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Exhibit 10.17  

TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT

American Equity Investment Life Holding Company  

 Dated as of September 7, 1999  

 
  
 

    TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	

ARTICLE I

DEFINITIONS AND INTERPRETATION\
	

Section 1.1	
 	

Definitions and Interpretation	
 	

1
	

ARTICLE II

TRUST INDENTURE ACT
	

Section 2.1	
 	

Trust Indenture Act; Application	
 	

4
	Section 2.2	 	Lists of Holders of Securities	 	4
	Section 2.3	 	Reports by the Preferred Guarantee Trustee	 	4
	Section 2.4	 	Periodic Reports to Preferred Guarantee Trustee	 	4
	Section 2.5	 	Evidence of Compliance with Conditions Precedent	 	4
	Section 2.6	 	Events of Default; Waiver	 	4
	Section 2.7	 	Event of Default; Notice	 	5
	Section 2.8	 	Conflicting Interests	 	5
	

ARTICLE III

POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
	

Section 3.1	
 	

Powers and Duties of the Preferred Guarantee Trustee	
 	

5
	Section 3.2	 	Certain Rights of Preferred Guarantee Trustee	 	6
	Section 3.3	 	Not Responsible for Recitals or Issuance of Trust Preferred Securities Guarantee	 	8
	

ARTICLE IV

PREFERRED GUARANTEE TRUSTEE
	

Section 4.1	
 	

Preferred Guarantee Trustee; Eligibility	
 	

8
	Section 4.2	 	Appointment, Removal and Resignation of Preferred Guarantee Trustees	 	9
	

ARTICLE V

TRUST PREFERRED SECURITIES GUARANTEE
	

Section 5.1	
 	

Trust Preferred Securities Guarantee	
 	

9
	Section 5.2	 	Subordination	 	9
	Section 5.3	 	Waiver of Notice and Demand	 	9
	Section 5.4	 	Obligations Not Affected	 	10
	Section 5.5	 	Rights of Holders	 	10
	Section 5.6	 	Guarantee of Payment	 	11
	Section 5.7	 	Subrogation	 	11
	Section 5.8	 	Independent Obligations	 	11
	Section 5.9	 	Conversion	 	11
	

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION
	

Section 6.1	
 	

Limitation of Transactions	
 	

11
	Section 6.2	 	Ranking	 	12
	

ARTICLE VII

TERMINATION
	

Section 7.1	
 	

Termination	
 	

12
	 	 	 	 	 

1

 

	

ARTICLE VIII

INDEMNIFICATION
	

Section 8.1	
 	

Exculpation	
 	

12
	Section 8.2	 	Indemnification	 	13
	

ARTICLE IX

MISCELLANEOUS
	

Section 9.1	
 	

Successors and Assigns	
 	

13
	Section 9.2	 	Amendments	 	13
	Section 9.3	 	Notices	 	13
	Section 9.4	 	Benefit	 	14
	Section 9.5	 	Governing Law	 	14

2

 
 

TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT    
    

        This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Trust Preferred Securities Guarantee"), dated as of September 7, 1999, is executed and delivered
by American Equity Investment Life Holding Company, an Iowa corporation (the "Guarantor"), and West Des Moines State Bank, an Iowa banking corporation, as trustee (the "Preferred Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the Trust Preferred Securities (as defined herein) of American Equity Capital Trust I, a Delaware statutory business trust (the
"Trust"). 

        WHEREAS,
pursuant to an Amended and Restated Declaration of Trust, dated as of September 7, 1999 (the "Declaration"), among the trustees of the Trust named therein, the Guarantor,
as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Trust, the Trust is issuing on the date hereof 750,669.67 (or up to an aggregate of 1,000,000 if
additional preferred securities are issued after the initial Closing Date in accordance with the Declaration) preferred securities, having an aggregate liquidation amount of $22,520,090 (or up to
$30,000,000 in the aggregate if additional preferred securities are issued after the initial Closing Date in accordance with the Declaration), designated the "8% Convertible Trust Preferred
Securities" (the "Trust Preferred Securities"); 

        WHEREAS,
as incentive for the Holders to purchase the Trust Preferred Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Trust
Preferred Securities Guarantee, to guarantee the obligations of the Trust to the Holders of Trust Preferred Securities on the terms and conditions set forth herein; and 

        WHEREAS,
the Guarantor is also executing and delivering a guarantee agreement (the "Trust Common Securities Guarantee") in substantially identical terms to this Trust Preferred
Securities Guarantee for the benefit of the holders of the Trust Common Securities (as defined herein), except that if an Indenture Event of Default (as defined herein) has occurred and is continuing,
the rights of holders of the Trust Common Securities to receive Guarantee Payments (as defined in the Trust Common Securities Guarantee) under the Trust Common Securities Guarantee shall be
subordinated to the rights of Holders of Trust Preferred Securities to receive Guarantee Payments (as defined herein) under this Trust Preferred Securities Guarantee; 

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

 
 

ARTICLE I    
    
    DEFINITIONS AND INTERPRETATION    
    

        Section 1.1    Definitions and Interpretation.    

        In
this Trust Preferred Securities Guarantee, unless the context otherwise requires: 

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

        (b)   terms
defined in the Declaration as at the date hereof have the same meaning when used in this Trust Preferred Securities Guarantee unless otherwise defined in the Trust
Preferred Securities Guarantee; 

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

        (d)   all
references to "the Trust Preferred Securities Guarantee" or "this Trust Preferred Securities Guarantee" are to this Trust Preferred Securities Guarantee as modified,
supplemented or amended from time to time; 

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

 

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

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

        (h)   a
reference to any Person shall include its successors and assigns; 

        (i)    a
reference to any agreement or instrument shall mean such agreement or instrument, as supplemented, modified, amended, or amended and restated, and in effect from time
to time; and 

        (j)    a
reference to any statute, law, rule or regulation, shall include any amendments thereto applicable to the relevant Person, and any successor statute, law, rule or
regulation. 

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

        "Business
Day" means any day other than a Saturday, Sunday or day on which banking institutions in West Des Moines, Iowa or in Wilmington, Delaware are authorized or required by any
applicable law or executive order to close. 

        "Common
Stock" means the common stock, par value $1.00 per share, of the Guarantor. 

        "Corporate
Trust Office" means the office of the Preferred Guarantee Trustee at which the corporate trust business of the Preferred Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this Agreement is located at West Des Moines State Bank, 1601 22nd Street, West Des Moines, Iowa 50266, Attention: Corporate Trust
Administration. 

        "Covered
Person" means any Holder or beneficial owner of Trust Preferred Securities. 

        "Debentures"
means the 8% Convertible Junior Subordinated Debentures due 2029 of the Guarantor held by the Property Trustee (as defined in the Declaration). 

        "Event
of Default" means a default by the Guarantor on any of its payment or other obligations under this Trust Preferred Securities Guarantee. 

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

        "Holder"
shall mean any holder, as registered on the books and records of the Trust, of any Trust Preferred Securities; provided, however, that in determining whether the holders of the
requisite 

2

 

percentage
of Trust Preferred 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 Preferred Guarantee Trustee, any Affiliate of the Preferred Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred Guarantee Trustee. 

        "Indenture"
means the Indenture, dated as of September 7, 1999, among the Guarantor and West Des Moines State Bank, an Iowa banking corporation, as trustee, pursuant to which the
Debentures are to be issued to the Property Trustee of the Trust. 

        "Indenture
Event of Default" means an "Indenture Event of Default" as defined in the Indenture. 

        "Indenture
Trustee" means the Person acting as trustee under the Indenture, initially West Des Moines State Bank, Iowa. 

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

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

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

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

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

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

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

        "Preferred
Guarantee Trustee" means West Des Moines State Bank, until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms
of
this Trust Preferred Securities Guarantee and thereafter means each such Successor Preferred Guarantee Trustee. 

        "Responsible
Officer" means, with respect to the Preferred Guarantee Trustee, any officer within the Corporate Trust Office of the Preferred Guarantee Trustee, including any vice
president, any assistant vice president, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of the Preferred 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
Preferred Guarantee Trustee" means a successor Preferred Guarantee Trustee possessing the qualifications to act as Preferred Guarantee Trustee under Section 4.1. 

3

 

        "Trust
Common Securities" means the securities representing common undivided beneficial interests in the assets of the Trust. 

        "Trust
Indenture Act" means the Trust Indenture Act of 1939, as amended. 

 
 

ARTICLE II    
    
    TRUST INDENTURE ACT    
    

        Section 2.1    Trust Indenture Act; Application.    

        (a)   This
Trust Preferred Securities Guarantee is subject to the provisions of the Trust Indenture Act that would be required to be part of this Trust Preferred Securities
Guarantee were this Trust Preferred Securities Guarantee to be qualified under the Trust Indenture Act, which provisions are incorporated
by reference in and made part of this Trust Preferred Securities Guarantee and this Trust Preferred Securities Guarantee shall, to the extent applicable, be governed by such provisions; and 

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

        Section 2.2    Lists of Holders of Securities.    

        (a)   The
Guarantor shall provide the Preferred Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Trust Preferred Securities ("List of Holders") as of such date, (i) within 14 days after each record date for payment of Distributions, and (ii) at
any other time within 30 days of receipt by the Trust of a written request for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee, provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the
Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. 

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

        Section 2.3    Reports by the Preferred Guarantee Trustee.    Within 60 days after November 15 of
each year, the Preferred Guarantee Trustee shall provide to the Holders of the Trust Preferred Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the
form and in the manner provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act. 

        Section 2.4    Periodic Reports to Preferred Guarantee Trustee.    The Guarantor shall provide to the Preferred
Guarantee Trustee such documents, reports and information as required by Section 314 (if any) and the compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust Indenture Act. 

        Section 2.5    Evidence of Compliance with Conditions Precedent.    The Guarantor shall provide to the
Preferred Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Preferred Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate. 

        Section 2.6    Events of Default; Waiver.    The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred Securities, 

4

 

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 Trust Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. 

        Section 2.7    Event of Default; Notice.    

        (a)   The
Preferred 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 Trust Preferred Securities, notices of all Events of Default of which the Preferred Guarantee Trustee is deemed to have knowledge (as defined in Section 2.7(b)), unless such defaults
have been cured before the giving of such notice; provided that the Preferred Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Preferred Securities. 

        (b)   The
Preferred Guarantee Trustee shall be deemed to have knowledge of an Event of Default if (i) the Preferred Guarantee Trustee shall have received written notice
of such Event of Default or (ii) a Responsible Officer of the Preferred Guarantee Trustee charged with the administration of the Declaration shall have obtained actual knowledge of such Event
of Default. 

        Section 2.8    Conflicting Interests.    The Declaration shall be deemed to be specifically described in this
Trust Preferred Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. 

 
 

ARTICLE III    
    
    POWERS, DUTIES AND RIGHTS
  OF PREFERRED GUARANTEE TRUSTEE    
    

        Section 3.1    Powers and Duties of the Preferred Guarantee Trustee.    

        (a)   This
Trust Preferred Securities Guarantee shall be held by the Preferred Guarantee Trustee for the benefit of the Holders of the Trust Preferred Securities, and the
Preferred Guarantee Trustee shall not transfer this Trust Preferred Securities Guarantee to any Person except a Holder of Trust Preferred Securities exercising his or her rights pursuant to
Section 5.5(b) or to a Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee Trustee of its appointment to act as Successor Preferred Guarantee Trustee. The
right, title and interest of the Preferred Guarantee Trustee shall automatically vest in any Successor Preferred 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 Preferred Guarantee Trustee. 

        (b)   If
an Event of Default of which the Preferred Guarantee Trustee is deemed to have knowledge (as defined in Section 2.7(b)) has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Trust Preferred Securities Guarantee for the benefit of the Holders of the Trust Preferred Securities. 

        (c)   The
Preferred Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Trust Preferred Securities Guarantee, and no implied covenants shall be read into this Trust Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and of which the Preferred Guarantee Trustee is deemed to have
knowledge (as defined in Section 2.7(b)), the Preferred Guarantee Trustee shall exercise such of the rights and powers vested in it by this Trust Preferred Securities Guarantee, and use the
same 

5

 

degree
of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. 

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

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

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

        (B)  in
the absence of bad faith on the part of the Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and conforming to the requirements of this Trust Preferred Securities
Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Trust Preferred Securities Guarantee; 

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

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

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

        Section 3.2    Certain Rights of Preferred Guarantee Trustee.    

        (a)   Subject
to the provisions of Section 3.1: 

          (i)  The
Preferred 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. 

6

  

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

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

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

         (v)  The
Preferred Guarantee Trustee may consult with counsel of its selection, and the written 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 Preferred Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of
this Trust Preferred Securities Guarantee from any court of competent jurisdiction. 

        (vi)  The
Preferred Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Preferred Securities Guarantee at the
request or direction of any Holder, unless such Holder shall have provided to the Preferred Guarantee Trustee such security and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including 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 Preferred Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Preferred Securities Guarantee. 

       (vii)  The
Preferred 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 Preferred Guarantee Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it may see fit. 

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

         (x)  Whenever
in the administration of this Trust Preferred Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive instructions with respect
to 

7

 

enforcing
any remedy or right or taking any other action hereunder, the Preferred Guarantee Trustee (i) may request instructions from the Holders of a Majority in liquidation amount of the
Trust Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions. 

        (xi)  The
Preferred 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 Trust Preferred Securities Guarantee. 

        (b)   No
provision of this Trust Preferred Securities Guarantee shall be deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred
Guarantee Trustee shall be construed to be a duty. 

        Section 3.3    Not Responsible for Recitals or Issuance of Trust Preferred Securities Guarantee.    The
recitals contained in this Trust Preferred Securities Guarantee shall be taken as the statements of the Guarantor, and the Preferred Guarantee Trustee does not assume any responsibility for their
correctness. The Preferred Guarantee Trustee makes no representation as to the validity or sufficiency of this Trust Preferred Securities Guarantee. 

 
 

ARTICLE IV    
    
    PREFERRED GUARANTEE TRUSTEE    
    

        Section 4.1    Preferred Guarantee Trustee; Eligibility.    

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

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

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

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

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

8

 

        Section 4.2    Appointment, Removal and Resignation of Preferred Guarantee Trustees.    

        (a)   Subject
to Section 4.2(c), the Preferred Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. 

        (b)   Subject
to Section 4.2(c), the Preferred Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing
executed by the Preferred Guarantee Trustee and delivered to the Guarantor. 

        (c)   The
Preferred Guarantee Trustee shall hold office and shall not be removed in accordance with Section 4.2(a) or resign in accordance with Section 4.2(b)
unless and until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Guarantee Trustee and delivered
to the Guarantor and, in the case of a resignation in accordance with Section 4.2(b), the resigning Preferred Guarantee Trustee. 

        (d)   If
no Successor Preferred Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of removal or resignation, the resigning or removed Preferred Guarantee Trustee may petition any court of competent jurisdiction for appointment of a
Successor Preferred Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee. 

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

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

 
 

ARTICLE V    
    
    TRUST PREFERRED SECURITIES GUARANTEE    
    

        Section 5.1    Trust Preferred Securities Guarantee.    The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust 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 Trust to pay such amounts to the Holders. 

        Section 5.2    Subordination.    If an Indenture Event of Default has occurred and is continuing, the rights of
holders of Trust Common Securities to receive Guarantee Payments under the Trust Common Securities Guarantee are subordinate to the rights of Holders of Trust Preferred Securities to receive Guarantee
Payments under this Trust Preferred Securities Guarantee. 

        Section 5.3    Waiver of Notice and Demand.    The Guarantor hereby waives notice of acceptance of this Trust
Preferred Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Trust 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. 

9

 

        Section 5.4    Obligations Not Affected.    The obligations, covenants, agreements and duties of the Guarantor
under this Trust Preferred Securities Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following: 

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

        (b)   the
extension of time for the payment by the Trust of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Trust Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Trust Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures
or any extension of the maturity date of the Debentures permitted by the Indenture); 

        (c)   any
failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the
Trust Preferred Securities, or any action on the part of the Trust 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 Trust or any of the assets of the Trust; 

        (e)   any
invalidity of, or defect or deficiency in, the Trust Preferred 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 5.4 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 

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

        Section 5.5    Rights of Holders.    

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

        (b)   Any
Holder of Trust Preferred Securities may institute a legal proceeding against the Guarantor to enforce the obligations of the Guarantor under this Trust Preferred
Securities Guarantee without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other Person. 

        (c)   If
an Indenture Event of Default constituting the failure to pay interest, principal or premium, if any, on the Debentures on the date such interest, principal or
premium, if any, is otherwise payable has occurred and is continuing, then a Holder of Trust Preferred Securities may directly, at any time on or after the respective due date specified in the
Debentures for such payment, institute a proceeding for enforcement of payment to such Holder of the interest, principal or premium, if any, on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Trust Preferred Securities of such Holder. The Holders of Trust 

10

 

Preferred
Securities will not be able to exercise directly any other remedy available to the holders of the Debentures unless the Property Trustee (as defined in the Indenture) fails to do so. 

        Section 5.6    Guarantee of Payment.    This Trust Preferred Securities Guarantee creates a guarantee of
payment and not of collection. 

        Section 5.7    Subrogation.    The Guarantor shall be subrogated to all (if any) rights of the Holders of Trust
Preferred Securities against the Trust in respect of any amounts paid to such Holders by the Guarantor under this Trust Preferred Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Trust Preferred Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Trust Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders. 

        Section 5.8    Independent Obligations.    The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust 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 Trust Preferred Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.4
hereof. 

        Section 5.9    Conversion.    The Guarantor acknowledges its obligation to issue and deliver common stock of
the Guarantor upon the conversion of the Trust Preferred Securities. 

 
 

ARTICLE VI    
    
    LIMITATION OF TRANSACTIONS; SUBORDINATION    
    

        Section 6.1    Limitation of Transactions.    So long as any Trust Preferred Securities remain outstanding, if
(i) the Guarantor has exercised its option to defer interest payments on the Debentures by extending the interest payment period and such extension shall be continuing, (ii) the
Guarantor shall be in default with respect to its payment or other obligations under the Guarantee or (iii) there shall have occurred and be continuing any event that, with the giving of notice
or the lapse of time or both, would constitute an Indenture Event of Default, then the Guarantor shall not (a) declare or pay dividends on, or make a distribution with respect to, or redeem or
purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (1) purchases or acquisitions of shares of Company Common Stock (or Company Common Stock
equivalents) in connection with the satisfaction by the Guarantor of its obligations under any employee benefit or agent plans or the satisfaction by the Guarantor of its obligations pursuant to any
contract or security requiring the Guarantor to purchase shares of Company Common Stock (or Company Common Stock equivalents), (2) purchases of shares of Company Common Stock (or Company Common
Stock equivalents) from officers or employees of the Guarantor or its subsidiaries upon termination of employment or retirement not pursuant to any obligation under any contract or security requiring
the Guarantor to purchase shares of Company Common Stock (or Company Common Stock equivalents), (3) as a result of a reclassification of the Guarantor's capital stock or the exchange or
conversion of one class or series of the Guarantor's capital stock for another class or series of the Guarantor's capital stock, (4) dividends or distributions of shares of Company Common Stock
on Company Common Stock or (5) 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), (b) make any payment of principal of (premium, if any) or interest on or repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor that rank pari passu with or junior to the Debentures (except by conversion into or exchange for shares of Company Common Stock) and
(c) make any guarantee payments with respect to any of the foregoing (other than pursuant to the Guarantee). 

11

  

        Section 6.2    Ranking.    

        (a)   This
Trust Preferred Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) senior to the Guarantor's common stock,
(ii) pari passu with the most senior preferred or preference securities now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor with respect to any preferred or preference securities of the Guarantor or any Affiliate of the Guarantor, and (iii) junior and subordinate in right of
payment to all other liabilities of the Guarantor except any liabilities that may be pari passu expressly by their terms. 

        (b)   The
holders of any obligations of the Guarantor that are senior in priority to the obligations under this Trust Preferred Securities Guarantee will be entitled to all of
the rights inuring to the holders of "Senior Debt" under Article 12 of the Indenture, and the Holders of the Trust Preferred Securities will be subject to all of the terms and conditions of
such Article 12 with respect to any claims or rights hereunder with the same effect as though fully set forth herein. 

 
 

ARTICLE VII    
    
    TERMINATION    
    

        Section 7.1    Termination.    This Trust Preferred Securities Guarantee shall terminate as to each Holder of
Trust Preferred Securities upon (i) full payment of the applicable Redemption Price (as defined in the Declaration) with respect to all Trust Preferred Securities, (ii) the distribution
of the Debentures held by the Trust to the Holders of all of the Trust Preferred Securities of the Trust, (iii) liquidation of the Trust, or (iv) the distribution of Guarantor's common
stock to such Holder in respect of the conversion of such Holder's Trust Preferred Securities into common stock of the Guarantor and will terminate completely upon full payment of the amounts payable
in accordance with the Declaration of the Trust. Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at
any time any Holder of Trust Preferred Securities must restore payment of any sums paid under the Trust Preferred Securities or under this Trust Preferred Securities Guarantee. 

 
 

ARTICLE VIII    
    
    INDEMNIFICATION    
    

        Section 8.1    Exculpation.    

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

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

12

 

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

 
 

ARTICLE IX    
    
    MISCELLANEOUS    
    

        Section 9.1    Successors and Assigns.    All guarantees and agreements contained in this Trust Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Trust Preferred 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, each as
permitted by the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Trust Preferred Securities Guarantee without the prior approval of the Holders of at least a
Majority in liquidation amount of the Trust Preferred Securities. 

        Section 9.2    Amendments.    Except with respect to any changes that do not materially adversely affect the
rights of Holders (in which case no consent of Holders will be required), this Trust Preferred Securities Guarantee may be amended only with the prior approval of the Holders of at least a Majority in
liquidation amount of the Trust Preferred Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders of the Trust Preferred Securities apply to the giving
of such approval. 

        Section 9.3    Notices.    All notices provided for in this Trust Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered, sent by facsimile or mailed by registered or certified mail, as follows: 

        (a)   if
given to the Preferred Guarantee Trustee, at the Preferred Guarantee Trustee's mailing address set forth below (or such other address as the Preferred Guarantee
Trustee may give notice of to the Holders of the Trust Preferred Securities): 

West
Des Moines State Bank

1601 22nd Street

West Des Moines, Iowa 50266

Attention: Corporate Trust Administration 

        (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 Trust
Preferred Securities): 

American
Equity Investment Life Holding Company

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Attention: Chief Financial Officer 

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

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

13

 

was
given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. 

        Section 9.4    Benefit.    This Trust Preferred Securities Guarantee is solely for the benefit of the Holders
of the Trust Preferred Securities and, subject to Section 3.1(a), is not separately transferable from the Trust Preferred Securities. 

        Section 9.5    Governing Law.    THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF IOWA AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS. 

14

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

	 	 	AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
	

 	
 	

By:	

/s/  TERRY A. REIMER      
 Name: Terry A. Reimer

Title: Exec. V.P.
	

 	
 	

 	

 
	 	 	WEST DES MOINES STATE BANK,

as Preferred Guarantee Trustee
	

 	
 	

By:	

/s/  DAVID V. MAURER      
 Name: David V. Maurer

Title: SVP/STO

QuickLinks

TABLE OF CONTENTS

TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT

ARTICLE I DEFINITIONS AND INTERPRETATION

ARTICLE II TRUST INDENTURE ACT

ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE

ARTICLE IV PREFERRED GUARANTEE TRUSTEE

ARTICLE V TRUST PREFERRED SECURITIES GUARANTEE

ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION

ARTICLE VII TERMINATION

ARTICLE VIII INDEMNIFICATION

ARTICLE IX MISCELLANEOUSQuickLinks
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Exhibit 10.18  

TRUST COMMON SECURITIES GUARANTEE AGREEMENT

American Equity Investment Life Holding Company  

 Dated as of September 7, 1999  

 
  
 

    TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	

ARTICLE I

DEFINITIONS AND INTERPRETATION
	

Section 1.1	
 	

Definitions and Interpretation	
 	

1
	

ARTICLE II

TRUST INDENTURE ACT
	

Section 2.1	
 	

Trust Indenture Act; Application	
 	

4
	Section 2.2	 	Lists of Holders of Securities	 	4
	Section 2.3	 	Reports by the Common Guarantee Trustee	 	4
	Section 2.4	 	Periodic Reports to Common Guarantee Trustee	 	4
	Section 2.5	 	Evidence of Compliance with Conditions Precedent	 	4
	Section 2.6	 	Events of Default; Waiver	 	4
	Section 2.7	 	Event of Default; Notice	 	5
	Section 2.8	 	Conflicting Interests	 	5
	

ARTICLE III

POWERS, DUTIES AND RIGHTS OF COMMON GUARANTEE TRUSTEE
	

Section 3.1	
 	

Powers and Duties of the Common Guarantee Trustee	
 	

5
	Section 3.2	 	Certain Rights of Common Guarantee Trustee	 	6
	Section 3.3	 	Not Responsible for Recitals or Issuance of Trust Common Securities Guarantee	 	8
	

ARTICLE IV

COMMON GUARANTEE TRUSTEE
	

Section 4.1	
 	

Common Guarantee Trustee; Eligibility	
 	

8
	Section 4.2	 	Appointment, Removal and Resignation of Common Guarantee Trustees	 	9
	

ARTICLE V

TRUST COMMON SECURITIES GUARANTEE
	

Section 5.1	
 	

Trust Common Securities Guarantee	
 	

9
	Section 5.2	 	Subordination	 	9
	Section 5.3	 	Waiver of Notice and Demand	 	9
	Section 5.4	 	Obligations Not Affected	 	10
	Section 5.5	 	Rights of Holders	 	10
	Section 5.6	 	Guarantee of Payment	 	11
	Section 5.7	 	Subrogation	 	11
	Section 5.8	 	Independent Obligations	 	11
	Section 5.9	 	Conversion	 	11
	

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION
	

Section 6.1	
 	

Limitation of Transactions	
 	

11
	Section 6.2	 	Ranking	 	12
	

ARTICLE VII

TERMINATION
	

Section 7.1	
 	

Termination	
 	

12
	 	 	 	 	 

1

 

	

ARTICLE VIII

INDEMNIFICATION
	

Section 8.1	
 	

Exculpation	
 	

12
	Section 8.2	 	Indemnification	 	13
	

ARTICLE IX

MISCELLANEOUS
	

Section 9.1	
 	

Successors and Assigns	
 	

13
	Section 9.2	 	Amendments	 	13
	Section 9.3	 	Notices	 	13
	Section 9.4	 	Benefit	 	14
	Section 9.5	 	Governing Law	 	14

2

 
 

TRUST COMMON SECURITIES GUARANTEE AGREEMENT    
    

        This TRUST COMMON SECURITIES GUARANTEE AGREEMENT (this "Trust Common Securities Guarantee"), dated as of September 7, 1999, is executed and delivered by
American Equity Investment Life Holding Company, an Iowa corporation (the "Guarantor"), and West Des Moines State Bank, an Iowa banking corporation, as trustee (the "Common Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time of the Trust Common Securities (as defined herein) of American Equity Capital Trust I, a Delaware statutory business trust (the
"Trust"). 

        WHEREAS,
pursuant to an Amended and Restated Declaration of Trust, dated as of September 7, 1999 (the "Declaration"), among the trustees of the Trust named therein, the Guarantor,
as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Trust, the Trust is issuing on the date hereof 23,216.59 (or up to an aggregate of 30,928 if
additional common securities are issued after the initial Closing Date in accordance with the Declaration) common securities, having an aggregate liquidation amount of $696,497.63 (or up to $927,840
in the aggregate if additional common securities are issued after the initial Closing Date in accordance with the Declaration), designated the "Trust Common Securities" (the "Trust Common
Securities"); 

        WHEREAS,
as incentive for the Holders to purchase the Trust Common Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Trust
Common Securities Guarantee, to guarantee the obligations of the Trust to the Holders of Trust Common Securities on the terms and conditions set forth herein; and 

        WHEREAS,
the Guarantor is also executing and delivering a guarantee agreement (the "Trust Preferred Securities Guarantee") in substantially identical terms to this Trust Common
Securities Guarantee for the benefit of the holders of the Trust Preferred Securities (as defined herein), except that if an Indenture Event of Default (as defined herein) has occurred and is
continuing, the rights of holders of the Trust Common Securities to receive Guarantee Payments (as defined herein) under the Trust Common Securities Guarantee shall be subordinated to the rights of
Holders of Trust Preferred Securities to receive Guarantee Payments (as defined in the Trust Preferred Securities Guarantee) under this Trust Common Securities Guarantee; 

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

 
 

ARTICLE I    
    
    DEFINITIONS AND INTERPRETATION    
    

        Section 1.1    Definitions and Interpretation.    

        In
this Trust Common Securities Guarantee, unless the context otherwise requires: 

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

        (b)   terms
defined in the Declaration as at the date hereof have the same meaning when used in this Trust Common Securities Guarantee unless otherwise defined in the Trust
Common Securities Guarantee; 

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

        (d)   all
references to "the Trust Common Securities Guarantee" or "this Trust Common Securities Guarantee" are to this Trust Common Securities Guarantee as modified,
supplemented or amended from time to time; 

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

 

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

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

        (h)   a
reference to any Person shall include its successors and assigns; 

        (i)    a
reference to any agreement or instrument shall mean such agreement or instrument, as supplemented, modified, amended, or amended and restated, and in effect from time
to time; and 

        (j)    a
reference to any statute, law, rule or regulation, shall include any amendments thereto applicable to the relevant Person, and any successor statute, law, rule or
regulation. 

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

        "Business
Day" means any day other than a Saturday, Sunday or day on which banking institutions in West Des Moines, Iowa or in Wilmington, Delaware are authorized or required by any
applicable law or executive order to close. 

        "Common
Guarantee Trustee" means West Des Moines State Bank, until a Successor Common Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this
Trust Common Securities Guarantee and thereafter means each such Successor Common Guarantee Trustee. 

        "Common
Stock" means the common stock, par value $1.00 per share, of the Guarantor. 

        "Corporate
Trust Office" means the office of the Common Guarantee Trustee at which the corporate trust business of the Common Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this Agreement is located at West Des Moines
State Bank, 1601 22nd Street, West Des Moines, Iowa 50266, Attention: Corporate Trust Administration. 

        "Covered
Person" means any Holder or beneficial owner of Trust Common Securities. 

        "Debentures"
means the 8% Convertible Junior Subordinated Debentures due 2029 of the Guarantor held by the Property Trustee (as defined in the Declaration). 

        "Event
of Default" means a default by the Guarantor on any of its payment or other obligations under this Trust Common Securities Guarantee. 

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

2

 

Securities
Guarantee are subordinate to the rights of Holders of Trust Preferred Securities to receive Guarantee Payments under the Trust Preferred Securities Guarantee. 

        "Holder"
shall mean any holder, as registered on the books and records of the Trust, of any Trust Common Securities; provided, however, that in determining whether the holders of the
requisite percentage of Trust Common 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 Common Guarantee Trustee, any Affiliate of the Common Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Common Guarantee Trustee. 

        "Indenture"
means the Indenture, dated as of September 7, 1999, among the Guarantor and West Des Moines State Bank, an Iowa banking corporation, as trustee, pursuant to which the
Debentures are to be issued to the Property Trustee of the Trust. 

        "Indenture
Event of Default" means an "Indenture Event of Default" as defined in the Indenture. 

        "Indenture
Trustee" means the Person acting as trustee under the Indenture, initially West Des Moines State Bank, Iowa. 

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

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

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

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

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

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

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

        "Responsible
Officer" means, with respect to the Common Guarantee Trustee, any officer within the Corporate Trust Office of the Common Guarantee Trustee, including any vice president,
any assistant vice president, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Corporate Trust Office of the Common 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
Common Guarantee Trustee" means a successor Common Guarantee Trustee possessing the qualifications to act as Common Guarantee Trustee under Section 4.1. 

3

 

        "Trust
Indenture Act" means the Trust Indenture Act of 1939, as amended. 

        "Trust
Preferred Securities" means the securities representing preferred undivided beneficial interests in the assets of the Trust. 

 
 

ARTICLE II    
    
    TRUST INDENTURE ACT    
    

        Section 2.1    Trust Indenture Act; Application.    

        (a)   This
Trust Common Securities Guarantee is subject to the provisions of the Trust Indenture Act that would be required to be part of this Trust Common Securities
Guarantee were this Trust Common
Securities Guarantee to be qualified under the Trust Indenture Act, which provisions are incorporated by reference in and made part of this Trust Common Securities Guarantee and this Trust Common
Securities Guarantee shall, to the extent applicable, be governed by such provisions; and 

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

        Section 2.2    Lists of Holders of Securities.    

        (a)   The
Guarantor shall provide the Common Guarantee Trustee with a list, in such form as the Common Guarantee Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Common Securities ("List of Holders") as of such date, (i) within 14 days after each record date for payment of Distributions, and (ii) at any other time
within 30 days of receipt by the Trust of a written request for a List of Holders as of a date no more than 14 days before such List of Holders is given to the Common Guarantee Trustee,
provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Common Guarantee
Trustee by the Guarantor. The Common Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. 

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

        Section 2.3    Reports by the Common Guarantee Trustee.    Within 60 days after November 15 of
each year, the Common Guarantee Trustee shall provide to the Holders of the Trust Common Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The Common Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. 

        Section 2.4    Periodic Reports to Common Guarantee Trustee.    The Guarantor shall provide to the Common
Guarantee Trustee such documents, reports and information as required by Section 314 (if any) and the compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust Indenture Act. 

        Section 2.5    Evidence of Compliance with Conditions Precedent.    The Guarantor shall provide to the Common
Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Common Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate. 

        Section 2.6    Events of Default; Waiver.    The Holders of a Majority in liquidation amount of Trust Common
Securities may, by vote, on behalf of the Holders of all of the Trust Common Securities, 

4

 

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 Trust Common Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. 

        Section 2.7    Event of Default; Notice.    

        (a)   The
Common 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 Trust Common Securities, notices of all Events of Default of which the Common Guarantee Trustee is deemed to have knowledge (as defined in Section 2.7(b)), unless such defaults have been
cured before the giving of such notice; provided that the Common Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Common Guarantee Trustee
in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Common Securities. 

        (b)   The
Common Guarantee Trustee shall be deemed to have knowledge of an Event of Default if (i) the Common Guarantee Trustee shall have received written notice of
such Event of Default or (ii) a Responsible Officer of the Common Guarantee Trustee charged with the administration of the Declaration shall have obtained actual knowledge of such Event of
Default. 

        Section 2.8    Conflicting Interests.    The Declaration shall be deemed to be specifically described in this
Trust Common Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. 

 
 

ARTICLE III    
    
    POWERS, DUTIES AND RIGHTS
  OF COMMON GUARANTEE TRUSTEE    
    

        Section 3.1    Powers and Duties of the Common Guarantee Trustee.    

        (a)   This
Trust Common Securities Guarantee shall be held by the Common Guarantee Trustee for the benefit of the Holders of the Trust Common Securities, and the Common
Guarantee Trustee shall not transfer this Trust Common Securities Guarantee to any Person except a Holder of Trust Common Securities exercising his or her rights pursuant to Section 5.5(b) or
to a Successor Common Guarantee Trustee on acceptance by such Successor Common Guarantee Trustee of its appointment to act as Successor Common Guarantee Trustee. The right, title and interest of the
Common Guarantee Trustee shall automatically vest in any Successor Common 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 Common Guarantee Trustee. 

        (b)   If
an Event of Default of which the Common Guarantee Trustee is deemed to have knowledge (as defined in Section 2.7(b)) has occurred and is continuing, the Common
Guarantee Trustee shall enforce this Trust Common Securities Guarantee for the benefit of the Holders of the Trust Common Securities. 

        (c)   The
Common Guarantee Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Trust Common Securities Guarantee, and no implied covenants shall be read into this Trust Common Securities Guarantee against the Common
Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and of which the Common Guarantee Trustee is deemed to have knowledge (as
defined in Section 2.7(b)), the Common Guarantee Trustee shall exercise such of the rights and powers vested in it by this Trust Common Securities Guarantee, and use the same 

5

 

degree
of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. 

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

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

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

        (B)  in
the absence of bad faith on the part of the Common Guarantee Trustee, the Common 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 Common Guarantee Trustee and conforming to the requirements of this Trust Common Securities Guarantee;
but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Common Guarantee Trustee, the Common Guarantee Trustee shall be under
a duty to examine the same to determine whether or not they conform to the requirements of this Trust Common Securities Guarantee; 

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

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

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

        Section 3.2    Certain Rights of Common Guarantee Trustee.    

        (a)   Subject
to the provisions of Section 3.1: 

          (i)  The
Common 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. 

6

 

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

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

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

         (v)  The
Common Guarantee Trustee may consult with counsel of its selection, and the written 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 Common Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this
Trust Common Securities Guarantee from any court of competent jurisdiction. 

        (vi)  The
Common Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Common Securities Guarantee at the request
or direction of any Holder, unless such Holder shall have provided to the Common Guarantee Trustee such security and indemnity, reasonably satisfactory to the Common Guarantee Trustee, against the
costs, expenses (including 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 Common Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Common Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Common Securities Guarantee. 

       (vii)  The
Common 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 Common Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may see fit. 

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

         (x)  Whenever
in the administration of this Trust Common Securities Guarantee the Common Guarantee Trustee shall deem it desirable to receive instructions with respect to 

7

 

enforcing
any remedy or right or taking any other action hereunder, the Common Guarantee Trustee (i) may request instructions from the Holders of a Majority in liquidation amount of the Trust
Common Securities, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions. 

        (xi)  The
Common 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 Trust Common Securities Guarantee. 

        (b)   No
provision of this Trust Common Securities Guarantee shall be deemed to impose any duty or obligation on the Common 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 Common 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 Common Guarantee Trustee
shall be construed to be a duty. 

        Section 3.3    Not Responsible for Recitals or Issuance of Trust Common Securities Guarantee.    The recitals
contained in this Trust Common Securities Guarantee shall be taken as the statements of the Guarantor, and the Common Guarantee Trustee does not assume any responsibility for their correctness. The
Common Guarantee Trustee makes no representation as to the validity or sufficiency of this Trust Common Securities Guarantee. 

 
 

ARTICLE IV    
    
    COMMON GUARANTEE TRUSTEE    
    

        Section 4.1    Common Guarantee Trustee; Eligibility.    

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

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

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

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

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

8

  

        Section 4.2    Appointment, Removal and Resignation of Common Guarantee Trustees.    

        (a)   Subject
to Section 4.2(c), the Common Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. 

        (b)   Subject
to Section 4.2(c), the Common Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing
executed by the Common Guarantee Trustee and delivered to the Guarantor. 

        (c)   The
Common Guarantee Trustee shall hold office and shall not be removed in accordance with Section 4.2(a) or resign in accordance with Section 4.2(b)
unless and until a Successor Common Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Common Guarantee Trustee and delivered to
the Guarantor and, in the case of a resignation in accordance with Section 4.2(b), the resigning Common Guarantee Trustee. 

        (d)   If
no Successor Common Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within 60 days after delivery
to the Guarantor of an instrument of removal or resignation, the resigning or removed Common Guarantee Trustee may petition any court of competent jurisdiction for appointment of a Successor Common
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Common Guarantee Trustee. 

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

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

 
 

ARTICLE V    
    
    TRUST COMMON SECURITIES GUARANTEE    
    

        Section 5.1    Trust Common Securities Guarantee.    The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust 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 Trust to pay such amounts to the Holders. 

        Section 5.2    Subordination.    If an Indenture Event of Default has occurred and is continuing, the rights of
holders of Trust Common Securities to receive Guarantee Payments under this Trust Common Securities Guarantee are subordinate to the rights of Holders of Trust Preferred Securities to receive
Guarantee Payments under the Trust Preferred Securities Guarantee. 

        Section 5.3    Waiver of Notice and Demand.    The Guarantor hereby waives notice of acceptance of this Trust
Common Securities Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Trust 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. 

9

 

        Section 5.4    Obligations Not Affected.    The obligations, covenants, agreements and duties of the Guarantor
under this Trust Common Securities Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following: 

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

        (b)   the
extension of time for the payment by the Trust of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Trust Common Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Trust Common Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the Indenture); 

        (c)   any
failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Trust Common Securities, or any action on the part of the Trust 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 Trust or any of the assets of the Trust; 

        (e)   any
invalidity of, or defect or deficiency in, the Trust Common 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 5.4 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 

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

        Section 5.5    Rights of Holders.    

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

        (b)   Any
Holder of Trust Common Securities may institute a legal proceeding against the Guarantor to enforce the obligations of the Guarantor under this Trust Common
Securities Guarantee without first instituting a legal proceeding against the Trust, the Common Guarantee Trustee or any other Person. 

        (c)   If
an Indenture Event of Default constituting the failure to pay interest, principal or premium, if any, on the Debentures on the date such interest, principal or
premium, if any, is otherwise payable has occurred and is continuing, then a Holder of Trust Common Securities may directly, at any time on or after the respective due date specified in the Debentures
for such payment, institute a proceeding for enforcement of payment to such Holder of the interest, principal or premium, if any, on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Common Securities of such Holder. The Holders of Trust 

10

 

Common
Securities will not be able to exercise directly any other remedy available to the holders of the Debentures unless the Property Trustee (as defined in the Indenture) fails to do so. 

        Section 5.6    Guarantee of Payment.    This Trust Common Securities Guarantee creates a guarantee of payment
and not of collection. 

        Section 5.7    Subrogation.    The Guarantor shall be subrogated to all (if any) rights of the Holders of Trust
Common Securities against the Trust in respect of any amounts paid to such Holders by the Guarantor under this Trust Common Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Trust Common Securities Guarantee, if, at the time of any such payment, any amounts are due and unpaid under this Trust Common Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the
Holders. 

        Section 5.8    Independent Obligations.    The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Trust Common Securities, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Trust Common Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.4 hereof. 

        Section 5.9    Conversion.    

        The
Guarantor acknowledges its obligation to issue and deliver common stock of the Guarantor upon the conversion of the Trust Common Securities. 

 
 

ARTICLE VI    
    
    LIMITATION OF TRANSACTIONS; SUBORDINATION    
    

        Section 6.1    Limitation of Transactions.    So long as any Trust Common Securities remain outstanding, if
(i) the Guarantor has exercised its option to defer interest payments on the Debentures by extending the interest payment period and such extension shall be continuing, (ii) the
Guarantor shall be in default with respect to its payment or other obligations under the Guarantee or (iii) there shall have occurred and be continuing any event that, with the giving of notice
or the lapse of time or both, would constitute an Indenture Event of Default, then the Guarantor shall not (a) declare or pay dividends on, or make a distribution with respect to, or redeem or
purchase or acquire, or make a liquidation payment with respect to, any of its capital stock (other than (1) purchases or acquisitions of shares of Company Common Stock (or Company Common Stock
equivalents) in connection with the satisfaction by the Guarantor of its obligations under any employee benefit or agent plans or the satisfaction by the Guarantor of its obligations pursuant to any
contract or security requiring the Guarantor to purchase shares of Company Common Stock (or Company Common Stock equivalents), (2) purchases of shares of Company Common Stock (or Company Common
Stock equivalents) from officers or employees of the Guarantor or its subsidiaries upon termination of employment or retirement not pursuant to any obligation under any contract or security requiring
the Guarantor to purchase shares of Company Common Stock (or Company Common Stock equivalents), (3) as a result of a reclassification of the Guarantor's capital stock or the exchange or
conversion of one class or series of the Guarantor's capital stock for another class or series of the Guarantor's capital stock, (4) dividends or distributions of shares of Company Common Stock
on Company Common Stock or (5) 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), (b) make any payment of principal of (premium, if any) or interest on or repay, repurchase or redeem any debt securities (including guarantees) issued by
the Guarantor that rank pari passu with or junior to 

11

 

the
Debentures (except by conversion into or exchange for shares of Company Common Stock) and (c) make any guarantee payments with respect to any of the foregoing (other than pursuant to the
Guarantee). 

        Section 6.2    Ranking.    

        (a)   This
Trust Common Securities Guarantee will constitute an unsecured obligation of the Guarantor and will rank (i) senior to the Guarantor's common stock,
(ii) pari passu with the most senior preferred or preference securities now or hereafter issued by the Guarantor and with any guarantee now or
hereafter entered into by the Guarantor with respect to any preferred or preference securities of the Guarantor or any Affiliate of the Guarantor, and (iii) junior and subordinate in right of
payment to all other liabilities of the Guarantor except any liabilities that may be pari passu expressly by their terms. 

        (b)   The
holders of any obligations of the Guarantor that are senior in priority to the obligations under this Trust Common Securities Guarantee will be entitled to all of
the rights inuring to the holders of "Senior Debt" under Article 12 of the Indenture, and the Holders of the Trust Common Securities will be subject to all of the terms and conditions of such
Article 12 with respect to any claims or rights hereunder with the same effect as though fully set forth herein. 

 
 

ARTICLE VII    
    
    TERMINATION    
    

        Section 7.1    Termination.    This Trust Common Securities Guarantee shall terminate as to each Holder of
Trust Common Securities upon (i) full payment of the applicable Redemption Price (as defined in the Declaration) with respect to all Trust Common Securities, (ii) the distribution of the
Debentures held by the Trust to the Holders of all of the Trust Common Securities of the Trust, (iii) liquidation of the Trust, or (iv) the distribution of Guarantor's common stock to
such Holder in respect of the conversion of such Holder's Trust Common Securities into common stock of the Guarantor and will terminate completely upon full payment of the amounts payable in
accordance with the Declaration of the Trust. Notwithstanding the foregoing, this Trust Common Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Common Securities must restore payment of any sums paid under the Trust Common Securities or under this Trust Common Securities Guarantee. 

 
 

ARTICLE VIII    
    
    INDEMNIFICATION    
    

        Section 8.1    Exculpation.    

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

        (b)   An
Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements
presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the 

12

 

value
and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Trust Common Securities might
properly be paid. 

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

 
 

ARTICLE IX    
    
    MISCELLANEOUS    
    

        Section 9.1    Successors and Assigns.    All guarantees and agreements contained in this Trust Common
Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Trust Common 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, each as
permitted by the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Trust Common Securities Guarantee without the prior approval of the Holders of at least a
Majority in liquidation amount of the Trust Common Securities. 

        Section 9.2    Amendments.    Except with respect to any changes that do not materially adversely affect the
rights of Holders (in which case no consent of Holders will be required), this Trust Common Securities Guarantee may be amended only with the prior approval of the Holders of at least a Majority in
liquidation amount of the Trust Common Securities. The provisions of Section 12.2 of the Declaration with respect to meetings of Holders of the Trust Common Securities apply to the giving of
such approval. 

        Section 9.3    Notices.    All notices provided for in this Trust Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered, sent by facsimile or mailed by registered or certified mail, as follows: 

        (a)   if
given to the Common Guarantee Trustee, at the Common Guarantee Trustee's mailing address set forth below (or such other address as the Common Guarantee Trustee may
give notice of to the Holders of the Trust Common Securities): 

West
Des Moines State Bank

1601 22nd Street

West Des Moines, Iowa 50266

Attention: Corporate Trust Administration 

        (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 Trust
Common Securities): 

American
Equity Investment Life Holding Company

5000 Westown Parkway, Suite 440

West Des Moines, Iowa 50266

Attention: Chief Financial Officer 

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

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

        Section 9.4    Benefit.    This Trust Common Securities Guarantee is solely for the benefit of the Holders of
the Trust Common Securities and, subject to Section 3.1(a), is not separately transferable from the Trust Common Securities. 

        Section 9.5    Governing Law.    THIS TRUST COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF IOWA AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS. 

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

	 	AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
	

 	

By:	
 	

/s/  TERRY A. REIMER      

	 	Name:	 	Terry A. Reimer
	 	Title:	 	Exec. V.P.
	

 	

WEST DES MOINES STATE BANK, as Common Guarantee Trustee
	

 	

By:	
 	

/s/  DAVID V. MAURER      

	 	Name:	 	David V. Maurer
	 	Title:	 	SVP/STO

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QuickLinks

TABLE OF CONTENTS

TRUST COMMON SECURITIES GUARANTEE AGREEMENT

ARTICLE I DEFINITIONS AND INTERPRETATION

ARTICLE II TRUST INDENTURE ACT

ARTICLE III POWERS, DUTIES AND RIGHTS OF COMMON GUARANTEE TRUSTEE

ARTICLE IV COMMON GUARANTEE TRUSTEE

ARTICLE V TRUST COMMON SECURITIES GUARANTEE

ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION

ARTICLE VII TERMINATION

ARTICLE VIII INDEMNIFICATION

ARTICLE IX MISCELLANEOUS

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