated herein and in the Registration Statement
     (including the issuance and sale of the Shares and the use of the proceeds
     from the sale of the Shares as described in the Prospectus under the
     caption "Use of Proceeds") and compliance by the Company and the Selling
     Stockholder with their obligations hereunder and under any Terms Agreement
     and the Shares and such other agreements or instruments have been duly
     authorized by all necessary corporate action of the Company and do not and
     will not, whether with or without the giving of notice or passage of time
     or both, conflict with or constitute a breach of, or default or Repayment
     Event (as defined below) under, or result in the creation or imposition of
     any lien, charge or encumbrance upon any property or assets of the Company
     or any of its Subsidiaries pursuant to, the Agreements and Instruments
     (except for such conflicts, breaches, defaults or Repayment Events or
     liens, charges or encumbrances that, singly or in the aggregate, would not
     result in a Material Adverse Effect), nor will such action result in any
     violation of the provisions of the articles of incorporation or code of
     regulations (or similar corporate documents) of the Company or any of its
     Subsidiaries or any applicable law, statute, rule, regulation, judgment,
     order, writ or decree of any government, government instrumentality or
     court, domestic or foreign, having jurisdiction over the Company or any of
     its Subsidiaries or any of their assets, properties or operations. As used
     herein, a "Repayment Event" means any event or condition which gives the
     holder of any note, debenture or other evidence of indebtedness (or any
     person acting on such holder's behalf) the right to require the repurchase,
     redemption or repayment of all or a portion of such indebtedness by the
     Company or any of its Subsidiaries;

          (l) This Agreement and any Terms Agreement have been duly authorized,
     executed and delivered by the Company;

          (m) Each subsidiary of the Company which is engaged in the business of
     insurance or reinsurance (collectively, the "Insurance Subsidiaries") holds
     such insurance licenses, certificates and permits from governmental
     authorities (including, without limitation, from the insurance regulatory
     agencies of the various jurisdictions where it conducts business (the
     "Insurance Licenses")) as are necessary to the conduct of its business as
     described in the Registration Statement; the Company and each Insurance
     Subsidiary have fulfilled and performed all obligations necessary to
     maintain the Insurance Licenses; except as disclosed in the Registration
     Statement, there is no pending or, to the knowledge of the Company,
     threatened action, suit, proceeding or investigation that could reasonably
     be expected to result in the revocation, termination or suspension of any
     Insurance License which would, individually or in the aggregate, have a
     Material Adverse Effect; and except as disclosed in the Registration
     Statement, no insurance regulatory agency or body has issued, or, to the
     knowledge of the Company, commenced any proceeding for the issuance of, any
     order or decree impairing, restricting or prohibiting the payment of
     dividends by any Insurance Subsidiary to its parent;

          (n) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency is necessary or required for the performance by the
     Company of its obligations hereunder, in connection with the offering,
     issuance or sale of the Shares hereunder or the consummation of the
     transactions contemplated by this Agreement or for the due execution,
     delivery or performance of this Agreement or the Terms Agreement by the
     Company, except such as have been already obtained or as may be required
     under state securities laws;

          (o) Except as disclosed in the Registration Statement, the Company and
     its Subsidiaries have good and marketable title to all real properties and
     all other properties and assets owned by them, in each case free from
     liens, encumbrances and defects that would, individually or in the
     aggregate, materially affect the value of such properties and assets, taken
     as a whole, and except as disclosed in the Registration Statement, the
     Company and its Subsidiaries hold any leased real or personal property
     under valid and enforceable leases with no exceptions that would materially
     interfere with the use made or to be made of the leased property, taken as
     a whole, by them;

          (p) The Company and its Subsidiaries own, possess or can acquire on
     reasonable terms, adequate trademarks, trade names and other rights to
     inventions, know-how, patents, copyrights, confidential information and
     other intellectual property (collectively, "intellectual property rights")
     necessary to conduct the business now operated by them, or presently
     employed by them, and have not received any notice of infringement of or
     conflict with asserted rights of others with respect to any intellectual
     property rights that, if determined adversely to the Company or any of its
     Subsidiaries, would individually or in the aggregate have a Material
     Adverse Effect;

          (q) Except as disclosed in the Registration Statement, neither the
     Company nor any of its Subsidiaries is in violation of any statute, any
     rule, regulation, decision or order of any governmental agency or body or
     any court, domestic or foreign, relating to the use, disposal or release of
     hazardous or toxic substances or relating to the protection or restoration
     of the environment or human exposure to hazardous or toxic substances
     (collectively, "environmental laws"), owns or operates any real property
     contaminated with any substance that is subject to any environmental laws,
     is liable for any off-site disposal or contamination pursuant to any
     environmental laws, or is subject to any claim relating to any
     environmental laws, which violation, contamination, liability or claim
     would individually or in the aggregate have a Material Adverse Effect; and
     the Company is not aware of any pending investigation which might lead to
     such a claim;

          (r) The Company is not required, and upon the issuance and sale of the
     Shares as herein contemplated and the application of the net proceeds
     therefrom as described in the Registration Statement will not be required,
     to register as an "investment company" under the Investment Company Act of
     1940, as amended (the "1940 Act");

          (s) Except as disclosed in the Registration Statement, the Company and
     the Insurance Subsidiaries have made no material change in their insurance
     reserving practices since December 31, 2003;

          (t) 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 except where such violation or default would not,
     individually or in the aggregate, have a Material Adverse Effect; no
     Insurance Subsidiary has received any notice from any of the other parties
     to such treaties, contracts or agreements that such other party intends not
     to perform such treaty and, the Company and the Insurance Subsidiaries have
     no reason to believe that any of the other parties to such treaties or
     arrangements will be unable to perform such treaty or arrangement except to
     the extent adequately and properly reserved for in the consolidated
     financial statements of the Company included in the Registration Statement
     or Prospectus, except where such default or inability to perform would not,
     individually or in the aggregate, have a Material Adverse Effect;

          (u) The statutory financial statements of the Insurance Subsidiaries,
     from which certain ratios and other statistical data included or
     incorporated by reference in the Registration Statement and Prospectus have
     been derived, have been prepared for each relevant period in conformity
     with statutory accounting principles or practices required or permitted by
     the National Association of Insurance Commissioners and by the appropriate
     Insurance Department of the jurisdiction of domicile of each Insurance
     Subsidiary, and such statutory accounting practices have been applied on a
     consistent basis throughout the periods involved, except as may otherwise
     be indicated therein or in the notes thereto, and present fairly in all
     material respects the statutory financial position of the Insurance
     Subsidiaries as of the dates thereof, and the statutory basis results of
     operations of the Insurance Subsidiaries for the periods covered thereby;

          (v) The Company is, and if operated in the manner described in the
     Prospectus shall remain, an insurance holding company;

          (w) Neither the Company nor any affiliate of the Company has taken,
     nor will the Company or any affiliate take, directly or indirectly, any
     action which is designed to or which has constituted or which would be
     expected to cause or result in stabilization or manipulation of the price
     of any security of the Company to facilitate the sale or resale of the
     Securities;

          (x) The Common Stock is an "actively-traded security" excepted from
     the requirements of Rule 101 of Regulation M under the Exchange Act by
     subsection (c)(1) of such rule;

          (y) The Shares are duly authorized for listing, subject to official
     notice of issuance, on the New York Stock Exchange (the "NYSE") and the
     Nasdaq National Market ("Nasdaq");

          (z) No labor dispute with the employees of either of the Company or
     any of its Subsidiaries that might have a Material Adverse Effect exists
     or, to the knowledge of the Company, is imminent;

          (aa) Neither the Company nor any of its Subsidiaries nor, to the
     knowledge of the Company, any officer, director, employee or agent acting
     on behalf of the Company or any of its Subsidiaries has at any time (i)
     made any contributions to any candidate for political office in violation
     of law, or failed to disclose fully any contributions to any candidate for
     political office in accordance with any applicable statute, rule,
     regulation or ordinance requiring such disclosure, (ii) made any payment to
     any local, state, federal or foreign governmental officer or official, or
     other person charged with similar public or quasi-public duties, other than
     payments required or allowed by applicable law, (iii) made any payment
     outside the ordinary course of business to any purchasing or selling agent
     or person charged with similar duties of any entity to which the Company or
     any Subsidiary sells or from which the Company or any Subsidiary buys
     products for the purpose of influencing such agent or person to buy
     products from or sell products to the Company or such Subsidiary, or (iv)
     except as described in the Prospectus, engaged in any transaction,
     maintained any bank account or used any corporate funds except for
     transactions, bank accounts and funds which have been and are reflected in
     the normally maintained books and records of the Company or such
     Subsidiary;

          (bb) The Company and its Subsidiaries are insured by insurers of
     recognized financial responsibility against such losses and risks and in
     such amounts as are prudent and customary in the business in which they
     engage as described in the Prospectus; neither the Company nor any
     Subsidiary has been refused any insurance coverage sought or applied for;
     and the Company has no reason to believe that it or any Subsidiary will not
     be able to renew its existing insurance coverage as and when such coverage
     expires or to obtain similar coverage from similar insurers as may be
     necessary to continue its proposed business at a cost that would not result
     in a Material Adverse Effect;

          (cc) Neither the Company nor any of its Subsidiaries is, and if
     operated in the manner described in the Prospectus, will be a "broker"
     within the meaning of Section 3(a)(4) of the Exchange Act or a "dealer"
     within the meaning of Section 3(a)(5) of the Exchange Act or required to be
     registered pursuant to Section 15(a) of the Exchange Act;

          (dd) Except as contemplated by Section 3 of this Agreement, the
     Company has not incurred any liability for any finder's fees or similar
     payments in connection with the transactions herein contemplated;

          (ee) The Company has not entered into any other sales agency
     agreements or other similar arrangements with any agent or other
     representative in respect of the Shares and the equity shelf program
     established by this Agreement;

          (ff) Each of the principal executive officer and the principal
     financial officer of the Company (or each former principal executive
     officer of the Company and each former principal financial officer of the
     Company as applicable) has made all certifications required by Sections 302
     and 906 of the Sarbanes-Oxley Act of 2002 and the rules and regulations of
     the Commission promulgated thereunder (the "Sarbanes-Oxley Act") with
     respect to all reports, schedules, forms, statements and other documents
     required to be filed by it or furnished by it to the Commission. For
     purposes of the preceding sentence, "principal executive officer" and
     "principal financial officer" shall have the meanings given to such terms
     in the Sarbanes-Oxley Act;

          (gg) The Company and its consolidated subsidiaries maintain a system
     of internal accounting controls sufficient to provide reasonable assurances
     that (i) transactions are executed in accordance with management's
     authorization; (ii) transactions are recorded as necessary to permit
     preparation of financial statements in conformity with generally accepted
     accounting principles and to maintain accountability for assets; (iii)
     access to assets is permitted only in accordance with management's
     authorization; (iv) the recorded accountability for assets is compared with
     the existing assets at reasonable intervals and appropriate action is taken
     with respect to any differences; (v) material information relating to the
     Company and its consolidated subsidiaries is promptly made known to the
     officers responsible for establishing and maintaining the system of
     internal accounting controls; and (vi) any significant deficiencies or
     weaknesses in the design or operation of internal accounting controls which
     could adversely affect the Company's ability to record, process, summarize
     and report financial data, and any fraud whether or not material that
     involves management or other employees who have a significant role in
     internal controls, are adequately and promptly disclosed to the Company's
     independent auditors and the audit committee of the Company's board of
     directors;

          (hh) The Company and its consolidated subsidiaries employ disclosure
     controls and procedures that are designed to ensure that information
     required to be disclosed by the Company in the reports that it files or
     submits under the Exchange Act is recorded, processed, summarized and
     reported, within the time periods specified in the Commission's rules and
     forms, and is accumulated and communicated to the Company's management,
     including its principal executive officer or officers and principal
     financial officer or officers, as appropriate to allow timely decisions
     regarding disclosure; and

          (ii) There are no transactions, arrangements and other relationships
     between and/or among the Company, and/or, to the knowledge of the Company,
     any of its affiliates and any unconsolidated entity, including, but not
     limited to, any structural finance, special purpose or limited purpose
     entity (each, an "Off Balance Sheet Transaction") that could reasonably be
     expected to affect materially the Company's liquidity or the availability
     of or requirements for its capital resources, including those Off Balance
     Sheet Transactions described in the Commission's Statement about
     Management's Discussion and Analysis of Financial Conditions and Results of
     Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be
     described in the Prospectus which have not been described as required.

     (ii) The Company and the Selling Stockholder jointly and severally
represent and warrant to the Manager that:

          (a) The Selling Stockholder has valid and unencumbered title to the
     Secondary Shares to be delivered by the Selling Stockholder hereunder and
     full right, power and authority to enter into this Agreement and any Terms
     Agreement and to sell, assign, transfer and deliver the Secondary Shares to
     be delivered by the Selling Stockholder hereunder; and upon the delivery of
     and payment for the Secondary Shares hereunder the purchasers thereof will
     acquire valid and unencumbered title to the Secondary Shares to be
     delivered by the Selling Stockholder; as of the date hereof, the Selling
     Stockholder owns 1,361,711 shares of Common Stock of the Company;

          (b) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency is necessary or required for the performance by the
     Selling Stockholder of its obligations hereunder, in connection with the
     offering, sale of the Shares hereunder or the consummation of the
     transactions contemplated by this Agreement or for the due execution,
     delivery or performance of this Agreement or the Terms Agreement by the
     Selling Stockholder, except such as have been already obtained or as may be
     required under state securities laws;

          (c) Except as disclosed in the Prospectus, there are no pending
     actions, suits or proceedings against or affecting the Selling Stockholder,
     or any of its Subsidiaries or any of their respective properties that, if
     determined adversely to the Selling Stockholder or any of its Subsidiaries,
     would individually or in the aggregate have a Material Adverse Effect or
     which are otherwise material in the context of the sale of the Shares; and
     no such actions, suits or proceedings are threatened or, to the Selling
     Stockholder's knowledge, contemplated;

          (d) The execution, delivery and performance of this Agreement, any
     Terms Agreement and the Shares and any other agreement or instrument
     entered into or issued or to be entered into or issued by the Selling
     Stockholder in connection with the consummation of the transactions
     contemplated herein and in the Registration Statement (including the sale
     of the Secondary Shares and the use of the proceeds from the sale of the
     Secondary Shares as described in the Prospectus under the caption "Use of
     Proceeds") and compliance by the Selling Stockholder with its obligations
     hereunder and under any Terms Agreement and the Secondary Shares and such
     other agreements or instruments have been duly authorized by all necessary
     corporate action of the Selling Stockholder and do not and will not,
     whether with or without the giving of notice or passage of time or both,
     conflict with or constitute a breach of, or default or Repayment Event
     under, or result in the creation or imposition of any lien, charge or
     encumbrance upon any property or assets of the Company or any of its
     Subsidiaries pursuant to, the Agreements and Instruments (except for such
     conflicts, breaches, defaults or Repayment Events or liens, charges or
     encumbrances that, singly or in the aggregate, would not result in a
     Material Adverse Effect), nor will such action result in any violation of
     the provisions of the articles of incorporation or by-laws (or similar
     corporate documents) of the Selling Stockholder or any of its Subsidiaries
     or any applicable law, statute, rule, regulation, judgment, order, writ or
     decree of any government, government instrumentality or court, domestic or
     foreign, having jurisdiction over the Selling Stockholder or any of its
     Subsidiaries or any of their assets, properties or operations;

          (e) This Agreement and any Terms Agreement have been duly authorized,
     executed and delivered by or on behalf of the Selling Stockholder;

          (f) Neither the Selling Stockholder nor any affiliate of the Selling
     Stockholder has taken, nor will the Selling Stockholder or any affiliate
     take, directly or indirectly, any action which is designed to or which has
     constituted or which would be expected to cause or result in stabilization
     or manipulation of the price of any security of the Company to facilitate
     the sale or resale of the Shares;

          (g) Except as contemplated by Section 3 of this Agreement, the Selling
     Stockholder has not incurred any liability for any finder's fees or similar
     payments in connection with the transactions herein contemplated;

          (h) The Selling Stockholder has not entered into any other sales
     agency agreements or other similar arrangements with any agent or other
     representative in respect of the Shares and the equity shelf program
     established by this Agreement;

          (i) The decision to enter into this Agreement and engage in the
     transactions contemplated hereby was not prompted by any material
     non-public information concerning the Company or any of its Subsidiaries in
     the possession of the Selling Stockholder;

          (j) Each part of the Registration Statement, when such part became or
     becomes effective, did not or will not contain any untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary in order to make the statements therein not
     misleading. The Prospectus and any amendment or supplement thereto, on the
     date of filing thereof with the Commission, did not or will not contain any
     untrue statement of a material fact or omit to state a material fact
     necessary to make the statements therein, in the light of the circumstances
     under which they were made, not misleading; and any statutes, regulations,
     contracts or other documents that are required to be described in the
     Registration Statement or the Prospectus or to be filed as exhibits to the
     Registration Statement have been so described or filed; provided that the
     foregoing representations and warranties in this Section 2(ii)(j) relates
     only to information in the Registration Statement relating to or dealing
     with the Selling Stockholder.

     SECTION 3. Sale and Delivery of Securities. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell, and
the Selling Stockholder agrees to sell, through the Manager, as sales agent, and
the Manager agrees to use its reasonable efforts to sell, as sales agent for the
Company and the Selling Stockholder, the Shares on the following terms:

          (i) The Shares are to be sold on a daily basis or otherwise as shall
     be agreed to by the Company, in the case of Primary Shares, the Selling
     Stockholder, in the case of Secondary Shares, and the Manager, but in any
     event the Shares are to be sold only in trades on the NYSE, on any day that
     is a trading day for the NYSE (other than a day on which the NYSE is
     scheduled to close prior to its regular weekday closing time). The Company
     will designate in writing the maximum amount and minimum price of Primary
     Shares and the Selling Stockholder will designate in writing the maximum
     amount and minimum price of Secondary Shares to be sold by the Manager
     daily as reasonably agreed to by the Manager and in any event not in excess
     of the amount available for issuance under the currently effective
     Registration Statement. Subject to the terms and conditions hereof, the
     Manager shall use its reasonable efforts to sell all of the designated
     Shares. The gross sales of any Shares sold under this Section 3(a) shall be
     the market price for shares of the Company's Common Stock sold by the
     Manager under this Section 3(a) on the NYSE at the time of such sale.

          (ii) Notwithstanding the foregoing, the Company may instruct the
     Manager in writing not to sell Primary Shares and the Selling Stockholder
     may instruct the Manager in writing not to sell Secondary Shares if such
     sales cannot be effected at or above the price designated by the Company or
     the Selling Stockholder, as the case may be, in any such instruction.
     Furthermore, the Company shall not authorize the issuance and sale of, and
     the Selling Stockholder shall not authorize the sale of, and the Manager
     shall not be obligated to use its reasonable efforts to sell, any Share at
     a price lower than the minimum price therefor designated from time to time
     by the Company's Board of Directors in the case of Primary Shares and the
     Selling Stockholder's Board of Directors in the case of Secondary Shares
     and notified to the Manager in writing. In addition, the Company, in the
     case of the Primary Shares, the Selling Stockholder in the case of the
     Secondary Shares or the Manager may, upon notice to the other parties
     hereto by telephone (confirmed promptly by telecopy), suspend the offering
     of the Shares; provided, however, that such suspension or termination shall
     not affect or impair the parties' respective obligations with respect to
     the Shares sold hereunder prior to the giving of such notice.

          (iii) The Manager hereby covenants and agrees not to make any sales of
     Shares on behalf of the Company or the Selling Stockholder, pursuant to
     this Section 3(a), other than (a) by means of ordinary brokers'
     transactions between members of the NYSE that qualify for delivery of a
     Prospectus to the NYSE in accordance with Rule 153 under the Act (such
     transactions are hereinafter referred to as "At the Market Offerings") and
     (b) such other sales of Shares on behalf of the Company or the Selling
     Stockholder in its capacity as agent of the Company and the Selling
     Stockholder as shall be agreed by the Company in the case of Primary
     Shares, the Selling Stockholder in the case of Secondary Shares, and the
     Manager. The Company and the Selling Stockholder each acknowledges and
     agrees that in the event a sale of Shares on behalf of the Company or the
     Selling Stockholder would constitute the sale of a "block" under Rule
     10b-18(a)(5) under the Exchange Act or a "distribution" within the meaning
     of Rule 100 of Regulation M under the Exchange Act or the Manager
     reasonably believes it may be deemed an "underwriter" under the Act in a
     transaction that is not an At the Market Offering, the Company and the
     Selling Stockholder, will provide to the Manager, at the Manager's request
     and upon reasonable advance notice to the Company and the Selling
     Stockholder, on or prior to the Settlement Date, the opinions of counsel,
     accountants' letters and officers' certificates pursuant to Section 5
     hereof that the Company and/or the Selling Stockholder would be required to
     provide to the Manager in connection with a sale of Shares pursuant to a
     Terms Agreement, each dated the Settlement Date (as defined below), and
     such other documents and information as the Manager shall reasonably
     request.

          (iv) The compensation to the Manager for sales of Shares, as an agent
     of the Company or the Selling Stockholder, shall be 2.0% of the gross sales
     price of the Shares sold pursuant to this Section 3(a), and such rate of
     compensation shall not apply when the Manager acts as principal. The
     remaining proceeds with respect to Primary Shares sold, after further
     deduction for any transaction fees imposed by any governmental or
     self-regulatory organization in respect of such sales, shall constitute the
     net proceeds to the Company and the remaining proceeds with respect to
     Secondary Shares sold, after further deduction for any transaction fees
     imposed by any governmental or self-regulatory organization in respect of
     such sales, shall constitute the net proceeds to the Selling Stockholder
     (the "Net Proceeds").

          (v) The Manager shall provide written confirmation to the Company, in
     the case of Primary Shares, and the Selling Stockholder in the case of
     Secondary Shares, following the close of trading on the NYSE each day in
     which Shares are sold under this Section 3(a) setting forth the amount of
     Shares sold on such day, the Net Proceeds to the Company or the Selling
     Stockholder, and the compensation payable by the Company or the Selling
     Stockholder to the Manager with respect to such sales.

          (vi) Settlement for sales of Shares pursuant to this Section 3(a) will
     occur on the third business day following the date on which such sales are
     made (each such day, a "Settlement Date"). On each Settlement Date, the
     Shares sold through the Manager for settlement on such date shall be issued
     and delivered by the Company, in the case of Primary Shares, and delivered
     by the Selling Stockholder, in the case of Secondary Shares, to the Manager
     against payment of the Net Proceeds for the sale of such Shares. Settlement
     for all such Shares shall be effected by free delivery of Shares to the
     Manager's account at The Depository Trust Company in return for payments in
     same day funds delivered to the account designated by the Company, in the
     case of Primary Shares, and the Selling Stockholder, in the case of
     Secondary Shares. If the Company shall default on its obligation to deliver
     Primary Shares on any Settlement Date or the Selling Stockholder shall
     default on its obligation to deliver Secondary Shares on any Settlement
     Date, the Company, in the case of a default in the delivery of Primary
     Shares, and the Company and the Selling Stockholder jointly and severally,
     in the case of a default in the delivery of Secondary Shares, shall (a)
     hold the Manager harmless against any loss, claim or damage arising from or
     as a result of such default by the Company or the Selling Stockholder as
     the case may be and (b) pay the Manager any commission to which it would
     otherwise be entitled absent such default. If the Manager breaches this
     Agreement by failing to deliver proceeds on any Settlement Date for Primary
     Shares delivered by the Company or Secondary Shares delivered by the
     Selling Stockholder, the Manager will pay the Company in the case of a
     breach in the payment of proceeds for Primary Shares or the Selling
     Stockholder in the case of a breach in the payment of proceeds for
     Secondary Shares, interest based on the effective overnight Federal Funds
     rate.

          (vii) At each Settlement Date and Filing Date (as defined below), each
     of the Company and the Selling Stockholder shall be deemed to have affirmed
     each of its representations and warranties contained in this Agreement. The
     Company covenants and agrees with the Manager that (a) with respect to each
     of the Company's first three fiscal quarters, on or prior to the date on
     which the Company shall be obligated to file a quarterly report on Form
     10-Q in respect of such quarter and (b) with respect to the Company's
     fourth fiscal quarter for year 2004 and for each year thereafter, on or
     prior to the thirty-fifth day after the end of such quarter in which sales
     of Shares were made by the Manager pursuant to this Section 3(a) (each such
     date, a "Filing Date"), the Company will file a prospectus supplement with
     the Commission under the applicable paragraph of Rule 424(b), which
     prospectus supplement will set forth, with regard to such quarter, the
     number of Shares sold through the Manager as agent pursuant to this Section
     3(a) in At the Market Offerings, the Net Proceeds to the Company and the
     Selling Stockholder and the compensation paid by the Company and the
     Selling Stockholder with respect to such sales of Shares pursuant to this
     Section 3(a) and deliver such number of copies of each such prospectus
     supplement to the NYSE as are required by such Exchange. Any obligation of
     the Manager to use its reasonable efforts to sell the Shares on behalf of
     the Company or the Selling Stockholder shall be subject to the continuing
     accuracy of the representations and warranties of the Company and the
     Selling Stockholder herein, to the performance by the Company and the
     Selling Stockholder of their obligations hereunder and to the continuing
     satisfaction of the additional conditions specified in Section 5 of this
     Agreement.

     (b) (i) If either of the Company or the Selling Stockholder wishes to issue
and sell Shares pursuant to this Agreement but other than as set forth in
Section 3(a) of this Agreement (each, a "Placement"), it will notify the Manager
of the proposed terms of such Placement. If the Manager, acting as principal,
wishes to accept such proposed terms (which it may decline to do for any reason
in its sole discretion) or, following discussions with the Company with respect
to Primary Shares or the Selling Stockholder with respect to Secondary Shares,
wishes to accept amended terms, the Manager, the Company and the Selling
Stockholder will enter into a Terms Agreement setting forth the terms of such
Placement.

          (ii) The terms set forth in a Terms Agreement will not be binding on
     the Company, the Selling Stockholder or the Manager unless and until the
     Company, the Selling Stockholder and the Manager have each executed such
     Terms Agreement accepting all of the terms of such Terms Agreement. In the
     event of a conflict between the terms of this Agreement and the terms of a
     Terms Agreement, the terms of such Terms Agreement will control.

     (c) (i) Under no circumstances shall the number of Shares sold pursuant to
this Agreement and any Terms Agreement exceed the number set forth in Section 1
or the number of shares of Common Stock available for issuance under the
currently effective Registration Statement.

          (ii) If any party has reason to believe that the exemptive provisions
     set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not
     satisfied with respect to the Shares, it shall promptly notify the other
     party and sales of Shares under this Agreement and any Terms Agreement
     shall be suspended until that or other exemptive provisions have been
     satisfied in the judgment of each party. The Manager shall calculate on a
     weekly basis the ADTV (as defined by Rule 100 of Regulation M under the
     Exchange Act) of the Common Stock.

     (d) Each sale of Shares to the Manager shall be made in accordance with the
terms of this Agreement and a Terms Agreement, which will provide for the sale
of such Shares to, and the purchase thereof by, the Manager. A Terms Agreement
may also specify certain provisions relating to the reoffering of such Shares by
the Manager. The commitment of the Manager to purchase Shares pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company and the Selling Stockholder herein
contained and shall be subject to the terms and conditions herein set forth.
Each Terms Agreement shall specify the number of Shares to be purchased by the
Manager pursuant thereto, the price to be paid to the Company or the Selling
Stockholder for such Shares, any provisions relating to rights of, and default
by, underwriters acting together with the Manager in the reoffering of the
Shares, and the time and date (each such time and date being referred to herein
as a "Time of Delivery") and place of delivery of and payment for such Shares.
Such Terms Agreement shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant to Section 5
of this Agreement and any other information or documents required by the
Manager.

SECTION 4. Covenants of the Company and the Selling Stockholder.

     (i) The Company agrees with the Manager:

          (a) During the period in which a prospectus relating to the Shares is
     required to be delivered under the Act, to notify the Manager promptly of
     the time when any subsequent amendment to the Registration Statement has
     become effective or any subsequent supplement to the Prospectus has been
     filed and of any request by the Commission for any amendment or supplement
     to the Registration Statement or Prospectus or for additional information;
     to prepare and file with the Commission, promptly upon the Manager's
     request, any amendments or supplements to the Registration Statement or
     Prospectus that, in the Manager's reasonable opinion, may be necessary or
     advisable in connection with the offering of the Shares by the Manager; not
     to file any amendment or supplement to the Registration Statement or
     Prospectus (other than any prospectus supplement relating to the offering
     of other securities (including, without limitation, Common Stock) other
     than pursuant to this Agreement) unless a copy thereof has been submitted
     to the Manager a reasonable period of time before the filing and the
     Manager has not reasonably objected thereto; to file promptly all reports
     and any definitive proxy or information statements required to be filed by
     the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
     15(d) of the Exchange Act for so long as the delivery of a prospectus is
     required in connection with the offering or sale of the Shares and to
     advise the Manager of any such filing; and to furnish to the Manager, at
     the time of filing thereof a copy of any document that upon filing is
     deemed to be incorporated by reference in the Registration Statement or
     Prospectus; and to cause each amendment or supplement to the Prospectus to
     be filed with the Commission as required pursuant to the applicable
     paragraph of Rule 424(b) of the Act or, in the case of any document to be
     incorporated therein by reference, to be filed with the Commission as
     required pursuant to the Exchange Act, within the time period prescribed;

          (b) To promptly advise the Manager, of any request by the Commission
     for amendments or supplements to the Registration Statement or Prospectus
     or for additional information with respect thereto, or of notice of
     institution of proceedings for, or the entry of a stop order suspending the
     effectiveness of the Registration Statement and, if the Commission should
     enter a stop order suspending the effectiveness of the Registration
     Statement, to make every reasonable effort to obtain the lifting or removal
     of such order as soon as possible; to promptly advise the Manager of any
     proposal to amend or supplement the Registration Statement or Prospectus,
     including by filing any documents that would be incorporated therein by
     reference, and to file no such amendment or supplement to which the Manager
     shall object in writing;

          (c) To make available to the Manager, as soon as practicable after the
     Registration Statement becomes effective, and thereafter from time to time
     to furnish to the Manager, copies of the Prospectus (or of the Prospectus
     as amended or supplemented if the Company shall have made any amendments or
     supplements thereto after the effective date of the Registration Statement)
     in such quantities and at such locations as the Manager may reasonably
     request for the purposes contemplated by the Act, which Prospectus and any
     amendments or supplements thereto furnished to the Manager will be
     materially identical to the version created to be transmitted to the
     Commission for filing via EDGAR, except to the extent permitted by
     Regulation S-T; and for so long as this agreement is in effect, the Company
     will prepare and file promptly such amendment or amendments to the
     Registration Statement and the Prospectus as may be necessary to comply
     with the requirements of Section 10(a)(3) of the Act;

          (d) To promptly notify the Manager to suspend the offering of Shares
     upon the happening of any event known to the Company within the time during
     which a prospectus relating to the Shares is required to be delivered under
     the Act which, in the judgment of the Company, would require the making of
     any change in the Prospectus then being used, or in the information
     incorporated therein by reference, so that the Prospectus would not include
     an untrue statement of material fact or omit to state a material fact
     necessary to make the statements therein, in the light of the circumstances
     under which they are made, not misleading, and, during such time and any
     such time as is contemplated by Section 4(ii)(a), to prepare and furnish,
     at the Company's expense, to the Manager promptly such amendments or
     supplements to such Prospectus as may be necessary to reflect any such
     change and, to the extent it relates solely to the Shares, to furnish the
     Manager with a copy of such proposed amendment or supplement before filing
     any such amendment or supplement with the Commission and thereafter
     promptly to furnish at the Company's own expense to the Manager, copies in
     such quantities and at such locations as the Manager may from time to time
     reasonably request of an appropriate amendment to the Registration
     Statement or supplement to the Prospectus so that the Prospectus as so
     amended or supplemented will (i) reflect such change, or (ii) not, in the
     light of the circumstances when it is so delivered, be misleading, or (iii)
     comply with applicable securities laws;

          (e) To furnish such information as may be required and otherwise to
     cooperate in qualifying the Shares for offering and sale under the
     securities or blue sky laws of such states as the Manager may designate and
     to maintain such qualifications in effect so long as required for the
     distribution of the Shares; provided that the Company shall not be required
     to qualify as a foreign corporation or to consent to the service of process
     under the laws of any such state (except service of process with respect to
     the offering and sale of the Shares); and to promptly advise the Manager of
     the receipt by the Company of any notification with respect to the
     suspension of the qualification of the Shares for sale in any jurisdiction
     or the initiation or threatening of any proceeding for such purpose;

          (f) To furnish to the Manager (i) copies of any reports or other
     communications which the Company shall send directly to its stockholders or
     shall from time to time publish or publicly disseminate (except with
     respect to information, other than press releases, on the Company's
     website), (ii) copies of all annual, quarterly and current reports filed
     with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
     as may be designated by the Commission (except with respect to information
     on the Company's website), (iii) copies of any financial statements or
     reports filed with any national securities exchange on which any class of
     securities of the Company is listed, and (iv) such other information as the
     Manager may reasonably request regarding the Company or its Subsidiaries,
     in each case as soon as such reports, communications, documents or
     information becomes available;

          (g) To make generally available to its security holders, and to
     deliver to the Manager, an earnings statement of the Company (which will
     satisfy the provisions of Section 11(a) of the Act) covering a period of
     twelve months beginning after the effective date of the Registration
     Statement (as defined in Rule 158(c) of the Act) as soon as is reasonably
     practicable after the termination of such twelve-month period but not later
     than September 30, 2005;

          (h) Whether or not the transactions contemplated hereunder are
     consummated or this Agreement is terminated, to pay all of the Company's
     expenses incident to the performance of its obligations hereunder,
     including, but not limited to, such costs, expenses, fees and taxes in
     connection with (i) the preparation and filing of the Registration
     Statement, the Prospectus, each Prospectus Supplement, and any amendments
     or supplements thereto, and the printing and furnishing of copies of each
     thereof to the Manager (including costs of mailing and shipment), (ii) the
     registration, issue, sale and delivery of the Shares, (iii) any power of
     attorney and any closing documents (including compilations thereof) and the
     reproduction and/or printing and furnishing of copies of each thereof to
     the Manager (including costs of mailing and shipment), (iv) the
     qualification of the Shares for offering and sale under state laws and the
     determination of their eligibility for investment under state law as
     aforesaid (including the reasonable legal fees and filing fees and other
     disbursements of counsel for the Manager) and the printing and furnishing
     of copies of any blue sky surveys to the Manager, (v) the listing of the
     Shares on the NYSE and any registration thereof under the Exchange Act,
     (vi) any filing for review of the public offering of the Shares by the NASD
     (including the reasonable legal fees and other reasonable disbursements of
     counsel for the Manager in connection with any such filing) and (vii) the
     fees and disbursements of the Company's counsel and accountants. The
     Manager will pay its own out-of-pocket costs and expenses incurred in
     connection with entering into this Agreement and the transactions
     contemplated by this Agreement, including, without limitation, travel,
     reproduction, printing and similar expenses as well as the fees and
     disbursements of its legal counsel; provided, however, that if, within one
     year of the date of this Agreement, the Company terminates this Agreement
     and $10,000,000 in value of Shares have not been sold through the Manager
     pursuant to the terms of this Agreement or to the Manager pursuant to any
     Terms Agreement then the Company will promptly, upon the request of the
     Manager, reimburse the Manager for the reasonable fees and disbursements of
     the Manager's legal counsel incurred in connection with the entering into
     of this Agreement and the matters contemplated hereby but not to exceed an
     aggregate of $50,000;

          (i) To apply the net proceeds from the sale of the Primary Shares in
     the manner set forth in the Prospectus;

          (j) Not to sell, offer or agree to sell, contract to sell, grant any
     option to sell or otherwise dispose of, directly or indirectly, any shares
     of Common Stock or securities convertible into or exchangeable or
     exercisable for Common Stock or warrants or other rights to purchase Common
     Stock or any other securities of the Company that are substantially similar
     to Common Stock or permit the registration under the Act of any shares of
     Common Stock, except for (i) the registration of the Shares and the sales
     through the Manager pursuant to this Agreement or to the Manager pursuant
     to any Terms Agreement, (ii) sales of shares through any dividend
     reinvestment and stock purchase plan of the Company and (iii) options
     granted and shares of Common Stock awarded pursuant to employee benefit and
     director compensation plans and shares of Common Stock issuable upon the
     exercise of such outstanding options during the period from the date of
     this Agreement through the final Filing Date for the sale of Shares
     pursuant to Section 3(a) of this Agreement, without (a) giving the Manager
     at least three business days' prior written notice specifying the nature of
     the proposed sale and the date of such proposed sale and (b) the Manager
     suspending activity under this program for such period of time as requested
     by the Company;

          (k) At any time during the term of this Agreement, as supplemented
     from time to time, to advise the Manager immediately after it shall have
     received notice or obtained knowledge, of any information or fact that
     would alter or affect any opinion, certificate, letter and other document
     provided to the Manager pursuant to Section 5 herein;

          (l) Upon commencement of the offering of Shares under this Agreement,
     and each time that (i) the Registration Statement or the Prospectus shall
     be amended or supplemented (other than a Prospectus Supplement filed
     pursuant to Rule 424(b) under the Act pursuant to Section 3(a) of this
     Agreement or relating solely to the offering of securities other than the
     Shares), (ii) there is filed with the Commission any document incorporated
     by reference into the Prospectus (other than a Current Report on Form 8-K,
     unless the Manager shall otherwise reasonably request), or (iii) Shares are
     delivered to the Manager pursuant to a Terms Agreement, to furnish or cause
     to be furnished to the Manager forthwith a certificate dated and delivered
     the date of effectiveness of such amendment, the date of filing with the
     Commission of such supplement or other document, or the Time of Delivery,
     as the case may be, in form satisfactory to the Manager to the effect that
     the statements contained in the certificate referred to in Section 5(f) of
     this Agreement which were last furnished to the Manager are true and
     correct at the time of such amendment, supplement, filing, or delivery, as
     the case may be, as though made at and as of such time (except that such
     statements shall be deemed to relate to the Registration Statement and the
     Prospectus as amended and supplemented to such time) or, in lieu of such
     certificate, a certificate of the same tenor as the certificate referred to
     in said Section 5(f), modified as necessary to relate to the Registration
     Statement and the Prospectus as amended and supplemented to the time of
     delivery of such certificate;

          (m) Upon commencement of the offering of Shares under this Agreement,
     and each time that (i) the Registration Statement or the Prospectus is
     amended or supplemented (other than a Prospectus Supplement filed pursuant
     to Rule 424(b) under the Act pursuant to Section 3(a) of this Agreement or
     relating solely to the offering of securities other than the Shares), (ii)
     there is filed with the Commission any document incorporated by reference
     into the Prospectus (other than a Current Report on Form 8-K, unless the
     Manager shall otherwise reasonably request), or (iii) Shares are delivered
     to the Manager pursuant to a Terms Agreement, to furnish or cause to be
     furnished forthwith to the Manager and to counsel to the Manager a written
     opinion of Keating, Muething and Klekamp, P.L.L., counsel to the Company
     ("Company Counsel"), or other counsel satisfactory to the Manager, dated
     and delivered the date of effectiveness of such amendment, the date of
     filing with the Commission of such supplement or other document, or the
     Time of Delivery, as the case may be, in form and substance satisfactory to
     the Manager, of the same tenor as the opinions referred to in Section 5(c)
     of this Agreement, but modified as necessary to relate to the Registration
     Statement and the Prospectus as amended and supplemented to the time of
     delivery of such opinion;

          (n) Upon commencement of the offering of Shares under this Agreement,
     and each time that (i) the Registration Statement or the Prospectus shall
     be amended or supplemented to include additional amended financial
     information, (ii) at the Manager's oral or written request and upon
     reasonable advance oral or written notice to the Company, Shares are
     delivered to the Manager pursuant to a Terms Agreement, (iii) the Company
     shall file an annual report on Form 10-K or (iv) at the Manager's request
     and upon reasonable advance notice to the Company, there is filed with the
     Commission any document (other than an annual report on Form 10-K)
     incorporated by reference into the Prospectus which contains additional or
     amended financial information, to cause the accountants that certified the
     financial statements and supporting schedules included or incorporated by
     reference in the Registration Statement, or other independent accountants
     satisfactory to the Manager, forthwith to furnish the Manager a letter,
     dated the date of effectiveness of such amendment, the date of filing of
     such supplement or other document with the Commission, or the Time of
     Delivery, as the case may be, in form satisfactory to the Manager, of the
     same tenor as the letter referred to in Section 5(e) of this Agreement but
     modified to relate to the Registration Statement and the Prospectus, as
     amended and supplemented to the date of such letter, provided however,
     that such letter shall not be required to be furnished to the Manager based
     on (x) the filing of a Form 10-Q containing financial information relating
     solely to a quarter in which Shares will not be sold pursuant to this
     Agreement or (y) the filing of any other document (other than an annual
     report on Form 10-K) incorporated by reference into the Prospectus which
     contains additional or amended financial information during a quarter in
     which Shares will not be sold pursuant to this Agreement;

          (o) That it consents to the Manager trading in the Company's Common
     Stock for the Manager's own account and for the account of its clients at
     the same time as sales of Shares occur pursuant to this Agreement or
     pursuant to a Terms Agreement in accordance with applicable law;

          (p) For three years from the date of this Agreement or of any Terms
     Agreement, to furnish to its stockholders within 120 days after the end of
     each fiscal year, for so long as the Company shall not be required to file
     annual and periodic reports with the Commission under the Exchange Act,
     audited financial statements (including a balance sheet and statements of
     income, stockholders' equity and of cash flow of the Company for such
     fiscal year), accompanied by a copy of the certificate or report thereon of
     an independent registered public accounting firm;

          (q) If to the knowledge of the Company, any condition set forth in
     Section 5(a) or 5(h) of this Agreement shall not have been satisfied on the
     applicable Settlement Date, to offer to any person who has agreed to
     purchase Shares from the Company as the result of an offer to purchase
     solicited by the Manager the right to refuse to purchase and pay for such
     Shares;

          (r) Not to at any time, directly or indirectly, take any action
     intended, or which might reasonably be expected, to cause or result in, or
     which will constitute, stabilization of the price of the shares of Common
     Stock to facilitate the sale or resale of any of the Shares; and not invest
     in futures contracts, options on futures contracts or options on
     commodities, unless the Company is exempt from the registration
     requirements of the Commodity Exchange Act, as amended (the "Commodity
     Act"), or otherwise complies with the Commodity Act. The Company will not
     engage in any activities bearing on the Commodity Act, unless such
     activities are exempt from the Commodity Act or otherwise comply with the
     Commodity Act;

          (s) To disclose in its quarterly reports on Form 10-Q and in its
     annual report on Form 10-K the number of Shares sold through the Manager
     under this Agreement, the Net Proceeds to the Company and the Selling
     Stockholder and the compensation paid by the Company and the Selling
     Stockholder with respect to sales of Shares pursuant to this Agreement
     during the relevant quarter; and

          (t) That each acceptance by the Company of an offer to purchase Shares
     hereunder, and each execution and delivery by the Company of a Terms
     Agreement, shall be deemed to be an affirmation to the Manager that the
     representations and warranties of the Company contained in or made pursuant
     to this Agreement are true and correct as of the date of such acceptance or
     of such Terms Agreement as though made at and as of such date, and an
     undertaking that such representations and warranties will be true and
     correct as of the Settlement Date for the Shares relating to such
     acceptance or as of the Time of Delivery relating to such sale, as the case
     may be, as though made at and as of such date (except that such
     representations and warranties shall be deemed to relate to the
     Registration Statement and the Prospectus as amended and supplemented
     relating to such Shares).

     (ii) The Selling Stockholder agrees with the Manager:

          (a) To promptly notify the Manager and the Company to suspend the
     offering of Shares upon the happening of any event known to the Selling
     Stockholder within the time during which a prospectus relating to the
     Shares is required to be delivered under the Act which, in the judgment of
     the Selling Stockholder, would require the making of any change in the
     Prospectus then being used, or in the information incorporated therein by
     reference, so that the Prospectus would not include an untrue statement of
     material fact or omit to state a material fact necessary to make the
     statements therein, in the light of the circumstances under which they are
     made, not misleading;

          (b) To furnish such information as may be required and otherwise to
     cooperate in qualifying the Shares for offering and sale under the
     securities or blue sky laws of such states as the Manager may designate and
     to maintain such qualifications in effect so long as required for the
     distribution of the Shares; provided that the Selling Stockholder shall not
     be required to qualify as a foreign corporation or to consent to the
     service of process under the laws of any such state (except service of
     process with respect to the offering and sale of the Shares); and to
     promptly advise the Manager of the receipt by the Selling Stockholder of
     any notification with respect to the suspension of the qualification of the
     Shares for sale in any jurisdiction or the initiation or threatening of any
     proceeding for such purpose;

          (c) Whether or not the transactions contemplated hereunder are
     consummated or this Agreement is terminated, to pay all of the Selling
     Stockholder's expenses incident to the performance of its obligations
     hereunder, including, but not limited to, such costs, expenses, fees and
     taxes in connection with (i) the preparation and filing of the Registration
     Statement, the Prospectus, each Prospectus Supplement, and any amendments
     or supplements thereto, and the printing and furnishing of copies of each
     thereof to the Manager (including costs of mailing and shipment), (ii) the
     registration, issue, sale and delivery of the Shares, (iii) any power of
     attorney and any closing documents (including compilations thereof) and the
     reproduction and/or printing and furnishing of copies of each thereof to
     the Manager (including costs of mailing and shipment), (iv) the
     qualification of the Shares for offering and sale under state laws and the
     determination of their eligibility for investment under state law as
     aforesaid (including the reasonable legal fees and filing fees and other
     disbursements of counsel for the Manager) and the printing and furnishing
     of copies of any blue sky surveys to the Manager, (v) the listing of the
     Shares on the NYSE and any registration thereof under the Exchange Act,
     (vi) any filing for review of the public offering of the Shares by the NASD
     (including the reasonable legal fees and other reasonable disbursements of
     counsel for the Manager in connection with any such filing) and (vii) the
     fees and disbursements of the Selling Stockholder's counsel and
     accountants. The Manager will pay its own out-of-pocket costs and expenses
     incurred in connection with entering into this Agreement and the
     transactions contemplated by this Agreement, including, without limitation,
     travel, reproduction, printing and similar expenses as well as the fees and
     disbursements of its legal counsel;

          (d) To apply the net proceeds from the sale of the Secondary Shares in
     the manner set forth in the Prospectus;

          (e) Not to sell, offer or agree to sell, contract to sell, grant any
     option to sell or otherwise dispose of, directly or indirectly, any shares
     of Common Stock or securities convertible into or exchangeable or
     exercisable for Common Stock or warrants or other rights to purchase Common
     Stock or any other securities of the Company that are substantially similar
     to Common Stock or permit the registration under the Act of any shares of
     Common Stock, except for the registration of the Secondary Shares and the
     sales through the Manager pursuant to this Agreement or to the Manager
     pursuant to any Terms Agreement without (a) giving the Manager at least
     three business days' prior written notice specifying the nature of the
     proposed sale and the date of such proposed sale and (b) the Manager
     suspending activity with respect to the Secondary Shares under this program
     for such period of time as requested by the Selling Stockholder;

          (f) At any time during the term of this Agreement, as supplemented
     from time to time, to advise the Manager immediately after it shall have
     received notice or obtain knowledge thereof, of any information or fact
     that would alter or affect any opinion, certificate, letter and other
     document provided to the Manager pursuant to Section 5 herein;

          (g) Upon commencement of the offering of Secondary Shares under this
     Agreement, and each time that (i) the Registration Statement or the
     Prospectus shall be amended or supplemented (other than a Prospectus
     Supplement filed pursuant to Rule 424(b) under the Act pursuant to Section
     3(a) of this Agreement or relating solely to the offering of securities
     other than the Shares), (ii) there is filed with the Commission any
     document incorporated by reference into the Prospectus (other than a
     Current Report on Form 8-K, unless the Manager shall otherwise reasonably
     request), or (iii) Shares are delivered to the Manager pursuant to a Terms
     Agreement, to furnish or cause to be furnished to the Manager forthwith a
     certificate dated and delivered the date of effectiveness of such
     amendment, the date of filing with the Commission of such supplement or
     other document, or the Time of Delivery, as the case may be, in form
     satisfactory to the Manager to the effect that the statements contained in
     the certificate referred to in Section 5(g) of this Agreement which were
     last furnished to the Manager are true and correct at the time of such
     amendment, supplement, filing, or delivery, as the case may be, as though
     made at and as of such time (except that such statements shall be deemed to
     relate to the Registration Statement and the Prospectus as amended and
     supplemented to such time) or, in lieu of such certificate, a certificate
     of the same tenor as the certificate referred to in said Section 5(g),
     modified as necessary to relate to the Registration Statement and the
     Prospectus as amended and supplemented to the time of delivery of such
     certificate;

          (h) Upon commencement of the offering of Secondary Shares under this
     Agreement, and each time that (i) the Registration Statement or the
     Prospectus is amended or supplemented (other than a Prospectus Supplement
     filed pursuant to Rule 424(b) under the Act pursuant to Section 3(a) of
     this Agreement or relating solely to the offering of securities other than
     the Shares), (ii) there is filed with the Commission any document
     incorporated by reference into the Prospectus (other than a Current Report
     on Form 8-K, unless the Manager shall otherwise reasonably request), or
     (iii) Shares are delivered to the Manager pursuant to a Terms Agreement, to
     furnish or cause to be furnished forthwith to the Manager and to counsel to
     the Manager a written opinion of Keating, Muething & Klekamp, P.L.L., or
     other counsel satisfactory to the Manager, dated and delivered the date of
     effectiveness of such amendment, the date of filing with the Commission of
     such supplement or other document, or the Time of Delivery, as the case may
     be, in form and substance satisfactory to the Manager, of the same tenor as
     the opinions referred to in Section 5(d) of this Agreement, but modified as
     necessary to relate to the Registration Statement and the Prospectus as
     amended and supplemented to the time of delivery of such opinion;

          (i) That it consents to the Manager trading in the Company's Common
     Stock for the Manager's own account and for the account of its clients at
     the same time as sales of Shares occur pursuant to this Agreement or
     pursuant to a Terms Agreement;

          (j) If to the knowledge of the Selling Stockholder, any condition set
     forth in Section 5(a) or 5(h) of this Agreement shall not have been
     satisfied on the applicable Settlement Date, to offer to any person who has
     agreed to purchase Secondary Shares from the Selling Stockholder as the
     result of an offer to purchase solicited by the Manager the right to refuse
     to purchase and pay for such Secondary Shares;

          (k) Not to at any time, directly or indirectly, take any action
     intended, or which might reasonably be expected, to cause or result in, or
     which will constitute, stabilization of the price of the shares of Common
     Stock to facilitate the sale or resale of any of the Shares; and not invest
     in futures contracts, options on futures contracts or options on
     commodities, unless the Company is exempt from the registration
     requirements of the Commodity Act, or otherwise complies with the Commodity
     Act. The Selling Stockholder will not engage in any activities bearing on
     the Commodity Act, unless such activities are exempt from the Commodity Act
     or otherwise comply with the Commodity Act; and

          (l) That each acceptance by the Selling Stockholder of an offer to
     purchase Shares hereunder, and each execution and delivery by the Company
     of a Terms Agreement, shall be deemed to be an affirmation to the Manager
     that the representations and warranties of the Selling Stockholder
     contained in or made pursuant to this Agreement are true and correct as of
     the date of such acceptance or of such Terms Agreement as though made at
     and as of such date, and an undertaking that such representations and
     warranties will be true and correct as of the Settlement Date for the
     Secondary Shares relating to such acceptance or as of the Time of Delivery
     relating to such sale, as the case may be, as though made at and as of such
     date (except that such representations and warranties shall be deemed to
     relate to the Registration Statement and the Prospectus as amended and
     supplemented relating to such Secondary Shares).

     SECTION 5. Conditions of Manager's Obligations. The obligations of the
Manager hereunder and under any Terms Agreement are subject to (i) the accuracy
of the representations and warranties on the part of the Company and the Selling
Stockholder on the date hereof, any applicable date referred to in Section 4(l)
of this Agreement, the date of any executed Terms Agreement and as of each
Settlement Date and Time of Delivery, (ii) the performance by the Company and
the Selling Stockholder of their obligations hereunder and (iii) to the
following additional conditions precedent:

     (a) No stop order with respect to the effectiveness of the Registration
Statement shall have been issued under the Act or proceedings initiated under
Section 8(d) or 8(e) of the Act, and no order directed at or in relation to any
document incorporated by reference therein and no order preventing or suspending
the use of the Prospectus has been issued by the Commission, and no suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or
to the knowledge of the Company, the Selling Stockholder or the Manager of the
initiation or threatening of any proceedings for any of such purposes, has
occurred; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall 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; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall 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 are made,
not misleading.

     (b) No material and unfavorable change, financial or otherwise (other than
as referred to in the Registration Statement and Prospectus), in the business,
condition or prospects of the Company and its Subsidiaries taken as a whole
shall occur or become known and no transaction which is material and unfavorable
to the Company (other than as referred to in the Registration Statement and
Prospectus) shall have been entered into by the Company or any of its
Subsidiaries.

     (c) The Company shall furnish to the Manager, at every date specified in
Section 4(i)(m) of this Agreement, an opinion of Company Counsel, addressed to
the Manager, and dated as of such date, and in form satisfactory to the Manager,
stating that:

          (i) The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of Ohio;

          (ii) The Company has power and authority (corporate and other) to own,
     lease and operate its properties and conduct its business as described in
     the Prospectus and to enter into and perform its obligations under this
     Agreement and any Terms Agreement; and the Company is duly qualified to do
     business as a foreign corporation and is in good standing (or the local law
     equivalent) in all other jurisdictions in which its ownership or lease of
     property or the conduct of business, requires such qualification except
     where the failure to so qualify will not, individually or in the aggregate
     have a Material Adverse Effect;

          (iii) Each Subsidiary has been duly incorporated and is an existing
     corporation in good standing (or local law equivalent) under the laws of
     the jurisdiction of its incorporation, with power and authority (corporate
     and other) to own its properties and conduct its business as described in
     the Prospectus and is duly qualified to do business as a foreign
     corporation in good standing (or local law equivalent) in all other
     jurisdictions in which its ownership or lease of property or the conduct of
     its business requires such qualification; except as otherwise disclosed in
     the Registration Statement, all of the issued and outstanding capital stock
     of each such Subsidiary has been duly authorized and validly issued, is
     fully paid and non-assessable and is owned by the Company, directly or
     through subsidiaries, free from liens, encumbrances and defects; none of
     the outstanding shares of capital stock of any Subsidiary was issued in
     violation of the preemptive or other similar rights of any securityholder
     of such Subsidiary;

          (iv) The authorized, issued and outstanding capital stock of the
     Company is as set forth in the financial statements, including the
     schedules and notes thereto, included in the Registration Statement and
     Prospectus. The Shares and all other shares of issued and outstanding
     capital stock of the Company have been duly authorized and validly issued
     and are fully paid and non-assessable; none of the outstanding shares of
     capital stock of the Company was issued in violation of the preemptive or
     other similar rights of any securityholder of the Company. The description
     of the Common Stock in the Prospectus is complete and accurate in all
     material respects. Except as set forth in the Prospectus, there are no
     options to purchase, or any rights or warrants to subscribe for, or any
     securities or obligations convertible or exchangeable into or exercisable
     for, or any contracts, commitments, plans or arrangements to issue or sell,
     any shares of capital stock of the Company, any shares of capital stock of
     any Subsidiary or any such warrants, convertible, exercisable or
     exchangeable securities or obligations. The descriptions of the Company's
     stock option and other stock plans or arrangements, and the options or
     other rights granted and exercised thereunder, set forth or incorporated by
     reference in the Prospectus, accurately present the information required to
     be shown with respect to such plans, arrangements, options and rights;

          (v) The Shares have been duly authorized for listing by NYSE upon
     official notice of issuance;

          (vi) To such counsel's knowledge, except as disclosed in the
     Registration Statement or the Prospectus, no person or entity has the right
     to require the registration under the Act of shares of Common Stock or
     other securities of the Company by reason of the filing or effectiveness of
     the Registration Statement;

          (vii) To such counsel's knowledge, none of the Subsidiaries is in
     violation of its articles of incorporation or by-laws (or similar corporate
     documents);

          (viii) All descriptions in the Prospectus and the Prospectus
     Supplement, as such descriptions have been updated by descriptions in the
     Prospectus Supplement or incorporated by reference therein, of statutes,
     regulations or legal or governmental proceedings to the extent that they
     constitute matters of law or legal conclusions, are accurate in all
     material respects and present in all material respects the information
     required to be shown by the Act and the Exchange Act including those
     contained in the Prospectus under the caption "Federal Income Tax
     Considerations";

          (ix) This Agreement and any Terms Agreement have been duly authorized,
     executed and delivered by the Company;

          (x) The Registration Statement has been declared effective under the
     1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has
     been made in the manner and within the time period required by Rule 424(b);
     and, to the best of such counsel's knowledge, no stop order suspending the
     effectiveness of the Registration Statement has been issued under the 1933
     Act and no proceedings for that purpose have been instituted or are pending
     or threatened by the Commission;

          (xi) The Registration Statement, the Prospectus, excluding the
     documents incorporated by reference therein, and each amendment or
     supplement to the Registration Statement and Prospectus, excluding the
     documents incorporated by reference therein, as of their respective
     effective or issue dates (other than the financial statements and
     supporting schedules and notes included therein or omitted therefrom, as to
     which such counsel need express no opinion) complied as to form in all
     material respects with the requirements of the Act and the rules and
     regulations of the Commission thereunder;

          (xii) The documents incorporated by reference in the Prospectus (other
     than the financial statements and supporting schedules and notes included
     therein or omitted therefrom, as to which such counsel need express no
     opinion), when they became effective or were filed with the Commission, as
     the case may be, complied as to form in all material respects with the
     requirements of the Act or the Exchange Act, as applicable, and the rules
     and regulations of the Commission thereunder;

          (xiii) To the best of such counsel's knowledge after reasonable
     investigation, there is not pending or threatened any action, suit,
     proceeding, inquiry or investigation, to which the Company or any of its
     subsidiaries is a party, or to which the property of either of the Company
     or any of its subsidiaries is subject, before or brought by any court or
     governmental agency or body, domestic or foreign, which would reasonably be
     expected to result in a Material Adverse Effect, or which would reasonably
     be expected to materially and adversely affect the properties or assets
     thereof or the consummation of the transactions contemplated in this
     Agreement, any Terms Agreement or the performance by the Company of its
     obligations thereunder;

          (xiv) The information in the Prospectus, to the extent that it
     constitutes matters of law, summaries of legal matters, the Company's
     articles of incorporation and code of regulations or legal proceedings, or
     legal conclusions, has been reviewed by such counsel and is correct in all
     material respects;

          (xv) All descriptions in the Registration Statement of contracts and
     other documents to which the Company or its subsidiaries are a party are
     accurate in all material respects; to the best of such counsel's knowledge,
     there are no franchises, contracts, indentures, mortgages, loan agreements,
     notes, leases or other instruments required to be described or referred to
     in the Registration Statement or to be filed as exhibits to the
     Registration Statement other than those described or referred to therein or
     filed or incorporated by reference as exhibits thereto;

          (xvi) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency, domestic or foreign (other than under the Act and the
     rules and regulations of the Commission thereunder, which have been
     obtained, or as may be required under the securities or blue sky laws of
     the various states as to which such counsel need express no opinion) is
     necessary or required in connection with the due authorization, execution
     and delivery of this Agreement or the due execution, delivery or
     performance of the Terms Agreement by the Company or for the offering,
     issuance, sale or delivery of the Shares;

          (xvii) The execution, delivery and performance of this Agreement, any
     Terms Agreement and the Shares and any other agreement or instrument
     entered into or issued or to be entered into or issued by the Company in
     connection with the consummation of the transactions contemplated herein
     and in the Registration Statement (including the issuance and sale of the
     Shares and the use of the proceeds from the sale of the Shares as described
     in the Prospectus under the caption "Use of Proceeds") and compliance by
     the Company with its obligations under this Agreement, any Terms Agreement
     and the Shares and such other agreements or instruments do not and will
     not, whether with or without the giving of notice or lapse of time or both,
     conflict with or constitute a breach of, or default or Repayment Event
     under or result in the creation or imposition of any lien, charge or
     encumbrance upon any property or assets of the Company or any of its
     subsidiaries pursuant to any contract, indenture, mortgage, deed of trust,
     loan or credit agreement, note, lease or any other agreement or instrument,
     known to such counsel, to which the Company or any of its subsidiaries is a
     party or by which it or any of them may be bound, or to which any of the
     property or assets of the Company or any of its subsidiaries or the Selling
     Stockholder is subject (except for such conflicts, breaches, defaults or
     Repayment Events or liens, charges or encumbrances that would not have a
     Material Adverse Effect), nor will such action result in any violation of
     the provisions of the articles of incorporation or code of regulations (or
     similar corporate documents) of the Company or any of its subsidiaries, or
     any applicable law, statute, rule, regulation, judgment, order, writ or
     decree, known to such counsel, of any government, government
     instrumentality or court, domestic or foreign, having jurisdiction over the
     Company or any of its subsidiaries or the Selling Stockholder or any of its
     respective properties, assets or operations;

          (xviii) The Company is not required, and upon the issuance and sale of
     the Securities as herein contemplated and the application of the net
     proceeds therefrom as described in the Prospectus will not be required, to
     register as an "investment company" under the 1940 Act;

          (xix) Neither the Company nor any of its Subsidiaries is, and if
     operated in the manner described in the Prospectus, will not be a "broker"
     within the meaning of Section 3(a)(4) of the Exchange Act or a "dealer"
     within the meaning of Section 3(a)(5) of the Exchange Act or required to be
     registered pursuant to Section 15(a) of the Exchange Act;

          (xx) To the knowledge of such counsel (after reasonable
     investigation), each Insurance Subsidiary holds such insurance licenses,
     certificates and permits from governmental authorities (including, without
     limitation, Insurance Licenses) as are necessary to the conduct of its
     business as described in the Prospectus; to the knowledge of such counsel,
     there is no pending or threatened action, suit, proceeding or investigation
     that could reasonably be expected to result in the revocation, termination
     or suspension of any Insurance License which would have a Material Adverse
     Effect; and except as disclosed in the Prospectus, to the knowledge of such
     counsel (after reasonable investigation), 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;

          (xxi) To the knowledge of such counsel (after reasonable
     investigation), all reinsurance treaties and arrangements to which any
     Insurance Subsidiary is a party are in full force and effect and such
     counsel is not aware of any violation of, or default in the performance,
     observance or fulfillment of, any obligation, agreement, covenant or
     condition contained therein by any Insurance Subsidiary.

     Such counsel shall also state that nothing has come to its attention that
would lead it to believe that the Registration Statement or any amendment
thereto, (except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
it need make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and notes thereto and other financial data included or incorporated by reference
therein or omitted therefrom, as to which we need make no statement), at the
time the Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at any Settlement Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

     In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).

     (d) The Selling Stockholder shall furnish to the Manager, at every date
specified in Section 4(ii)(h) of this Agreement, an opinion of Keating, Muething
and Klekamp, P.L.L. in its capacity as counsel to the Selling Stockholder,
addressed to the Manager, and dated as of such date, and in form satisfactory to
the Manager, stating that:

          (i) The Selling Stockholder has valid and unencumbered title to the
     Secondary Shares to be delivered by the Selling Stockholder hereunder and
     full right, power and authority to enter into this Agreement and to sell,
     assign, transfer and deliver the Secondary Shares to be delivered by the
     Selling Stockholder hereunder; and upon the delivery of and payment for the
     Secondary Shares hereunder the purchasers thereof will acquire valid and
     unencumbered title to the Secondary Shares to be delivered by the Selling
     Stockholder;

          (ii) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency is necessary or required for the performance by the
     Selling Stockholder of its obligations hereunder, in connection with the
     offering or sale of the Shares hereunder or the consummation of the
     transactions contemplated by this Agreement or for the due execution,
     delivery or performance of this Agreement or the Terms Agreement by the
     Selling Stockholder, except such as have been already obtained or as may be
     required under state securities laws;

          (iii) To the best of such counsel's knowledge (after reasonable
     investigation), except as disclosed in the Prospectus, there are no pending
     actions, suits or proceedings against or affecting the Selling Stockholder,
     or any of its Subsidiaries or any of their respective properties that, if
     determined adversely to the Selling Stockholder or any of its Subsidiaries,
     would individually or in the aggregate have a Material Adverse Effect, or
     which are otherwise material in the context of the sale of the Shares; and
     no such actions, suits or proceedings are threatened or pending;

          (iv) The execution, delivery and performance of this Agreement, any
     Terms Agreement and the Shares and any other agreement or instrument
     entered into or issued or to be entered into or issued by the Selling
     Stockholder in connection with the consummation of the transactions
     contemplated herein and in the Registration Statement (including the sale
     of the Shares and the use of the proceeds from the sale of the Shares as
     described in the Prospectus under the caption "Use of Proceeds") and
     compliance by the Company and the Selling Stockholder with their
     obligations hereunder and under any Terms Agreement and the Shares and such
     other agreements or instruments have been duly authorized by all necessary
     corporate action of the Selling Stockholder and do not and will not,
     whether with or without the giving of notice or passage of time or both,
     conflict with or constitute a breach of, or default or Repayment Event (as
     defined below) under, or result in the creation or imposition of any lien,
     charge or encumbrance upon any property or assets of the Company or any of
     its Subsidiaries pursuant to, the Agreements and Instruments (except for
     such conflicts, breaches, defaults or Repayment Events or liens, charges or
     encumbrances that, singly or in the aggregate, would not result in a
     Material Adverse Effect), nor will such action result in any violation of
     the provisions of the articles of incorporation or code of regulations (or
     similar corporate documents) of the Company or any of its Subsidiaries or
     the Selling Stockholder or any applicable law, statute, rule, regulation,
     judgment, order, writ or decree of any government, government
     instrumentality or court, domestic or foreign, having jurisdiction over the
     Company or any of its Subsidiaries or the Selling Stockholder or any of
     their assets, properties or operations;

          (v) This Agreement and any Terms Agreement have been duly authorized,
     executed and delivered by or on behalf of the Selling Stockholder;

          (vi) The Registration Statements and the Prospectus include all
     information regarding the Selling Stockholder required to be included by
     Item 507 of Regulation S-K under the Act;

     (e) At the times specified in Section 4(n) of this Agreement, the Manager
shall have received from the accounting firm that certified the financial
statements and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus letters dated the date of delivery
thereof and addressed to the Manager in form and substance substantially in the
form (unless otherwise mutually agreed) as the Company has delivered to the
underwriters in its most recently completed public offering of securities, but
in any case reasonably satisfactory to the Manager.

     (f) The Company shall have delivered to the Manager a certificate, (i)
dated as of and delivered on each Filing Date and (ii) dated as of and delivered
on the Time of Delivery pursuant to any Terms Agreement, (each, a "Certificate
Date"), of two of its executive officers to the effect that (i) the
representations and warranties of the Company as set forth in this Agreement are
true and correct as of the Certificate Date, (ii) the Company has performed such
of its obligations under this Agreement as are to be performed at or before each
such Certificate Date, and (ii) the conditions set forth in paragraphs (a) and
(b) of Section 5 have been met.

     In addition, on each Certificate Date, the certificate shall also state
that the Shares to be sold on that date have been duly and validly authorized by
the Company and that all corporate action required to be taken for the
authorization, issuance and sale of the Shares on that date has been validly and
sufficiently taken.

     (g) The Selling Stockholder shall have delivered to the Manager a
certificate, (i) dated as of and delivered on each Filing Date and (ii) dated as
of and delivered on the Time of Delivery pursuant to any Terms Agreement, of two
of its executive officers to the effect that (i) the representations and
warranties of the Selling Stockholder as set forth in this Agreement are true
and correct as of the Certificate Date and (ii) the Selling Stockholder has
performed such of its obligations under this Agreement as are to be performed at
or before each such Certificate Date.

     (h) All filings with the Commission required by Rule 424 under the Act to
have been filed by the Settlement Date or the Time of Delivery, as the case may
be, shall have been made within the applicable time period prescribed for such
filing by Rule 424.

     (i) The Shares shall have been approved for listing on the NYSE, subject
only to notice of issuance at or prior to the Settlement Date or the Time of
Delivery, as the case may be.

     SECTION 6. Indemnification and Contribution.

     (a) The Company and the Selling Stockholder agree to jointly and severally
indemnify, defend and hold harmless the Manager, its partners, directors and
officers, and any person who controls the Manager within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which the
Manager or any such person may incur under the Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
6 being deemed to include the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of the Manager to the Company
expressly for use with reference to the Manager in such Registration Statement
or such Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading.

     If any action, suit or proceeding (together, a "Proceeding") is brought
against the Manager or any such person in respect of which indemnity may be
sought against the Company and the Selling Stockholder pursuant to the foregoing
paragraphs, the Manager or such person shall promptly notify the indemnifying
party in writing of the institution of such Proceeding and the Company and the
Selling Stockholder shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify the Company and the Selling Stockholder shall not relieve the Company and
the Selling Stockholder from any liability which the Company and the Selling
Stockholder may have to the Manager or any such person or otherwise except to
the extent the Company and the Selling Stockholder was materially prejudiced by
such omission. The Manager or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Manager or of such person unless the employment
of such counsel shall have been authorized in writing by the Company and the
Selling Stockholder in connection with the defense of such Proceeding or the
Company and the Selling Stockholder shall not have, within a reasonable period
of time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to the
Company and the Selling Stockholder (in which case the Company and the Selling
Stockholder shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and the Selling Stockholder, and paid
as incurred (it being understood, however, that the Company and the Selling
Stockholder shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). The Company and the Selling
Stockholder shall not be liable for any settlement of any Proceeding effected
without their written consent but if settled with the written consent of the
Company and the Selling Stockholder, the Company and the Selling Stockholder
agree to indemnify and hold harmless the Manager and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested the
Company and the Selling Stockholder to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the Company and the Selling Stockholder agree that they shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by the Company and the Selling Stockholder of the aforesaid request, (ii) the
Company and the Selling Stockholder shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying parties at least
30 days' prior notice of its intention to settle. The Company and the Selling
Stockholder shall not, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or may be a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.

     (b) Manager agrees to indemnify, defend and hold harmless the Company and
the Selling Stockholder, their directors and officers and any person who
controls the Company and the Selling Stockholder within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company and the Selling Stockholder or any such person
may incur under the Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf of the
Manager to the Company expressly for use with reference to the Manager in the
Registration Statement (or in the Registration Statement as amended by any post
effective amendment thereof by the Company) or in a Prospectus, or arises out of
or is based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.

     If any Proceeding is brought against the Company or the Selling Stockholder
or any such person in respect of which indemnity may be sought against the
Manager pursuant to the foregoing paragraph, the Company and the Selling
Stockholder or such person shall promptly notify the Manager in writing of the
institution of such Proceeding and the Manager shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Manager shall not relieve the Manager from any
liability which the Manager may have to the Company and the Selling Stockholder
or any such person or otherwise except to the extent that the Manager was
materially prejudiced by such omission. The Company and the Selling Stockholder
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
and the Selling Stockholder or such person unless the employment of such counsel
shall have been authorized in writing by the Manager in connection with the
defense of such Proceeding or the Manager shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to the
Manager (in which case the Manager shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties, but
the Manager may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of the Manager), in
any of which events such fees and expenses shall be borne by the Manager and
paid as incurred (it being understood, however, that the Manager shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Manager shall not be liable for any settlement of any such
Proceeding effected without the written consent of the Manager but if settled
with the written consent of the Manager, the Manager agrees to indemnify and
hold harmless the Company and the Selling Stockholder and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
the Manager to reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second sentence of this paragraph, then the Manager
agrees that it shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered into more than 60
business days after receipt by the Manager of the aforesaid request, (ii) the
Manager shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the Manager at least 30 days' prior notice of its intention to
settle. The Manager shall not, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.

     (c) If the indemnification provided for in this Section 6 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 6 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder, on the one hand, and the
Manager, on the other hand, from the offering of the Shares or (ii) if, the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholder, on the one hand, and the Manager, on the other, in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder, on the one hand, and the Manager, on the other, shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering (before deducting expenses) received by the Company and the Selling
Stockholder bear to the total compensation (before deducting expenses) received
by the Manager from the sale of Shares on behalf of the Company and the Selling
Stockholder or as principal. The relative fault of the Company and the Selling
Stockholder, on the one hand, and of the Manager, on the other, shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company and the Selling Stockholder or by
the Manager and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.

     (d) The Company and the Selling Stockholder and the Manager agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 6, the Manager shall not
be required to contribute any amount in excess of any amount by which the total
price at which the Shares sold by the Manager exceeds the amount of any damage
which the Manager has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

     (e) The indemnity and contribution agreements contained in this Section 6
and the covenants, warranties and representations of the Company and the Selling
Stockholder contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Manager, its
partners, directors or officers or any person (including each partner, officer
or director of such person) who controls the Manager within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company and the Selling Stockholder, their directors or officers or any
person who controls the Company or the Selling Stockholder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company and the Selling Stockholder and the Manager agree promptly to notify
each other of the commencement of any Proceeding against it and, in the case of
the Company and the Selling Stockholder, against any of the Company's or the
Selling Stockholder's officers or directors in connection with the issuance and
sale of the Shares, or in connection with the Registration Statement or
Prospectus.

     SECTION 7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company and the Selling
Stockholder herein or in certificates delivered pursuant hereto or any Terms
Agreement, and the agreements of the Manager contained in Section 6 of this
Agreement, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Manager or any controlling persons, or
the Company and the Selling Stockholder (or any of their officers, directors or
controlling persons), and shall survive delivery of and payment for the Shares.

     SECTION 8. Termination.

     (a) (i) The Company shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase Primary Shares in its sole discretion at
any time. Any such termination shall be without liability of any party to any
other party except that (i) if Shares have been sold through the Manager for the
Company, then Section 4(i)(g) and 4(i)(p) shall remain in full force and effect,
(ii) with respect to any pending sale, through the Manager for the Company, the
obligations of the Company, including in respect of compensation of the Manager,
shall remain in full force and effect notwithstanding the termination and (iii)
the provisions of Section 4(i)(h), Section 4(ii)(c), Section 6 and Section 7 of
this Agreement shall remain in full force and effect notwithstanding such
termination.

          (ii) The Selling Stockholder shall have the right, by giving written
     notice as hereinafter specified, to terminate the provisions of this
     Agreement relating to the solicitation of offers to purchase Secondary
     Shares in its sole discretion at any time. Any such termination shall be
     without liability of any party to any other party except that (i) if Shares
     have been sold through the Manager for the Selling Stockholder, then
     Section 4(g) and (p) shall remain in full force and effect, (ii) with
     respect to any pending sale, through the Manager for the Selling
     Stockholder, the obligations of the Selling Stockholder, including in
     respect of compensation of the Manager, shall remain in full force and
     effect notwithstanding the termination and (iii) the provisions of Section
     4(i)(h), Section 4(ii)(c), Section 6 and Section 7 of this Agreement shall
     remain in full force and effect notwithstanding such termination.

     (b) The Manager shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 4(i)(h), Section 4(ii)(c), Section 6
and Section 7 of this Agreement shall remain in full force and effect
notwithstanding such termination.

     (c) This Agreement shall remain in full force and effect, unless extended
by mutual agreement of the parties, until the second anniversary of the date set
forth on the first page of this Agreement unless terminated pursuant to Sections
8(a) or (b) above or otherwise by mutual agreement of the parties; provided that
any termination effected by this paragraph shall in all cases be deemed to
provide that Section 4(i)(h), Section 4(ii)(c), Section 6 and Section 7 shall
remain in full force and effect.

     (d) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Manager, the Company or the Selling Stockholder, as the case may
be. If such termination shall occur prior to the Settlement Date for any sale of
Shares, such sale shall settle in accordance with the provisions of Section
3(a)(vi) of this Agreement.

     (e) In the case of any purchase by the Manager pursuant to a Terms
Agreement, the obligations of the Manager pursuant to such Terms Agreement shall
be subject to termination in the absolute discretion of the Manager, if, since
the time of execution of the Terms Agreement or the respective dates as of which
information is given in the Registration Statement and Prospectus, there shall
have occurred a downgrading in the any rating assigned to any securities of the
Company or the financial strength of the Company or any Subsidiaries or any
Insurance Subsidiary's claims paying ability or similar rating by any
"nationally recognized statistical rating agency", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, or the financial
strength or claims paying ability of any Insurance Subsidiary by A.M. Best
Company, or such securities rating agency shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of any securities of the Company or the financial strength or claims
paying ability of any Subsidiary or Insurance Subsidiary or, if at any time
prior to the Time of Delivery, trading in securities generally on the NYSE or
the Nasdaq National Market shall have been suspended or limitations or minimum
prices shall have been established on the NYSE or the Nasdaq National Market, or
trading of any securities of the Company on any exchange or in the
over-the-counter market shall have been suspended or limitations or minimum
prices on any securities of the Company shall have been established; or if a
banking moratorium shall have been declared either by the United States or New
York State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in the Manager's judgment, to make it
impracticable to market the Shares. If the Manager elects to terminate its
obligations pursuant to this Section 8(e), the Company and the Selling
Stockholder shall be notified promptly in writing.

     SECTION 9. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements under this Agreement and any Terms Agreement
shall be in writing and delivered by hand, overnight courier, mail or facsimile
and, if to the Manager, shall be sufficient in all respects if delivered or sent
to UBS Securities LLC, 299 Park Avenue, New York, N.Y. 10171-0026, Attention:
Syndicate Department, Fax No. (212) 821-6186, with a copy for information
purposes to UBS Securities LLC, 677 Washington Blvd., Stamford, CT, 06901,
Attention: Legal and Compliance Department, Fax No. (203) 719-0680; if to the
Company, it shall be sufficient in all respects if delivered or sent to the
Company at the offices of the Company at, One East Fourth Street, Cincinnati,
Ohio 45202, Attention: Keith A. Jensen, Senior Vice President (Fax No. (513)
369-5750); or, if sent to the Selling Stockholder, it shall be sufficient in all
respects if delivered or sent to the Selling Stockholder at the Offices of the
Selling Stockholder at, One East Fourth Street, Cincinnati, Ohio 45202
Attention: James C. Kennedy, Vice President, Deputy General Counsel and
Secretary (Fax No. (513) 579-0108). Each party to this Agreement and any Terms
Agreement may change such address for notices by sending to the parties to this
Agreement and any Terms Agreement written notice of a new address for such
purpose.

     SECTION 10. Parties. The Agreement herein set forth and any Terms Agreement
have been and are made solely for the benefit of the Manager, the Company and
the Selling Stockholder and to the extent provided in Section 6 of this
Agreement the controlling persons, directors and officers referred to in such
section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Manager) shall acquire or have any right under or by virtue of this
Agreement and any Terms Agreement.

     SECTION 11. Adjustments for Stock Splits. The parties acknowledge and agree
that all share related numbers contained in this Agreement and any Terms
Agreement shall be adjusted to take into account any stock split effected with
respect to the Shares.

     SECTION 12. Entire Agreement. This Agreement and any Terms Agreement
constitute the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof.

     SECTION 13. Counterparts. This Agreement and any Terms Agreement may be
signed by the parties in one or more counterparts which together shall
constitute one and the same agreement among the parties.

     SECTION 14. Applicable Law. This Agreement, any Terms Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement or any Terms Agreement ("Claim"),
directly or indirectly, shall be governed by, and construed in accordance with,
the internal laws of the State of New York applicable to contracts entered into
and to be performed within such state without regard to conflicts of law
principles.

     SECTION 15. Headings. The Section headings in this Agreement and any Terms
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement or any Terms Agreement.

     SECTION 16. Submission to Jurisdiction. Except as set forth below, no Claim
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
and the Selling Stockholder each consents to the non-exclusive jurisdiction of
such courts and personal service with respect thereto. The Company and the
Selling Stockholder each hereby consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating to
this Agreement and any Terms Agreement is brought by any third party against the
Manager or any indemnified party. Each of the Manager, the Company and the
Selling Stockholder (in the case of the Company and the Selling Stockholder on
their behalf and, to the extent permitted by applicable law, on behalf of their
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement and any Terms Agreement.
The Company and the Selling Stockholder each agrees that a final, non-appealable
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Company and the Selling
Stockholder and may be enforced in any other courts in the jurisdiction of which
the Company or the Selling Stockholder is or may be subject, by suit upon such
judgment.

     SECTION 17. Miscellaneous. The Manager, an indirect, wholly-owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS AG. Because the Manager is a
separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by the Manager
are not deposits, are not insured by the Federal Deposit Insurance Corporation,
are not guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.

     A lending affiliate of the Manager may have lending relationships with
issuers of securities underwritten or privately placed by the Manager. To the
extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by the Manager will
disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of the
Manager.

     If the foregoing correctly sets forth the understanding between the
Company, the Selling Stockholder and the Manager, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company, the Selling Stockholder and the Manager.
Alternatively, the execution of this Agreement by the Company and the Selling
Stockholder and its acceptance by or on behalf of the Manager may be evidenced
by an exchange of telegraphic or other written communications.

                                    Very truly yours,

                                    AMERICAN FINANCIAL GROUP, INC.



                                    By:____________________________
                                       Name:
                                       Title:



                                    AMERICAN PREMIER UNDERWRITERS, INC.



                                    By:____________________________
                                       Name:
                                       Title:



ACCEPTED as of the date
first above written

UBS SECURITIES LLC



By:_______________________________
   Name:
   Title:





UBS SECURITIES LLC



By:_______________________________
   Name:
   Title:








                         AMERICAN FINANCIAL GROUP, INC.

                       AMERICAN PREMIER UNDERWRITERS, INC.



                                  Common Stock



                                 TERMS AGREEMENT

                                                                   ______, 20 __

UBS SECURITIES LLC
299 Park Avenue
New York, New York 10171

Dear Sirs:

     [American Financial Group, Inc. (the "Company")] [and][American Premier
Underwriters, Inc. (the Selling Stockholder)] propose[s], subject to the terms
and conditions stated herein and in the Equity Distribution Agreement, dated
[date], 2004 (the "Equity Distribution Agreement"), among the Company, American
Premier Underwriters, Inc. and UBS Securities LLC, to issue and sell to UBS
Securities LLC the securities specified in the Schedule hereto (the "Purchased
Securities").

     Each of the provisions of the Equity Distribution Agreement not
specifically related to the solicitation by UBS Securities LLC, as agent of the
Company and the Selling Stockholder, of offers to purchase securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein. Each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Terms
Agreement [and] [,] the Time of Delivery, except that each representation and
warranty in Section 2 of the Equity Distribution Agreement which makes reference
to the Prospectus (as therein defined) shall be deemed to be a representation
and warranty as of the date of the Equity Distribution Agreement in relation to
the Prospectus, and also a representation and warranty as of the date of this
Terms Agreement [and] [,] the Time of Delivery in relation to the Prospectus as
amended and supplemented to relate to the Purchased Securities.

     An amendment to the Registration Statement (as defined in the Equity
Distribution Agreement), or a supplement to the Prospectus, as the case may be,
relating to the Purchased Securities, in the form heretofore delivered to you is
now proposed to be filed with the Securities and Exchange Commission.

     Subject to the terms and conditions set forth herein and in the Equity
Distribution Agreement which are incorporated herein by reference, [the Company]
[and] [the Selling Stockholder] agree[s] to issue and sell to UBS Securities LLC
and the latter agrees to purchase from [the Company] [and] [the Selling
Stockholder] the number of shares of the Purchased Securities at the time and
place and at the purchase price set forth in the Schedule hereto.

     If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Terms Agreement, including
those provisions of the Equity Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between you and the Company.

                                      AMERICAN FINANCIAL GROUP, INC.



                                      By:____________________________
                                         Name:
                                         Title:



                                      AMERICAN PREMIER UNDERWRITERS, INC.



                                      By:______________________________
                                         Name:
                                         Title:





ACCEPTED as of the date
first above written

UBS SECURITIES LLC



By:____________________________
   Name:
   Title:





UBS SECURITIES LLC



By:_____________________________
   Name:
   Title:









Title of Purchased Securities:

     Common Stock, no par value

Number of Shares of Purchased Securities:

[Price to Public:]

Purchase Price by UBS Securities LLC:

Method of and Specified Funds for Payment of Purchase Price:

     By wire transfer to a bank account specified by the Company [the Selling
     Stockholder] in same day funds.

Method of Delivery:

     Free delivery of Shares to the Manager's account at the Depository Trust
     Company in return for payment of the purchase price.

Time of Delivery:

Closing Location:

Documents to be Delivered:

     The following documents referred to in the Equity Distribution Agreement
     shall be delivered as a condition to the Closing:

          (1) The officers' certificate referred to in Section 4(i)(l).
          (2) The opinion referred to in Section 4(i)(m).
          (3) The accountants' letter referred to in Section 4(i)(n).
          (4) The officer's certificate referred to in Section 4(ii)(g)
          (5) The opinion referred to in Section 4(ii)(h).
          (6) Such other documents as the Manager shall reasonably request.




                                   SCHEDULE A

                              List of Subsidiaries


The following is a list of Subsidiaries of AFG at June 30, 2004. All
corporations are subsidiaries of AFG and, if indented, subsidiaries of the
company under which they are listed.

  merican Money Management Corporation
  PU Holding Company
          American Premier Underwriters, Inc.
                   Premier Lease & Loan Services Insurance Agency, Inc.
                   Premier Lease & Loan Services of Canada, Inc.
                   Republic Indemnity Company of America
                   Republic Indemnity Company of California
  reat American Holding, Inc.
          Great American Security Insurance Company
          Great American Spirit Insurance Company
  reat American Insurance Company
          American Empire Surplus Lines Insurance Company
                   American Empire Insurance Company
          Brothers Property Corporation
          GAI Warranty Company
          GAI Warranty Company of Florida
          Great American Alliance Insurance Company
          Great American Assurance Company
          Great American Custom Insurance Services, Inc.
                   Professional Risk Brokers, Inc.
          Great American E&S Insurance Company
          Great American Fidelity Insurance Company
          Great American Financial Resources, Inc.
                   AAG Holding Company, Inc.
                            American Annuity Group Capital Trust II
                            Great American Life Insurance Company
                                    Annuity Investors Life Insurance Company
                                    Loyal American Life Insurance Company
                                    Manhattan National Life Insurance Company
                                    United Teacher Associates Insurance Company
                            Great American Life Assurance Company of
                              Puerto Rico, Inc.
                   Great American Insurance Company of New York
                   Great American Management Services, Inc.
                   Great American Protection Insurance Company
                            National Interstate Corporation
                                    National Interstate Insurance Company
                                             National Interstate Insurance
                                               Company of Hawaii, Inc.
                            Transport Insurance Company
                            Worldwide Insurance Company
                   Mid-Continent Casualty Company
                            Mid-Continent Insurance Company
                            Oklahoma Surety Company



                                                             Schedule to Annex I

Exhibit 5

[Stationery of Keating, Muething & Klekamp, P.L.L.]

MARK A. WEISS
DIRECT DIAL: (513) 579-6599
FACSIMILE: (513) 579-6457
E-MAIL: MWEISS@KMKLAW.COM

June 30, 2004

American Financial Group, Inc.
American Financial Capital Trust II
American Financial Capital Trust III
American Financial Capital Trust IV
One East Fourth Street
Cincinnati, Ohio 45202

Ladies and Gentlemen:

We have acted as counsel to American Financial Group, Inc., an Ohio corporation (“AFG”), and American Financial Capital Trust II, American Financial Capital Trust III, and American Financial Capital Trust IV, each a statutory trust organized under the laws of the State of Delaware (each, an “American Financial Capital Trust”), in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”), of a Registration Statement on Form S-3 (the “Registration Statement”), including a preliminary prospectus (the “Base Prospectus”) relating to the public offering of up to $600,000,000 in aggregate principal amount of (i) debt securities of AFG, which may either be senior debt securities (the “Senior Debt Securities”) to be issued pursuant to a senior indenture (the “Senior Indenture”) between AFG and U.S. Bank National Association (formerly known as Firstar Bank, N.A.), as trustee (the “Senior Trustee”), subordinated debt securities (“Subordinated Debt Securities”) to be issued pursuant to a Subordinated Indenture (the “Subordinated Indenture”) between AFG and U.S. Bank National Association (formerly known as Firstar Bank, N.A.), as trustee (the “Subordinated Trustee”), or junior subordinated debt securities (“Junior Subordinated Debt Securities”) to be issued pursuant to a junior subordinated indenture (the “Junior Subordinated Indenture”) between AFG and U.S. Bank National Association (formerly known as Firstar Bank, N.A.), as trustee (the “Junior Subordinated Trustee”), (ii) shares of common stock of AFG (the “Common Stock”) which include up to 1,361,711 shares of Common Stock (the “Secondary Shares”) which may be sold by American Premier Underwriters, Inc., a wholly-owned subsidiary of AFG (the “Selling Shareholder”) (Common Stock to be sold by AFG is referred to in this opinion as the “AFG Shares”), (iii) shares of preferred stock of AFG (the “Preferred Stock”), (iv) warrants to purchase Common Stock, Senior Debt Securities, Subordinated Debt Securities, Junior Subordinated Debt Securities or other securities of AFG (the “Warrants”), (v) depositary shares representing a fraction or a multiple of a share of a particular series of Preferred Stock (the “Depositary Shares”), (vi) stock purchase contracts of AFG (the “Stock Purchase Contracts”), (vii) stock purchase units of AFG (the “Stock Purchase Units”), and/or (viii) preferred securities representing preferred undivided beneficial interest in the assets of the American Financial Capital Trusts (the “Preferred Securities”). The proceeds of an offering of Preferred Securities by an American Financial Capital Trust (together with the proceeds from the issuance of common interests in such American Financial Capital Trust) will be used by such American Financial Capital Trust to purchase Junior Subordinated Debt Securities of AFG, to be issued pursuant to supplemental indentures to the Junior Subordinated Indenture. In addition, certain payment obligations of the respective American Financial Capital Trusts with respect to the Preferred Securities of such American Financial Capital Trust will be guaranteed (on a subordinated basis) by AFG pursuant to a Preferred Securities Guarantee (each, a “Guarantee”, and collectively, the “Guarantees”) to be executed by AFG for the benefit of holders of Preferred Securities of such American Financial Capital Trust.

We have, as counsel, examined such corporate records, certificates of public officials and officers of AFG and the American Financial Capital Trusts and other documents and reviewed such questions of law as we have deemed necessary or appropriate to enable us to render the opinions expressed below. As to various questions of fact material to such opinions, we have relied upon representations of AFG and the American Financial Capital Trusts. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of AFG and the American Financial Capital Trusts and such agreements, certificates of public officials, certificates of officers or other representatives of AFG, the American Financial Capital Trusts and others, and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, 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. In making our examination of executed documents, we have assumed that the parties thereto, other than AFG and the American Financial Capital Trusts, had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery of such documents by the parties to such documents, and the validity and binding effect thereof. As to any facts material to the opinions expressed herein which we did not independently establish or verify, we have relied upon oral or written statements and representations of officers and other representatives of AFG and the American Financial Capital Trusts and others.

Based solely on the examination detailed above, we are of the opinion that:

1. When (i) the issuance, execution and delivery of (a) supplemental indentures (“Senior Supplemental Indentures”) to the Senior Indenture and (b) the Senior Debt Securities have been duly authorized by all necessary corporate action of AFG and (ii) a Senior Supplemental Indenture has been duly executed and delivered by AFG and the Senior Trustee and Senior Debt Securities have been duly executed, authenticated, issued, delivered and paid for as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto and in accordance with the Senior Indenture and such Senior Supplemental Indenture, assuming the terms of such Senior Debt Securities are in compliance with then applicable law, the Senior Debt Securities will be validly issued and will constitute valid and binding obligations of AFG enforceable against AFG in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

2. When (i) the issuance, execution and delivery of (a) supplemental indentures (“Subordinated Supplemental Indentures”) to the Subordinated Indenture and (b) Subordinated Debt Securities have been duly authorized by all necessary corporate action of AFG, and (ii) a Subordinated Supplemental Indenture has been duly executed and delivered by AFG and the Subordinated Trustee and the Subordinated Debt Securities have been duly executed, authenticated, issued, delivered and paid for as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto and in accordance with the Subordinated Indenture and such Subordinated Supplemental Indenture, assuming the terms of such Subordinated Debt Securities are in compliance with then applicable law, the Subordinated Debt Securities will be validly issued and will constitute valid and binding obligations of AFG enforceable against AFG in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

3. When (i) the issuance, execution and delivery of (a) supplemental indentures (“Junior Subordinated Supplemental Indentures”) to the Junior Subordinated Indenture and (b) Junior Subordinated Debt Securities have been duly authorized by all necessary corporate action of AFG, and (ii) a Junior Subordinated Supplemental Indenture has been duly executed and delivered by AFG and the Junior Subordinated Trustee and the Junior Subordinated Debt Securities have been duly executed, authenticated, issued, delivered and paid for as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto and in accordance with the Junior Subordinated Indenture and such Junior Subordinated Supplemental Indenture, assuming the terms of such Junior Subordinated Debt Securities are in compliance with then applicable law, the Junior Subordinated Debt Securities will be validly issued and will constitute valid and binding obligations of AFG enforceable against AFG in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

4. When (i) the terms of the issuance and sale of the AFG Shares shall have been duly authorized by all necessary corporate action of AFG and (ii) the AFG Shares shall have been issued and sold as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating to the AFG Shares, against payment of the consideration fixed therefor by the Board of Directors of AFG or a duly authorized committee thereof, and if issued pursuant to Stock Purchase Contracts, Stock Purchase Units or Warrants, as contemplated by the terms thereof and of the agreements relating thereto, assuming that AFG has reserved for issuance the requisite number of shares of Common Stock, the AFG Shares will be duly authorized, validly issued, fully paid and nonassessable.

5. The Secondary Shares are authorized, validly issued, fully-paid and non-assessable shares of Common Stock free of any claim of pre-emptive rights.

6. When (i) the terms of the Preferred Stock and of its issuance and sale have been duly established in conformity with AFG’s Amended and Restated Articles of Incorporation so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon AFG and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over AFG, and authorized by all necessary corporate action of AFG, (ii) articles of amendment to the Amended and Restated Articles of Incorporation fixing and determining the terms of the Preferred Stock has been filed with the Secretary of State of the State of Ohio and (iii) the Preferred Stock has been duly issued and sold as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors or a duly authorized committee thereof, the Preferred Stock will be validly issued, fully paid and nonassessable.

When (i) the terms of the issuance and sale of the Warrants shall have been duly authorized by all necessary corporate action of AFG, (ii) the Warrants shall have been authenticated by the applicable warrant agent pursuant to the terms of a Warrant Agreement and (iii) the Warrants shall have been issued and sold as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating to the Warrants, the Warrants will be validly issued and will constitute valid and binding obligations of AFG enforceable against AFG in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

When (i) the terms of the issuance and sale of the Depositary Shares shall have been duly authorized by all necessary corporate action of AFG, (ii) the number of Depositary Shares issued by AFG at no time exceeds the maximum amount of shares of Preferred Stock authorized to be issued by AFG’s Amended and Restated Articles of Incorporation AFG and (iii) (iii) the Depositary Shares have been duly issued and sold as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors or a duly authorized committee thereof, the Depositary Shares will be validly issued, fully paid and nonassessable.

When (i) the issuance, execution and delivery by AFG of any of the Stock Purchase Contracts and the Stock Purchase Units shall have been duly authorized by all necessary corporate action of AFG, (ii) the agreements relating thereto shall have been duly executed and delivered by the parties thereto, (iii) the Stock Purchase Contracts and the Stock Purchase Units shall have been duly executed and delivered by AFG and any other necessary signatories thereto and sold as contemplated by the Registration Statement, the Base Prospectus and any prospectus supplement relating thereto, against payment of the consideration fixed therefor by the Board of Directors or a duly authorized committee thereof, assuming that the terms of such Stock Purchase Contracts and Stock Purchase Units are in compliance with then applicable law, the Stock Purchase Contracts and the Stock Purchase Units will be validly issued and will constitute valid and binding obligations of AFG enforceable against AFG in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

When (i) the execution and delivery of any Guarantee shall have been duly authorized by all necessary corporate action of AFG, (ii) such Guarantee shall have been duly executed and delivered by AFG, (iii) the Preferred Securities to which such Guarantee relates have been duly issued and sold and the purchase price therefor has been received by the respective American Financial Capital Trust and (iv) the Guarantee shall have been qualified under the Trust Indenture Act of 1939, as amended, such Guarantee will constitute a valid and legally binding obligation of AFG, enforceable against AFG in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally, and except as the enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

Our opinions expressed above are limited to the laws of the State of Ohio and the federal laws of the United States of America.

We hereby consent to be named in the Registration Statement and Base Prospectus as the attorneys who have passed upon legal matters in connection with the sale of the aforesaid securities and to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the Securities and Exchange Commission thereunder.

Sincerely,

KEATING, MUETHING & KLEKAMP, P.L.L.

BY: /s/Mark A. Weiss
——————————————
Mark A. Weiss

Exhibit 5.2

[Stationery of Morris, Nichols, Arsht & Tunnell]

June 29, 2004

American Financial Capital Trusts II, III and IV
c/o American Financial Group, Inc.
One East Fourth Street
Cincinnati, OH 45202

Re: American Financial Capital Trusts II, III and IV

Ladies and Gentlemen:

We have acted as special Delaware counsel to American Financial Capital Trust II, a Delaware statutory trust (“AFC Trust II”), American Financial Capital Trust III, a Delaware statutory trust (“AFC Trust III”), and American Financial Capital Trust IV, a Delaware statutory trust (“AFC Trust IV” and, collectively with AFC Trust II and AFC Trust III, the “Trusts” and each a “Trust”) in connection with certain matters of Delaware law relating to the formation of the Trusts and the proposed issuance of preferred securities in the Trusts to beneficial owners pursuant to and as described in the Registration Statement (and the prospectus forming a part thereof) on Form S-3 filed with the Securities and Exchange Commission (the “Commission”) by American Financial Group, Inc., an Ohio corporation (the “Company”), and the Trusts on or about the date hereof (the “Registration Statement”).

In rendering this opinion, we have examined copies of the following documents in the forms provided to us: the Certificate of Trust of AFC Trust II as filed in the Office of the Secretary of State of the State of Delaware (the “State Office”) on February 4, 1997 (the “AFC Trust II Certificate”); the Certificate of Trust of AFC Trust III as filed in the State Office on June 25, 2003 (the “AFC Trust III Certificate”); the Certificate of Trust of AFC Trust IV as filed in the State Office on June 25, 2003 (the “AFC Trust IV Certificate” and collectively with the AFC Trust II Certificate and the AFC Trust III Certificate, the “Certificates” and each a “Certificate”); a Declaration of Trust of AFC Trust II dated as of February 3, 1997 (the “AFC Trust II Original Governing Instrument”); a Declaration of Trust of AFC Trust III dated as of June 20, 2003 (the “AFC Trust III Original Governing Instrument”); a Declaration of Trust of AFC Trust IV dated as of June 20, 2003 (the “AFC Trust IV Original Governing Instrument” and collectively with the AFC Trust II Original Governing Instrument and the AFC Trust III Original Governing Instrument, the “Original Governing Instruments”); the Registration Statement; the amended and restated declaration of trust of American Financial Capital Trust I attached as an exhibit to Registration Statement No. 333-12537 on Form S-3 filed with the Commission on September 24, 1996, as amended by Pre-Effective Amendment Nos. 1 and 2 thereto (the “AFC Trust I Governing Instrument”); and a certification of good standing of the Trusts 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 (other than the Trusts) that is a party to any of 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; (iii) that the Company, as sponsor, and each trustee of each of the Trusts will duly authorize, execute and deliver an amended and restated declaration of such Trust in the form of the AFC Trust I Governing Instrument (with appropriate changes of names and completion as necessary) (each, a “Governing Instrument”) and all other documents contemplated thereby or by the Registration Statement to be executed in connection with the issuance by each Trust of “Preferred Securities” (as defined in the Governing Instrument of such Trust and as used herein, “Preferred Securities”) prior to the first issuance of Preferred Securities of such Trust; (iv) that the Preferred Securities of each Trust will be offered and sold pursuant to the prospectus forming a part of the Registration Statement and a prospectus supplement thereto that sets forth the specific terms of the Preferred Securities of each Trust (collectively, the “Prospectus”) that will be consistent with, and accurately describe, the terms of each Governing Instrument and all other relevant documents; (v) that no event has occurred subsequent to the filing of any Certificate, or will occur prior to the issuance of all Preferred Securities by each Trust, that would cause a dissolution or liquidation of any Trust under the applicable Original Governing Instrument or the applicable Governing Instrument; (vi) that the activities of each Trust have been and will be conducted in accordance with its Original Governing Instrument or its Governing Instrument, as applicable, and the Delaware Statutory Trust Act, 12 Del. C. § 3801 et seq. (the “Delaware Act”); (vii) that prior to the first issuance of Preferred Securities by each Trust, payment of the required consideration therefor will have been made in accordance with the terms and conditions of the applicable Governing Instrument and as described in the Prospectus, and that the Preferred Securities of each Trust are otherwise issued and sold in accordance with the terms, conditions, requirements and procedures set forth in the Governing Instrument of such Trust and as described in the Prospectus; and (viii) 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 amended, supplemented or otherwise modified, except as herein referenced. We have not reviewed any documents other than those identified above in connection with this opinion, and we have assumed that there are no other documents contrary to or inconsistent with the opinions expressed herein. 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 offered by each Trust 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:

1. Each of the Trusts is a duly formed and validly existing statutory trust in good standing under the laws of the State of Delaware.

2. Upon issuance, the Preferred Securities of each Trust will constitute validly issued and, subject to the qualifications set forth below, fully paid and nonassessable beneficial interests in the assets of the Trust. We note that pursuant to Section 11.04 of the Governing Instrument of each Trust, each Trust may withhold amounts otherwise distributable to a holder of Preferred Securities of the Trust 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 of Preferred Securities of the Trust and that, pursuant to the Governing Instrument, the holder of Preferred Securities of the Trust 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 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 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 and 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

BY: /s/Louis G. Hering
——————————————
Louis G. Hering

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” in the Registration Statement (Form S-3) and related Prospectus of American Financial Group, Inc. for the registration of debt securities, common stock, preferred stock, warrants, depositary shares, stock purchase contracts, stock purchase units, preferred securities and a guarantee of preferred securities of American Financial Group, Inc., American Financial Capital Trust II, American Financial Capital Trust III and American Financial Capital Trust IV and to the incorporation by reference therein of our report dated February 12, 2004, 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, 2003, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Cincinnati, Ohio
June 25, 2004

As filed with the Securities And Exchange Commission on June 30, 2004

SUBJECT TO COMPLETION, DATED JUNE 30, 2004

TABLE OF CONTENTS

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

DESCRIPTION OF THE TRUST PREFERRED SECURITIES

DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEE

RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,THE TRUST PREFERRED SECURITIES GUARANTEE AND THEJUNIOR SUBORDINATED DEBT SECURITIES HELD BY THE TRUST

SELLING SHAREHOLDER

LEGAL MATTERS

EXPERTS

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

SIGNATURES

[Stationery of Keating, Muething & Klekamp, P.L.L.]

[Stationery of Morris, Nichols, Arsht & Tunnell]

RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE TRUST PREFERRED SECURITIES GUARANTEE AND THE
JUNIOR SUBORDINATED DEBT SECURITIES HELD BY THE TRUST