Exhibit
4.32


 


 


 


 


 


AMENDED AND RESTATED


GUARANTEE AGREEMENT


AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY


Dated as of July 7, 2006


 


 


 


 


 


 















 


TABLE OF
CONTENTS


 


Page


ARTICLE I

DEFINITIONS AND INTERPRETATION


	
  SECTION 1.1.

  	
  Definitions and Interpretation

  	
  1

  
	
  ARTICLE II

  
	
  POWERS,
  DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

  
	
  SECTION 2.1.

  	
  Powers and Duties of
  the Guarantee Trustee

  	
  4

  
	
  SECTION 2.2.

  	
  Certain Rights of the
  Guarantee Trustee

  	
  5

  
	
  SECTION 2.3.

  	
  Not Responsible for
  Recitals or Issuance of Guarantee

  	
  7

  
	
  SECTION 2.4.

  	
  Events of Default;
  Waiver

  	
  8

  
	
  SECTION 2.5.

  	
  Events of Default;
  Notice

  	
  8

  
	
  ARTICLE III

  
	
  THE
  GUARANTEE TRUSTEE

  
	
  SECTION 3.1.

  	
  The Guarantee Trustee;
  Eligibility

  	
  8

  
	
  SECTION 3.2.

  	
  Appointment, Removal
  and Resignation of the Guarantee Trustee

  	
  9

  
	
  ARTICLE IV

  
	
  GUARANTEE

  
	
  SECTION 4.1.

  	
  Guarantee

  	
  10

  
	
  SECTION 4.2.

  	
  Waiver of Notice and
  Demand

  	
  10

  
	
  SECTION 4.3.

  	
  Obligations Not
  Affected

  	
  10

  
	
  SECTION 4.4.

  	
  Rights of Holders

  	
  11

  
	
  SECTION 4.5.

  	
  Guarantee of Payment

  	
  12

  
	
  SECTION 4.6.

  	
  Subrogation

  	
  12

  
	
  SECTION 4.7.

  	
  Independent Obligations

  	
  12

  
	
  SECTION 4.8.

  	
  Enforcement

  	
  12

  
	
  ARTICLE V

  
	
  LIMITATION
  OF TRANSACTIONS; SUBORDINATION

  
	
  SECTION 5.1.

  	
  Limitation of
  Transactions

  	
  12

  
	
  SECTION 5.2.

  	
  Ranking

  	
  13

  
	
  ARTICLE VI

  
	
  TERMINATION

  
	
  SECTION 6.1.

  	
  Termination

  	
  14

  



 



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TABLE OF CONTENTS

(continued)


	
  ARTICLE VII

  
	
  INDEMNIFICATION

  
	
  SECTION 7.1.

  	
  Exculpation

  	
  14

  
	
  SECTION 7.2.

  	
  Indemnification

  	
  14

  
	
  SECTION 7.3.

  	
  Compensation;
  Reimbursement of Expenses

  	
  15

  
	
  ARTICLE VIII

  
	
  MISCELLANEOUS

  
	
  SECTION 8.1.

  	
  Successors and Assigns

  	
  16

  
	
  SECTION 8.2.

  	
  Amendments

  	
  16

  
	
  SECTION 8.3.

  	
  Notices

  	
  16

  
	
  SECTION 8.4.

  	
  Benefit

  	
  17

  
	
  SECTION 8.5.

  	
  Governing Law

  	
  17

  
	
  SECTION 8.6.

  	
  Counterparts

  	
  17

  



 



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AMENDED AND RESTATED GUARANTEE
AGREEMENT


This AMENDED AND RESTATED GUARANTEE AGREEMENT (the “Guarantee”),
dated as of July 7, 2006, is executed and delivered by American Equity
Investment Life Holding Company, an Iowa corporation (the “Guarantor”), and Wells
Fargo Delaware Trust Company, a Delaware limited purpose trust company with its
principal place of business in the State of Delaware, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of American Equity Capital Trust
XII, a Delaware statutory trust (the “Issuer”).


WHEREAS, pursuant to an Amended and Restated
Declaration of Trust dated as of February 15, 2006, among the trustees named
therein of the Issuer, American Equity Investment Life Holding Company, as
sponsor, and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer issued on the date thereof securities,
having an aggregate liquidation amount of up to $30,000,000, designated the
Capital Securities;


WHEREAS, in connection with such issuance, the Parties
hereto entered into that certain Guarantee dated February 15, 2006 for the
benefit of the Holders (as defined therein) (the “Original Guarantee”); and


WHEREAS, the Guarantor has authorized the execution
and delivery of a Second Amended and Restated Declaration of Trust (the “Declaration”),
dated as of July 7, 2006 to increase the outstanding Capital Securities to
$40,000,000.


NOW, THEREFORE, in consideration of the purchase by
each Holder of the Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders of Capital Securities having an aggregate
liquidation of $40,000,000.  This
Guarantee amends and restates the original Guarantee in its entirety as
follows:


ARTICLE I

DEFINITIONS AND INTERPRETATION


SECTION 1.1.  Definitions
and Interpretation.


In this Guarantee, unless the context otherwise requires:


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


(b)           a term defined anywhere in this
Guarantee has the same meaning throughout;


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









 



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


(e)           terms defined in the Declaration as
of the date of execution of this Guarantee have the same meanings when used in
this Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires; and


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


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


“Corporate Trust Office” means the office of the
Guarantee Trustee at which the corporate trust business of the Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Guarantee is located at 919 Market Street, Suite 700,
Wilmington, DE 19801.


“Covered Person” means any Holder of Capital
Securities.


“Debentures” means the junior subordinated debentures
of American Equity Investment Life Holding Company, designated the Junior
Subordinated Debt Securities due April 7, 2036, held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.


“Event of Default” has the meaning set forth in
Section 2.4.


“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) which are required to be paid on such Capital
Securities to the extent the Issuer has funds available in the Property Account
(as defined in the Declaration) therefor at such time, (ii) the Redemption
Price (as defined in the Indenture) to the extent the Issuer has funds
available in the Property Account therefor at such time, with respect to any
Capital Securities called for redemption by the Issuer, (iii) the Special
Redemption Price (as defined in the Indenture) to the extent the Issuer has
funds available in the Property Account therefor at such time, with respect to
Capital Securities called for redemption upon the occurrence of a Special Event
(as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than
in connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor 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 has funds available in the Property Account 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 as required by applicable law (in either case, the “Liquidation
Distribution”).


“Guarantee Trustee” means Wells Fargo Delaware Trust
Company, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.



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“Holder” means 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 Guarantee Trustee
(including in its individual capacity), any Affiliate of the Guarantee Trustee,
or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Guarantee Trustee.


“Indenture” means the Amended and Restated Indenture,
dated as of July 7, 2006, between the Guarantor and Wells Fargo Bank, National
Association, not in its individual capacity but solely as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued to the Institutional Trustee of the Issuer.


“Liquidation Distribution” has the meaning set forth
in the definition of “Guarantee Payments” herein.


“Majority in liquidation amount of the Capital
Securities” means Holder(s) of outstanding Capital Securities, voting together
as a class, but separately from the holders of Common Securities, of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to, but excluding, the date upon which the voting percentages are
determined) of all Capital Securities then outstanding.


“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.


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


(a)           a statement that each officer signing
the Officer’s 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 Officer’s Certificate;


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


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



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“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
Guarantee Trustee, any officer within the Corporate Trust Office of the
Guarantee Trustee with direct responsibility for the administration of any
matters relating to this Guarantee, including any vice president, any assistant
vice president, any secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or other officer of the Corporate Trust
Office of the 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 Guarantee Trustee” means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
3.1.


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


ARTICLE II


POWERS,
DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE


SECTION 2.1.  Powers
and Duties of the Guarantee Trustee.


(a)           This Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Capital Securities, and
the Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Capital Securities exercising his or her rights pursuant to Section
4.4(b) or to a Successor Guarantee Trustee on 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, 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 Guarantee Trustee.


(b)           The Guarantee Trustee, before the
occurrence of any Event of Default and after the curing or waiving of all
Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Guarantee, and no implied
covenants shall be read into this Guarantee against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.4(b)) and is actually known to a Responsible Officer of
the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this 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.



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(c)           No provision of this Guarantee shall
be construed to relieve the 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 Events of Default that may
have occurred:


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


(B)           in the absence of bad faith on the
part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee Trustee
and conforming to the requirements of this Guarantee; but in the case of any
such certificates or opinions furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
on their face they conform to the requirements of this Guarantee;


(ii)           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 such Responsible Officer
of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining
the pertinent facts upon which such judgment was made;


(iii)          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 written direction of the Holders of not less than
a Majority in liquidation amount of the Capital 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; and


(iv)          no provision of this Guarantee shall
require the 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 Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds is not
reasonably assured to it under the terms of this Guarantee, or security and
indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk
or liability is not reasonably assured to it.


SECTION 2.2.  Certain
Rights of the Guarantee Trustee.


(a)           Subject to the provisions of Section
2.1:



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


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


(iii)          Whenever, in the administration of
this Guarantee, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting 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
conclusively rely upon an Officer’s Certificate of the Guarantor which, upon
receipt of such request, shall be promptly delivered by the Guarantor.


(iv)          The Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument or other
writing (or any rerecording, refiling or reregistration thereof).


(v)           The 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 Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee from any court of
competent jurisdiction.


(vi)          The Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses (including
attorneys’ fees and expenses and the expenses of the 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 Guarantee Trustee; provided, however,
that nothing contained in this Section 2.2(a)(vi) 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.


(vii)         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, 



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but the Guarantee
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.


(viii)        The 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 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 Guarantee
Trustee or its agents hereunder shall bind the Holders of the Capital Securities,
and the signature of the 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 Guarantee Trustee to so act or
as to its compliance with any of the terms and provisions of this Guarantee,
both of which shall be conclusively evidenced by the Guarantee Trustee’s or its
agent’s taking such action.


(x)            Whenever in the administration of
this Guarantee the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in liquidation amount of the Capital 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 conclusively
relying on or acting in accordance with such instructions.


(xi)           The 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 Guarantee.


(b)           No provision of this Guarantee 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.


SECTION 2.3.  Not
Responsible for Recitals or Issuance of Guarantee.


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



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SECTION 2.4.  Events
of Default; Waiver.


(a)           An Event of Default under this
Guarantee will occur upon the failure of the Guarantor to perform any of its
payment or other obligations hereunder; provided, that except with respect to
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.


(b)           The Holders of a Majority in
liquidation amount of the Capital Securities may, voting or consenting as a
class, 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 shall be deemed to have been cured, for every
purpose of this Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.


SECTION 2.5.  Events
of Default; Notice.


(a)           The 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 Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, however, that the Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Capital Securities.


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


ARTICLE III

THE GUARANTEE TRUSTEE


SECTION 3.1.  The
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 or national
association 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
Person authorized under such laws to exercise corporate trust powers, having,
or having a parent that has a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to supervision or examination
by federal, state, territorial or District of Columbia authority. If such
corporation or national association publishes reports of 



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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
3.1(a)(ii), the combined capital and surplus of such corporation or national
association 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 3.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the effect set forth in
Section 3.2(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 to the extent and in the manner provided by, and subject to, this
Guarantee.


SECTION 3.2.  Appointment,
Removal and Resignation of the Guarantee Trustee.


(a)           Subject to Section 3.2(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 in accordance with Section 3.2(a) 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 to
office 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 an 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
3.2 within 60 days after delivery of an instrument of removal or resignation,
the Guarantee Trustee resigning or being removed may petition 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.


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


(f)            Upon termination of this Guarantee
or removal or resignation of the Guarantee Trustee pursuant to this Section
3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing to the
Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of such
termination, removal or resignation.


 



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ARTICLE IV


GUARANTEE


SECTION 4.1.  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 the Issuer), as and when
due, regardless of any defense (except as defense of payment by the Issuer),
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.


(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 4.2.  Waiver
of Notice and Demand.


The Guarantor hereby waives notice of acceptance of
this 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 4.3.  Obligations
Not Affected.


The obligations, covenants, agreements and duties of
the Guarantor under this 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,
Special 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 (other than an extension of time for the payment
of the Distributions, Redemption Price, Special Redemption Price, Liquidation
Distribution or other sums payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);



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


(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 4.3 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 4.4.  Rights
of Holders.


(a)           The Holders of a Majority in
liquidation amount of the Capital 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 or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under this Guarantee; provided,
however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee
shall have the right to decline to follow any such direction if the Guarantee
Trustee shall determine that the actions so directed would be unjustly
prejudicial to the Holders not taking part in such direction or if the
Guarantee Trustee being advised by legal counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Guarantee Trustee in
good faith by its board of directors or trustees, executive committee or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceeding so directed would involve the Guarantee
Trustee in personal liability.


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



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SECTION 4.5.  Guarantee
of Payment.


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


SECTION 4.6.  Subrogation.


The Guarantor shall be subrogated to all (if any)
rights of the Holders of Capital Securities against the Issuer in respect of
any amounts paid to such Holders by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
applicable 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 Guarantee, if, after
giving effect to any such payment, any amounts are due and unpaid under this
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 4.7.  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
Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 4.3 hereof.


SECTION 4.8.  Enforcement.


A Beneficiary may enforce the Obligations of the
Guarantor contained in Section 4.1 (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 V


LIMITATION OF
TRANSACTIONS; SUBORDINATION


SECTION 5.1.  Limitation
of Transactions.


So long as any Capital Securities remain outstanding,
if (a) there shall have occurred and be continuing an Event of Default or (b)
the Guarantor shall have selected an Extension Period as provided in the
Declaration and such period, or any extension thereof, shall have commenced and
be continuing, then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor’s capital stock or (y) make any payment
of principal of or 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 Debentures (other than (i) payments under this Guarantee,
(ii) repurchases, redemptions or other acquisitions of shares of capital stock
of the Guarantor (A) in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of one or more employees,
officers, directors, or consultants, (B) in connection with a dividend
reinvestment or stockholder stock 



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purchase plan or (C) 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 the Event of
Default or the applicable Extension Period, (iii) as a result of any 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 of any class or series of the Guarantor’s
indebtedness for any class or series of the Guarantor’s capital stock, (iv) the
purchase of fractional interests in shares of the Guarantor’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (v) any declaration of a dividend in
connection with any stockholder’s rights plan, or the issuance of rights, stock
or other property under any stockholder’s rights plan, or the redemption or
repurchase of rights pursuant thereto, or (vi) 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 5.2.  Ranking.


This Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to
all present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities
agrees to the foregoing provisions of this Guarantee and the other terms set
forth herein.


This Guarantee will rank pari passu in
right of payment to any similar guarantee agreements issued by the Guarantor
with respect to securities (if any) similar to the Capital 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, American Equity Capital Trust IX, American Equity Capital
Trust X and American Equity Capital Trust XI.


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
hereunder 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 Indebtedness of
the Guarantor, under any indenture or agreement that the Guarantor may enter
into in the future or otherwise.


 



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ARTICLE VI


TERMINATION


SECTION 6.1.  Termination.


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


ARTICLE VII


INDEMNIFICATION


SECTION 7.1.  Exculpation.


(a)           In no event shall any Indemnified
Person 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 Indemnified Person has been advised of the likelihood of such loss
or damage and regardless of the form of action.


(b)           In no event shall any Indemnified
Person 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 7.2.  Indemnification.


(a)           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 willful misconduct on the part of the Indemnified Person, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including but not limited to the costs and expenses
(including reasonable legal fees and expenses) of the Indemnified Person
defending itself against, or investigating, any claim or liability in
connection with the exercise or performance of any of the Indemnified Person’s
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 7.2 shall survive the resignation or removal of the Guarantee Trustee
and the termination of this Guarantee.


(b)           Promptly after receipt by an
Indemnified Person under this Section 7.2 of notice of the commencement of any
action, such Indemnified Person will, if a claim in respect thereof is to be
made against the Guarantor under this Section 7.2, notify the Guarantor in
writing of the commencement thereof; but the failure so to notify the Guarantor
(i) will not relieve the Guarantor from liability under paragraph (a) above 



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unless and to the extent
that the Guarantor did not otherwise learn of such action and such failure
results in the forfeiture by the Guarantor of substantial rights and defenses
and (ii) will not, in any event, relieve the Guarantor from any obligations to
any Indemnified Person other than the indemnification obligation provided in
paragraph (a) above. The Guarantor shall be entitled to appoint counsel of the
Guarantor’s choice at the Guarantor’s expense to represent the Indemnified
Person in any action for which indemnification is sought (in which case the
Guarantor shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Person or Persons except as set
forth below); provided, however, that such counsel shall be
reasonably satisfactory to the Indemnified Person. Notwithstanding the
Guarantor’s election to appoint counsel to represent the Indemnified Person in
any action, the Indemnified Person shall have the right to employ separate
counsel (including local counsel), and the Guarantor shall bear the reasonable
fees, costs and expenses of such separate counsel, if (i) the use of counsel
chosen by the Guarantor to represent the Indemnified Person would present such
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the Indemnified Person and the
Guarantor and the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it and/or other Indemnified Persons which
are different from or additional to those available to the Guarantor, (iii) the
Guarantor shall not have employed counsel satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after
notice of the institution of such action or (iv) the Guarantor shall authorize
the Indemnified Person to employ separate counsel at the expense of the
Guarantor. The Guarantor will not, without the prior written consent of the
Indemnified Persons, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Persons are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Person from all liability
arising out of such claim, action, suit or proceeding.  The Guarantor may avoid its duty to indemnify
under this Section 7.2 if an Indemnified Person, without the prior written
consent of the Guarantor (which consent shall not be unreasonably withheld),
settles or compromises or consents to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding and indemnity could
have been sought hereunder by such Indemnified Party unless such settlement,
compromise or consent includes an unconditional release of the Guarantor from
all liability arising out of such claim, action, suit or proceeding.  The Guarantor shall not be liable for any
settlement of any claim effected without its consent.


(c)           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.


SECTION 7.3.  Compensation;
Reimbursement of Expenses.


The Guarantor agrees:


(a)           to pay to the Guarantee Trustee from
time to time such compensation for all services rendered by it hereunder as the
parties shall agree to from time to time (which 



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compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust); and


(b)           except as otherwise expressly
provided herein, to reimburse the Guarantee Trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Guarantee (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or willful misconduct.


The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.


ARTICLE VIII


MISCELLANEOUS


SECTION 8.1.  Successors
and Assigns.


All guarantees and agreements contained in this
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. Except in connection with any
merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of the Guarantor’s assets to another entity, in each
case to the extent permitted under the Indenture, the Guarantor may not assign
its rights or delegate its obligations under this Guarantee without the prior
approval of the Holders of not less than a Majority in liquidation amount of
the Capital Securities.


SECTION 8.2.  Amendments.


Except with respect to any changes that do not
adversely affect the rights of Holders of the Capital Securities in any
material respect (in which case no consent of Holders will be required), this
Guarantee may be amended only with the prior approval of the Guarantor and the Holders
of not less than a Majority in liquidation amount of the Capital Securities.
The provisions of the Declaration with respect to amendments thereof shall
apply equally with respect to amendments of the Guarantee.


SECTION 8.3.  Notices.


All notices provided for in this 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 Guarantee Trustee, at
the Guarantee Trustee’s mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the Holders of the Capital
Securities):



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Wells Fargo
Delaware Trust Company

919 Market Street

Suite 700

Wilmington, DE 19801

Attention: Corporate Trust Division

Telecopy: 302-575-2006

Telephone: 302-575-2005


(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 and to the Guarantee Trustee):


American Equity Investment Life Holding Company

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Attention: Wendy L. Carlson

Telecopy: (515) 221-0744

Telephone: (515) 457-1824


(c)           If given to any Holder of the 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 8.4.  Benefit.


This Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 2.1(a), is not
separately transferable from the Capital Securities.


SECTION 8.5.  Governing
Law.


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


SECTION 8.6.  Counterparts.


This Guarantee may contain more than one counterpart
of the signature page and this Guarantee may be executed by the affixing of the
signature of the Guarantor and the Guarantee Trustee to any of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.



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


	
  

  	
  American Equity Investment Life Holding

  Company, as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wendy L. Carlson

  
	
   

  	
  Name:

  	
  Wendy L. Carlson

  
	
   

  	
  Title:

  	
  CFO & General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO DELAWARE TRUST

  COMPANY, as Guarantee Trustee

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tracy M. McLamb

  
	
   

  	
  Name:

  	
  Tracy M. McLamb

  
	
   

  	
  Title:

  	
  Vice President

  



 



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