Document:

Exhibit 4.15

 

 

 

JUNIOR
SUBORDINATED INDENTURE

 

between

 

AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY

 

 

and

 

 

JPMORGAN CHASE
BANK,

as Trustee

 

 

 

 

Dated as
of September 14, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
  Definitions and Other Provisions
  of General Application

  
	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  
	
  Section 1.2.

  	
   

  	
  Compliance Certificate and Opinions

  	
   

  
	
  Section 1.3.

  	
   

  	
  Forms of Documents Delivered to Trustee

  	
   

  
	
  Section 1.4.

  	
   

  	
  Acts of Holders

  	
   

  
	
  Section 1.5.

  	
   

  	
  Notices, Etc. to Trustee and Company

  	
   

  
	
  Section 1.6.

  	
   

  	
  Notice to Holders; Waiver

  	
   

  
	
  Section 1.7.

  	
   

  	
  Effect of Headings and Table of Contents

  	
   

  
	
  Section 1.8.

  	
   

  	
  Successors and Assigns

  	
   

  
	
  Section 1.9.

  	
   

  	
  Separability Clause

  	
   

  
	
  Section 1.10.

  	
   

  	
  Benefits of Indenture

  	
   

  
	
  Section 1.11.

  	
   

  	
  Governing Law

  	
   

  
	
  Section 1.12.

  	
   

  	
  Submission to Jurisdiction

  	
   

  
	
  Section 1.13.

  	
   

  	
  Non-Business Days

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  Security Forms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Form of Security

  	
   

  
	
  Section 2.2.

  	
   

  	
  Restricted Legend

  	
   

  
	
  Section 2.3.

  	
   

  	
  Form of Trustee’s Certificate of
  Authentication

  	
   

  
	
  Section 2.4.

  	
   

  	
  Temporary Securities

  	
   

  
	
  Section 2.5.

  	
   

  	
  Definitive Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  The Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 3.2.

  	
   

  	
  Denominations

  	
   

  
	
  Section 3.3.

  	
   

  	
  Execution, Authentication, Delivery and
  Dating

  	
   

  
	
  Section 3.4.

  	
   

  	
  Global Securities

  	
   

  
	
  Section 3.5.

  	
   

  	
  Registration, Transfer and Exchange
  Generally

  	
   

  
	
  Section 3.6.

  	
   

  	
  Mutilated, Destroyed, Lost and Stolen
  Securities

  	
   

  
	
  Section 3.7.

  	
   

  	
  Persons Deemed Owners

  	
   

  

 

i

 

	
  Section 3.8.

  	
   

  	
  Cancellation

  	
   

  
	
  Section 3.9.

  	
   

  	
  Deferrals of Interest Payment Dates

  	
   

  
	
  Section 3.10.

  	
   

  	
  Right of Set-Off

  	
   

  
	
  Section 3.11.

  	
   

  	
  Agreed Tax Treatment

  	
   

  
	
  Section 3.12.

  	
   

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IV

  Satisfaction and Discharge

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
  Section 4.2.

  	
   

  	
  Application of Trust Money

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Events of Default

  	
   

  
	
  Section 5.2.

  	
   

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  
	
  Section 5.3.

  	
   

  	
  Collection of Indebtedness and Suits for
  Enforcement by Trustee

  	
   

  
	
  Section 5.4.

  	
   

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 5.5.

  	
   

  	
  Trustee May Enforce Claim Without Possession
  of Securities

  	
   

  
	
  Section 5.6.

  	
   

  	
  Application of Money Collected

  	
   

  
	
  Section 5.7.

  	
   

  	
  Limitation on Suits

  	
   

  
	
  Section 5.8.

  	
   

  	
  Unconditional Right of Holders to Receive
  Principal, Premium, if any,and Interest; Direct Action by Holders of
  Preferred Securities

  	
   

  
	
  Section 5.9.

  	
   

  	
  Restoration of Rights and Remedies

  	
   

  
	
  Section 5.10.

  	
   

  	
  Rights and Remedies Cumulative

  	
   

  
	
  Section 5.11.

  	
   

  	
  Delay or Omission Not Waiver

  	
   

  
	
  Section 5.12.

  	
   

  	
  Control by Holders

  	
   

  
	
  Section 5.13.

  	
   

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 5.14.

  	
   

  	
  Undertaking for Costs

  	
   

  
	
  Section 5.15.

  	
   

  	
  Waiver of Usury, Stay or Extension Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  The Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Corporate Trustee Required

  	
   

  
	
  Section 6.2.

  	
   

  	
  Certain Duties and Responsibilities

  	
   

  

 

ii

 

	
  Section 6.3.

  	
   

  	
  Notice of Defaults

  	
   

  
	
  Section 6.4.

  	
   

  	
  Certain Rights of Trustee

  	
   

  
	
  Section 6.5.

  	
   

  	
  May Hold Securities

  	
   

  
	
  Section 6.6.

  	
   

  	
  Compensation; Reimbursement; Indemnity

  	
   

  
	
  Section 6.7.

  	
   

  	
  Resignation and Removal; Appointment of
  Successor

  	
   

  
	
  Section 6.8.

  	
   

  	
  Acceptance of Appointment by Successor

  	
   

  
	
  Section 6.9.

  	
   

  	
  Merger, Conversion, Consolidation or
  Succession to Business

  	
   

  
	
  Section 6.10.

  	
   

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
   

  
	
  Section 6.11.

  	
   

  	
  Appointment of Authenticating Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  Holder’s Lists and Reports by Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Company to Furnish Trustee Names and
  Addresses of Holders

  	
   

  
	
  Section 7.2.

  	
   

  	
  Preservation of Information, Communications
  to Holders

  	
   

  
	
  Section 7.3.

  	
   

  	
  Reports by Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  Consolidation, Merger, Conveyance, Transfer or Lease

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Company May Consolidate, Etc., Only on
  Certain Terms

  	
   

  
	
  Section 8.2.

  	
   

  	
  Successor Company Substituted

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IX

  Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Supplemental Indentures without Consent of
  Holders

  	
   

  
	
  Section 9.2.

  	
   

  	
  Supplemental Indentures with Consent of
  Holders

  	
   

  
	
  Section 9.3.

  	
   

  	
  Execution of Supplemental Indentures

  	
   

  
	
  Section 9.4.

  	
   

  	
  Effect of Supplemental Indentures

  	
   

  
	
  Section 9.5.

  	
   

  	
  Reference in Securities to Supplemental
  Indentures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Payment of Principal, Premium, if any, and
  Interest

  	
   

  
	
  Section 10.2.

  	
   

  	
  Money for Security Payments to be Held in
  Trust

  	
   

  
	
  Section 10.3.

  	
   

  	
  Statement as to Compliance

  	
   

  
	
  Section 10.4.

  	
   

  	
  Calculation Agent

  	
   

  
					

 

iii

 

	
  Section 10.5.

  	
   

  	
  Additional Tax Sums

  	
   

  
	
  Section 10.6.

  	
   

  	
  Additional Covenants

  	
   

  
	
  Section 10.7.

  	
   

  	
  Waiver of Covenants

  	
   

  
	
  Section 10.8.

  	
   

  	
  Treatment of Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XI

  Redemption of Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Optional Redemption

  	
   

  
	
  Section 11.2.

  	
   

  	
  Special Event Redemption

  	
   

  
	
  Section 11.3.

  	
   

  	
  Election to Redeem; Notice to Trustee

  	
   

  
	
  Section 11.4.

  	
   

  	
  Selection of Securities to be Redeemed

  	
   

  
	
  Section 11.5.

  	
   

  	
  Notice of Redemption

  	
   

  
	
  Section 11.6.

  	
   

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 11.7.

  	
   

  	
  Payment of Securities Called for Redemption

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE XII

  Subordination of Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Securities Subordinate to Senior Debt

  	
   

  
	
  Section 12.2.

  	
   

  	
  No Payment When Senior Debt in Default;
  Payment Over of Proceeds Upon Dissolution, Etc

  	
   

  
	
  Section 12.3.

  	
   

  	
  Payment Permitted If No Default

  	
   

  
	
  Section 12.4.

  	
   

  	
  Subrogation to Rights of Holders of Senior
  Debt

  	
   

  
	
  Section 12.5.

  	
   

  	
  Provisions Solely to Define Relative Rights

  	
   

  
	
  Section 12.6.

  	
   

  	
  Trustee to Effectuate Subordination

  	
   

  
	
  Section 12.7.

  	
   

  	
  No Waiver of Subordination Provisions

  	
   

  
	
  Section 12.8.

  	
   

  	
  Notice to Trustee

  	
   

  
	
  Section 12.9.

  	
   

  	
  Reliance on Judicial Order or Certificate
  of Liquidating Agent

  	
   

  
	
  Section 12.10.

  	
   

  	
  Trustee Not Fiduciary for Holders of
  Senior Debt

  	
   

  
	
  Section 12.11.

  	
   

  	
  Rights of Trustee as Holder of Senior
  Debt; Preservation of Trustee’s Rights

  	
   

  
	
  Section 12.12.

  	
   

  	
  Article Applicable to Paying Agents

  	
   

  

 

iv

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule A 

  	
  -

  	
   

  	
  Determination of LIBOR

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
   

  	
  Form of Officer’s Financial
  Certificate

  

 

i

 

JUNIOR
SUBORDINATED INDENTURE, dated as of September 14, 2004, between AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY, an Iowa corporation (the “Company”), and
JPMORGAN CHASE BANK, a New York banking corporation, as Trustee (in such
capacity, the “Trustee”).

 

RECITALS
OF THE COMPANY

 

WHEREAS,
the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its unsecured junior subordinated deferrable
interest notes (the “Securities”) issued
to evidence loans made to the Company of the proceeds from the issuance by
American Equity Capital Trust VII, a Delaware statutory trust (the “Trust”), of undivided preferred beneficial interests in the
assets of the Trust (the “Preferred Securities”) and
undivided common beneficial interests in the assets of the Trust (the “Common Securities” and, collectively with the Preferred
Securities, the “Trust Securities”), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered; and

 

WHEREAS,
all things necessary to make this Indenture a valid agreement of the Company,
in accordance with its terms, have been done.

 

NOW,
THEREFORE, this Indenture Witnesseth:

 

For
and in consideration of the premises and the purchase of the Securities by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

 

ARTICLE I

 

DEFINITIONS
AND OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION 1.1. Definitions.

 

For
all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:

 

(a)
the terms defined in this Article I have the meanings assigned to them
in this Article I;

 

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

 

(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;

 

(d) unless the context otherwise requires, any reference to an
“Article” or a “Section” refers to an Article or a Section, as the case may be,
of this Indenture;

 

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

 

1

 

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

 

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

 

“Act” when
used with respect to any Holder, has the meaning specified in Section 1.4.

 

“Administrative Trustee” means, with respect to the Trust, each Person
identified as an “Administrative Trustee” in the Trust Agreement, solely in its
capacity as Administrative Trustee of the Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Administrative Trustee appointed as therein provided.

 

“Additional Interest” means the interest, if any, that shall accrue on any
amounts payable on the Securities, the payment of which has not been made on
the applicable Interest Payment Date and which shall accrue at the rate per
annum specified or determined as specified in such Security, in each case to
the extent legally enforceable.

 

“Additional Tax Sums” has the meaning specified in Section 10.5.

 

“Additional Taxes” means taxes, duties or other governmental charges imposed on the Trust as a
result of a Tax Event (which, for the sake of clarity, does not include amounts
required to be deducted or withheld by the Trust from payments made by the
Trust to or for the benefit of the Holder of, or any Person that acquires a
beneficial interest in, the Securities).

 

“Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person. For the purposes of this definition, “control,” when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Applicable Accounting Principles” means accounting practices prescribed or permitted by
the National Association of Insurance Commissioners and, with respect to the
Company’s subsidiary insurance companies, the applicable insurance department
of the state of domicile of such insurance subsidiary, and in each case,
applied consistently throughout the periods involved.

 

“Applicable Depository Procedures” means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent applicable
to such transaction and as in effect from time to time.

 

“Applicable Insurance Regulatory Authority” means the Iowa Insurance Division or, if at any time
after the execution of this Indenture any such entity is not existing and
performing the duties now assigned to it, any successor body performing similar
duties or functions.

 

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section
6.11 to act on behalf of the Trustee to authenticate the Securities.

 

2

 

“Bankruptcy Code” means Title 11 of the United States Code or any successor statute(s)
thereto, or any similar federal or state law for the relief of debtors, in each
case as amended from time to time.

 

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

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification.

 

“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.

 

“Calculation Agent” has the meaning specified in Section 10.4.

 

“Common Securities” has the meaning specified in the first recital of this Indenture.

 

“Common Stock” means the common stock, par value $1.00 per share, of the Company.

 

“Company” means
the Person named as the “Company” in
the first paragraph of this Indenture until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor
corporation.

 

“Company Request” and “Company Order” mean, respectively, the
written request or order signed in the name of the Company by its Chairman of
the Board of Directors, its Vice Chairman of the Board of Directors, its Chief
Executive Officer, President or a Vice President, and by its Chief Financial
Officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.

 

“Corporate Trust Office” means the principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of this Indenture is located at 600 Travis, 50th
Floor, Houston, Texas 77002, Attn: Institutional Trust Services, American
Equity Capital Trust VII.

 

“Debt” means,
with respect to any Person, whether recourse is to all or a portion of the
assets of such Person, whether currently existing or hereafter incurred and
whether or not contingent and without duplication, (i) every obligation of such
Person for money borrowed; (ii) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of
such Person; (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or other accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of this
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and

 

3

 

commodity forward contracts, options and swaps and
similar arrangements; (vii) every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is responsible
or liable for, directly or indirectly, as obligor or otherwise; and (viii) any
renewals, extensions, refundings, amendments or modifications of any obligation
of the type referred to in clauses (i) through (vii).

 

“Defaulted Interest” has the meaning specified in Section 3.1.

 

“Delaware Trustee” means, with respect to the Trust, the Person identified as the “Delaware
Trustee” in the Trust Agreement, solely in its capacity as Delaware Trustee of
the Trust under the Trust Agreement and not in its individual capacity, or its
successor in interest in such capacity, or any successor Delaware Trustee
appointed as therein provided.

 

“Depositary” means
an organization registered as a clearing agency under the Exchange Act that is
designated as Depositary by the Company or any successor thereto.

 

“Depositary Participant” means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depositary effects
book-entry transfers and pledges of securities deposited with the Depositary.

 

“Distributions” means amounts payable in respect of the Trust Securities as provided in the
Trust Agreement and referred to therein as “Distributions.”

 

“Dollar” or “$” means the currency of the United States of America that,
as at the time of payment, is legal tender for the payment of public and
private debts.

 

“DTC” means
The Depository Trust Company, a New York corporation, or any successor thereto.

 

“Event of Default” has the meaning specified in Section 5.1.

 

“Exchange Act” means the Securities Exchange Act of 1934 or any statute successor thereto,
in each case as amended from time to time.

 

“Expiration Date” has the meaning specified in Section 1.4.

 

“Extension Period” has the meaning specified in Section 3.9.

 

“GAAP” means
United States generally accepted accounting principles, consistently applied,
from time to time in effect.

 

“Global Security” means a Security that evidences all or part of the Securities, the
ownership and transfers of which shall be made through book entries by a Depositary.

 

“Government Obligation” means (a) any security that is (i) a direct obligation
of the United States of America of which the full faith and credit of the
United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or the payment of which is unconditionally

 

4

 

guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (b) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any Government Obligation that is specified in clause
(a) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any Government Obligation that is so specified and held, provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.

 

“Guarantee Agreement” means the Guarantee Agreement executed by the Company
and JPMorgan Chase Bank, as Guarantee Trustee, contemporaneously with the
execution and delivery of this Indenture, for the benefit of the holders of the
Preferred Securities, as modified, amended or supplemented from time to time.

 

“Holder” means
a Person in whose name a Security is registered in the Securities Register.

 

“Indenture” means
this instrument as originally executed or as it may from time to time be
amended or supplemented by one or more amendments or indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.

 

“Interest Payment Date” means March 15, June 15, September 15, and December 15
of each year, commencing on December 15, 2004, during the term of this
Indenture.

 

“Investment Company Act” means the Investment Company Act of 1940 or any
successor statute thereto, in each case as amended from time to time.

 

“Investment Company Event” means the receipt by the Company of an Opinion of
Counsel experienced in such matters to the effect that, as a result of the
occurrence of a change in law or regulation (including any announced
prospective change) or a written change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or,
within ninety (90) days of the date of such opinion will be, considered an “investment
company” that is required to be registered under the Investment Company Act,
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the date of the issuance of the Securities.

 

“LIBOR” has
the meaning specified in Schedule A.

 

“LIBOR Business Day” has the meaning specified in Schedule A.

 

“LIBOR Determination Date” has the meaning specified in Schedule A.

 

“Liquidation Amount” has the meaning specified in the Trust Agreement.

 

“Maturity,” when
used with respect to any Security, means the date on which the principal of
such Security or any installment of principal becomes due and payable as
therein or

 

5

 

herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

 

“Notice of Default” means a written notice of the kind specified in Section 5.1(c).

 

“Officers’ Certificate” means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company
and delivered to the Trustee.

 

“Operative Documents” means the Trust Agreement, the Indenture, the Purchase
Agreement, the Guarantee Agreement and the Securities.

 

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for or an employee
of the Company or any Affiliate of the Company.

 

“Optional Redemption Price” has the meaning set forth in Section 11.1.

 

“Original Issue Date” means the date of original issuance of each Security.

 

“Outstanding” means, when used in reference to any Securities, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture,
except:

 

(i) Securities theretofore canceled by
the Trustee or delivered to the Trustee for cancellation;

 

(ii)
Securities for whose payment or redemption money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and

 

(iii)
Securities that have been paid or in substitution for or in lieu of which other
Securities have been authenticated and delivered pursuant to the provisions of
this Indenture, unless proof satisfactory to the Trustee is presented that any
such Securities are held by Holders in whose hands such Securities are valid,
binding and legal obligations of the Company;

 

provided, that, in determining whether the Holders of the
requisite principal amount of Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities that a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee’s right
so to act with respect to

 

6

 

such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or
such other obligor. Notwithstanding anything herein to the contrary, Securities
initially issued to the Trust that are owned by the Trust shall be deemed to be
Outstanding notwithstanding the ownership by the Company or an Affiliate of any
beneficial interest in the Trust.

 

“Paying Agent” means the Trustee or any Person authorized by the Company to pay the
principal of or any premium or interest on, or other amounts in respect of, any
Securities on behalf of the Company.

 

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

 

“Place of Payment” means, with respect to the Securities, the Corporate Trust Office of the
Trustee.

 

“Preferred Securities” has the meaning specified in the first recital of this
Indenture.

 

“Predecessor Security” of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.

 

“Proceeding” has
the meaning specified in Section 12.2.

 

“Property Trustee” means the Person identified as the “Property Trustee” in the Trust
Agreement, solely in its capacity as Property Trustee of the Trust under the
Trust Agreement and not in its individual capacity, or its successor in
interest in such capacity, or any successor Property Trustee appointed as
therein provided.

 

“Purchase Agreement” means the agreement, dated as of the date hereof, between the Company and
the Trust and ALESCO Preferred Funding V, Ltd.

 

“Redemption Date” means, when used with respect to any Security to be redeemed, the date
fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price” means, when used with respect to any Security to be redeemed, in whole or
in part, the Special Redemption Price or the Optional Redemption Price, as
applicable, at which such Security or portion thereof is to be redeemed as
fixed by or pursuant to this Indenture.

 

“Reference Banks” has the meaning specified in Schedule A.

 

“Regular Record Date” for the interest payable on any Interest Payment Date
with respect to the Securities means the date that is fifteen (15) days
preceding such Interest Payment Date (whether or not a Business Day).

 

7

 

“Responsible Officer’ means, when used with respect to the Trustee, the
officer in the Institutional Trust Services department of the Trustee having
direct responsibility for the administration of this Indenture.

 

“Rights Plan” means a plan of the Company providing for the issuance by the Company to
all holders of its Common Stock of rights
entitling the holders thereof to subscribe for or purchase shares of any class
or series of capital stock of the Company which rights (i) are
deemed to be transferred with such shares of such Common Stock and (ii) are
also issued in respect of future issuances of such Common Stock, in each case
until the occurrence of a specified event or events.

 

“Securities” or
“Security means any debt securities or
debt security, as the case may be, authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933 or any successor statute thereto, in each
case as amended from time to time.

 

“Securities Register” and “Securities Registrar” have
the respective meanings specified in Section 3.5.

 

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

 

“Special Event” means the occurrence of an Investment Company Event or a Tax Event.

 

“Special Record Date” for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.1.

 

“Special Redemption Price” has the meaning set forth in Section 11.2.

 

“Stated Maturity” means December 15, 2034.

 

8

 

“Statutory Financial Statements” means all financial statements of the Company’s
subsidiary insurance companies for each relevant period, each prepared in
accordance with Applicable Accounting Principles.

 

“Subsidiary” means
a Person more than fifty percent (50%) of the outstanding voting stock or other
voting interests of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, “voting
stock” means stock that ordinarily has voting power for the election
of directors, whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.

 

“Tax Event” means
the receipt by the Company of an Opinion of Counsel experienced in such matters
to the effect that, as a result of (a) any amendment to or change (including
any announced prospective change) in the laws or any regulations thereunder of
the United States or any political subdivision or taxing authority thereof or
therein or (b) any judicial decision or any official administrative
pronouncement (including any private letter ruling, technical advice memorandum
or field service advice) or regulatory procedure, including any notice or
announcement of intent to adopt any such pronouncement or procedure (an “Administrative Action”), regardless of whether such
judicial decision or Administrative Action is issued to or in connection with a
proceeding involving the Company or the Trust and whether or not subject to
review or appeal, which amendment, change, judicial decision or Administrative
Action is enacted, promulgated or announced, in each case, on or after the date
of issuance of the Securities, there is more than an insubstantial risk that
(i) the Trust is, or will be within ninety (90) days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Securities, (ii) interest payable by the Company on
the Securities is not, or within ninety (90) days of the date of such opinion,
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within ninety
(90) days of the date of such opinion, subject to more than a de minimis amount of other taxes, duties or other
governmental charges.

 

“Trust” has
the meaning specified in the first recital of this Indenture.

 

“Trust Agreement” means the Amended and Restated Trust Agreement executed and delivered by
the Company, the Property Trustee, Chase Manhattan Bank USA, National
Association, as Delaware Trustee and the Administrative Trustees named therein,
contemporaneously with the execution and delivery of this Indenture, for the
benefit of the holders of the Trust Securities, as amended or supplemented from
time to time.

 

“Trustee” means
the Person named as the “Trustee” in
the first paragraph of this instrument, solely in its capacity as such and not
in its individual capacity, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and, thereafter, “Trustee” shall mean or include each Person who is then a
Trustee hereunder.

 

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

 

“Trust Securities” has the meaning specified in the first recital of this Indenture.

 

9

 

SECTION 1.2. Compliance Certificate and Opinions.

 

(a)           Upon any application or request by
the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall, if requested by the Trustee, furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent (including covenants compliance with
which constitutes a condition precedent), if any, have been complied with.

 

(b)           Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture (other than the certificate provided pursuant to Section 10.3) shall include:

 

(i) a
statement by each individual signing such certificate or opinion that such
individual has read such covenant or condition and the definitions herein
relating thereto;

 

(ii) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions of such individual contained in such
certificate or opinion are based;

 

(iii) a
statement that, in the opinion of such individual, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been complied
with; and

 

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

 

SECTION 1.3. Forms of Documents Delivered to Trustee.

 

(a)           In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.

 

(b)           Any certificate or opinion of an
officer of the Company may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or after reasonable inquiry should know, that the certificate or
opinion or representations with respect to matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or after reasonable
inquiry should know, that the certificate or opinion or representations with respect
to such matters are erroneous.

 

10

 

(c)           Where any Person is required to make,
give or execute two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.

 

(d)           Whenever, subsequent to the receipt
by the Trustee of any Board Resolution, Officers’ Certificate, Opinion of
Counsel or other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be discovered therein, a
new document or instrument may be substituted therefor in corrected form with
the same force and effect as if originally received in the corrected form and,
irrespective of the date or dates of the actual execution and/or delivery
thereof, such substitute document or instrument shall be deemed to have been
executed and/or delivered as of the date or dates required with respect to the
document or instrument for which it is substituted. Without limiting the
generality of the foregoing, any Securities issued under the authority of such
defective document or instrument shall nevertheless be the valid obligations of
the Company entitled to the benefits of this Indenture equally and ratably with
all other Outstanding Securities.

 

SECTION 1.4. Acts of Holders.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given to or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in
person or by an agent thereof duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments (including any appointment of an agent) is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 1.4.

 

(b)           The fact and date of the execution by
any Person of any such instrument or writing may be proved by the affidavit of
a witness of such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him or her the
execution thereof. Where such execution is by a Person acting in other than his
or her individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution by
any Person of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner that the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee
may determine.

 

(c)           The ownership of Securities shall be
proved by the Securities Register.

 

(d)           Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any
Security shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.

 

11

 

(e)           Without limiting the foregoing, a
Holder entitled to take any action hereunder with regard to any particular
Security may do so with regard to all or any part of the principal amount of
such Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such principal
amount.

 

(f)            Except as set forth in paragraph (g)
of this Section 1.4, the Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to give,
make or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given,
made or taken by Holders of Securities. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities on such record date, and
no other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; provided, that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date (as defined in Section 1.4(h)) by Holders of the requisite principal amount of Outstanding Securities on
such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect). Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 1.6.

 

(g)           The Trustee may set any day as a
record date for the purpose of determining the Holders of Outstanding
Securities entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration or rescission or annulment
thereof referred to in Section 5.2, (iii)
any request to institute proceedings referred to in Section 5.7(b) or
(iv) any direction referred to in Section 5.12. If any record
date is set pursuant to this paragraph, the Holders of Outstanding Securities
on such record date, and no other Holders, shall be entitled to join in such
notice, declaration, request or direction, whether or not such Holders remain
Holders after such record date; provided, that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no
action by any Person be canceled and of no effect). Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company’s expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.6.

 

(h)           With respect to any record date set
pursuant to paragraph (f) or (g) of this Section 1.4, the party hereto that sets such record date may
designate any day as the “Expiration Date” and
from time to time may change the Expiration Date to any earlier or later day; provided, that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto
in writing, and to each Holder of Securities in the manner set forth in Section
1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.4, the party hereto that set such record date shall be
deemed to have initially designated the ninetieth (90th) day after
such record

 

12

 

date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later
than the one hundred eightieth (180th) day after the applicable
record date.

 

SECTION 1.5. Notices, Etc. to Trustee and Company.

 

Any
request, demand, authorization, direction, notice, consent, waiver, Act of
Holders, or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:

 

(a)           the Trustee by any Holder, any holder
of Preferred Securities or the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with and received
by the Trustee at its Corporate Trust Office, or

 

(b)           the Company by the Trustee, any
Holder or any holder of Preferred Securities shall be sufficient for every
purpose hereunder if in writing and mailed, first class, postage prepaid, to
the Company addressed to it at American Equity Investment Life Holding Company,
5000 Westown Parkway, Suite 440, West Des Moines, IA 50266, Attention: Wendy Carlson, Chief
Financial Officer or at any other address previously furnished in writing to
the Trustee by the Company.

 

SECTION 1.6. Notice to Holders; Waiver.

 

Where
this Indenture provides for notice to Holders of any event, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first class, postage prepaid, to each Holder affected by
such event to the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. If, by reason of the suspension of or
irregularities in regular mail service or for any other reason, it shall be
impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

 

SECTION 1.7. Effect of Headings and Table of Contents.

 

The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction of this Indenture.

 

SECTION 1.8. Successors and Assigns.

 

This
Indenture shall be binding upon and shall inure to the benefit of any successor
to the Company and the Trustee, including any successor by operation of law.
Except in connection

 

13

 

with a transaction involving the Company that is
permitted under Article VIII and pursuant to which the assignee agrees
in writing to perform the Company’s obligations hereunder, the Company shall
not assign its obligations hereunder.

 

SECTION 1.9. Separability Clause.

 

If
any provision in this Indenture or in the Securities shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby, and there
shall be deemed substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at issue.

 

SECTION 1.10.
Benefits of Indenture.

 

Nothing
in this Indenture or in the Securities, express or implied, shall give to any
Person, other than the parties hereto and their successors and assigns, the
holders of Senior Debt, the Holders of the Securities and, to the extent
expressly provided in Sections 5.2, 5.8,
5.9, 5.11, 5.13, 9.2 and 10.7, the holders of Preferred
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

 

SECTION 1.11.
Governing Law.

 

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

 

SECTION 1.12.
Submission to Jurisdiction.

 

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

 

SECTION 1.13.
Non-Business Days.

 

If
any Interest Payment Date, Redemption Date or Stated Maturity of any Security
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or the Securities) payment of interest, premium, if any, or principal
or other amounts in respect of such Security shall not be made on such date,
but shall be made on the next succeeding Business Day (and no interest shall
accrue in respect of the amounts whose payment is so delayed for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) except that, if
such Business Day falls in the next succeeding calendar year, such payment
shall be made on the immediately preceding

 

14

 

Business Day, in each case with the same force and
effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity.

 

ARTICLE II

 

SECURITY
FORMS

 

SECTION 2.1. Form of Security.

 

Any
Security issued hereunder shall be in substantially the following form:

 

 

AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY

 

Floating Rate
Junior Subordinated Note due 2034

 

	
  No.

  	
   

  	
  $10,830,000

  	
   

  

 

American
Equity Investment Life Holding Company, a corporation organized and existing
under the laws of Iowa (hereinafter called the “Company,” which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to                              ,
or registered assigns, the principal sum of Ten Million Eight Hundred Thirty
Thousand Dollars ($10,830,000) or such other principal amount represented
hereby as may be set forth in the records of the Securities Registrar
hereinafter referred to in accordance with the Indenture on December 15, 2034.
The Company further promises to pay interest on said principal sum from
September 14, 2004, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 15, June 15, September 15, and December
15 of each year, commencing December 15, 2004, or if any such day is not a
Business Day, on the next succeeding Business Day (and no interest shall accrue
in respect of the amounts whose payment is so delayed for the period from and
after such Interest Payment Date until such next succeeding Business Day),
except that, if such Business Day falls in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on the Interest Payment Date,
at a variable rate equal to LIBOR plus 3.75% per annum, together with
Additional Tax Sums, if any, as provided in Section 10.5 of the
Indenture, until the principal hereof is paid or duly provided for or made
available for payment; provided, further, that
any overdue principal, premium, if any, or Additional Tax Sums and any overdue
installment of interest shall bear Additional Interest at a variable rate equal
to LIBOR plus 3.75% per annum (to the extent that the payment of such interest
shall be legally enforceable), compounded quarterly, from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand.

 

The
amount of interest payable shall be computed on the basis of a 360-day year and
the actual number of days elapsed in the relevant interest period. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date shall, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest installment. Any
such interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in

 

15

 

whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than ten (10) days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.

 

So
long as no Event of Default has occurred and is continuing, the Company shall
have the right, at any time and from time to time during the term of this
Security, to defer the payment of interest on this Security for a period of up
to twenty (20) consecutive quarterly interest payment periods (each such
period, an “Extension Period”), during which
Extension Period(s), no interest shall be due and payable (except any
Additional Tax Sums that may be due and payable). No Extension Period shall end
on a date other than an Interest Payment Date, and no Extension Period shall
extend beyond the Stated Maturity of the principal of this Security. No
interest shall be due and payable during an Extension Period (except any
Additional Tax Sums that may be due and payable), except at the end thereof,
but each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest (to the extent
payment of such interest would be legally enforceable) at a variable rate equal
to LIBOR plus 3.75% per annum, compounded quarterly, from the dates on which amounts
would have otherwise been due and payable until paid or made available for
payment. At the end of any such Extension Period, the Company shall pay all
interest then accrued and unpaid on this Security, together with such
Additional Interest. Prior to the termination of any such Extension Period, the
Company may further defer the payment of interest; provided, that
(i) all such previous and further extensions comprising such Extension Period
do not exceed twenty (20) quarterly interest payment periods, (ii) no Extension
Period shall end on a date other than an Interest Payment Date and (iii) no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security. Upon the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest then due
on any Interest Payment Date, the Company may elect to begin a new Extension
Period; provided, that (i) such Extension Period
does not exceed twenty (20) quarterly interest payment periods, (ii) no
Extension Period shall end on a date other than an Interest Payment Date and
(iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security. The Company shall give the Holder of this Security
and the Trustee written notice of its election to begin any such Extension
Period at least one Business Day prior to the next succeeding Interest Payment
Date on which interest on this Security would be payable but for such deferral
or, so long as this Security is held by the Trust, at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on
the Preferred Securities of American Equity Capital Trust VII would be payable
but for such deferral and (ii) the date on which the Property Trustee of such
Trust is required to give notice to any securities exchange or other applicable
selfregulatory organization or to holders of such Preferred Securities of the
record date for the payment of such Distributions.

 

During
any such Extension Period, the Company shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company’s capital stock or (ii)
make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to
this Security (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in

 

16

 

connection with (1) any employment contract, benefit
plan or other similar arrangement with or for the benefit of any one or more
employees, officers, directors or consultants, (2) a dividend reinvestment or
stockholder stock purchase plan and (3) the issuance of capital stock of the
Company (or securities convertible into or exercisable for such capital stock)
as consideration in an acquisition transaction entered into prior to the applicable
Extension Period, (b) as a result of an exchange or conversion of any class or
series of the Company’s capital stock (or any capital stock of a Subsidiary of
the Company) for any class or series of the Company’s capital stock or of any
class or series of the Company’s indebtedness for any class or series of the
Company’s capital stock, (c) the purchase of fractional interests in shares of
the Company’s capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock).

 

Payment
of principal of, premium, if any, and interest on this Security shall be made
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. Payments of principal,
premium, if any, and interest due at the Maturity of this Security shall be
made at the Place of Payment upon surrender of such Securities to the Paying
Agent, and payments of interest shall be made, subject to such surrender where
applicable, by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Paying
Agent at least ten (10) Business Days prior to the date for payment by the
Person entitled thereto unless proper written transfer instructions have not
been received by the relevant record date, in which case such payments shall be
made by check mailed to the address of such Person as such address shall appear
in the Security Register. Notwithstanding the foregoing, so long as the Holder
of this Security is the Property Trustee, the payment of the principal of (and
premium, if any) and interest (including any overdue installment of interest
and Additional Tax Sums, if any) on this Security will be made at such place and
to such account as may be designated by the Property Trustee.

 

The
indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Debt, and this Security is issued subject to the provisions
of the Indenture with respect thereto. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all
notice of the acceptance of the subordination provisions contained herein and
in the Indenture by each holder of Senior Debt, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.

 

Unless
the certificate of authentication hereon has been executed by the Trustee by
manual signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

 

[FORM OF REVERSE
OF SECURITY]

 

17

 

This
Security is one of a duly authorized issue of securities of the Company (the “Securities”) issued under the Junior Subordinated
Indenture, dated as of September 14, 2004 (the “Indenture”),
between the Company and JPMorgan Chase Bank, as Trustee (in such
capacity, the “Trustee,” which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt, the Holders of the
Securities and the holders of the Preferred Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.

 

All
terms used in this Security that are defined in the Indenture or in the Amended
and Restated Trust Agreement, dated as of September 14, 2004 (as modified,
amended or supplemented from time to time, the “Trust
Agreement”), relating to the American Equity Capital Trust VII (the “Trust”) among the Company, as Depositor, the Trustees named
therein and the Holders from time to time of the Trust Securities issued
pursuant thereto, shall have the meanings assigned to them in the Indenture or
the Trust Agreement, as the case may be.

 

The
Company may, on any Interest Payment Date, at its option, upon not less than
thirty (30) days’ nor more than sixty (60) days’ written notice to the Holders
of the Securities (unless a shorter notice period shall be satisfactory to the
Trustee) on or after December 15, 2009 and subject to the terms and conditions
of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to one hundred
percent (100%) of the principal amount hereof, together, in the case of any
such redemption, with accrued interest, including any Additional Interest,
through but excluding the date fixed as the Redemption Date; provided, that the Company shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required.

 

In
addition, upon the occurrence and during the continuation of a Special Event,
the Company may, at its option, upon not less than thirty (30) days’ nor more
than sixty (60) days’ written notice to the Holders of the Securities (unless a
shorter notice period shall be satisfactory to the Trustee), redeem this
Security, in whole but not in part, subject to the terms and conditions of Article
XI of the Indenture at a Redemption Price equal to one hundred seven and
one half percent (107.5%) of the principal amount hereof, together, in the case
of any such redemption, with accrued interest, including any Additional
Interest, through but excluding the date fixed as the Redemption Date; provided, that the Company shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required.

 

In
the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof. If less than all the Securities are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than sixty (60) days prior to the Redemption Date by the Trustee from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security.

 

The
Indenture permits, with certain exceptions as therein provided, the Company and
the Trustee at any time to enter into a supplemental indenture or indentures
for the purpose of modifying in any manner the rights and obligations of the
Company and of the Holders of the

 

18

 

Securities, with the consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities, on behalf of the Holders of all
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

 

No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any,
and interest, including any Additional Interest, on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

 

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Securities Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar and duly executed by, the Holder hereof or such Holder’s
attorney duly authorized in writing, and thereupon one or more new Securities,
of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

 

The
Securities are issuable only in registered form without coupons in minimum
denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities are exchangeable for a like aggregate principal
amount of Securities and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

 

The
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

 

The
Company and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security agree that, for United States federal, state and local tax
purposes, it is intended that this Security constitute indebtedness.

 

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

 

19

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed on
this                    day
of                      ,20    .

 

	
   

  	
  AMERICAN EQUITY INVESTMENT LIFE
  HOLDING COMPANY

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SECTION 2.2. Restricted Legend.

 

(a)           Any Security issued hereunder shall
bear a legend in substantially the following form:

 

“[IF THE SECURITY
IS A GLOBAL SECURITY INSERT: THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”)
OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC
OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.

 

UNLESS THIS SECURITY IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND SUCH
SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER
OF THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE

 

20

 

PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.

 

THE HOLDER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
COMPANY, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),(3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN
THE CASE OF (III) OR (V), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN
OPINION OF COUNSEL AND OTHER INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER
WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

 

THE SECURITIES WILL BE ISSUED AND MAY
BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS
THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER
OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH SECURITIES, OR ANY
INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH SECURITIES.

 

THE HOLDER OF THIS SECURITY, OR ANY
INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY

 

21

 

REASON OF ANY PLAN’S INVESTMENT IN THE
ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD
THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE
IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY
EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.”

 

(b)           The
above legends shall not be removed from any Security unless there is delivered
to the Company satisfactory evidence, which may include an Opinion of Counsel,
as may be reasonably required to ensure that any future transfers thereof may
be made without restriction under or violation of the provisions of the
Securities Act and other applicable law. Upon provision of such satisfactory
evidence, the Company shall execute and deliver to the Trustee, and the Trustee
shall deliver, upon receipt of a Company Order directing it to do so, a
Security that does not bear the legend.

 

SECTION 2.3. Form of Trustee’s Certificate of Authentication.

 

The
Trustee’s certificate of authentication shall be in substantially the following
form:

 

This
is one of the Securities referred to in the within-mentioned Indenture.

 

	
  Dated:

  
	
   

  
	
   

  	
  JPMORGAN CHASE BANK, as Trustee

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized signatory

  

 

SECTION 2.4. Temporary Securities.

 

(a)           Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

 

(b)           If temporary Securities are issued,
the Company will cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for that purpose without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities,

 

22

 

the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of any authorized denominations having the same Original Issue Date and Stated
Maturity and having the same terms as such temporary Securities. Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.

 

SECTION 2.5. Definitive Securities.

 

The
Securities issued on the Original Issue Date shall be in definitive form. The
definitive Securities shall be printed, lithographed or engraved, or produced
by any combination of these methods, if required by any securities exchange on
which the Securities may be listed, on a steel engraved border or steel
engraved borders or may be produced in any other manner permitted by the rules
of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

 

ARTICLE III

 

THE
SECURITIES

 

SECTION 3.1. Payment of Principal and Interest.

 

(a)           The unpaid principal amount of the
Securities shall bear interest at a variable rate of LIBOR plus 3.75% per annum
until paid or duly provided for, such interest to accrue from the Original
Issue Date or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, and any overdue principal, premium, if any, or
Additional Tax Sums and any overdue installment of interest shall bear
Additional Interest at the rate equal to a variable rate of LIBOR plus 3.75% per annum, compounded quarterly from the dates such
amounts are due until they are paid or funds for the payment thereof are made
available for payment.

 

(b)           Interest and Additional Interest on
any Security that is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, except that interest and
any Additional Interest payable on the Stated Maturity (or any date of
principal repayment upon early maturity) of the principal of a Security or on a
Redemption Date shall be paid to the Person to whom principal is paid. The
initial payment of interest on any Security that is issued between a Regular
Record Date and the related Interest Payment Date shall be payable as provided
in such Security.

 

(c)           Any interest on any Security that is
due and payable, but is not timely paid or duly provided for, on any Interest
Payment Date for Securities (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
paragraph (i) or (ii) below:

 

(i) The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such

 

23

 

Defaulted Interest (a “Special Record Date”), which shall be fixed in the
following manner. At least thirty (30) days prior to the date of the proposed
payment, the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest, which shall be not more
than fifteen (15) days and not less than ten (10) days prior to the date of the
proposed payment and not less than ten (10) days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class,
postage prepaid, to each Holder of a Security at the address of such Holder as
it appears in the Securities Register not less than ten (10) days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered on such Special Record Date;
or

 

(ii) The
Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities may be listed and, upon such notice as may be required by such
exchange (or by the Trustee if the Securities are not listed), if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such payment shall be deemed practicable by the Trustee.

 

(d)           Payments of interest on the
Securities shall include interest accrued to but excluding the respective
Interest Payment Dates. Interest payments for the Securities shall be computed
and paid on the basis of a 360-day year and the actual number of days elapsed in
the relevant interest period.

 

(e)           Payment of principal of, premium, if
any, and interest on the Securities shall be made in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of principal, premium, if any,
and interest due at the Maturity of such Securities shall be made at the Place
of Payment upon surrender of such Securities to the Paying Agent and payments
of interest shall be made subject to such surrender where applicable, by wire
transfer at such place and to such account at a banking institution in the
United States as may be designated in writing to the Paying Agent at least ten
(10) Business Days prior to the date for payment by the Person entitled thereto
unless proper written transfer instructions have not been received by the
relevant record date, in which case such payments shall be made by check mailed
to the address of such Person as such address shall appear in the Security
Register. Notwithstanding the foregoing, so long as the holder of this Security
is the Property Trustee, the payment of the principal of (and premium, if any)
and interest (including any overdue installment of interest and Additional Tax
Sums, if any) on this

 

24

 

Security will be made at such place and to such account
as may be designated by the Property Trustee.

 

(f)          Subject to the foregoing provisions of
this Section 3.1, each Security delivered under this Indenture upon transfer
of or in exchange for or in lieu of any other Security shall carry the rights
to interest accrued and unpaid, and to accrue, that were carried by such other
Security.

 

SECTION 3.2. Denominations.

 

The
Securities shall be in registered form without coupons and shall be issuable in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof.

 

SECTION 3.3. Execution, Authentication, Delivery and Dating.

 

(a)           At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities in an aggregate principal amount
(including all then Outstanding Securities) not in excess of Ten Million Eight
Hundred Thirty Thousand Dollars ($10,830,000) executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon:

 

(i) a
copy of any Board Resolution relating thereto; and

 

(ii) an
Opinion of Counsel stating that: (1) such Securities. when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute, and the
Indenture constitutes, valid and legally binding obligations of the Company,
each enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles; (2) the Securities have been duly authorized and executed by
the Company and have been delivered to the Trustee for authentication in
accordance with this Indenture; (3) the Securities are not required to be
registered under the Securities Act; and (4) the Indenture is not required to
be qualified under the Trust Indenture Act.

 

(b)           The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its Chief Executive Officer, its President
or one of its Vice Presidents. The signature of any of these officers on the
Securities may be manual or facsimile. Securities bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.

 

(c)           No
Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Security a certificate
of authentication

 

25

 

substantially in the form provided for herein executed
by the Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.8, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.

 

(d)           Each Security shall be dated the date
of its authentication. 

 

SECTION 3.4. Global Securities.

 

(a)           Upon
the election of the Holder after the Original Issue Date, which election need
not be in writing, the Securities owned by such Holder shall be issued in the
form of one or more Global Securities registered in the name of the Depositary or
its nominee. Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

 

(b)           Notwithstanding
any other provision in this Indenture, no Global Security may be exchanged in
whole or in part for Securities registered, and no transfer of a Global
Security in whole or in part may be registered, in the name of any Person other
than the Depositary for such Global Security or a nominee thereof unless (i)
such Depositary advises the Trustee and the Company in writing that such Depositary
is no longer willing or able to properly discharge its responsibilities as
Depositary with respect to such Global Security, and no qualified successor is
appointed by the Company within ninety (90) days of receipt by the Company of
such notice, (ii) such Depositary ceases to be a clearing agency registered
under the Exchange Act and no successor is appointed by the Company within
ninety (90) days after obtaining knowledge of such event, (iii) the Company
executes and delivers to the Trustee a Company Order stating that the Company
elects to terminate the book-entry system through the Depositary or (iv) an
Event of Default shall have occurred and be continuing. Upon the occurrence of
any event specified in clause (i), (ii), (iii) or (iv) above, the Trustee shall
notify the Depositary and instruct the Depositary to notify all owners of
beneficial interests in such Global Security of the occurrence of such event
and of the availability of Securities to such owners of beneficial interests
requesting the same. The Trustee may conclusively rely, and be protected in
relying, upon the written identification of the owners of beneficial interests
furnished by the Depositary, and shall not be liable for any delay resulting
from a delay by the Depositary. Upon the issuance of such Securities and the
registration in the Securities Register of such Securities in the names of the
Holders of the beneficial interests therein, the Trustees shall recognize such
holders of beneficial interests as Holders.

 

(c)           If
any Global Security is to be exchanged for other Securities or canceled in
part, or if another Security is to be exchanged in whole or in part for a
beneficial interest in any Global Security, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article III or (ii) the principal amount thereof shall be reduced
or increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to

 

26

 

the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with the Applicable Depository Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration instructions,
the Company shall execute and the Trustee shall authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) in accordance with the instructions of the Depositary. The Trustee
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.

 

(d)           Every
Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.

 

(e)           Securities
distributed to holders of Book-Entry Preferred Securities (as defined in the
applicable Trust Agreement) upon the dissolution of the Trust shall be
distributed in the form of one or more Global Securities registered in the name
of a Depositary or its nominee, and deposited with the Securities Registrar, as
custodian for such Depositary, or with such Depositary, for credit by the
Depositary to the respective accounts of the beneficial owners of the
Securities represented thereby (or such other accounts as they may direct).
Securities distributed to holders of Preferred Securities other than Book-Entry
Preferred Securities upon the dissolution of the Trust shall not be issued in
the form of a Global Security or any other form intended to facilitate
book-entry trading in beneficial interests in such Securities.

 

(f)            The
Depositary or its nominee, as the registered owner of a Global Security, shall
be the Holder of such Global Security for all purposes under this Indenture and
the Securities, and owners of beneficial interests in a Global Security shall
hold such interests pursuant to the Applicable Depository Procedures.
Accordingly, any such owner’s beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Depositary or its nominee or its Depositary
Participants. The Securities Registrar and the Trustee shall be entitled to
deal with the Depositary for all purposes of this Indenture relating to a Global
Security (including the payment of principal and interest thereon and the
giving of instructions or directions by owners of beneficial interests therein
and the giving of notices) as the sole Holder of the Security and shall have no
obligations to the owners of beneficial interests therein. Neither the Trustee
nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.

 

(g)           The
rights of owners of beneficial interests in a Global Security shall be exercised
only through the Depositary and shall be limited to those established by law
and agreements between such owners and the Depositary and/or its Depositary
Participants.

 

(h)           No
holder of any beneficial interest in any Global Security held on its behalf by
a Depositary shall have any rights under this Indenture with respect to such
Global Security, and such Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee nor any
agent of the Company or the Trustee will have any responsibility

 

27

 

 

or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a Global
Security or maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.

 

SECTION 3.5. Registration, Transfer and Exchange Generally.

 

(a)           The
Trustee shall cause to be kept at the Corporate Trust Office a register (the “Securities Register’’) in which the registrar and transfer
agent with respect to the Securities (the “Securities Registrar”), subject
to such reasonable regulations as it may prescribe, shall provide for the
registration of Securities and of transfers and exchanges of Securities. The
Trustee shall at all times also be the Securities Registrar. The provisions of Article
VI shall apply to the Trustee in its role as Securities Registrar.

 

(b)           Subject
to compliance with Section 2.2(b), upon
surrender for registration of transfer of any Security at the offices or
agencies of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denominations of like tenor and aggregate principal amount.

 

(c)           At
the option of the Holder, Securities may be exchanged for other Securities of
any authorized denominations, of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities that
the Holder making the exchange is entitled to receive.

 

(d)           All
Securities issued upon any transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.

 

(e)           Every
Security presented or surrendered for transfer or exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar, duly executed by the Holder thereof or such Holder’s
attorney duly authorized in writing.

 

(f)            No
service charge shall be made to a Holder for any transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities.

 

(g)           Neither
the Company nor the Trustee shall be required pursuant to the provisions of
this Section 3.5 (g): (i) to issue, register the transfer of or exchange any
Security during a period beginning at the opening of business fifteen (15) days
before the day of selection for redemption of Securities pursuant to Article
XI and ending at the close of business on the day of mailing of the notice
of redemption or (ii) to register the transfer of or exchange any Security so

 

28

 

selected for redemption in whole or in part, except, in
the case of any such Security to be redeemed in part, any portion thereof not
to be redeemed.

 

(h)           The
Company shall designate an office or offices or agency or agencies where
Securities may be surrendered for registration or transfer or exchange. The
Company initially designates the Corporate Trust Office as its office and
agency for such purposes. The Company shall give prompt written notice to the
Trustee and to the Holders of any change in the location of any such office or
agency.

 

SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.

 

(a)           If
any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Trustee to save the Company and
the Trustee harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of like tenor and
aggregate principal amount and bearing a number not contemporaneously
outstanding.

 

(b)           If
there shall be delivered to the Trustee (i) evidence to its satisfaction of the
destruction, loss or theft of any Security and (ii) such security or indemnity
as may be required by it to save each of the Company and the Trustee harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser,
the Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and aggregate principal amount as such
destroyed, lost or stolen Security, and bearing a number not contemporaneously
outstanding.

 

(c)           If
any such mutilated, destroyed, lost or stolen Security has become or is about
to become due and payable. the Company in its discretion may, instead of
issuing a new Security, pay such Security.

 

(d)           Upon
the issuance of any new Security under this Section 3.6, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

 

(e)           Every
new Security issued pursuant to this Section 3.6 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

 

(f)            The
provisions of this Section 3.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

 

SECTION 3.7. Persons Deemed Owners.

 

The Company, the Trustee and any agent
of the Company or the Trustee shall treat the Person in whose name any Security
is registered as the owner of such Security for the purpose of

 

29

 

receiving payment of principal of and any interest on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

 

SECTION 3.8. Cancellation.

 

All
Securities surrendered for payment, redemption, transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and Securities surrendered directly to the Trustee for
any such purpose shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder that the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 3.8, except as
expressly permitted by this Indenture. All canceled Securities shall be
retained by the Trustee in accordance with its customary practices.

 

SECTION 3.9. Deferrals of Interest Payment Dates.

 

(a)           So long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time and
from time to time during the term of the Security, to defer the payment of
interest on the Securities for a period of up to twenty (20) consecutive
quarterly interest payment periods (each such period, an “Extension
Period”), during which Extension Period(s), the Company shall have
the right to make no payments or partial payments of interest on any Interest
Payment Date (except any Additional Tax Sums that otherwise may be due and
payable). No Extension Period shall end on a date other than an Interest
Payment Date and no Extension Period shall extend beyond the Stated Maturity of
the principal of the Securities. No interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest (to the extent payment of such interest would be
legally enforceable) at the rate equal to a variable rate equal to LIBOR plus 3.75% per annum,
compounded quarterly, from the dates on which amounts would have otherwise been due and payable
until paid or until funds for the payment thereof have been made available for
payment. At the end of any such Extension Period, the Company shall pay all
interest then accrued and unpaid on the Securities together with such
Additional Interest. Prior to the termination of any such Extension Period, the
Company may extend such Extension Period and further defer the payment of
interest; provided, that (i) all such previous and
further extensions comprising such Extension Period do not exceed twenty (20) quarterly
interest payment periods, (ii) no Extension Period shall end on a date other
than an Interest Payment Date and (iii) no Extension Period shall extend beyond
the Stated Maturity of the principal of the Securities. Upon the termination of
any such Extension Period and upon the payment of all accrued and unpaid
interest and any Additional Interest then due on any Interest Payment Date, the
Company may elect to begin a new Extension Period; provided, that
(i) such Extension Period does not exceed twenty (20) quarterly interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date and (iii) no Extension Period shall extend beyond the
Stated Maturity of the principal of the Securities. The Company shall give the
Holders of the Securities and the Trustee written notice of its election to
begin any such Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on the Securities would be
payable but for such deferral or, so long as any Securities are held by the
Trust, at least one

 

30

 

Business Day prior to the earlier of (i) the next
succeeding date on which Distributions on the Preferred Securities of such
Trust would be payable but for such deferral and (ii) the date on which the
Property Trustee of such Trust is required to give notice to any securities
exchange or other applicable self-regulatory organization or to holders of such
Preferred Securities of the record date for the payment of such Distributions.

 

(b)           In connection with any such Extension
Period, the Company shall be subject to the restrictions set forth in Section
10.6(a).

 

SECTION 3.10.
Right of Set-Off:

 

Notwithstanding
anything to the contrary herein, the Company shall have the right to set off
any payment it is otherwise required to make in respect of any Security to the
extent the Company has theretofore made, or is concurrently on the date of such
payment making, a payment under the Guarantee Agreement relating to such
Security or to a holder of Preferred Securities pursuant to an action
undertaken under Section 5.8 of this Indenture.

 

SECTION 3.11.
Agreed Tax Treatment.

 

Each
Security issued hereunder shall provide that the Company and, by its acceptance
or acquisition of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a direct or indirect beneficial interest in, such
Security, intend and agree to treat such Security as indebtedness of the
Company for United States Federal, state and local tax purposes and to treat
the Preferred Securities (including but not limited to all payments and
proceeds with respect to the Preferred Securities) as an undivided beneficial
ownership interest in the Securities (and any other Trust property) (and
payments and proceeds therefrom, respectively) for United States Federal, state
and local tax purposes. The provisions of this Indenture shall be interpreted
to further this intention and agreement of the parties.

 

SECTION 3.12.
CUSIP Numbers.

 

The
Company in issuing the Securities may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of
redemption and other similar or related materials as a convenience to Holders; provided, that any such notice or other materials may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption or other
materials and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.

 

ARTICLE IV

 

SATISFACTION
AND DISCHARGE

 

SECTION 4.1. Satisfaction and Discharge of Indenture.

 

This
Indenture shall, upon Company Request, cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for and as otherwise provided in this Section 4.1)
and the Trustee, on demand of and at

 

31

 

the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)           either

 

(i) all
Securities theretofore authenticated and delivered (other than (A) Securities
that have been mutilated, destroyed, lost or stolen and that have been replaced
or paid as provided in Section 3.6 and (B) Securities for whose payment
money has theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged from such
trust as provided in Section 10.2) have been delivered to the Trustee
for cancellation; or

 

(ii) all
such Securities not theretofore delivered to the Trustee for cancellation 

 

(A)          have become due and payable, or

 

(B)           will become due and payable at their
Stated Maturity within one year of the date of deposit, or

 

(C)           are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the expense, of the
Company,

 

and
the Company, in the case of subclause (ii)(A), (B) or (C) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for such
purpose (x) an amount in the currency or currencies in which the Securities are
payable, (y) Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than the due date of any payment, money in an amount or (z)
a combination thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest (including any
Additional Interest) to the date of such deposit (in the case of Securities
that have become due and payable) or to the Stated Maturity (or any date of
principal repayment upon early maturity) or Redemption Date, as the case may
be;

 

(b)           the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and

 

(c)           the Company has delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel each stating that
all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.6, the obligations of the Company to any Authenticating
Agent under Section 6.11 and, if money shall have been deposited with
the Trustee pursuant to subclause (a)(ii) of this Section 4.1, the obligations of the Trustee under Section 4.2 and Section
10.2(e) shall survive.

 

32

 

SECTION 4.2. Application of Trust Money.

 

Subject
to the provisions of Section 10.2(e), all
money deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by the Trustee, in accordance with the provisions of the
Securities and this Indenture, to the payment in accordance with Section 3.1, either directly or through any Paying Agent (including the Company acting
as its own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal and any premium and interest (including any
Additional Interest) for the payment of which such money or obligations have
been deposited with or received by the Trustee. Moneys held by the Trustee
under this Section 4.2 shall not be subject to the claims of holders of
Senior Debt under Article XII.

 

ARTICLE V

 

REMEDIES

SECTION 5.1. Events of Default.

 

“Event of Default” means, wherever used herein with respect to the Securities, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

 

(a)           default in the payment of any
interest upon any Security, including any Additional Interest in respect
thereof, when it becomes due and payable, and continuance of such default for a
period of thirty (30) days (subject to the deferral of any due date in the case
of an Extension Period); or

 

(b)           default in the payment of the
principal of or any premium on any Security at its Maturity; or

 

(c)           default in the performance, or
breach, of any covenant or warranty of the Company in this Indenture and
continuance of such default or breach for a period of thirty (30) days after
there has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least twenty
five percent (25%) in aggregate principal amount of the Outstanding Securities
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder;

 

(d)           the entry by a court having
jurisdiction in the premises of a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of sixty (60) consecutive days;

 

33

 

(e)           the institution by the Company of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by the
Company to the institution of bankruptcy or insolvency proceedings against it,
or the filing by the Company of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due and its willingness to be adjudicated a bankrupt or insolvent, or
the taking of corporate action by the Company in furtherance of any such
action; or

 

(f)            the Trust shall have voluntarily or
involuntarily liquidated, dissolved, wound-up its business or otherwise
terminated its existence, except in connection with (1) the distribution of the
Securities to holders of the Preferred Securities in liquidation of their
interests in the Trust, (2) the redemption of all of the outstanding Preferred
Securities or (3) certain mergers, consolidations or amalgamations, each as and
to the extent permitted by the Trust Agreement.

 

SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.

 

(a)           If an Event of Default occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than twenty five percent (25%) in aggregate principal amount of the Outstanding
Securities may declare the principal amount of all the Securities to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), provided, that if, upon an Event of Default, the Trustee
or the Holders of not less than twenty five percent (25%) in principal amount
of the Outstanding Securities fail to declare the principal of all the
Outstanding Securities to be immediately due and payable, the holders of at
least twenty five percent (25%) in aggregate Liquidation Amount of the
Preferred Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Property Trustee, the Company and the
Trustee; and upon any such declaration the principal amount of and the accrued
interest (including any Additional Interest) on all the Securities shall become
immediately due and payable.

 

(b)           At any time after such a declaration
of acceleration with respect to Securities has been made and before a judgment
or decree for payment of the money due has been obtained by the Trustee as
hereinafter provided in this Article V, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities, by written notice to the Indenture Trustee, or the holders of a
majority in aggregate Liquidation Amount of the Preferred Securities, by
written notice to the Property Trustee, the Company and the Trustee, may
rescind and annul such declaration and its consequences if:

 

(i) the Company has paid or deposited
with the Trustee a sum sufficient to pay:

 

(A)          all overdue installments of interest
on all Securities,

 

(B)           any accrued Additional Interest on
all Securities,

 

34

 

(C) the
principal of and any premium on any Securities that have become due otherwise
than by such declaration of acceleration and interest (including any Additional
Interest) thereon at the rate borne by the Securities, and

 

(D)          all sums paid or advanced by the
Trustee hereunder and the reasonable compensation, expenses, disbursements and
advances of the Trustee, the Property Trustee and their agents and counsel; and

 

(ii) all
Events of Default with respect to Securities, other than the non-payment of the
principal of Securities that has become due solely by such acceleration, have
been cured or waived as provided in Section 5.13;

 

provided, that if the Holders of such Securities fail to annul
such declaration and waive such default, the holders of not less than a
majority in aggregate Liquidation Amount of the Preferred Securities then
outstanding shall also have the right to rescind and annul such declaration and
its consequences by written notice to the Property Trustee, the Company and the
Trustee, subject to the satisfaction of the conditions set forth in paragraph
(b) of this Section 5.2. No such rescission shall affect any subsequent default
or impair any right consequent thereon.

 

SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.

 

(a)           The Company covenants that if:

 

(i)
default is made in the payment of any installment of interest (including any
Additional Interest) on any Security when such interest becomes due and payable
and such default continues for a period of thirty (30) days, or

 

(ii)
default is made in the payment of the principal of and any premium on any
Security at the Maturity thereof,

 

the Company will, upon demand of the Trustee, pay to
the Trustee, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal and any premium
and interest (including any Additional Interest) and, in addition thereto, all
amounts owing the Trustee under Section 6.6.

 

(b)           If the Company fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any other obligor
upon such Securities and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of the Company or any other
obligor upon the Securities, wherever situated.

 

(c)           If an Event of Default with respect
to Securities occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
Securities by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

 

35

 

SECTION 5.4. Trustee May File Proofs of Claim.

 

In
case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or similar judicial proceeding relative to
the Company (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized hereunder in
order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to first pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts owing the Trustee, any
predecessor Trustee and other Persons under Section 6.6.

 

SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.

 

All
rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, subject to Article
XII and after provision for the payment of all the amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

 

SECTION 5.6. Application of Money Collected.

 

Any
money or property collected or to be applied by the Trustee with respect to the
Securities pursuant to this Article V shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal or any premium
or interest (including any Additional Interest), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

 

FIRST:
To the payment of all amounts due the Trustee, any predecessor Trustee and
other Persons under Section 6.6;

 

SECOND:
To the payment of all Senior Debt of the Company if and to the extent required
by Article XII;

 

THIRD:
Subject to Article XII, to the payment of the amounts then due and unpaid upon
the Securities for principal and any premium and interest (including any
Additional Interest) in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
any premium and interest (including any Additional Interest), respectively; and

 

FOURTH:
The balance, if any, to the Person or Persons entitled thereto.

 

36

 

SECTION 5.7. Limitation on Suits.

 

Subject
to Section 5.8, no Holder of any Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:

 

(a)           such Holder has previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Securities;

 

(b)           the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities shall have
made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;

 

(c)           such Holder or Holders have offered
to the Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;

 

(d)           the Trustee after its receipt of such
notice, request and offer of indemnity has failed to institute any such proceeding
for sixty (60) days; and

 

(e)           no direction inconsistent with such
written request has been given to the Trustee during such sixty (60)-day period
by the Holders of a majority in aggregate principal amount of the Outstanding
Securities;

 

it being understood and intended that no one or more of
such Holders shall have any right in any manner whatever by virtue of, or by
availing itself of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Securities, or to obtain or to
seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all such Holders.

 

SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium, if
any, and Interest; Direct Action by Holders of Preferred
Securities.

 

Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and any premium on such Security at its Maturity and payment of
interest (including any Additional Interest) on such Security when due and
payable and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder. Any registered
holder of the Preferred Securities shall have the right, upon the occurrence of
an Event of Default described in Section 5.1(a) or Section 5.1(b), to institute a suit directly against the Company for
enforcement of payment to such holder of principal of and any premium and
interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities held by such holder.

 

SECTION 5.9. Restoration of Rights and Remedies.

 

If
the Trustee, any Holder or any holder of Preferred Securities has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, such

 

37

 

Holder or such holder of Preferred Securities, then and
in every such case the Company, the Trustee, such Holders and such holder of
Preferred Securities shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee, such Holder and such holder
of Preferred Securities shall continue as though no such proceeding had been
instituted.

 

SECTION 5.10.
Rights and Remedies Cumulative.

 

Except
as otherwise provided in Section 3.6(f), no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

SECTION 5.11.
Delay or Omission Not Waiver.

 

No
delay or omission of the Trustee, any Holder of any Securities or any holder of
any Preferred Security to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article V or by law to the Trustee or to the Holders and the
right and remedy given to the holders of Preferred Securities by Section 5.8
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee, the Holders or the holders of Preferred Securities, as the case
may be.

 

SECTION 5.12.
Control by Holders.

 

The
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities (or, as the case may be, the holders of a majority in
aggregate Liquidation Amount of Preferred Securities) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided, that:

 

(a)           such direction shall not be in
conflict with any rule of law or with this Indenture,

 

(b)           the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such direction, and

 

(c)           subject to the provisions of Section
6.2, the Trustee shall have the right to decline to follow
such direction if a Responsible Officer or Officers of the Trustee shall, in
good faith, reasonably determine that the proceeding so directed would be
unjustly prejudicial to the Holders not joining in any such direction or would
involve the Trustee in personal liability.

 

SECTION 5.13.
Waiver of Past Defaults.

 

(a)           The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities or the
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities may waive any past Event of Default hereunder and its
consequences except an Event of Default:

 

38

 

(i)     in the payment of the principal of or any
premium or interest (including any Additional Interest) on any Security (unless
such Event of Default has been cured and the Company has paid to or deposited
with the Trustee a sum sufficient to pay all installments of interest
(including any Additional Interest) due and past due and all principal of and
any premium on all Securities due otherwise than by acceleration), or

 

(ii)    in respect of a covenant or provision hereof
that under Article IX cannot be modified or amended without the consent
of each Holder of any Outstanding Security.

 

(b)           Any such waiver shall be deemed to be
on behalf of the Holders of all the Securities or, in the case of a waiver by
holders of Preferred Securities issued by such Trust, by all holders of
Preferred Securities.

 

(c)           Upon
any such waiver, 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 Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereon.

 

SECTION 5.14.
Undertaking for Costs.

 

All
parties to this Indenture agree, and each Holder of any Security by his or her
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees and
expenses, against any party litigant in Such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.14 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than ten percent (10%) in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or any
premium on the Security after the Stated Maturity or any interest (including
any Additional Interest) on any Security after it is due and payable.

 

SECTION 5.15.
Waiver of Usury, Stay or Extension Laws.

 

The
Company covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

39

 

ARTICLE VI

 

THE
TRUSTEE

 

SECTION 6.1. Corporate Trustee Required.

 

There
shall at all times be a Trustee hereunder with respect to the Securities. The
Trustee shall be a corporation organized and doing business under the laws of
the United States or of any state thereof, authorized to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or state authority and having
an office within the United States. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of such
supervising or examining authority, then, for the purposes of this Section
6.1, 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. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 6.1, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VI.

 

SECTION 6.2. Certain Duties and Responsibilities.

 

Except
during the continuance of an Event of Default:

 

(i)     the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and

 

(ii)    in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture; provided, that in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they substantially conform on their face to the
requirements of this Indenture.

 

(b)           If an Event of Default known to the
Trustee has occurred and is continuing, the Trustee shall, prior to the receipt
of directions, if any, from the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities (or, if applicable, from the
holders of at least a majority in aggregate Liquidation Amount of Preferred
Securities), exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.

 

(c)           Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.2. To the

 

40

 

extent that, at law or in equity, the Trustee has
duties and liabilities relating to the Holders, the Trustee shall not be liable
to any Holder or any holder of Preferred Securities for the Trustee’s good
faith reliance on the provisions of this Indenture. The provisions of this
Indenture, to the extent that they restrict the duties and liabilities of the
Trustee otherwise existing at law or in equity, are agreed by the Company and
the Holders and the holders of Preferred Securities to replace such other
duties and liabilities of the Trustee.

 

(d)           No provisions of this Indenture shall
be construed to relieve the Trustee from liability with respect to matters that
are within the authority of the Trustee under this Indenture for its own
negligent action, negligent failure to act or willful misconduct, except that:

 

(i)     the Trustee shall not be liable for any
error or judgment made in good faith by an authorized officer of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;

 

(ii)    the 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 at least a majority in aggregate principal
amount of the Outstanding Securities (or, as the case may be, the holders of a
majority in aggregate Liquidation Amount of Preferred Securities) relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee under this Indenture; and

 

(iii)   the Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed in
writing with the Company and money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law.

 

(e)           If
at any time the Trustee hereunder is not the same Person as the Property
Trustee under the Trust Agreement:

 

(i)     whenever a reference is made herein to the
dissolution, termination or liquidation of the Trust, the Trustee shall be
entitled to assume that no such dissolution, termination, or liquidation has
occurred so long as the Securities are or continue to be registered in the name
of such Property Trustee, and the Trustee shall be charged with notice or
knowledge of such dissolution, termination or liquidation only upon written
notice thereof given to the Trustee by the Depositor under the Trust Agreement;
and

 

(ii)    the Trustee shall not be charged with notice
or knowledge that any Person is a holder of Preferred Securities or Common
Securities issued by the Trust or whether any group of holders of Preferred
Securities constitutes any specified percentage of all outstanding Preferred
Securities for any purpose under this Indenture, unless and until the Trustee
is furnished with a list of holders by such Property Trustee and the aggregate
Liquidation Amount of the Preferred Securities then outstanding. The Trustee
may conclusively rely and shall be protected in relying on such list.

 

(f)            Notwithstanding Section 1.10, the Trustee shall not, and shall not be deemed to, owe
any fiduciary duty to the holders of any of the Trust Securities issued by the
Trust and shall not be liable to any such holder (other than for the willful
misconduct or negligence of the Trustee) if the Trustee in good faith (i) pays
over or distributes to a registered Holder of the

 

41

 

Securities or to the Company or to any other Person, cash,
property or securities to which such holders of such Trust Securities shall be
entitled or (ii) takes any action or omits to take any action at the request of
the Holder of such Securities. Nothing in this paragraph shall affect the
obligation of any other such Person to hold such payment for the benefit of,
and to pay such amount over to, such holders of Preferred Securities or Common
Securities or their representatives.

 

SECTION 6.3. Notice of Defaults.

 

Within
ninety (90) days after the occurrence of any default actually known to the
Trustee, the Trustee shall give the Holders notice of such default unless such
default shall have been cured or waived; provided, that
in the case of any default of the character specified in Section  5.1(c), no such notice to Holders shall be given until at least
thirty (30) days after the occurrence thereof. For the purpose of this Section
6.3, the term “default” means any event which is, or after
notice or lapse of time or both would become, an Event of Default.

 

SECTION 6.4. Certain Rights of Trustee.

 

Subject
to the provisions of Section 6.2:

 

(a)           the Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting in good faith and
in accordance with the terms hereof upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

 

(b)           if (i) in performing its duties under
this Indenture the Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Indenture the Trustee
finds ambiguous or inconsistent with any other provisions contained herein or
(iii) the Trustee is unsure of the application of any provision of this
Indenture, then, except as to any matter as to which the Holders are entitled
to decide under the terms of this Indenture, the Trustee shall deliver a notice
to the Company requesting the Company’s written instruction as to the course of
action to be taken and the Trustee shall take such action, or refrain from
taking such action, as the Trustee shall be instructed in writing to take, or
to refrain from taking, by the Company; provided, that
if the Trustee does not receive such instructions from the Company within ten
Business Days after it has delivered such notice or such reasonably shorter
period of time set forth in such notice the Trustee may, but shall be under no
duty to, take such action, or refrain from taking such action, as the Trustee
shall deem advisable and in the best interests of the Holders, in which event
the Trustee shall have no liability except for its own negligence, bad faith or
willful misconduct;

 

(c)           any request or direction of the
Company shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;

 

(d)           the Trustee may consult with counsel
(which counsel may be counsel to the Trustee, the Company or any of its
Affiliates, and may include any of its employees) and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and

 

42

 

protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

 

(e)           the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders or any holder of
Preferred Securities pursuant to this Indenture, unless such Holders (or such
holders of Preferred Securities) shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses (including
reasonable attorneys’ fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction, including reasonable
advances as may be requested by the Trustee;

 

(f)            the 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, indenture, note or other paper or document,
but the Trustee in its discretion may make such inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;

 

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

 

(h)           whenever in the administration of
this Indenture the Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action with
respect to enforcing any remedy or right hereunder, the Trustees (i) may
request instructions from the Holders (which instructions may only be given by
the Holders of the same aggregate principal amount of Outstanding Securities as
would be entitled to direct the Trustee under this Indenture in respect of such
remedy, right or action), (ii) may refrain from enforcing such remedy or right
or taking such action until such instructions are received and (iii) shall be
protected in acting in accordance with such instructions;

 

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

 

(j)            without prejudice to any other
rights available to the Trustee under applicable law, when the Trustee incurs
expenses or renders services in connection with any bankruptcy, insolvency or
other proceeding referred to in clauses (d) or (e) of the definition of Event
of Default, such expenses (including legal fees and expenses of its agents and
counsel) and the compensation for such services are intended to constitute
expenses of administration under any bankruptcy laws or law relating to
creditors rights generally;

 

(k)           whenever in the administration of
this Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, conclusively rely upon an Officers’
Certificate addressing such matter, which, upon receipt of such request, shall
be promptly delivered by the Company;

 

43

 

(1)           the Trustee shall not be charged with
knowledge of any Event of Default unless either (i) a Responsible Officer of
the Trustee shall have actual knowledge or (ii) the Trustee shall have received
written notice thereof from the Company or a Holder; and

 

(m)          in the event that the Trustee is also
acting as Paying Agent, Authenticating Agent or Securities Registrar hereunder,
the rights and protections afforded to the Trustee pursuant to this Article
VI shall also be afforded such Paying Agent, Authenticating Agent, or
Securities Registrar.

 

SECTION 6.5. May Hold Securities.

 

The
Trustee, any Authenticating Agent, any Paying Agent, any Securities Registrar
or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Securities Registrar or such other agent.

 

SECTION 6.6. Compensation: Reimbursement; Indemnity. 

 

(a)           The Company agrees

 

(i)     to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder in such
amounts as the Company and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

 

(ii)    to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct; and

 

(iii)   to the fullest extent permitted by applicable
law, to indemnify the Trustee and its Affiliates, and their officers,
directors, shareholders, agents, representatives and employees for, and to hold
them harmless against, any loss, damage, liability, tax (other than income,
franchise or other taxes imposed on amounts paid pursuant to (i) or (ii)
hereof), penalty, expense or claim of any kind or nature whatsoever incurred
without negligence, bad faith or willful misconduct on its part arising out of
or in connection with the acceptance or administration of this trust or the
performance of the Trustee’s duties hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.

 

(b)           To secure the Company’s payment
obligations in this Section 6.6, the
Company hereby grants and pledges to the Trustee and the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee, other than money or property held in trust to pay principal and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.

 

44

 

(c)           The obligations of the Company under
this Section 6.6 shall survive the satisfaction and discharge of this
Indenture and the earlier resignation or removal of the Trustee.

 

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

 

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

 

SECTION 6.7. Resignation and Removal; Appointment of Successor.

 

(a)           No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to this Article
VI shall become effective until the acceptance of appointment by the
successor Trustee under Section 6.8.

 

(b)           The Trustee may resign at any time by
giving written notice thereof to the Company.

 

(c)           Unless an Event of Default shall have
occurred and be continuing, the Trustee may be removed at any time by the
Company by a Board Resolution. If an Event of Default shall have occurred and
be continuing, the Trustee may be removed by Act of the Holders of a majority
in aggregate principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.

 

(d)           If the Trustee shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any reason, at a time when no Event of Default shall have
occurred and be continuing, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee, and such successor Trustee and the retiring
Trustee shall comply with the applicable requirements of Section 6.8. If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, at a time when an Event of Default shall have occurred and be
continuing, the Holders, by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall
comply with the applicable requirements of Section 6.8. If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment within sixty (60) days after the giving of a
notice of resignation by the Trustee or the removal of the Trustee in the
manner required by Section 6.8, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of such Holder and all others similarly situated, and any resigning
Trustee may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.

 

(e)           The Company shall give notice to all
Holders in the manner provided in Section 1.6 of each resignation and
each removal of the Trustee and each appointment of a successor

 

45

 

Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

 

SECTION 6.8. Acceptance of Appointment by Successor.

 

(a)           In case of the appointment hereunder
of a successor Trustee, each successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.

 

(b)           Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all rights,
powers and trusts referred to in paragraph (a) of this Section 6.8.

 

(c)           No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article VI.

 

SECTION 6.9. Merger, Conversion, Consolidation or Succession to Business.

 

Any
Person into which the Trustee may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided, that such Person shall be
otherwise qualified and eligible under this Article VI. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation or as otherwise provided above in this Section
6.9 to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated, and in case any Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor Trustee or in the name of such
successor Trustee, and in all cases the certificate of authentication shall
have the full force which it is provided anywhere in the Securities or in this
Indenture that the certificate of the Trustee shall have.

 

SECTION 6.10.
Not Responsible for Recitals or Issuance of
Securities.

 

The
recitals contained herein and in the Securities, except the Trustee’s certificates
of authentication, shall be taken as the statements of the Company, and neither
the Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.

 

46

 

SECTION 6.11.
Appointment of Authenticating Agent.

 

(a)           The Trustee may appoint an
Authenticating Agent or Agents with respect to the Securities, which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.6, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee’s
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, or of any State or Territory thereof or the
District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 6.11 the combined capital and surplus
of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 6.11, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.11.

 

(b)           Any Person into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any
Person succeeding to all or substantially all of the corporate trust business
of an Authenticating Agent shall be the successor Authenticating Agent
hereunder, provided such Person shall be otherwise eligible under this Section
6.11, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

 

(c)           An Authenticating Agent may resign at
any time by giving written notice thereof to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.11, the Trustee may appoint a successor Authenticating
Agent eligible under the provisions of this Section 6.11, which shall be acceptable to the Company, and shall give notice of such
appointment to all Holders. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent.

 

(d)           The Company agrees to pay to each
Authenticating Agent from time to time reasonable compensation for its services
under this Section 6.11 in such amounts as the Company and the
Authenticating Agent shall agree from time to time.

 

47

 

(e)           If an appointment of an
Authenticating Agent is made pursuant to this Section 6.11, the Securities may have endorsed thereon, in addition
to the Trustee’s certificate of authentication, an alternative certificate of
authentication in the following form:

 

This is one of the Securities referred to in the within
mentioned Indenture. 

 

	
  Dated:

  
	
   

  
	
   

  	
  JPMORGAN CHASE BANK, not in its
  individual capacity, but solely as Trustee

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authenticating Agent

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized signatory

  

 

ARTICLE VII

 

HOLDER’S
LISTS AND REPORTS BY COMPANY

 

SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.

 

The
Company will furnish or cause to be furnished to the Trustee:

 

(a)           semiannually, on or before June 30
and December 31 of each year, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a date not
more than fifteen (15) days prior to the delivery thereof, and

 

(b)           at such other times as the Trustee
may request in writing, within thirty (30) days after the receipt by the
Company of any such request, a list of similar form and content as of a date
not more than fifteen (15) days prior to the time such list is furnished,

 

in each case to the extent such information is in the
possession or control of the Company and has not otherwise been received by the
Trustee in its capacity as Securities Registrar.

 

SECTION 7.2. Preservation of Information, Communications to Holders.

 

(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as provided in Section
7.1 and the names and addresses of Holders received by the Trustee in its
capacity as Securities Registrar. The Trustee may destroy any list furnished to
it as provided in Section 7.1 upon receipt of a new list so furnished.

 

48

 

(b)           The rights of Holders to communicate
with other Holders with respect to their rights under this Indenture or under
the Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided in the Trust Indenture Act.

 

(c)           Every Holder of Securities, by
receiving and holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of either of them shall be
held accountable by reason of the disclosure of information as to the names and
addresses of the Holders made pursuant to the Trust Indenture Act.

 

SECTION 7.3. Reports by Company.

 

(a)           The Company shall furnish to the
Holders and to prospective purchasers of Securities, upon their request, the
information required to be furnished pursuant to Rule 144A(d)(4) under the
Securities Act. The Company shall furnish to the Trustee and, so long as the
Property Trustee holds any of the Securities, the Company shall furnish to the
Property Trustee, Statutory Financial Statements promptly following their
filing with the Applicable Insurance Regulatory Authority. The delivery
requirement set forth in the preceding sentence may be satisfied by compliance
with Section 7.3(b) hereof.

 

(b)           The Company shall furnish to each of
(i) the Trustee, (ii) the Holders and to subsequent holders of Securities,
(iii) Cohen Bros. Financial Management LLC, 1818 Market Street, 28th
Street, Philadelphia, Pennsylvania 13103), or such other address as designated
by Cohen Bros. Financial Management LLC) and (iv) any beneficial owner of the
Securities reasonably identified to the Company (which identification may be
made either by such beneficial owner or by Cohen Bros. Financial Management
LLC), a duly completed and executed certificate substantially and substantively
in the form attached hereto as Exhibit A,
including the financial statements referenced in such Exhibit, which
certificate and financial statements shall be so furnished by the Company not
later than forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of the Company and not later than ninety (90) days
after the end of each fiscal year of the Company. The delivery requirements
under this Section 7.3(b) may be satisfied by compliance with Section 8.16(b)
of the Trust Agreement.

 

(c)           If the Company intends to file its
annual and quarterly information with the Securities and Exchange Commission
(the “Commission”) in electronic form
pursuant to Regulation S-T of the Commission using the Commission’s Electronic
Data Gathering, Analysis and Retrieval (“EDGAR”) system,
the Company shall notify the Trustee in the manner prescribed herein of each
such annual and quarterly filing. The Trustee is hereby authorized and directed
to access the EDGAR system for purposes of retrieving the financial information
so filed. Compliance with the foregoing shall constitute delivery by the
Company of its financial statements to the Trustee in compliance with the
provisions of Section 314(a) of the Trust Indenture Act, if applicable. The
Trustee shall have no duty to search for or obtain any electronic or other
filings that the Company makes with the Commission, regardless of whether such
filings are periodic, supplemental or otherwise. Delivery of reports,
information and documents to the Trustee pursuant to this Section 7.3(c)
shall be solely for purposes of compliance with this Section 7.3(c) and,
if applicable, with Section 314(a) of the Trust Indenture Act. The Trustee’s
receipt of such reports, information and documents shall not constitute notice to
it of the content thereof or any matter determinable from the content thereof,
including the

 

49

 

Company’s compliance with any of its covenants
hereunder, as to which the Trustee is entitled to rely upon Officers’
Certificates.

 

ARTICLE VIII

 

CONSOLIDATION,
MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION 8.1. Company May Consolidate,
Etc., Only on Certain Terms.

 

The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an
entirety to the Company, unless:

 

(a)           if the Company shall consolidate with
or merge into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the entity formed by such
consolidation or into which the Company is merged or the Person that acquires
by conveyance or transfer, or that leases, the properties and assets of the
Company substantially as an entirety shall be an entity organized and existing
under the laws of the United States of America or any State or Territory
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium and interest (including any Additional Interest) on all the
Securities and the performance of every covenant of this Indenture on the part
of the Company to be performed or observed;

 

(b)           immediately after giving effect to
such transaction, no Event of Default, and no event that, after notice or lapse
of time, or both, would constitute an Event of Default, shall have happened and
be continuing; and

 

(c)           the Company has delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction, any
such supplemental indenture comply with this Article VIII and that all
conditions precedent herein provided for relating to such transaction have been
complied with; and the Trustee may rely upon such Officers’ Certificate and
Opinion of Counsel as conclusive evidence that such transaction complies with
this Section 8.1.

 

SECTION 8.2. Successor Company Substituted.

 

(a)           Upon any consolidation or merger by
the Company with or into any other Person, or any conveyance, transfer or lease
by the Company of its properties and assets substantially as an entirety to any
Person in accordance with Section 8.1 and the execution and delivery to the
Trustee of the supplemental indenture described in Section 8.1(a), the successor entity formed by such consolidation or
into which the Company is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and in the event of any
such conveyance or transfer, following the execution and delivery of such
supplemental indenture, the Company shall be discharged from all obligations
and covenants under the Indenture and the Securities.

 

50

 

(b)           Such successor Person may cause to be
executed, and may issue either in its own name or in the name of the Company,
any or all of the Securities issuable hereunder that theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor Person instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities that previously shall have been
signed and delivered by the officers of the Company to the Trustee for authentication,
and any Securities that such successor Person thereafter shall cause to be
executed and delivered to the Trustee on its behalf. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture.

 

(c)           In case of any such consolidation,
merger, sale, conveyance or lease, such changes in phraseology and form may be
made in the Securities thereafter to be issued as may be appropriate to reflect
such occurrence.

 

ARTICLE IX

 

SUPPLEMENTAL
INDENTURES

 

SECTION 9.1. Supplemental Indentures without Consent of Holders.

 

Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form reasonably satisfactory to the Trustee,
for any of the following purposes:

 

(a)           to evidence the succession of another
Person to the Company, and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or

 

(b)           to cure any ambiguity, to correct or
supplement any provision herein that may be defective or inconsistent with any
other provision herein, or to make or amend any other provisions with respect
to matters or questions arising under this Indenture, which shall not be
inconsistent with the other provisions of this Indenture, provided, that
such action pursuant to this clause (b) shall not adversely affect in any
material respect the interests of any Holders or the holders of the Preferred
Securities; or

 

(c)           to add to the covenants, restrictions
or obligations of the Company or to add to the Events of Default, provided, that such action pursuant to this clause (c) shall
not adversely affect in any material respect the interests of any Holders or
the holders of the Preferred Securities; or

 

(d)           to modify, eliminate or add to any
provisions of the Indenture or the Securities to such extent as shall be
necessary to ensure that the Securities are treated as indebtedness of the
Company for United States Federal income tax purposes, provided, that
such action pursuant to this clause (d) shall not adversely affect in any
material respect the interests of any Holders or the holders of the Preferred
Securities.

 

51

 

SECTION 9.2. Supplemental Indentures with Consent of Holders.

 

(a)           With the consent of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security,

 

(i)
change the Stated Maturity of the principal or any premium of any Security or
change the date of payment of any installment of interest (including any
Additional Interest) on any Security, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable upon the redemption thereof
or change the place of payment where, or the coin or currency in which, any
Security or interest thereon is payable, or restrict or impair the right to
institute suit for the enforcement of any such payment on or after such date,
or

 

(ii)
reduce the percentage in aggregate principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with any provision of this Indenture or of defaults hereunder and
their consequences provided for in this Indenture, or

 

(iii)
modify any of the provisions of this Section 9.2, Section 5.13 or Section  10.7, except to increase any percentage in aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
reason, or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Security;

 

provided, further, that, so long as any Preferred Securities remain
outstanding, no amendment under this Section 9.2 shall
be effective until the holders of a majority in Liquidation Amount of the Preferred
Securities shall have consented to such amendment; provided,
further, that if the consent of the Holder of each Outstanding
Security is required for any amendment under this Indenture, such amendment
shall not be effective until the holder of each Outstanding Preferred Security
shall have consented to such amendment.

 

(b)           It shall not be necessary for any Act
of Holders under this Section 9.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.

 

SECTION 9.3. Execution of Supplemental Indentures.

 

In
executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article IX or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in conclusively relying upon, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent herein provided for relating to such action have been
complied with. The Trustee may,

 

52

 

but shall not be obligated to, enter into any such
supplemental indenture that affects the Trustee’s own rights, duties,
indemnities or immunities under this Indenture or otherwise. Copies of the
final form of each supplemental indenture shall be delivered by the Trustee at
the expense of the Company to each Holder, and, if the Trustee is the Property
Trustee, to each holder of Preferred Securities, promptly after the execution
thereof.

 

SECTION 9.4. Effect of Supplemental Indentures.

 

Upon
the execution of any supplemental indenture under this Article IX, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Securities and every holder of Preferred
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

 

SECTION 9.5. Reference in Securities to Supplemental Indentures.

 

Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and shall if required by the Company,
bear a notation in form approved by the Company as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.

 

ARTICLE X

 

COVENANTS

 

SECTION 10.1.
Payment of Principal, Premium, if any, and Interest.

 

The
Company covenants and agrees for the benefit of the Holders of the Securities
that it will duly and punctually pay the principal of and any premium and
interest (including any Additional Interest) on the Securities in accordance
with the terms of the Securities and this Indenture. As of the date of this
Indenture, the Company represents that it has no present intention to exercise
its right under Section 2.11 to defer payments of interest on the
Securities.

 

SECTION 10.2.
Money for Security Payments to be Held in Trust.

 

(a)           If the Company shall at any time act
as its own Paying Agent with respect to the Securities, it will, on or before
each due date of the principal of and any premium or interest (including any
Additional Interest) on the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium or interest (including Additional Interest) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee in writing of its failure
so to act.

 

(b)           Whenever the Company shall have one
or more Paying Agents, it will, prior to 10:00 a.m., New York City time, on
each due date of the principal of or any premium or interest (including any
Additional Interest) on any Securities, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided in the Trust
Indenture Act and

 

53

 

(unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its failure so to act.

 

(c)           The Company will cause each Paying
Agent for the Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 10.2, that
such Paying Agent will (i) comply with the provisions of this Indenture and the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent for payment in respect of the Securities.

 

(d)           The Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying Agent to pay, to
the Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

 

(e)           Any money deposited with the Trustee
or any Paying Agent, or then held by the Company in trust for the payment of
the principal of and any premium or interest (including any Additional Interest)
on any Security and remaining unclaimed for two years after such principal and
any premium or interest has become due and payable shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be paid on Company Request to the Company, or (if then held by
the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease: provided, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than thirty (30) days from the date of such publication, any unclaimed balance
of such money then remaining will be repaid to the Company.

 

SECTION 10.3.
Statement as to Compliance.

 

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

 

54

 

requirements of this Section 10.3 may be satisfied by
compliance with Section 8.16(a) of the Trust Agreement.

 

SECTION 10.4.
Calculation Agent.

 

(a)           The Company hereby agrees that for so
long as any of the Securities remain Outstanding, there will at all times be an
agent appointed to calculate LIBOR in respect of each Interest Payment Date in
accordance with the terms of Schedule A (the “Calculation
Agent”). The Company has initially appointed the Property Trustee as
Calculation Agent for purposes of determining LIBOR for each Interest Payment
Date. The Calculation Agent may be removed by the Company at any time. So long
as the Property Trustee holds any of the Securities, the Calculation Agent
shall be the Property Trustee, except as described in the immediately preceding
sentence. If the Calculation Agent is unable or unwilling to act as such or is
removed by the Company, the Company will promptly appoint as a replacement
Calculation Agent the London office of a leading bank which is engaged in
transactions in Eurodollar deposits in the international Eurodollar market and
which does not control or is not controlled by or under common control with the
Company or its Affiliates. The Calculation Agent may not resign its duties
without a successor having been duly appointed.

 

(b)           The Calculation Agent shall be
required to agree that, as soon as possible after 11:00 a.m. (London time) on
each LIBOR Determination Date (as defined in Schedule A), but in no event later than 11:00 a.m. (London time) on
the Business Day immediately following each LIBOR Determination Date, the
Calculation Agent will calculate the interest rate (the Interest Payment shall
be rounded to the nearest cent, with half a cent being rounded upwards) for the
related Interest Payment Date, and will communicate such rate and amount to the
Company, the Trustee, each Paying Agent and the Depositary. The Calculation
Agent will also specify to the Company the quotations upon which the foregoing
rates and amounts are based and, in any event, the Calculation Agent shall
notify the Company before 5:00 p.m. (London time) on each LIBOR Determination
Date that either: (i) it has determined or is in the process of determining the
foregoing rates and amounts or (ii) it has not determined and is not in the
process of determining the foregoing rates and amounts, together with its
reasons therefor. The Calculation Agent’s determination of the foregoing rates
and amounts for any Interest Payment Date will (in the absence of manifest
error) be final and binding upon all parties. For the sole purpose of
calculating the interest rate for the Securities, “Business Day” shall be
defined as any day on which dealings in deposits in Dollars are transacted in
the London interbank market.

 

SECTION 10.5.
Additional Tax Sums.

 

So
long as no Event of Default has occurred and is continuing, if (a) the Trust is
the Holder of all of the Outstanding Securities and (b) a Tax Event described
in clause (i) or (iii) in the definition of Tax Event in Section 1.1
hereof has occurred and is continuing, the Company shall pay to the Trust (and
its permitted successors or assigns under the related Trust Agreement) for so
long as the Trust (or its permitted successor or assignee) is the registered
holder of the Outstanding Securities, such amounts as may be necessary in order
that the amount of Distributions (including any Additional Interest Amount (as
defined in the Trust Agreement)) then due and payable by the Trust on the
Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes arising from such Tax Event (additional such amounts payable
by the

 

55

 

Company to the Trust, the “Additional
Tax Sums”). Whenever in this indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Tax Sums provided for in this Section 10.5 to the extent
that, in such context, Additional Tax Sums are, were or would be payable in
respect thereof pursuant to the provisions of this Section 10.5 and
express mention of the payment of Additional Tax Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Tax Sums in
those provisions hereof where such express mention is not made; provided, that the deferral of the payment of interest pursuant
to Section 3.9 on the Securities shall not defer the payment of any
Additional Tax Sums that may be due and payable.

 

SECTION 10.6.
Additional Covenants.

 

(a)           The Company covenants and agrees with
each Holder of Securities that if an Event of Default shall have occurred and
be continuing or the Company shall have given notice of its election to begin
an Extension Period with respect to the Securities or such Extension Period, or
any extension thereof, shall be continuing, it shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any shares of the Company’s capital stock,
or (ii) make any payment of principal of or any interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the
Securities (other than (A) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(B) as a result of an exchange or conversion of any class or series of the
Company’s capital stock (or any capital stock of a Subsidiary of the Company)
for any class or series of the Company’s capital stock or of any class or
series of the Company’s indebtedness for any class or series of the Company’s
capital stock, (C) the purchase of fractional interests in shares of the
Company’s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (D) any
declaration of a dividend in connection with any Rights Plan, the issuance of
rights, stock or other property under any Rights Plan or the redemption or
repurchase of rights pursuant thereto or (E) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock).

 

(b)           The Company also covenants with each
Holder of Securities (i) to hold, directly or indirectly, one hundred percent
(100%) of the Common Securities of the Trust, provided, that
any permitted successor of the Company hereunder may succeed to the Company’s
ownership of such Common Securities, (ii) as holder of such Common Securities,
not to voluntarily dissolve, wind-up or liquidate the Trust other than (A) in
connection with a distribution of the Securities to the holders of the
Preferred Securities in liquidation of the Trust or (B) in connection with certain
mergers, consolidations or amalgamations permitted by the Trust Agreement and
(iii) to use its reasonable commercial efforts, consistent with the terms and
provisions of the Trust Agreement,

 

56

 

to cause the Trust to continue to be taxable as a
grantor trust and not as a corporation for United States Federal income tax
purposes.

 

SECTION 10.7.
Waiver of Covenants.

 

The
Company may omit in any particular instance to comply with any covenant or
condition contained in Section 10.6 if, before or after the time for
such compliance, the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities shall, by Act of such Holders, and at
least a majority of the aggregate Liquidation Amount of the Preferred
Securities then outstanding, by consent of such holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company in respect of any such covenant or
condition shall remain in full force and effect.

 

SECTION 10.8.
Treatment of Securities.

 

The
Company will treat the Securities as indebtedness, and the amounts, other than
payments of principal, payable in respect of the principal amount of such
Securities as interest, for all U.S. federal income tax purposes. All payments
in respect of the Securities will be made free and clear of U.S. withholding
tax to any beneficial owner thereof that has provided an Internal Revenue
Service Form W-9 or W-8BEN (or any substitute or successor form) establishing
its U.S. or non-U.S. status for U.S. federal income tax purposes, or any other
applicable form establishing a complete exemption from U.S. withholding tax.

 

ARTICLE XI

 

REDEMPTION
OF SECURITIES

 

SECTION 11.1.
Optional Redemption.

 

The
Company may, at its option, on any Interest Payment Date, on or after December
15, 2009, redeem the Securities in whole at any time or in part from time to
time, at a Redemption Price equal to one hundred percent (100%) of the
principal amount thereof (or of the redeemed portion thereof, as applicable),
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, through but excluding the date fixed as the Redemption
Date (the “Optional Redemption Price”); provided, that
the Company shall have received the prior approval of any Applicable Insurance
Regulatory Authorities with respect to such redemption if then required.

 

SECTION 11.2.
Special Event Redemption.

 

Prior
to December 15, 2009, upon the occurrence and during the continuation of a
Special Event, the Company may, at its option, redeem the Securities, in whole
but not in part, at a Redemption Price equal to one hundred seven and one half
percent (107.5%) of the principal amount thereof, together, in the case of any
such redemption, with accrued interest, including any Additional Interest,
through but excluding the date fixed as the Redemption Date (the “Special
Redemption Price”), provided, that
the Company shall have received the prior approval

 

57

 

of any Applicable Insurance Regulatory Authority with
respect to such redemption if then required.

 

SECTION 11.3.
Election to Redeem; Notice to Trustee.

 

The
election of the Company to redeem any Securities, in whole or in part, shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, not less than forty-five (45)
days and not more than seventy-five (75) days prior to the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee
and the Property Trustee under the Trust Agreement in writing of such date and
of the principal amount of the Securities to be redeemed and provide the
additional information required to be included in the notice or notices
contemplated by Section 11.5. In the
case of any redemption of Securities, in whole or in part, (a) prior to the
expiration of any restriction on such redemption provided in this Indenture or
the Securities or (b) pursuant to an election of the Company which is subject
to a condition specified in this Indenture or the Securities, the Company shall
furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel
evidencing compliance with such restriction or condition.

 

SECTION 11.4.
Selection of Securities to be Redeemed.

 

(a)           If less than all the Securities are
to be redeemed, the particular Securities to be redeemed shall be selected and
redeemed on a pro rata basis not more than sixty (60) days prior to the
Redemption Date by the Trustee from the Outstanding Securities not previously
called for redemption, provided, that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.

 

(b)           The Trustee shall promptly notify the
Company in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.

 

(c)           The provisions of paragraphs (a) and
(b) of this Section 11.4 shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in
whole or in part. In the case of any such redemption in part, the unredeemed
portion of the principal amount of the Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Security.

 

SECTION 11.5.
Notice of Redemption.

 

(a)           Notice of redemption shall be given not
later than the thirtieth (30th) day, and not earlier than the
sixtieth (60th) day, prior to the Redemption Date to each Holder of
Securities to be redeemed, in whole or in part, (unless a shorter notice shall
be satisfactory to the Property Trustee under the related Trust Agreement).

 

(b)           With respect to Securities to be
redeemed, in whole or in part, each notice of redemption shall state:

 

58

 

(i) the Redemption Date;

 

(ii) the Redemption Price or, if the Redemption Price cannot
be calculated prior to the time the notice is required to be sent, the estimate
of the Redemption Price, as calculated by the Company, together with a
statement that it is an estimate and that the actual Redemption Price will be
calculated on the fifth Business Day prior to the Redemption Date (and if an
estimate is provided, a further notice shall be sent of the actual Redemption
Price on the date that such Redemption Price is calculated);

 

(iii) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the particular Securities to be redeemed;

 

(iv) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Security or portion thereof, and that any
interest (including any Additional Interest) on such Security or such portion,
as the case may be, shall cease to accrue on and after said date; and

 

(v) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.

 

(c)           Notice of redemption of Securities to
be redeemed, in whole or in part, at the election of the Company shall be given
by the Company or, at the Company’s request, by the Trustee in the name and at
the expense of the Company and shall be irrevocable. The notice if mailed in
the manner provided above shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice. In any case, a failure
to give such notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security.

 

SECTION 11.6.
Deposit of Redemption Price.

 

Prior
to 10:00 a.m., New York City time, on the Redemption Date specified in the
notice of redemption given as provided in Section 11.5, the Company will deposit with the Trustee or with one
or more Paying Agents (or if the Company is acting as its own Paying Agent, the
Company will segregate and hold in trust as provided in Section 10.2) an amount of money sufficient to pay the Redemption Price of, and any
accrued interest (including any Additional Interest) on, all the Securities (or
portions thereof) that are to be redeemed on that date.

 

SECTION 11.7.
Payment of Securities Called for Redemption.

 

(a)           If any notice of redemption has been
given as provided in Section 11.5, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment specified
in such notice, the Securities or the specified portions thereof shall be paid
and redeemed by the Company at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.

 

59

 

(b)           Upon presentation of any Security
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Security or Securities, of authorized denominations, in aggregate
principal amount equal to the unredeemed portion of the Security so presented
and having the same Original Issue Date, Stated Maturity and terms.

 

(c)           If any Security called for redemption
shall not be so paid upon surrender thereof for redemption, the principal of
and any premium on such Security shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.

 

ARTICLE XII

 

SUBORDINATION
OF SECURITIES

 

SECTION 12.1.
Securities Subordinate to Senior Debt.

 

The
Company covenants and agrees, and each Holder of a Security, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article XII, the
payment of the principal of and any premium and interest (including any
Additional Interest) on each and all of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior payment in full
of all Senior Debt.

 

SECTION 12.2.
No Payment When Senior Debt in Default; Payment
Over of Proceeds Upon Dissolution, Etc.

 

(a)           In the event and during the
continuation of any default by the Company in the payment of any principal of
or any premium or interest on any Senior Debt (following any grace period, if
applicable) when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration of acceleration or otherwise, then,
upon written notice of such default to the Company by the holders of such
Senior Debt or any trustee therefor, unless and until such default shall have
been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made
or agreed to be made on account of the principal of or any premium or interest
(including any Additional Interest) on any of the Securities, or in respect of
any redemption, repayment, retirement, purchase or other acquisition of any of
the Securities.

 

(b)           In the event of a bankruptcy,
insolvency or other proceeding described in clause (d) or (e) of the definition
of Event of Default (each such event, if any, herein sometimes referred to as a “Proceeding”), all Senior Debt (including any interest
thereon accruing after the commencement of any such proceedings) shall first be
paid in full before any payment or distribution, whether in cash, securities or
other property, shall be made to any Holder of any of the Securities on account
thereof. Any payment or distribution, whether in cash, securities or other
property (other than securities of the Company or any other entity provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), which would
otherwise (but for these subordination provisions) be payable or deliverable in
respect of the Securities

 

60

 

shall be paid or delivered directly to the holders of
Senior Debt in accordance with the priorities then existing among such holders
until all Senior Debt (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.

 

(c)           In the event of any Proceeding, after
payment in full of all sums owing with respect to Senior Debt, the Holders of
the Securities, together with the holders of any obligations of the Company
ranking on a parity with the Securities, shall be entitled to be paid from the
remaining assets of the Company the amounts at the time due and owing on account
of unpaid principal of and any premium and interest (including any Additional
Interest) on the Securities and such other obligations before any payment or
other distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or any obligations of the Company ranking junior
to the Securities and such other obligations. If, notwithstanding the
foregoing, any payment or distribution of any character or any security,
whether in cash, securities or other property (other than securities of the
Company or any other entity provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Debt at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment) shall be received by the Trustee or any
Holder in contravention of any of the terms hereof and before all Senior Debt
shall have been paid in full, such payment or distribution or security shall be
received in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Debt at the time outstanding in
accordance with the priorities then existing among such holders for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all such Senior Debt (including any interest thereon accruing after the
commencement of any Proceeding) in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Debt is hereby irrevocably authorized to
endorse or assign the same.

 

(d)           The Trustee and the Holders, at the
expense of the Company, shall take such reasonable action (including the
delivery of this Indenture to an agent for any holders of Senior Debt or
consent to the filing of a financing statement with respect hereto) as may, in
the opinion of counsel designated by the holders of a majority in principal
amount of the Senior Debt at the time outstanding, be necessary or appropriate
to assure the effectiveness of the subordination effected by these provisions.

 

(e)           The provisions of this Section
12.2 shall not impair any rights, interests, remedies or powers of any
secured creditor of the Company in respect of any security interest the
creation of which is not prohibited by the provisions of this Indenture.

 

(f)            The securing of any obligations of
the Company, otherwise ranking on a parity with the Securities or ranking
junior to the Securities, shall not be deemed to prevent such obligations from
constituting, respectively, obligations ranking on a parity with the Securities
or ranking junior to the Securities.

 

SECTION 12.3.
Payment Permitted If No Default.

 

Nothing
contained in this Article XII or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time, except during the
pendency of the

 

61

 

conditions described in paragraph (a) of Section
12.2 or of any Proceeding referred to in Section  12.2, from making payments at any time of principal of and
any premium or interest (including any Additional Interest) on the Securities
or (b) the application by the Trustee of any moneys deposited with it hereunder
to the payment of or on account of the principal of and any premium or interest
(including any Additional Interest) on the Securities or the retention of such
payment by the Holders, if, at the time of such application by the Trustee, it
did not have knowledge (in accordance with Section 12.8) that such payment would have been prohibited by the provisions of this Article
XII, except as provided in Section 12.8.

 

SECTION 12.4.
Subrogation to Rights of Holders of Senior Debt.

 

Subject
to the payment in full of all amounts due or to become due on all Senior Debt,
or the provision for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this Article
XII (equally and ratably with the holders of all indebtedness of the
Company that by its express terms is subordinated to Senior Debt of the Company
to substantially the same extent as the Securities are subordinated to the
Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of
and any premium and interest (including any Additional Interest) on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article XII, and no payments made pursuant to the provisions of
this Article XII to the holders of Senior Debt by Holders of the
Securities or the Trustee, shall, as among the Company, its creditors other
than holders of Senior Debt, and the Holders of the Securities, be deemed to be
a payment or distribution by the Company to or on account of the Senior Debt.

 

SECTION 12.5.
Provisions Solely to Define Relative Rights.

 

The
provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of and any
premium and interest (including any Additional Interest) on the Securities as
and when the same shall become due and payable in accordance with their terms,
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than their rights in relation to
the holders of Senior Debt or (c) prevent the Trustee or the Holder of any
Security (or to the extent expressly provided herein, the holder of any
Preferred Security) from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article
XII of the holders of Senior Debt to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.

 

62

 

SECTION 12.6.
Trustee to Effectuate Subordination.

 

Each
Holder of a Security by his or her acceptance thereof authorizes and directs
the Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination provided in this Article
XII and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.

 

SECTION 12.7.
No Waiver of Subordination Provisions.

 

(a)           No right of any present or future
holder of any Senior Debt to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or be otherwise charged with.

 

(b)           Without in any way limiting the
generality of paragraph (a) of this Section 12.7, the holders of Senior Debt may, at any time and from
to time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding, (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt, (iii) release
any Person liable in any manner for the payment of Senior Debt and (iv)
exercise or refrain from exercising any rights against the Company and any
other Person.

 

SECTION 12.8.
Notice to Trustee.

 

(a)           The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment to or by the Trustee in respect
of the Securities. Notwithstanding the provisions of this Article XII or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder of Senior Debt or from any trustee, agent or
representative therefor; provided, that
if the Trustee shall not have received the notice provided for in this Section
12.8 at least two Business Days prior to the date upon which by the terms
hereof any monies may become payable for any purpose (including, the payment of
the principal of and any premium on or interest (including any Additional
Interest) on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.

 

63

 

(b)           The Trustee shall be entitled to rely
on the delivery to it of a written notice by a Person representing himself or
herself to be a holder of Senior Debt (or a trustee, agent, representative or
attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact
therefor). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this Article
XII, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article XII, and if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.

 

SECTION 12.9.
Reliance on Judicial Order or Certificate of
Liquidating Agent.

 

Upon
any payment or distribution of assets of the Company referred to in this Article
XII, the Trustee and the Holders of the Securities shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII.

 

SECTION 12.10.
Trustee Not Fiduciary for Holders of Senior Debt.

 

The
Trustee, in its capacity as trustee under this Indenture, shall not be deemed
to owe any fiduciary duty to the holders of Senior Debt and shall not be liable
to any such holders if it shall in good faith mistakenly pay over or distribute
to Holders of Securities or to the Company or to any other Person cash,
property or securities to which any holders of Senior Debt shall be entitled by
virtue of this Article XII or otherwise.

 

SECTION 12.11.
Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee’s Rights.

 

The
Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XII with respect to any Senior Debt that may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.

 

SECTION 12.12.
Article Applicable to Paying Agents.

 

If
at any time any Paying Agent other than the Trustee shall have been appointed
by the Company and be then acting hereunder, the term “Trustee” as
used in this Article XII shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article XII in addition to or in place
of the Trustee; provided, that

 

64

 

Sections 12.8 and 12.11 shall not apply to the Company or any
Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.

 

* * * *

 

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

 

65

 

IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed as of the day and year first
above written.

 

	
   

  	
  AMERICAN EQUITY INVESTMENT LIFE
  HOLDING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra J. Richardson

  
	
   

  	
   

  	
  Name:  Debra J. Richardson

  
	
   

  	
   

  	
  Title:  Secretary & Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maria D. Calzado

  
	
   

  	
   

  	
  Name:  Maria D. Calzado

  
	
   

  	
   

  	
  Title:  Vice President

  
				

 

 

Junior
Subordinated IndentureExhibit 4.16

 

 

GUARANTEE
AGREEMENT

 

between

 

AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY,

as Guarantor,

 

and

 

JPMORGAN CHASE
BANK,

as Guarantee Trustee

 

 

Dated as
of September 14, 2004

 

 

AMERICAN EQUITY
CAPITAL TRUST VII

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
  Interpretation and Definitions

  	
   

  
	
   

  	
  Section 1.1.

  	
   

  	
  Interpretation

  	
   

  
	
   

  	
  Section 1.2.

  	
   

  	
  Definitions

  	
   

  
	
  ARTICLE II

  	
  Reports

  	
   

  
	
   

  	
  Section 2.1.

  	
   

  	
  List of Holders

  	
   

  
	
   

  	
  Section 2.2.

  	
   

  	
  Periodic Reports to the Guarantee Trustee

  	
   

  
	
   

  	
  Section 2.3.

  	
   

  	
  Event of Default; Waiver

  	
   

  
	
   

  	
  Section 2.4.

  	
   

  	
  Event of Default; Notice

  	
   

  
	
  ARTICLE III

  	
  Powers, Duties and Rights of the Guarantee
  Trustee

  	
   

  
	
   

  	
  Section 3.1.

  	
   

  	
  Powers and Duties of the Guarantee Trustee

  	
   

  
	
   

  	
  Section 3.2.

  	
   

  	
  Certain Rights of the Guarantee Trustee

  	
   

  
	
   

  	
  Section 3.3.

  	
   

  	
  Compensation

  	
   

  
	
   

  	
  Section 3.4.

  	
   

  	
  Indemnity

  	
   

  
	
   

  	
  Section 3.5.

  	
   

  	
  Securities

  	
   

  
	
  ARTICLE IV

  	
  Guarantee Trustee

  	
   

  
	
   

  	
  Section 4.1.

  	
   

  	
  Guarantee Trustee; Eligibility

  	
   

  
	
   

  	
  Section 4.2.

  	
   

  	
  Appointment, Removal and Resignation of the
  Guarantee Trustee

  	
   

  
	
  ARTICLE V

  	
  Guarantee

  	
   

  
	
   

  	
  Section 5.1.

  	
   

  	
  Guarantee

  	
   

  
	
   

  	
  Section 5.2.

  	
   

  	
  Waiver of Notice and Demand

  	
   

  
	
   

  	
  Section 5.3.

  	
   

  	
  Obligations Not Affected

  	
   

  
	
   

  	
  Section 5.4.

  	
   

  	
  Rights of Holders

  	
   

  
	
   

  	
  Section 5.5.

  	
   

  	
  Guarantee of Payment

  	
   

  
	
   

  	
  Section 5.6.

  	
   

  	
  Subrogation

  	
   

  
	
   

  	
  Section 5.7.

  	
   

  	
  Independent Obligations

  	
   

  
	
   

  	
  Section 5.8.

  	
   

  	
  Enforcement

  	
   

  
	
  ARTICLE VI

  	
  Covenants and Subordination

  	
   

  
	
   

  	
  Section 6.1.

  	
   

  	
  Dividends, Distributions and Payments

  	
   

  
	
   

  	
  Section 6.2.

  	
   

  	
  Subordination

  	
   

  
	
   

  	
  Section 6.3.

  	
   

  	
  Pari Passu Guarantees

  	
   

  

 

i

 

	
  ARTICLE VII 

  	
  Termination

  	
   

  
	
   

  	
  Section 7.1.

  	
   

  	
  Termination

  	
   

  
	
  ARTICLE VIII 

  	
  Miscellaneous

  	
   

  
	
   

  	
  Section 8.1.

  	
   

  	
  Successors and Assigns

  	
   

  
	
   

  	
  Section 8.2.

  	
   

  	
  Amendments

  	
   

  
	
   

  	
  Section 8.3.

  	
   

  	
  Notices

  	
   

  
	
   

  	
  Section 8.4.

  	
   

  	
  Benefit

  	
   

  
	
   

  	
  Section 8.5.

  	
   

  	
  Governing Law

  	
   

  
	
   

  	
  Section 8.6.

  	
   

  	
  Submission to Jurisdiction

  	
   

  
	
   

  	
  Section 8.7.

  	
   

  	
  Counterparts

  	
   

  
	
   

  	
  Section 8.8.

  	
   

  	
  Severability

  	
   

  

 

ii

 

GUARANTEE AGREEMENT, dated as of
September 14, 2004, executed and delivered by AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY, an Iowa corporation (the “Guarantor”) having its
principal office at 5000 Westown Parkway, Suite 440, West Des Moines, IA 50266,
and JPMORGAN CHASE BANK, a New York banking corporation, as trustee (in such
capacity, the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of AMERICAN EQUITY
CAPITAL TRUST VII, a Delaware statutory trust (the “Issuer”).

 

WITNESSETH:

 

WHEREAS, pursuant to an Amended and
Restated Trust Agreement, dated as of the date hereof (the “Trust Agreement”), among the
Guarantor, as Depositor, the Property Trustee, the Delaware Trustee and the
Administrative Trustees named therein and the holders from time to time of the
Preferred Securities (as hereinafter defined), the Issuer is issuing Ten
Million Five Hundred Thousand Dollars ($10,500,000) aggregate Liquidation Amount
(as defined in the Trust Agreement) of its Floating Rate Preferred Securities
(Liquidation Amount $1,000 per preferred security) (the “Preferred
Securities”) representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;

 

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

 

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

 

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

 

 

ARTICLE I

 

INTERPRETATION
AND DEFINITIONS

 

SECTION 1.1. Interpretation.

 

In this Guarantee Agreement, unless
the context otherwise requires:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 1.2. Definitions.

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

“Issuer” has the meaning set forth herein above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

ARTICLE II

 

REPORTS

 

SECTION 2.1. List of Holders.

 

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

 

SECTION 2.2. Periodic Reports to the Guarantee Trustee.

 

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

 

SECTION 2.3. Event of Default; Waiver.

 

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

 

SECTION 2.4. Event of Default; Notice.

 

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

 

(b)         The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Guarantee Agreement
shall have obtained written notice, of such Event of Default from the Guarantor
or a Holder.

 

6

 

ARTICLE III

 

POWERS,
DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

 

SECTION 3.1. Powers and Duties of the Guarantee Trustee.

 

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

 

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

 

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

 

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

 

(ii)       the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the

 

7

 

Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement.

 

SECTION 3.2. Certain Rights of the Guarantee Trustee.

 

(a)         Subject
to the provisions of Section 3.1:

 

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

 

(ii)       any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officers’ Certificate unless otherwise prescribed herein;

 

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

 

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

 

(v)       the Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and if the Guarantee Trustee shall determine to make
such inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Guarantor, personally or by agent or attorney;

 

8

 

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

 

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

 

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

 

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

 

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

 

SECTION 3.3. Compensation.

 

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

 

SECTION 3.4. Indemnity.

 

The Guarantor agrees to indemnify and
hold harmless the Guarantee Trustee and any of its Affiliates and any of their
officers, directors, shareholders, employees, representatives or agents from
and against any loss, damage, liability, tax (other than income, franchise or
other taxes imposed on amounts paid pursuant to Section 3.3), penalty, expense or claim of any kind or

 

9

 

nature whatsoever incurred without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Guarantee Trustee.

 

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

 

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

 

SECTION 3.5. Securities.

 

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

 

ARTICLE IV

 

GUARANTEE
TRUSTEE

 

SECTION 4.1. Guarantee Trustee; Eligibility.

 

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

 

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

 

(ii)         be a corporation organized and doing
business under the laws of the United States or of any State thereof,
authorized to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million dollars ($50,000,000), subject to supervision
or examination by Federal or State authority and having an office within the
United States. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then, for the purposes of this Section 4.1, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE V

 

GUARANTEE

 

SECTION 5.1. Guarantee.

 

(a)         The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by or
on behalf of the Issuer), as and when due, regardless of any defense (except
for the defense of payment by the Issuer), right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor’s obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer to pay such amounts to
the Holders. The Guarantor shall give prompt written notice to the Guarantee
Trustee in the event it makes any direct payment to the Holders hereunder.

 

11

 

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

 

SECTION 5.2. Waiver of Notice and Demand.

 

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

 

SECTION 5.3. Obligations Not Affected.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)           any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that

 

12

 

the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.

 

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

 

SECTION 5.4. Rights of Holders.

 

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

 

SECTION 5.5. Guarantee of Payment.

 

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

 

SECTION 5.6. Subrogation.

 

The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement and shall
have the right to waive payment by the Issuer pursuant to Section 5.1;
provided, that, the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
in trust for the Holders and to pay over such amount to the Holders.

 

SECTION 5.7. Independent Obligations.

 

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

 

 

13

 

SECTION 5.8 . Enforcement.

 

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

 

ARTICLE VI

 

COVENANTS
AND SUBORDINATION

 

SECTION 6.1. Dividends, Distributions and Payments.

 

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

 

SECTION 6.2. Subordination.

 

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

 

14

 

SECTION 6.3. Pari Passu Guarantees.

 

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

 

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

 

ARTICLE VII

 

TERMINATION

 

SECTION 7.1. Termination.

 

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

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.1. Successors and Assigns.

 

All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article VIII of the Indenture and pursuant to which the
successor or assignee agrees in writing to perform the

 

15

 

Guarantor’s obligations hereunder, the Guarantor shall
not assign its rights or delegate its obligations hereunder without the prior
approval of the Holders of a Majority in Liquidation Amount of the Preferred
Securities.

 

SECTION 8.2. Amendments.

 

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

 

SECTION 8.3. Notices.

 

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

 

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

 

American
Equity Investment Life Insurance Company

5000
Westown Parkway, Suite 440

West Des
Moines, IA 50266

Facsimile
No.: (515) 221-0744

Attention:
Wendy Carlson

 

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

 

American
Equity Capital Trust VII

5000
Westown Parkway, Suite 440

West Des
Moines, IA 50266

Facsimile
No.: (515) 221-0744

Attention:
Wendy Carlson

 

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

 

16

 

JPMorgan
Chase Bank

600
Travis, 50th Floor

Houston,
Texas 77002

Facsimile
No.: 713-216-2101

Attention:
International Trust Services -

American
Equity Capital Trust VII

 

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

 

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

 

SECTION 8.4. Benefit.

 

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

 

SECTION 8.5. Governing Law.

 

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

 

SECTION 8.6. Submission to Jurisdiction.

 

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

 

SECTION 8.7. Counterparts.

 

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

 

17

 

SECTION 8.8. Severability.

 

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

 

[Signature pages follow.]

 

18

 

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

 

	
   

  	
  AMERICAN EQUITY INVESTMENT LIFE
  HOLDING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra Richardson

  	
   

  
	
   

  	
   

  	
  Name:  Debra Richardson

  
	
   

  	
   

  	
  Title:  Secretary & Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, as Guarantee
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maria D. Calzado

  	
   

  
	
   

  	
   

  	
  Name:  Maria D. Calzado

  
	
   

  	
   

  	
  Title:  Vice President

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