EX-4.6






Exhibit 4.6




American Financial Capital Trust

[                    ] [                    ]% Capital Securities




Dated as of [                    ,                    ]




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE 1.
	 	DEFINITIONS AND INTERPRETATION	 	 	1	 
	Section 1.1
	 	Definitions and Interpretation	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 2.
	 	TRUST INDENTURE ACT	 	 	5	 
	Section 2.1
	 	Trust Indenture Act; Application	 	 	5	 
	Section 2.2
	 	Lists of Holders of Securities	 	 	5	 
	Section 2.3
	 	Reports by the Capital Securities Guarantee Trustee	 	 	5	 
	Section 2.4
	 	Periodic Reports to Capital Securities Guarantee Trustee	 	 	5	 
	Section 2.5
	 	Evidence of Compliance with Conditions Precedent	 	 	6	 
	Section 2.6
	 	Events of Default; Waiver	 	 	6	 
	Section 2.7
	 	Event of Default; Notice	 	 	6	 
	Section 2.8
	 	Conflicting Interests	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE 3.
	 	POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES GUARANTEE TRUSTEE	 	 	6	 
	Section 3.1
	 	Powers and Duties of the Capital Securities Guarantee Trustee	 	 	6	 
	Section 3.2
	 	Certain Rights of Capital Securities Guarantee Trustee	 	 	8	 
	Section 3.3
	 	Not Responsible for Recitals or Issuance of Capital Securities Guarantee	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE 4.
	 	CAPITAL SECURITIES GUARANTEE TRUSTEE	 	 	10	 
	Section 4.1
	 	Capital Securities Guarantee Trustee; Eligibility	 	 	10	 
	Section 4.2
	 	Appointment, Removal and Resignation of Capital Securities Guarantee Trustee	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE 5.
	 	GUARANTEE	 	 	12	 
	Section 5.1
	 	Guarantee	 	 	12	 
	Section 5.2
	 	Waiver of Notice and Demand	 	 	12	 
	Section 5.3
	 	Obligations Not Affected	 	 	12	 
	Section 5.4
	 	Rights of Holders	 	 	13	 
	Section 5.5
	 	Guarantee of Payment	 	 	14	 
	Section 5.6
	 	Subrogation	 	 	14	 
	Section 5.7
	 	Independent Obligations	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE 6.
	 	LIMITATION OF TRANSACTIONS; SUBORDINATION	 	 	14	 
	Section 6.1
	 	Limitation of Transactions	 	 	14	 
	Section 6.2
	 	Ranking	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE 7.
	 	TERMINATION	 	 	15	 
	Section 7.1
	 	Termination	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE 8.
	 	INDEMNIFICATION	 	 	15	 
	Section 8.1
	 	Exculpation	 	 	15	 
	Section 8.2
	 	Indemnification	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE 9.
	 	MISCELLANEOUS	 	 	16	 
	Section 9.1
	 	Successors and Assigns	 	 	16	 






 









 






	 	 	 	 	 	 	 
	Section 9.2
	 	Amendments	 	 	16	 
	Section 9.3
	 	Notices	 	 	16	 
	Section 9.4
	 	Benefit	 	 	17	 
	Section 9.5
	 	Governing Law	 	 	17	 






 









 






CROSS-REFERENCE TABLE*




	 	 	 
	Section of Trust Indenture Act	 	Section of
	of 1939, as amended	 	Declaration
	310(a)

	 	4.1(a)
	310(c)

	 	Inapplicable
	311(c)

	 	Inapplicable
	312(a)

	 	2.2(a)
	312(b)

	 	2.2(b)
	313

	 	2.3
	314(a)

	 	2.4
	314(b)

	 	Inapplicable
	314(c)

	 	2.5
	314(d)

	 	Inapplicable
	314(f)

	 	Inapplicable
	315(a)

	 	3.1(d)
	315(c)

	 	3.1(c)
	315(d)

	 	3.1(d)








 




			
	*	 	This Cross-Reference Table does not constitute part of the Capital
Securities Guarantee and shall not affect the interpretation of any of
its terms or provisions.






 









 








CAPITAL SECURITIES GUARANTEE AGREEMENT




     This GUARANTEE AGREEMENT (the “Capital Securities Guarantee”), dated as of [                    ],
is executed and delivered by AMERICAN FINANCIAL GROUP, INC., an Ohio corporation (the “Guarantor”),
and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, as trustee
(the “Capital Securities Guarantee Trustee”), for the benefit of the Holders (as defined herein)
from time to time of the Capital Securities (as defined herein) of American Financial Capital Trust
[                    ], a Delaware statutory trust (the “Issuer”).



     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of [                    ,          ], among the trustees of the Issuer named
therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date hereof [                     ] Capital Securities representing undivided preferred beneficial interests in the assets
of the Issuer, designated the American Financial Capital Trust [           ] [           ]% Capital Securities (the “Capital Securities”), initially in the aggregate liquidation
amount of $[                     ]; and



     [WHEREAS, pursuant to the terms of an Underwriting Agreement dated as of
[                    ], by and among the Guarantor, as sponsor, the Issuer and the Underwriters
named therein (the “Underwriting Agreement”), the Issuer has agreed to issue up to an additional
[                     ] Capital Securities with an aggregate liquidation amount of up to
$[                    ] upon exercise of an option granted in the Underwriting Agreement to the Underwriters
(the “Option”); and]



     WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in this Capital
Securities Guarantee, to pay to the Holders of the Capital Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions set forth herein;
and



     WHEREAS, the Guarantor also is executing and delivering a guarantee agreement (the “Common
Securities Guarantee”) for the benefit of the holders of the Common Securities (as defined herein).



     NOW, THEREFORE, in consideration of the purchase by each Holder of Capital Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the Holders.



ARTICLE 1.

DEFINITIONS AND INTERPRETATION




Section 1.1 Definitions and Interpretation.




     In this Capital Securities Guarantee, unless the context otherwise requires:




     (a) Capitalized terms used in this Capital Securities Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section 1.1;



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     (b) terms defined in the Declaration as at the date of execution of this Capital
Securities Guarantee have the same meaning when used in this Capital Securities Guarantee;




     (c) a term defined anywhere in this Capital Securities Guarantee has the same meaning
throughout;




     (d) all references to “the Capital Securities Guarantee” or “this Capital Securities
Guarantee” are to this Capital Securities Guarantee as modified, supplemented or amended
from time to time;




     (e) all references in this Capital Securities Guarantee to Articles and Sections are to
Articles and Sections of this Capital Securities Guarantee, unless otherwise specified;




     (f) a term defined in the Trust Indenture Act has the same meaning when used in this
Capital Securities Guarantee, unless otherwise defined in this Capital Securities Guarantee
or unless the context otherwise requires; and




     (g) a reference to the singular includes the plural and vice versa.



     “Affiliate” has the same meaning as given to that term in Rule 405 of the Securities
Act of 1933, as amended, or any successor rule thereunder.



     “Authorized Officer” means the Chief Executive Officer, President, Chief Financial
Officer, any Vice President, Treasurer, Assistant Treasurer, Associate General Counsel or other
Person authorized to bind a Person.



     “Business Day” means any day other than a day on which federal or state banking
institutions in New York, New York or Cincinnati, Ohio are authorized or obligated by law,
executive order or regulation to close.



     “Capital Securities Guarantee Trustee” means The Bank of New York Mellon Trust
Company, N.A., a national banking association, until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the terms of this Capital
Securities Guarantee and thereafter means each such Successor Capital Securities Guarantee Trustee.



     “Capital Securities” means the total number of American Financial Capital Trust [   ] [   ]%
Capital Securities (liquidation amount $[          ] per Capital
Security) issued pursuant to the Declaration representing undivided preferred beneficial interests
in the assets of the Issuer, [including any Capital Securities issued upon exercise of the Option.]



     “Common Securities” means the securities representing undivided common beneficial
interests in the assets of the Issuer[, including any additional Common Securities issued in
connection with the exercise of the Option].



     “Corporate Trust Office” means the office of the Capital Securities Guarantee Trustee
at



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which the corporate trust business of the Capital Securities Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of execution of this
Agreement is located at 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602.



     “Covered Person” means any Holder or beneficial owner of Capital Securities.



     “Event of Default” means a default by the Guarantor on any of its payments or other
obligations under this Capital Securities Guarantee.



     “Guarantee Payments” means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or made by the Issuer:
(i) any accrued and unpaid Distributions (as defined in the Declaration) that are required to be
paid on such Capital Securities to the extent the Issuer shall have funds available therefor, (ii)
the applicable Redemption Price to the extent the Issuer has funds available therefor, with respect
to any Capital Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the
distribution of Notes to the Holders in exchange for Capital Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent the Issuer shall have
funds available therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the “Liquidation
Distribution”). If an Event of Default under, and as defined in, the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Capital Securities to receive
Guarantee Payments under the Capital Securities Guarantee.



     “Holder” shall mean any holder, as registered on the books and records of the Issuer,
of any Capital Securities; provided, however, that in determining whether the
holders of the requisite percentage of Capital Securities have given any request, notice, consent
or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor.



     “Indemnified Person” means the Capital Securities Guarantee Trustee, any Affiliate of
the Capital Securities Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the Capital Securities
Guarantee Trustee.



     “Indenture” means the Indenture dated as of                      between the Guarantor (the
“Note Issuer”) and The Bank of New York Mellon Trust Company, N.A., as trustee, together with any
Board Resolution (as defined in the Indenture) or any indenture supplemental thereto, pursuant to
which certain subordinated debt securities of the Note Issuer are to be issued to the Property
Trustee (as defined in the Declaration) of the Issuer.



     “Majority in liquidation amount of the Securities” means, except as provided by the
Trust Indenture Act, a vote by Holder(s) of Capital Securities, voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would be paid on
redemption, liquidation, dissolution or otherwise, plus accrued and unpaid Distributions to the
date upon which the voting percentages are determined) of all Capital Securities.



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     “Notes” means the series of junior subordinated debt securities of the Guarantor
designated the [          ]% Junior Subordinated Notes, due [           ], held by the
Property Trustee of the Issuer on behalf of the Trust.



     “Officers’ Certificate” means, with respect to any Person, a certificate signed by two
Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance
with a condition or covenant provided for in this Capital Securities Guarantee shall include:




     (a) a statement that each officer signing the Officers’ Certificate has read the
covenant or condition and the definition relating thereto;




     (b) a brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate;




     (c) a statement that each such officer has made such examination or investigation as,
in such officer’s opinion, is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been complied with; and




     (d) a statement as to whether, in the opinion of each such officer, such condition or
covenant has been complied with.



     “Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision thereof, or any
other entity of whatever nature.



     “Responsible Officer” means, with respect to the Capital Securities Guarantee Trustee,
any officer within the Corporate Trust Office of the Capital Securities Guarantee Trustee,
including any vice president, any assistant vice president, any assistant treasurer or other
officer of the Corporate Trust Office of the Capital Securities Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer’s knowledge of and familiarity with the particular subject.



     “Successor Capital Securities Guarantee Trustee” means a successor Capital Securities
Guarantee Trustee possessing the qualifications to act as Capital Securities Guarantee Trustee
under Section 4.1.



     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.



     “Trust Securities” means the Common Securities and the Capital Securities.



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ARTICLE 2.

TRUST INDENTURE ACT




Section 2.1 Trust Indenture Act; Application.





     (a) This Capital Securities Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Capital Securities Guarantee and shall,
to the extent applicable, be governed by such provisions; and




     (b) If and to the extent that any provision of this Capital Securities Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall control.



Section 2.2 Lists of Holders of Securities.





     (a) The Guarantor shall provide the Capital Securities Guarantee Trustee with a list,
in such form as the Capital Securities Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Capital Securities (“List of Holders”) as of such
date, (i) within 10 days after each record date, and (ii) at any other time within 30 days
of receipt by the Guarantor of a written request for a List of Holders as of a date no more
than 10 days before such List of Holders is given to the Capital Securities Guarantee
Trustee; provided that the Guarantor shall not be obligated to provide such List
of Holders at any time the List of Holders does not differ from the most recent List of
Holders given to the Capital Securities Guarantee Trustee by the Guarantor. The Capital
Securities Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.




     (b) The Capital Securities Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.



Section 2.3 Reports by the Capital Securities Guarantee Trustee.




     Within 60 days after March 31 of each year, the Capital Securities Guarantee Trustee shall
provide to the Holders of the Capital Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Capital Securities Guarantee Trustee also shall comply with the requirements of
Section 313(d) of the Trust Indenture Act.



Section 2.4 Periodic Reports to Capital Securities Guarantee Trustee.




     The Guarantor shall provide to the Capital Securities Guarantee Trustee such documents,
reports and information, if any, as required by Section 314 and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.



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Section 2.5 Evidence of Compliance with Conditions Precedent.




     The Guarantor shall provide to the Capital Securities Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Capital Securities Guarantee
that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers’ Certificate.



Section 2.6 Events of Default; Waiver.




     The Holders of a Majority in liquidation amount of the Securities may, by vote, on behalf of
the Holders of all of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.



Section 2.7 Event of Default; Notice.





     (a) The Capital Securities Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities, notices of all Events of Default actually known to a Responsible Officer
of the Capital Securities Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided that the Capital Securities Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of the Capital
Securities Guarantee Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders.




     (b) The Capital Securities Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer of the Capital Securities Guarantee
Trustee shall have received written notice thereof, or unless a Responsible Officer of the
Capital Securities Guarantee Trustee charged with the administration of the Declaration
shall have obtained actual knowledge thereof.



Section 2.8 Conflicting Interests.




     The Declaration and the Indenture shall be deemed to be specifically described in this Capital
Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.



ARTICLE 3.

POWERS, DUTIES AND RIGHTS OF

CAPITAL SECURITIES GUARANTEE TRUSTEE




Section 3.1 Powers and Duties of the Capital Securities Guarantee Trustee.





     (a) This Capital Securities Guarantee shall be held by the Capital Securities Guarantee
Trustee for the benefit of the Holders, and the Capital Securities Guarantee



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Trustee shall not transfer this Capital Securities Guarantee to any Person except a
Holder of Capital Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Capital Securities Guarantee Trustee on acceptance by such Successor Capital
Securities Guarantee Trustee of its appointment to act as Successor Capital Securities
Guarantee Trustee. The right, title and interest of the Capital Securities Guarantee Trustee
shall automatically vest in any Successor Capital Securities Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor Capital Securities
Guarantee Trustee.




     (b) If an Event of Default actually known to a Responsible Officer of the Capital
Securities Guarantee Trustee has occurred and is continuing, the Capital Securities
Guarantee Trustee shall enforce this Capital Securities Guarantee for the benefit of the
Holders in accordance with and subject to the terms of this Capital Securities Guarantee.




     (c) The Capital Securities Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this Capital
Securities Guarantee, and no implied covenants shall be read into this Capital Securities
Guarantee against the Capital Securities Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is actually known
to a Responsible Officer of the Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall exercise such of the rights and powers vested in it by this Capital
Securities Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of his or her
own affairs.




     (d) No provision of this Capital Securities Guarantee shall be construed to relieve the
Capital Securities Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:




     (i) prior to the occurrence of any Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:




     A. the duties and obligations of the Capital Securities Guarantee
Trustee shall be determined solely by the express provisions of this Capital
Securities Guarantee, and the Capital Securities Guarantee Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Capital Securities
Guarantee against the Capital Securities Guarantee Trustee; and




     B. in the absence of bad faith on the part of the Capital Securities
Guarantee Trustee, the Capital Securities Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness



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of the opinions expressed therein, upon any certificates or opinions
furnished to the Capital Securities Guarantee Trustee and conforming to the
requirements of this Capital Securities Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Capital Securities Guarantee Trustee, the
Capital Securities Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Capital Securities Guarantee;




     (ii) the Capital Securities Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Capital Securities
Guarantee Trustee, unless it shall be proved that the Capital Securities Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such judgment
was made;




     (iii) the Capital Securities Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Capital Securities Guarantee Trustee, or exercising
any trust or power conferred upon the Capital Securities Guarantee Trustee under
this Capital Securities Guarantee; and




     (iv) no provision of this Capital Securities Guarantee shall require the
Capital Securities Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Capital Securities Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Capital Securities
Guarantee or indemnity, reasonably satisfactory to the Capital Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.



Section 3.2 Certain Rights of Capital Securities Guarantee Trustee.





     (a) Subject to the provisions of Section 3.1:




     (i) The Capital Securities Guarantee Trustee may rely conclusively, and shall
be fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.




     (ii) Any direction or act of the Guarantor contemplated by this Capital
Securities Guarantee shall be sufficiently evidenced by an Officers’ Certificate.




     (iii) Whenever, in the administration of this Capital Securities Guarantee, the
Capital Securities Guarantee Trustee shall deem it desirable that a



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matter be proved or established before taking, suffering or omitting any action
hereunder, the Capital Securities Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers’ Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.




     (iv) The Capital Securities Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording, refiling or
re-registration thereof).




     (v) The Capital Securities Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Capital Securities Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Capital Securities Guarantee from any court of competent
jurisdiction.




     (vi) The Capital Securities Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Capital Securities
Guarantee at the request or direction of any Holder, unless such Holder shall have
provided to the Capital Securities Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Capital Securities Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses and the expenses of the
Capital Securities Guarantee Trustee’s agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the Capital
Securities Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(iv) shall be taken to relieve the Capital Securities Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Capital Securities Guarantee as provided in Section
3.1(c).




     (vii) The Capital Securities Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Capital Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.




     (viii) The Capital Securities Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the Capital Securities



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Guarantee Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder.




     (ix) Any action taken by the Capital Securities Guarantee Trustee or its agents
hereunder shall bind the Holders of the Capital Securities, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to inquire as
to the authority of the Capital Securities Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Capital Securities
Guarantee, both of which shall be conclusively evidenced by the Capital Securities
Guarantee Trustee’s or its agent’s taking such action.




     (x) Whenever in the administration of this Capital Securities Guarantee the
Capital Securities Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action hereunder,
the Capital Securities Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.




     (xi) The Capital Securities Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Capital Securities Guarantee.




     (b) No provision of this Capital Securities Guarantee shall be deemed to impose any
duty or obligation on the Capital Securities Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Capital Securities Guarantee Trustee shall be construed to be a
duty.



Section 3.3 Not Responsible for Recitals or Issuance of Capital Securities Guarantee.




     The recitals contained in this Capital Securities Guarantee shall be taken as the statements
of the Guarantor, and the Capital Securities Guarantee Trustee does not assume any responsibility
for their correctness. The Capital Securities Guarantee Trustee makes no representation as to the
validity or sufficiency of this Capital Securities Guarantee.



ARTICLE 4.

CAPITAL SECURITIES GUARANTEE TRUSTEE




Section 4.1 Capital Securities Guarantee Trustee; Eligibility.




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     (a) There shall at all times be a Capital Securities Guarantee Trustee which shall:




     (i) not be an Affiliate of the Guarantor; and




     (ii) be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the Securities and Exchange Commission to
act as a trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent report
of condition so published.




     (b) If at any time the Capital Securities Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Capital Securities Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).




     (c) If the Capital Securities Guarantee Trustee has or shall acquire any “conflicting
interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Capital
Securities Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.



Section 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee Trustee.





     (a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an Event of
Default.




     (b) The Capital Securities Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Capital Securities Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor Capital
Securities Guarantee Trustee and delivered to the Guarantor.




     (c) The Capital Securities Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the Capital
Securities Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Capital Securities Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such Successor Capital
Securities Guarantee Trustee and delivered to the Guarantor and the resigning Capital
Securities Guarantee Trustee.




     (d) If no Successor Capital Securities Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after



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delivery of an instrument of removal or resignation, the Capital Securities Guarantee
Trustee resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Capital Securities Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a Successor Capital
Securities Guarantee Trustee.




     (e) No Capital Securities Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Capital Securities Guarantee Trustee.




     (f) Upon termination of this Capital Securities Guarantee or removal or resignation of
the Capital Securities Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall
pay to the Capital Securities Guarantee Trustee all amounts accrued to the date of such
termination, removal or resignation.



ARTICLE 5.

GUARANTEE




Section 5.1 Guarantee.




     The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the Issuer may have or
assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.



Section 5.2 Waiver of Notice and Demand.




     The Guarantor hereby waives notice of acceptance of this Capital Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.



Section 5.3 Obligations Not Affected.




     The obligations, covenants, agreements and duties of the Guarantor under this Capital
Securities Guarantee shall in no way be affected or impaired by reason of the happening from time
to time of any of the following:




     (a) the release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by the Issuer;




     (b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Capital Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Capital Securities



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(other than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension of any
interest payment period on the Notes or any extension of the maturity date of the Notes
permitted by the Indenture);




     (c) any failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the Capital Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;




     (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;




     (e) any invalidity of, or defect or deficiency in, the Capital Securities;




     (f) any failure or omission to receive any regulatory approval or consent required in
connection with the Common Securities or Capital Securities, including the failure to
receive any approval of the Board of Governors of the Federal Reserve System required in
connection with the Capital Securities;




     (g) the settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or




     (h) any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that
the obligations of the Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.



     There shall be no obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing.



Section 5.4 Rights of Holders.





     (a) The Holders of a Majority in liquidation amount of the Securities have the right to
direct the time, method and place of conducting of any proceeding for any remedy available
to the Capital Securities Guarantee Trustee in respect of this Capital Securities Guarantee
or exercising any trust or power conferred upon the Capital Securities Guarantee Trustee
under this Capital Securities Guarantee.




     (b) If the Capital Securities Guarantee Trustee fails to enforce such Capital
Securities Guarantee, any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Capital Securities Guarantee Trustee’s rights
under this Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Capital Securities Guarantee Trustee or any other person or entity.
The Guarantor waives any right or remedy to require that any action be brought first



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against the Issuer or any other person or entity before proceeding directly against the
Guarantor.



Section 5.5 Guarantee of Payment.




     This Capital Securities Guarantee creates a guarantee of payment and not of collection.



Section 5.6
Subrogation.




     The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in
respect of any amounts paid to such Holders by the Guarantor under this Capital Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Capital Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust
for the Holders and to pay over such amount to the Holders.



Section 5.7 Independent Obligations.




     The Guarantor acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Capital Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a)
through (h), inclusive, of Section 5.3 hereof.



ARTICLE 6.

LIMITATION OF TRANSACTIONS; SUBORDINATION




Section 6.1 Limitation of Transactions.




     So long as any Capital Securities remain outstanding, if there shall have occurred and be
continuing an Event of Default under this Capital Securities Guarantee, an Event of Default or a
Nonpayment under the Declaration or during an Extended Interest Payment Period (as defined in the
Indenture), then (a) the Guarantor shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of its common stock in
connection with the satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor’s capital stock or the exchange or
conversion of one class or series of the Guarantor’s capital stock for another class or series of
the Guarantor’s capital stock, or (iii) the purchase of fractional interests in shares of the
Guarantor’s capital stock pursuant to an acquisition or the conversion or exchange provisions of
such capital stock of the Guarantor or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing or (b) the Guarantor shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Guarantor which rank pari passu with or junior to the Notes.



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Section 6.2 Ranking.




     This Capital Securities Guarantee will constitute an unsecured obligation of the Guarantor and
will rank (i) subordinate and junior in right of payment to all other liabilities, including
contingent liabilities, of the Guarantor, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred securities (including trust preferred
securities) or preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor’s common stock.



ARTICLE 7.

TERMINATION




Section 7.1 Termination.




     This Capital Securities Guarantee shall terminate upon (i) full payment of the Redemption
Price of all Capital Securities, (ii) upon the distribution of the Notes to the Holders of all of
the Capital Securities, or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation or dissolution of the Issuer. Notwithstanding the foregoing, this
Capital Securities Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the Capital Securities or
under this Capital Securities Guarantee.



ARTICLE 8.

INDEMNIFICATION




Section 8.1 Exculpation.





     (a) No Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Capital Securities Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person’s negligence or willful misconduct with respect to such acts or
omissions.




     (b) An Indemnified Person shall be fully protected in relying in good faith upon the
records of the Guarantor and upon such information, opinions, reports or statements
presented to the Guarantor by any Person as to matters the Indemnified Person reasonably
believes are within such other Person’s professional or expert competence and who has been
selected with reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Capital Securities might properly be paid.



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Section 8.2 Indemnification.




     The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified
Person harmless against, any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this
Capital Securities Guarantee.



ARTICLE 9.

MISCELLANEOUS




Section 9.1 Successors and Assigns.




     All guarantees and agreements contained in this Capital Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to
the benefit of the Holders of the Capital Securities then outstanding.



Section 9.2 Amendments.




     Except with respect to any changes that do not adversely affect the rights of Holders (in
which case no consent of Holders will be required), this Capital Securities Guarantee may only be
amended with the prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages are determined) of
all the outstanding Capital Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of holders of the Securities apply to the giving of such approval.



Section 9.3 Notices.




     All notices provided for in this Capital Securities Guarantee shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail,
as follows:




     (a) If given to the Capital Securities Guarantee Trustee, at the Capital Securities
Guarantee Trustee’s mailing address set forth below (or such other address as the Capital
Securities Guarantee Trustee may give notice of to the Holders):


The Bank of New York Mellon Trust Company, N.A.

2 North LaSalle Street, Suite 1020

Chicago, IL 60602

Attention: Global Corporate Trust

Telecopy: 312-827-8542




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With a copy to:



Drinker Biddle & Reath LLP

191 North Wacker Drive, Suite 3700

Chicago, IL 60606

Attention: Steven M. Wagner

Telecopy: 312-569-3000





     (b) If given to the Guarantor, at the Guarantor’s mailing address set forth below (or
such other address as the Guarantor may give notice of to the Holders of the Capital
Securities):


American Financial Group, Inc.

One East Fourth Street

Cincinnati, Ohio 45202

Attention: Corporate Secretary

Facsimile: (513) ___-____





     (c) If given to any Holder of Capital Securities, at the address set forth on the books
and records of the Issuer.



     All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.



Section 9.4 Benefit.




     This Capital Securities Guarantee is solely for the benefit of the Holders of the Capital
Securities and, subject to Section 3.1(a), is not separately transferable from the Capital
Securities.



Section 9.5 Governing Law.




     THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.



[Signature page follows.]




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     THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year first above written.



	 	 	 	 	 
	 	AMERICAN FINANCIAL GROUP, INC.,
as

Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Capital Securities

Guarantee Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Agent 	 
	 




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