Exhibit 4.26




 





 


 


GUARANTEE AGREEMENT


 


 


between


 


 


AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY,

as
Guarantor,


 


 


and


 


 


JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Guarantee Trustee


 


 


Dated as
of August 4, 2005


 


 


AMERICAN EQUITY CAPITAL TRUST X


 




 





 





















 


GUARANTEE AGREEMENT,
dated as of August 4, 2005, executed and delivered by AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY, an Iowa corporation (the “Guarantor”)
having its principal office at 5000 Westown Parkway, Suite 440, West Des
Moines, IA 50266, and JPMORGAN CHASE BANK, National Association, a national
banking association, as trustee (in such capacity, the “Guarantee Trustee”),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of AMERICAN EQUITY CAPITAL TRUST X, a
Delaware statutory trust (the “Issuer”).


 


W
I T N E S S E T H :


 


WHEREAS, pursuant to an
Amended and Restated Trust Agreement, dated as of the date hereof (the “Trust Agreement”),
among the Guarantor, as Depositor, the Property Trustee, the Delaware Trustee
and the Administrative Trustees named therein and the holders from time to time
of the Preferred Securities (as hereinafter defined), the Issuer is issuing
Twenty Million Dollars ($20,000,000) aggregate Liquidation Amount (as defined
in the Trust Agreement) of its Floating Rate Preferred Securities (Liquidation
Amount $1,000 per preferred security) (the “Preferred Securities”)
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in the Trust Agreement;


 


WHEREAS, the Preferred
Securities will be issued by the Issuer and the proceeds thereof, together with
the proceeds from the issuance of the Issuer’s Common Securities (as defined
below), will be used to purchase the Notes (as defined in the Trust Agreement)
of the Guarantor; and


 


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


 


NOW, THEREFORE, in
consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement to provide as follows for the
benefit of the Holders from time to time of the Preferred Securities:


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I

  	
  Interpretation and
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.2.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  List of
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.2.

  	
  Periodic
  Reports to the Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.3.

  	
  Event
  of Default; Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.4.

  	
  Event
  of Default; Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  Powers, Duties and Rights of
  the Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Powers
  and Duties of the Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.2.

  	
  Certain
  Rights of the Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
  Compensation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.4.

  	
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.5.

  	
  Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Guarantee
  Trustee; Eligibility

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
  Appointment,
  Removal and Resignation of the Guarantee Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.2.

  	
  Waiver
  of Notice and Demand

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.3.

  	
  Obligations
  Not Affected

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.4.

  	
  Rights
  of Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.5.

  	
  Guarantee
  of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.6.

  	
  Subrogation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.7.

  	
  Independent
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.8.

  	
  Enforcement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  Covenants and Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Dividends,
  Distributions and Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.2.

  	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.3.

  	
  Pari
  Passu Guarantees

  	
   

  



 


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  ARTICLE VII

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.2.

  	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.3.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.4.

  	
  Benefit

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.5.

  	
  Governing
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.6.

  	
  Submission
  to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.7.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.8.

  	
  Severability

  	
   

  



 


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ARTICLE I


 


INTERPRETATION AND DEFINITIONS


 


SECTION 1.1.  Interpretation.


 


In this Guarantee
Agreement, unless the context otherwise requires:


 


(a)                                  capitalized
terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.2;


 


(b)                                 the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”;


 


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


 


(d)                                 all
references in this Guarantee Agreement to Articles and Sections are to Articles
and Sections of this Guarantee Agreement unless otherwise specified;


 


(e)                                  the
words “hereby”, “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Guarantee Agreement as a whole and not to any particular
Article, Section or other subdivision;


 


(f)                                    a
reference to the singular includes the plural and vice versa; and


 


(g)                                 the
masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.


 


SECTION 1.2.  Definitions.


 


As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings:


 


“Affiliate”  of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person; provided,  that
the Issuer shall not be deemed to be an Affiliate of the Guarantor.  For the purposes of this definition, “control” when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.


 


“Beneficiaries” means any Person to whom
the Issuer is or hereafter becomes indebted or liable.


 


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“Board of Directors” means
either the board of directors of the Guarantor or any duly authorized committee
of that board.


 


“Common Securities” means
the securities representing common undivided beneficial interests in the assets
of the Issuer.


 


“Debt” means
with respect to any Person, whether recourse is to all or a portion of the
assets of such Person, whether currently existing or hereafter incurred, and
whether or not contingent and without duplication, (i) every obligation of
such Person for money borrowed; (ii) every obligation of such Person
evidenced by bonds, debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers’ acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable arising in the ordinary course of business); (v) every
capital lease obligation of such Person; (vi) all indebtedness of such
Person, whether incurred on or prior to the date of this Guarantee Agreement or
thereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options,
swaps and similar arrangements; (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor or otherwise; and (viii) any renewals, extensions, refundings,
amendments or modifications of any obligation of the type referred to in
clauses (i) through (vii).


 


“Event of Default” means a default by the Guarantor on any
of its payment or other obligations under this Guarantee Agreement; provided, that
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default from the Guarantee Trustee and
shall not have cured such default within thirty (30) days after receipt of such
notice.


 


“Guarantee Payments” means
the following payments or distributions, without duplication, with respect to
the Preferred Securities, to the extent not paid or made by or on behalf of the
Issuer: (i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) required to be paid on the Preferred Securities, to the extent
the Issuer shall have funds on hand available therefor at such time, (ii) the
Redemption Price with respect to any Preferred Securities to the extent the
Issuer shall have funds on hand available therefor at such time, and (iii) upon
a voluntary or involuntary termination, winding up or liquidation of the
Issuer, unless Notes are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount of $1,000 per Preferred Security plus
accumulated and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent that the Issuer shall have funds available therefor at
such time and (b) the amount of assets of the Issuer remaining available
for distribution to Holders in liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer in accordance with applicable law (in
either case, the “Liquidation Distribution”).


 


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“Guarantee Trustee”  means
JPMorgan Chase Bank, National Association, until a Successor Guarantee Trustee,
as defined below, has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.


 


“Guarantor”  means American Equity
Investment Life Insurance Company and each of its successors and assigns.


 


“Issuer” has the meaning set
forth  herein above.


 


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


 


“Indenture”  means
the Junior Subordinated Indenture, dated as of the date hereof, as supplemented
and amended, between the Guarantor and JPMorgan Chase Bank, National
Association, as trustee.


 


“List of Holders”  has
the meaning specified in Section 2.1.


 


“Majority in
Liquidation Amount of the Preferred Securities”  means a vote by the Holder(s), voting separately as
a class, of more than fifty percent (50%) of the aggregate Liquidation Amount
of all then outstanding Preferred Securities issued by the Issuer.


 


“Obligations” means any costs, expenses or
liabilities (but not including liabilities related to taxes) of the Issuer,
other than obligations of the Issuer to pay to holders of any Trust Securities
the amounts due such holders pursuant to the terms of the Trust Securities.


 


“Officers’
Certificate”  means,
with respect to any Person, a certificate signed by the Chief Executive
Officer, Chief Financial Officer, President or a Vice President of such Person,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of such Person, and delivered to the Guarantee Trustee.  Any Officers’ Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement (other than the certificate provided pursuant to Section 2.2)
shall include:


 


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


 


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


 


(c)                                  a
statement that each 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


 


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(d)                                 a
statement as to whether, in the opinion of each 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, government or any agency or political
subdivision thereof or any other entity of whatever nature.


 


“Preferred Securities” has the meaning set
forth in the first recital hereof.


 


“Responsible Officer”  means,
with respect to the Guarantee Trustee, the officer in the Worldwide Securities
Services department of the Trustee having direct responsibility for the
administration of this Guarantee Agreement.


 


“Senior Debt”  means
the principal of and any premium, if any, and interest on (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Guarantor whether or not such claim for
post-petition interest is allowed in such proceeding) all Debt of the
Guarantor, whether incurred on or prior to the date of the Indenture or
thereafter incurred, unless it is provided
in the instrument creating or evidencing the same or pursuant to which the same
is outstanding, that such obligations are not superior in right of payment to
the Preferred Securities; provided, that if the Guarantor is
subject to the regulation and supervision of an insurance regulatory
authority,  the Guarantor
shall have received the approval
of such appropriate insurance regulatory authority  prior to issuing any such obligation; and provided, further, that Senior Debt shall
not include any other debt securities and guarantees in respect of such debt
securities issued to any trust other than the Trust (or a trustee of any such
trust), partnership or other entity affiliated with the Guarantor that is a
financing vehicle of the Guarantor (a “financing entity”) in connection with
the issuance by such financing entity of equity securities or other securities
that are treated as equity capital for regulatory capital purposes guaranteed
by the Guarantor pursuant to an instrument that ranks pari passu with or junior in right of
payment to the Indenture, including, without limitation, securities issued by
American Equity Capital Trust I, American Equity Capital Trust II, American
Equity Capital Trust III, American Equity Capital Trust IV, American Equity
Capital Trust V, American Equity Capital Trust VI, American Equity Capital
Trust VII, American Equity Capital Trust VIII and American Equity Capital Trust
IX.


 


“Trust Indenture Act” means the Trust
Indenture Act of 1939, as amended and as in effect on the date of this
Guarantee Agreement.


 


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


 


Capitalized or otherwise
defined terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date hereof.


 


5





















 


ARTICLE II


 


REPORTS


 


SECTION 2.1.  List of Holders.


 


The Guarantor shall
furnish or cause to be furnished to the Guarantee Trustee at such times as the
Guarantee Trustee may request in writing, within thirty (30) days after the
receipt by the Guarantor of any such request, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders (the “List
of Holders”) as of a date not more than fifteen (15) days prior to
the time such list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and is not identical to a
previously supplied list of Holders or has not otherwise been received by the
Guarantee Trustee in its capacity as such. 
The Guarantee Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.


 


SECTION 2.2.  Periodic Reports to the
Guarantee Trustee.


 


The Guarantor shall
deliver to the Guarantee Trustee, within one hundred and twenty (120) days
after the end of each fiscal year of the Guarantor ending after the date of
this Guarantee Agreement, an Officers’ Certificate covering the preceding
fiscal year, stating whether or not to the knowledge of the signers thereof the
Guarantor is in default in the performance or observance of any of the terms or
provisions or any of the conditions of this Guarantee Agreement (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Guarantor shall be in default thereof, specifying all such defaults and the
nature and status thereof of which they have knowledge.  The delivery requirements of this Section 2.2
may be satisfied by compliance with Section 8.16(a) of the Trust
Agreement.


 


SECTION 2.3.  Event of Default; Waiver.


 


The Holders of a Majority
in Liquidation Amount of the Preferred Securities may,  on behalf of the Holders, 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 Guarantee Agreement, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent therefrom.


 


SECTION 2.4.  Event of Default; Notice.


 


(a)                                  The
Guarantee Trustee shall, within ninety (90) days after the occurrence of a
default, transmit to the Holders notices of all defaults actually known to the
Guarantee Trustee, unless such defaults have been cured or waived before the
giving of such notice.  For the purpose
of this Section 2.4, the term “default” means any event that is, or after notice or lapse
of time or both would become, an Event of Default.


 


(b)                                 The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer


 


6





















 


charged
with the administration of this Guarantee Agreement shall have obtained written
notice, of such Event of Default from the Guarantor or a Holder.


 


ARTICLE III


 


POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE


 


SECTION 3.1.  Powers and Duties of the
Guarantee Trustee.


 


(a)                                  This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising its rights pursuant to Section 5.4(d) or
to a Successor Guarantee Trustee upon acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee.  The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee,
upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and succession of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.


 


(b)                                 The
rights, immunities, duties and responsibilities of the Guarantee Trustee shall
be as provided by this Guarantee Agreement and there shall be no other duties
or obligations, express or implied, of the Guarantee Trustee.  Notwithstanding the foregoing, no provisions
of this Guarantee Agreement shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.  Whether or
not herein expressly so provided, every provision of this Guarantee Agreement
relating to the conduct or affecting the liability of or affording protection
to the Guarantee Trustee shall be subject to the provisions of this Section 3.1.  To the extent that, at law or in equity, the
Guarantee Trustee has duties and liabilities relating to the Guarantor or the
Holders, the Guarantee Trustee shall not be liable to any Holder for the
Guarantee Trustee’s good faith reliance on the provisions of this Guarantee
Agreement.  The provisions of this
Guarantee Agreement, to the extent that they restrict the duties and
liabilities of the Guarantee Trustee otherwise existing at law or in equity,
are agreed by the Guarantor and the Holders to replace such other duties and
liabilities of the Guarantee Trustee.


 


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


 


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


 


(ii)                                  the
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


 


7





















 


of not less than a
Majority in Liquidation Amount of the Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement.


 


SECTION 3.2.  Certain Rights of the Guarantee
Trustee.


 


(a)                                  Subject
to the provisions of Section 3.1:


 


(i)                                     the
Guarantee Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting in good faith and in accordance with the terms hereof
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 reasonably 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 Guarantee Agreement
shall be sufficiently evidenced by an Officers’ Certificate unless otherwise
prescribed herein;


 


(iii)                               the
Guarantee Trustee may consult with counsel, and the advice of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by it hereunder in good faith and
in reliance thereon and in accordance with such advice.  Such counsel may be counsel to the Guarantee
Trustee, the Guarantor or any of its Affiliates and may be one of its
employees.  The Guarantee Trustee shall
have the right at any time to seek instructions concerning the administration
of this Guarantee Agreement from any court of competent jurisdiction;


 


(iv)                              the
Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the Guarantee Trustee
reasonable security or indemnity against the costs, expenses (including
reasonable attorneys’ fees and expenses) 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 Guarantee Trustee; provided, that,
nothing contained in this Section 3.2(a)(iv) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Guarantee
Agreement; provided, further,
that nothing contained in this Section 3.2(a)(iv) shall
prevent the Guarantee Trustee from exercising its rights under Section 4.2
hereof.;


 


(v)                                 the
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
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and if the
Guarantee Trustee shall determine to make such inquiry or investigation, it


 


8





















 


shall be entitled
to examine the books, records and premises of the Guarantor, personally or by
agent or attorney;


 


(vi)                              the
Guarantee Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through its agents, attorneys,
custodians or nominees and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney, custodian
or nominee appointed with due care by it hereunder;


 


(vii)                           whenever
in the administration of this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy
or right hereunder, the Guarantee Trustee (A) may request instructions
from the Holders of a Majority in Liquidation Amount of the Preferred
Securities, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (C) shall be
protected in acting in accordance with such instructions;


 


(viii)                        except as
otherwise expressly provided by this Guarantee Agreement, the Guarantee Trustee
shall not be under any obligation to take any action that is discretionary
under the provisions of this Guarantee Agreement; and


 


(ix)                                whenever,
in the administration of this Guarantee Agreement, the Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers’ Certificate which,
upon receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.


 


(b)                                 No
provision of this Guarantee Agreement shall be deemed to impose any duty or
obligation on the 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 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 Guarantee Trustee shall be construed to be a duty to act in accordance with
such power and authority.


 


SECTION 3.3.  Compensation.


 


The Guarantor agrees to
pay to the Guarantee Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provisions of law in regard to the compensation of a trustee of an express
trust) and to reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances (including the reasonable fees and
expenses of its attorneys and agents) incurred or made by the Guarantee Trustee
in accordance with any provisions of this Guarantee Agreement.


 


9





















 


SECTION 3.4.  Indemnity.


 


The Guarantor agrees to
indemnify and hold harmless the Guarantee Trustee and any of its Affiliates and
any of their officers, directors, shareholders, employees, representatives or
agents from and against any loss, damage, liability, tax (other than income,
franchise or other taxes imposed on amounts paid pursuant to Section 3.3),
penalty, expense or claim of any kind or nature whatsoever incurred without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.  The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a
result of any amount due to it under this Guarantee Agreement.  This indemnity shall survive the termination
of this Agreement or the resignation or removal of the Guarantee Trustee.


 


In no event shall the
Guarantee Trustee be liable for any indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including, but not limited
to, lost profits, even if the Guarantee Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.


 


In no event shall the
Guarantee Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond its control, including,
but not limited to, acts of God, flood, war (declared or undeclared),
terrorism, fire, riot, embargo, government action, including any laws,
ordinances, regulations, governmental action or the like which delay, restrict
or prohibit the providing of the services contemplated by this Guarantee
Agreement.


 


SECTION 3.5.  Securities.


 


The Guarantee Trustee or
any other agent of the Guarantee Trustee, in its individual or any other
capacity, may become the owner or pledgee of Common or Preferred Securities.


 


ARTICLE IV


 


GUARANTEE TRUSTEE


 


SECTION 4.1.  Guarantee Trustee;
Eligibility.


 


(a)                                  There
shall at all times be a 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
or of any State thereof, authorized to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million dollars ($50,000,000),
subject to supervision or examination by Federal or State authority and having
an office within the United States. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of such
supervising or examining authority, then, for the purposes of this Section 4.1,
the combined capital and surplus of


 


10





















 


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


 


(c)                                  If
the Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee
Trustee shall either eliminate such interest or resign in the manner and with
the effect set out in Section 4.2(c).


 


SECTION 4.2.  Appointment, Removal and
Resignation of the Guarantee Trustee.


 


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


 


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


 


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


 


(d)                                 If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within thirty (30) days
after delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee.  Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.


 


ARTICLE V


 


GUARANTEE


 


SECTION 5.1.  Guarantee.


 


(a)                                  The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by or
on behalf of the Issuer), as and when due, regardless of any defense (except
for the defense of payment by the Issuer), right of set-off or counterclaim
which 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


 


11





















 


Holders.  The Guarantor shall give prompt written
notice to the Guarantee Trustee in the event it makes any direct payment to the
Holders hereunder.


 


(b)                                 The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer,
and, in the event any such Obligation is not so assumed, subject to the terms
and conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and
all Obligations to such Beneficiaries. 
This Guarantee is intended to be for the Beneficiaries who have received
notice hereof.


 


SECTION 5.2.  Waiver of Notice and
Demand.


 


The Guarantor hereby
waives notice of acceptance of the Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, 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 Guarantee
Agreement 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 Preferred 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 (other than an extension of time for payment of Distributions
that results from the extension of any interest payment period on the Notes as
provided in the Indenture), Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or
in connection with, the Preferred Securities;


 


(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 Preferred 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 Preferred Securities;


 


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


 


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(g)                                 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 the consent of, the
Guarantor with respect to the happening of any of the foregoing.


 


SECTION 5.4.  Rights of Holders.


 


The Guarantor expressly
acknowledges that:  (a) this
Guarantee Agreement will be deposited with the Guarantee Trustee to be held for
the benefit of the Holders; (b) the Guarantee Trustee has the right to
enforce this Guarantee Agreement on behalf of the Holders; (c) the Holders
of a Majority in Liquidation Amount of the Preferred Securities have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (d) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against the
Guarantee Trustee, the Issuer or any other Person.


 


SECTION 5.5.  Guarantee of Payment.


 


This Guarantee Agreement
creates a guarantee of payment and not of collection.  This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Notes to Holders as provided in the Trust Agreement.


 


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 the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment by the Issuer pursuant to Section 5.1;
provided,  that,
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement.  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 Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3.


 


13





















 


SECTION 5.8.  Enforcement.


 


A Beneficiary may enforce the Obligations of the
Guarantor contained in Section 5.1(b) directly against the
Guarantor, and the Guarantor waives any right or remedy to require that any
action be brought against the Issuer or any other person or entity before
proceeding against the Guarantor.


 


ARTICLE VI


 


COVENANTS AND SUBORDINATION


 


SECTION 6.1.  Dividends, Distributions
and Payments.


 


So long as any Preferred
Securities remain outstanding, if there shall have occurred and be continuing
an Event of Default or the Guarantor shall have entered into an Extension
Period as provided for in the Indenture and such period, or any extension
thereof, shall have commenced and be continuing, then the Guarantor may not (a) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make
liquidation payment with respect to, any of the Guarantor’s capital stock or (b) make
any payment of principal of or any interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Guarantor that rank pari passu
in all respects with or junior in interest to the Notes (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Guarantor
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one of more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Guarantor (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the occurrence of such Event of Default or the applicable Extension
Period, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor’s capital stock (or any capital stock of a subsidiary
of the Guarantor) for any class or series of the Guarantor’s capital stock or
any class of series of the Guarantor’s indebtedness for any class or series of
the Guarantor’s capital stock, (iii) the purchase of fractional interests
in shares of the Guarantor’s capital stock pursuant to the conversions or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) any declaration of a dividend in connection with any
rights plan, the issuance of rights, stock or other property under any rights
plan or the redemption or repurchase of rights pursuant thereto, or (v) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari
passu with or junior to such stock).


 


SECTION 6.2.  Subordination.


 


The obligations of the
Guarantor under this Guarantee Agreement will constitute unsecured obligations
of the Guarantor and will rank subordinate and junior in right of payment to
all Senior Debt of the Guarantor.


 


14





















 


SECTION 6.3.  Pari Passu Guarantees.


 


(a)                                  The
obligations of the Guarantor under this Guarantee Agreement shall rank pari passu
with the obligations of the Guarantor under any similar guarantee agreements
issued by the Guarantor with respect to preferred securities (if any) similar
to the Preferred Securities, issued by trusts other than the Issuer established
or to be established by the Guarantor (if any), in each case similar to the
Issuer American Equity Capital
Trust I, American Equity Capital Trust II, American Equity Capital Trust III ,
American Equity Capital Trust IV, American Equity Capital Trust V, American
Equity Capital Trust VI, American Equity Capital Trust VII, American Equity
Capital Trust VIII and American Equity Capital Trust IX.


 


(b)                                 The
right of the Guarantor to participate in any distribution of assets of any of
its subsidiaries upon any such subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary,
except to the extent the Guarantor may itself be recognized as a creditor of
that subsidiary.  Accordingly, the
Guarantor’s obligations under this Guarantee will be effectively subordinated
to all existing and future liabilities of the Guarantor’s subsidiaries, and
claimants should look only to the assets of the Guarantor for payments
thereunder. This Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Guarantor, including Senior Debt of the
Guarantor, under any indenture or agreement that the Guarantor may enter into
in the future or otherwise.


 


ARTICLE VII


 


TERMINATION


 


SECTION 7.1.  Termination.


 


This Guarantee Agreement
shall terminate and be of no further force and effect upon (a) full
payment of the Redemption Price of all Preferred Securities, (b) the
distribution of Notes to the Holders in exchange for all of the Preferred
Securities or (c) full payment of the amounts payable in accordance with
the Trust Agreement upon liquidation of the Issuer.  Notwithstanding the foregoing, this Guarantee
Agreement 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 with
respect to Preferred Securities or this Guarantee Agreement.  The obligations of the Guarantor under Sections
3.3 and 3.4 shall survive any such termination or the resignation
and removal of the Guarantee Trustee.


 


ARTICLE VIII


 


MISCELLANEOUS


 


SECTION 8.1.  Successors and Assigns.


 


All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.  Except in connection with a


 


15





















 


consolidation,
merger or sale involving the Guarantor that is permitted under Article VIII
of the Indenture and pursuant to which the successor or assignee agrees in
writing to perform the Guarantor’s obligations hereunder, the Guarantor shall
not assign its rights or delegate its obligations hereunder without the prior
approval of the Holders of a Majority in Liquidation Amount of the Preferred
Securities.


 


SECTION 8.2.  Amendments.


 


Except with respect to
any changes that do not adversely affect the rights of the Holders in any
material respect (in which case no consent of the Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Guarantor, the Guarantee Trustee and the Holders of not less than a Majority in
Liquidation Amount of the Preferred Securities. 
The provisions of Article VI of the Trust Agreement concerning
meetings or consents of the Holders shall apply to the giving of such approval.


 


SECTION 8.3.  Notices.


 


Any notice, request or
other communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered, telecopied
or mailed by first class mail as follows:


 


(a)                                  if
given to the Guarantor, to the address or facsimile number set forth below or
such other address, facsimile number or to the attention of such other Person
as the Guarantor may give notice to the Guarantee Trustee and the Holders:


 


American
Equity Investment Life Insurance Company


5000 Westown
Parkway, Suite 440


West Des
Moines, IA 50266


Facsimile No.:
(515) 221-0744


Attention:
Wendy Carlson


 


(b)                                 if
given to the Issuer, at the Issuer’s address or facsimile number set forth
below or such other address, facsimile number or to the attention of such other
Person as the Issuer may give notice to the Guarantee Trustee and the Holders:


 


American
Equity Capital Trust X


5000 Westown
Parkway, Suite 440


West Des
Moines, IA 50266


Facsimile No.:
(515) 221-0744


Attention:
Wendy Carlson


 


(c)                                  if
given to the Guarantee Trustee, at the address or facsimile number set forth
below or such other address, facsimile number or to the attention of such other
Person as the Guarantee Trustee may give notice to the Guarantor and the
Holders:


 


16





















 


JPMorgan Chase
Bank, National Association


600 Travis, 50th
Floor


Houston, Texas
77002


Facsimile No.:
713-216-2101


Attention:
International Trust Services -


   American Equity Capital Trust X


 


(d)                                 if
given to any Holder, at the address set forth on the books and records of the
Issuer.


 


All notices hereunder
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 8.4.  Benefit.


 


This Guarantee Agreement is
solely for the benefit of the Holders and is not separately transferable from
the Preferred Securities.


 


SECTION 8.5.  Governing Law.


 


This Guarantee Agreement and the
rights and obligations of each party hereto, shall be construed and enforced in
accordance with and governed by the laws of the State of New York without
reference to its conflict of laws provisions (other than Section 5-1401 of
the General Obligations Law).


 


SECTION 8.6.  Submission
to Jurisdiction.


 


ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY
HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE
BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE
COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY
EXECUTION AND DELIVERY OF THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR
LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE
AGREEMENT.


 


SECTION 8.7.  Counterparts.


 


This instrument may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.


 


17





















 


SECTION 8.8.  Severability.


 


In the event that one or
more of the provisions contained in this Guarantee Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Guarantee, but this Guarantee shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.


 


[Signature pages follow.]


 


18





















 


IN WITNESS WHEREOF, the
undersigned have executed this Guarantee Agreement as of the date first above
written.


 


	
   

  	
  AMERICAN
  EQUITY INVESTMENT LIFE HOLDING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra J. Richardson

  	
   

  
	
   

  	
      Name: Debra J. Richardson

  
	
   

  	
      Title: Secretary & Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

  not in its individual capacity, but solely as

  Guarantee Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shelly A. Sterling

  	
   

  
	
   

  	
      Name: Shelly A.
  Sterling

  
	
   

  	
      Title: Vice
  President