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                                                                   EXHIBIT 10.10

                              COINSURANCE AGREEMENT

     This Coinsurance Agreement (this "Agreement") is by and between EquiTrust
Life Insurance Company, a corporation organized under the laws of the State of
lowa (hereinafter referred to as the "Reinsurer"), and American Equity
Investment Life Insurance Company, a company organized under the laws of the
State of lowa (hereinafter referred to as the "Company").

     The Company and the Reinsurer mutually agree to enter into a reinsurance
transaction under the terms and conditions stated herein. This Agreement is an
indemnity reinsurance agreement solely between the Company and the Reinsurer,
and the performance of the obligations of each party under this Agreement shall
be rendered solely to the other party. In no instance, except as set forth in
the insolvency provisions of this Agreement, shall anyone other than the Company
or the Reinsurer have any rights under this Agreement, and the Company shall be
and shall remain the only party hereunder that is liable to any insured or
beneficiary under the policy reinsured hereunder.

                                    ARTICLE I
                                   DEFINITIONS

     As used in this Agreement, the following terms shall have the following
meanings (definitions are applicable to both the singular and the plural forms
of each term defined in this Article):

1.1      "ACCOUNTING PERIOD" means monthly with the period ending on the last
         day of each calendar month.

1.2      "ACCRUAL RATE" means the current prime rate as published in the Wall
         Street Journal applicable to the period that a payment is due
         plus 1.00%.

1.3      "BUSINESS DAY" means any day that is not a Saturday, Sunday or other
         day on which national banking institutions are required or permitted by
         law or executive order to be closed.

1.4      "COMMISSION ALLOWANCE" shall have the meaning set forth in Schedule C.

1.5      "EFFECTIVE DATE" shall have the meaning set forth in Section 2.1.

1.6      "EXPENSE ALLOWANCE" shall have the meaning set forth in Schedule C.

1.7      "INCURRED CLAIMS" shall mean partial surrenders, full surrenders, death
         claims, and all other contractual benefits.

1.8      "INITIAL ACCRUAL RATE" means 7.30% per annum.

1.9      "INSURANCE TAXES AND CHARGES" means all insurance taxes (not including
         any federal, state or local tax measured by net income), Guaranty Fund
         assessments, and other insurance fees and charges related to the
         Reinsured Policies.

1.10     "POLICY" means any individual insurance policy described in Schedule A
         and all endorsements, riders, benefits, and amendments thereto.

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1.11     "PREMIUMS" means the gross considerations for the Policies reinsured
         hereunder.

1.12     "MONTHLY ACCOUNTING REPORT" means the report required to be prepared in
         accordance with Section 10.2 and Schedule B.

1.13     "MONTHLY ACCOUNTING PERIOD" means monthly with the period ending on the
         last day of each calendar month.

1.14     "QUOTA SHARE" means the percentage of risk assumed by the Reinsurer
         with respect to the different classes of Reinsured Policies, as set
         forth on Schedule A.

1.15     "REINSURANCE PREMIUM" shall have the meaning specified in Section 4.1.

1.16     "REINSURED POLICY" shall mean all Policies reinsured under this
         Agreement.

1.17     "RESERVES" means Exhibit 8, part B policy reserves as defined under
         statutory accounting principles.

1.18     "SETTLEMENT AMOUNT" means the net amount due and payable to either
         party with respect to any Accounting Period as set forth in Section
         10.3.

1.19     "TERMINAL ACCOUNTING AND SETTLEMENT" as described in Section 12.1 means
         the final accounting and payment of any amount due either party upon
         the termination of this Agreement.

                                   ARTICLE II
                                    COVERAGE

2.1      COVERAGE. As of August 1, 2001, (the "Effective Date"), the Company
         agrees to cede to the Reinsurer, and the Reinsurer agrees to indemnify
         the Company for the Quota Share of the risks under the Policies as of
         the Effective Date. The liability of the Reinsurer with respect to its
         share of the risks under the Reinsured Policies including liability for
         Incurred Claims under the Reinsured Policies shall begin simultaneously
         with that of the Company, but not prior to the Effective Date.

2.2      CONDITIONS. The reinsurance hereunder is subject to the same
         limitations, terms and conditions as the applicable Reinsured Policy
         hereunder, except as otherwise provided in this Agreement.

2.3      EXCLUSIONS. This Agreement does not apply to any risks except those
         risks under the applicable Reinsured Policy hereunder.

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                                   ARTICLE III
                               GENERAL PROVISIONS

3.1      CONFIDENTIALITY.

In performing the obligations arising under this Agreement, Reinsurer may have
access to and receive disclosure of certain information from Company which is
confidential or proprietary (hereinafter "Confidential Information").
Confidential Information includes all information provided by Company to
Reinsurer except (a) information which Reinsurer has confirmed is publicly
known, so long as it is not publicly known through the acts or omissions of
Reinsurer; or (b) information which is legally required to be disclosed by
Reinsurer under a requirement of a governmental agency or a court of law having
jurisdiction, but only if Reinsurer discloses only that information which, in
the reasonable opinion of its counsel, is required to be disclosed. Reinsurer
agrees that it will not disclose the Confidential Information to a third party
other than to carry out the Reinsurer's obligations under this Agreement.
Reinsurer further agrees not to appropriate any Confidential Information for its
own use either during the course of or subsequent to termination of this
Agreement. If Reinsurer discloses the Confidential Information to a third party
in order to perform the obligations under this Agreement, the Reinsurer will
disclose to the Company and will require the third party to agree to the
confidentiality standards set forth in this paragraph. Company has the right,
but not the obligation to audit the Confidential Information in the possession
of Reinsurer to detect use of the Confidential Information which is in violation
of this Coinsurance Agreement. Reinsurer's obligations with respect to the
confidentiality and security of the Confidential Information shall survive
termination of this Agreement. All Confidential Information in any medium and
any copies thereof, shall be promptly returned to Company or destroyed at
Company's option upon request of Company or upon termination of this Agreement.

Notwithstanding anything in this Section 3.1 to the contrary, Company agrees
that Reinsurer may disclose to analysts, rating agencies and/or any other
parties approved in advance by Company, information limited to (i) the existence
this Agreement; (ii) the quota share amount and total dollar amount of
reinsurance hereunder (premiums, benefits, and expenses); and (iii) the terms of
the Reinsured Contracts, but specifically excluding contract specific data from
the pricing models for the Reinsured Contracts, commission rates and/or the
identities of any of Company's sales agents.

3.2      INSPECTION. Either party or its designated representative may upon
         advance notice of at least ten (10) business days inspect, at the
         offices of the Company or the Reinsurer, as the case may be, where such
         records are located, and conduct reasonable audits of, the papers and
         any and all other books or documents of the Company or the Reinsurer
         reasonably relating to the Reinsured Policy and the administrative
         responsibilities hereunder, during normal business hours for such
         period as this Agreement is in effect or for as long thereafter as the
         Company or the Reinsurer, as the case may be, seeks performance by the
         other party pursuant to the terms of this Agreement. The information
         obtained shall be used only for purposes relating to the reinsurance
         provided under this Agreement and shall not be disclosed to any person
         without the express permission of the other party, except to the extent
         that disclosure is required by law. Each party will bear its own out of
         pocket costs in conducting investigations under this Section. Each

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         party's rights under this Section 3.2 shall survive termination of this
         Agreement until all reinsured policies have expired by their terms.

3.3      MISUNDERSTANDINGS AND OVERSIGHTS. If any delay, omission, error or
         failure to pay amounts due or to perform any other act required by this
         Agreement is unintentional and caused by misunderstanding, accident, or
         oversight, the Company and the Reinsurer shall adjust the situation to
         what it would have been had the misunderstanding, accident or oversight
         not occurred. The party first discovering such misunderstanding,
         accident or oversight, or act resulting from the misunderstanding or
         oversight, shall notify the other party in writing promptly upon
         discovery thereof and the parties shall act to correct such
         misunderstanding or oversight promptly upon receipt of such notice.
         However, this Section 3.3 shall not be construed as a waiver by either
         party of its right to enforce strictly the terms of this Agreement.

3.4      MISSTATEMENT. In the event that the liability provided by a Reinsured
         Policy is increased or decreased because of a misstatement of fact, the
         reinsurance hereunder shall increase or decrease proportionate to the
         Quota Share thereunder.

3.5      POLICY CHANGES. The Company and the Reinsurer shall share, based upon
         the applicable Quota Share, in any increase or decrease in the
         Company's liability that results from any change in the terms or
         conditions of any Reinsured Policy arising from the insured's addition
         or deletion of riders.

3.6      COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS.

         (a)  AGREEMENTS TO BE CONSTRUED IN ACCORDANCE WITH EXISTING LAW. It is
              the intention of the parties that this Agreement and related
              documents shall comply with all applicable federal and state laws
              and regulations in such a way that a Reinsured Policy remains
              reinsured on the quota share reinsurance plan.

         (b)  AMENDMENT UPON FAILURE TO COMPLY. In the event that it is
              determined by a regulatory authority, or by either party upon the
              advice of regulatory authorities that this Agreement or related
              documents fail to conform to the requirements of existing
              applicable laws and regulations, the parties shall exercise
              reasonable efforts to reach an agreement to amend the Agreement or
              related documents so as to return the parties to the economic
              position that they would have been in had no such change occurred,
              or so that both parties share proportionately in the economic
              detriment of such change. If the parties are unable to reach an
              agreement to amend the Agreement or related documents, then the
              party adversely affected by the change shall have the right to
              bring its dispute to arbitration in accordance with the provisions
              of Article XIV, but in no event will this Agreement terminate
              prior to resolution of the dispute in arbitration.

         (c)  STANDARD OF CARE - The Reinsurer agrees to perform the duties set
              forth herein in a manner consistent with general life insurance
              and with a standard of care equal to the standards it uses on
              similar policies that it directly writes and in accordance with
              applicable laws and regulations. The Reinsurer shall maintain all
              licenses, obtain all

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              regulatory approvals and comply with all regulatory requirements
              necessary to perform its obligations contemplated under this
              Agreement.

3.7      SETOFF AND RECOUPMENT. Any debts or credits, matured or unmatured,
         liquidated or unliquidated, regardless of when they arose or were
         incurred, in favor of or against either the Company or the Reinsurer
         with respect to this Agreement, are deemed mutual debts or credits, as
         the case may be, and shall be set off, and only the net balance shall
         be allowed or paid.

3.8      PAYMENTS. All payments made pursuant to this Agreement shall be made in
         immediately available U.S. funds.

                                   ARTICLE IV
                            PAYMENTS TO THE REINSURER

4.1      REINSURANCE PREMIUMS.  The Company will pay the Quota Share of premium
         on Reinsured Policies as shown on Schedule A.

4.2      OPTION  SETTLEMENTS.  The Company  will pay the Quota  Share  portion
         of the option settlements related to the equity indexed Reinsured
         Policies

                                    ARTICLE V
                             PAYMENTS TO THE COMPANY

5.1      POLICY  BENEFITS.  The  Reinsurer  shall  pay  its  Quota  Share  of
         all policy benefits including death benefits, withdrawals, surrenders,
         and annuitizations.

5.2      COMMISSION AND EXPENSE  ALLOWANCES.  The Reinsurer  shall pay its Quota
         Share of all Commission and Expense Allowances as shown in Schedule C.

5.3      OPTION COST.  The  Reinsurer  shall pay its Quota Share of the actual
         direct cost of options for options purchased to match the risk of the
         equity indexed Reinsured Policies.

                                   ARTICLE VI
                                    RESERVES

6.1      RESERVES. The Reinsurer shall establish and maintain appropriate
         Reserves with respect to the Reinsured Policies and shall hold their
         quota share of Reserves hereunder.

                                   ARTICLE VII
                           ACCOUNT PAYABLE/RECEIVABLE

7.1      ACCOUNT PAYABLE/RECEIVABLE. The Reinsurer will set up an Account
         Receivable equal to its Quota Share percentage of the fair value of the
         option assets backing the equity

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         indexed Reinsured Policies. The Company will set up an Account Payable
         in the same amount.

                                  ARTICLE VIII
                     CREDITED RATES/NON-GUARANTEED ELEMENTS

8.1      CREDITED RATES/NON-GUARANTEED ELEMENTS. The Company shall be
         responsible for determining Credited Rates and Non-Guaranteed Elements
         for the Reinsured Policies. In the event the Company is out of
         compliance with the spread covenants in their restated and amended
         credit agreement dated as of April 7, 2000 by and among the Company and
         US Bank and if the Company is not back in compliance within a sixty
         (60) day period, then the Reinsurer shall have the right to propose
         credited interest rates and all other non-guaranteed elements of the
         reinsured policies to the Company for approval. Approval shall not be
         unreasonably withheld by the Company.

                                   ARTICLE IX
                                 ADMINISTRATION

9.1      POLICY  ADMINISTRATION.  The  Company  shall  perform all
         administration of the Reinsured Policies. This includes purchasing
         options that are designed to match the risk of the equity indexed
         Reinsured Policies.

9.2      RECORD KEEPING. Reinsurer shall maintain all records and correspondence
         for services performed by Reinsurer hereunder relating to the Reinsured
         Policies in accordance with industry standards of insurance record
         keeping. In addition, the records shall be made available for
         examination, audit, and inspection by any State Insurance Department
         within whose jurisdiction the Reinsurer or the Company operates. The
         Reinsurer and Company further agree that in the event of the
         termination of this Agreement, any such records in the possession of
         the Reinsurer shall promptly be duplicated and forwarded to the Company
         unless otherwise instructed.

9.3      INDEMNIFICATION AND CONTROL OF DEFENSE.

         (a)  The Reinsurer shall have no duty or obligation to defend against
              any legal action or proceeding brought against the Company. The
              Reinsurer shall fully cooperate with the Company's efforts to
              defend such legal action or proceedings and will make available to
              the Company and its counsel such evidence relevant to such actions
              or proceedings as the Reinsurer may have as a result of performing
              its obligations under this Agreement.

         (b)  The Reinsurer shall not be liable to the Company for actions
              within the scope of the Reinsurer's actual authority in performing
              its obligations to the Company under this Agreement when such
              performance is in accordance with the standard expressed in
              Section 3.6(c) "Standard of Care."

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         (c)  The Company shall indemnify and hold harmless and defend the
              Reinsurer against any costs (including reasonable attorney's fees)
              or expenses, damages or judgments whatsoever which the Reinsurer
              may suffer as a result of the Reinsurer being named as a party
              defendant in any suit instituted by any persons to whom a Policy
              has been issued, or by any beneficiary, heir, legatee, or personal
              representative of such policyholder, where the Reinsurer's actions
              relevant to the suit are within the scope of the Reinsurer's
              actual authority in performing its obligations to the Company
              under this Agreement and were performed in accordance with the
              standard expressed in Section 3.6(c) "Standard of Care."

         (d)  The Reinsurer shall indemnify and hold harmless and defend the
              Company against any costs (including reasonable attorney's fees)
              or expenses, damages or judgments whatsoever which the Company may
              suffer as a result of the Company being named as a party defendant
              in any suit instituted by any persons to whom a Policy has been
              issued, or by any beneficiary, heir, legatee, or personal
              representative of such policyholder, where the Reinsurer's actions
              relevant to the suit are within its obligations to the Company
              under this Agreement and were not performed in accordance with the
              standard expressed in Section 3.6(c) "Standard of Care."

         (e)  Any party entitled to indemnification under this Agreement shall
              (1) give prompt notice to the party from whom indemnification is
              sought of any claim with respect to which it seeks
              indemnification; (2) permit such indemnifying party to assume and
              control defense of such claim with counsel reasonably satisfactory
              to the indemnified party; provided, however, that any party
              entitled to indemnification hereunder shall have the right to
              employ separate counsel and to participate in the defense of such
              claim, but the fees and expenses of such separate counsel shall be
              paid by the person employing separate counsel unless (a) the
              indemnifying party has agreed to pay such fees and expenses or (b)
              the indemnifying party shall have failed to assume the defense of
              such claim and to employ counsel reasonably satisfactory to such
              party. No indemnifying party shall be subject to any liability for
              any settlement made without its consent except where the
              indemnifying party has failed to assume the defense of such claim
              and to employ counsel reasonably satisfactory to the indemnified
              party. An indemnifying party who elects not to assume the defense
              of a claim will not be obligated to pay the fees and expenses of
              more than one counsel at any one time for all parties indemnified
              by such indemnifying party with respect to such claim, which
              counsel shall be designated in writing by the indemnified party
              and shall be reasonably acceptable to the indemnifying party.

                                    ARTICLE X
                            ACCOUNTING AND SETTLEMENT

10.1     INSURANCE  ACCOUNTING.  The Company shall  maintain  separate  books of
         account with respect to any Reinsured Policy, setting forth the data
         required in Schedule B.

10.2     MONTHLY ACCOUNTING REPORTS. Within ten (10) Business Days following the
         end of each Accounting Period, the Company shall supply the Reinsurer
         with a Monthly Accounting Report with the information as shown in Part
         I of Schedule B. On a quarterly basis

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         following the end of each calendar quarter the Company will include the
         information shown in Part II of Schedule B within fifteen (15) calendar
         days after the end of the calendar quarter and Schedule D within twenty
         one (21) calendar days after the end of the calendar quarter.

10.3     SETTLEMENTS. On a weekly basis the Company will determine an estimated
         Settlement Amount in accordance with Schedule B, accumulated with
         interest at the Accrual Rate. If the accumulated tentative settlement
         amount is positive, the Company will pay that amount to the Reinsurer.
         If the accumulated tentative Settlement Amount is negative, the
         Reinsurer will pay that amount to the Company. On a monthly basis the
         Reinsurer or the Company, as the case may be, shall pay any amount due,
         as adjusted by the accumulated tentative settlement amounts, to the
         other party within ten (10) Business Days of the receipt or submission
         of the Monthly Accounting Report.

10.4     ACCUMULATION OF SETTLEMENT AMOUNT. The Settlement Amount shall be
         accumulated with interest at the Accrual Rate from date each portion of
         the Settlement Amount is incurred to the date the Settlement Amount is
         due. If the Settlement is not paid by the due date, interest shall
         continue to accumulate at the Accrual Rate until such time that the
         Settlement Amount is paid. The Settlement Amount will be adjusted by
         the accumulated tentative settlement amounts.

10.5     RECONCILIATION. Each party shall have the right to review all
         individual components of transactions reflected in the Monthly
         Accounting Reports, and to request adjustments, as appropriate. Any
         amount due either party in connection with such adjustment shall be
         paid within ten (10) Business Days of the receipt of notice that
         additional amounts are due.

10.6     INTEREST PAYMENTS. Payment due to either the Reinsurer or the Company
         shall accrue interest at the Accrual Rate.

                                   ARTICLE XI
                              TERM AND TERMINATION

11.1     DURATION.  Except as otherwise  provided  herein,  this Agreement
         will be effective for so long as any Reinsured Policy is in effect.

11.2     REINSURER'S  LIABILITY.  The liability of the Reinsurer  with respect
         to the Reinsured Policy shall terminate on the date the liability of
         the Company on such Reinsured Policy is terminated.

11.3     TERMINATION. Should either party to this Agreement at any time:

         (a)  become insolvent;
         (b)  file a petition in bankruptcy;
         (c)  go into liquidation or rehabilitation;
         (d)  have a receiver appointed; or
         (e)  have its Company Action Level Risk Based Capital ratio as defined
              by the National Association of Insurance Commissioners (NAIC) drop
              below 100%,

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         then in such event the other party shall have the right to terminate
         this Agreement immediately upon notice to the other party.

11.4     TERMINATION DUE TO NONPAYMENT. Either party may terminate this
         Agreement if the other party fails to pay, when due, any amounts due
         under this Agreement provided that the delinquent party has been given
         at least twenty (20) Business Days advance written notice of its intent
         to terminate for that reason. Either party may avoid termination
         pursuant to this Section 11.4 by paying all amounts that are delinquent
         and then due on or before the date upon which the Agreement would have
         terminated in accordance with the notice from the other party. The
         other party shall provide written notice to the curing party that the
         default has been adequately cured.

11.5     TERMINATION FOR MATERIAL BREACH. In addition to all other rights and
         remedies, either party may terminate this Agreement by providing the
         other party with a minimum of thirty (30) days prior written notice in
         the event the other party commits a material breach of any provision of
         the Agreement. Said notice must specify the nature of said material
         breach. The breaching party shall have twenty (20) Business days from
         the date of the breaching party's receipt of the foregoing notice to
         cure said material breach to the reasonable satisfaction of the
         non-breaching party. If the breach is cured, the other party shall
         provide written notice to the curing party that the breach has been
         adequately cured. In the event the breaching party fails to cure the
         material breach within said twenty (20) Business day period, then at
         the option of the non-breaching party and upon notice, this Agreement
         will terminate upon expiration of the thirty (30) day notice period.
         Notwithstanding the foregoing, the parties shall cooperate with each
         other to effect a cure of any breach of the terms of this Agreement.

11.6     TERMINATION BY REINSURER. The Reinsurer has the right to terminate this
         agreement with respect to new business at any time by giving sixty (60)
         days notice to the Company.

11.7     TERMINATION BY THE COMPANY. The Company has the right to recapture this
         business after a period of 10 years. If the Company exercises its right
         to recapture the business, the Company will pay a recapture fee to the
         Reinsurer equal to the unamortized Commission and Expense Allowance
         with the amortization period of the Commission and Expense Allowance
         corresponding to the surrender charge period of each policy form

                                   ARTICLE XII
                     PAYMENTS UPON TERMINATION OF AGREEMENT

12.1     PAYMENTS ON TERMINATION.

         (a)  In the event that this Agreement shall be terminated under
              Sections 11.3, 11.4 or 11.5 a net accounting and settlement as to
              any balance due under this Agreement shall be undertaken by the
              parties to this Agreement (the "Terminal Accounting and
              Settlement"), which calculations shall be performed as of the day
              that is 90 days from the date that the liability of the Reinsurer
              shall have finally terminated (the "Terminal Accounting Date").
              The Terminal Accounting Date will be 120 days after the date of
              termination.

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         (b)  As of the Terminal Accounting Date, the Company shall supply the
              Reinsurer with a final Schedule B and the Settlement Amount will
              be paid as due pursuant to Section 10.3.

         (c)  In addition to the final Settlement Amount payment, the Company
              shall pay to the Reinsurer the Reinsurer's quota share portion of
              the unamortized portion of the Commission and Expense Allowance
              with the amortization period of the Commission and Expense
              Allowance corresponding to the surrender charge period of each
              policy form. The Reinsurer shall pay to the Company its quota
              share portion of the account values or the Reinsured Policies.

         (d)  Any payment required under the Terminal Accounting and Settlement
              by the Company shall be paid by the Company no later than thirty
              (30) days after the Terminal Accounting Date. Payments made after
              such time shall be deemed to be a delayed payment within the
              meaning of Section 11.6, and shall accrue interest accordingly. In
              the event that the calculation for the payment required under the
              Terminal Accounting and Settlement cannot be accurately calculated
              by such date, then an estimate shall be paid, with a supplemental
              accounting being made when the accurate information shall become
              available.

12.2     SUPPLEMENTAL ACCOUNTING. In the event that, subsequent to the Terminal
         Accounting and Settlement an adjustment is made with respect to any
         amount taken into account in the Terminal Accounting and Settlement, a
         supplemental accounting shall be made. Any net amount owed to the
         Reinsurer or the Company by reason of such supplemental accounting,
         plus any interest due accumulated at the Accrual Rate to the date of
         payment, shall be paid promptly upon the completion of such
         supplemental accounting.

                                  ARTICLE XIII
                                   INSOLVENCY

13.1     PAYMENTS. In the event of the insolvency of the Company, payments due
         the Company on all reinsurance made, ceded, renewed or otherwise
         becoming effective under this Agreement shall be payable by the
         Reinsurer directly to the Company or to its liquidator, receiver, or
         statutory successor on the basis of the liability of the Company under
         Reinsured Policies without diminution because of the insolvency of the
         Company.

13.2     EXECUTORY CONTRACT. It is expressly understood that this Agreement is
         an executory contract as long as both parties are required to perform
         under this Agreement. On the insolvency of either party, if this
         Agreement is not confirmed by the insolvent party and given status as
         an "Administrative Expense", then the other party may terminate for
         nonperformance without additional payment other than those required
         under Section 12.1.

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                                   ARTICLE XIV
                               DISPUTE RESOLUTION

14.1     DISPUTE RESOLUTION. If a dispute, controversy, or claim arises out of
         or relates to this Agreement, its termination or non-renewal, or the
         alleged breach thereof, and if said dispute cannot be settled through
         direct discussions, the parties agree to first endeavor to settle the
         dispute in an amicable manner by mediation administered by the American
         Arbitration Association ("AAA") under its Commercial Mediation Rules,
         before resorting to arbitration. If the matter has not been resolved
         pursuant to mediation within thirty (30) days of the commencement of
         such mediation (which period may be extended by mutual agreement in
         writing), then any unresolved dispute, controversy, or claim arising
         out of or relating to this Agreement, its termination or non-renewal,
         or the breach thereof, shall be settled by arbitration in accordance
         with the Commercial Arbitration Rules of the AAA, and judgment upon the
         award rendered by the arbitrator may be entered in any court having
         jurisdiction thereof. The arbitration shall be conducted by a sole
         arbitrator or, at the election of either party, before a panel of three
         arbitrators. Selection of the arbitrator(s) shall be in accordance with
         the Commercial Arbitration Rules of the AAA. The arbitrator(s) shall
         allow each party to conduct limited relevant discovery. The
         arbitrator(s) shall have no authority to award punitive damages or any
         damages not measured by the prevailing party's actual damages, and may
         not, in any event, make any ruling, finding or award that does not
         conform to the terms and conditions of this Agreement and applicable
         state and federal laws. All fees and expenses of arbitration shall be
         borne by the parties equally. However, each party shall bear the
         expense of its own counsel, experts, witnesses, and preparation and
         presentation of the arbitration matter. Any such arbitration shall be
         conducted in West Des Moines, Iowa.

                                   ARTICLE XV
                                     DAC TAX

    The parties hereto agree to the following pursuant to Section 1.848-2(g)(8)
of the Income Tax Regulations issued December 1992, under Section 848 of the
Internal Revenue Code of 1986, as amended. This election shall be effective for
2001 and for all subsequent taxable years for which this Agreement remains in
effect.

15.1     The term "party" will refer to either contracting company as
         appropriate.

15.2     The terms used in this Article are defined by reference to Regulation
         Section 1 848-2 in effect December 1992.

15.3     The party with the net positive consideration for the Coinsurance
         Agreement for each taxable year will capitalize specified policy
         acquisition expenses with respect to the Coinsurance Agreement without
         regard to the general deductions limitation of Section 848(c)(1).

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15.4     Both parties agree to exchange information pertaining to the amount of
         net consideration under the Coinsurance Agreement each year to ensure
         consistency or as otherwise required by the Internal Revenue Service.

15.5     The Company will submit a schedule to the Reinsurer by May 1 of each
         year of the calculation of the net consideration for the preceding
         calendar year. This schedule of calculations will be accompanied by a
         statement signed by one of the Company's officers stating that the
         Company will report such net consideration in its tax return for the
         preceding calendar year.

15.6     The Reinsurer may contest such calculation by providing an alternative
         calculation to the Company in writing within 30 days of receipt of the
         calculation. If the Reinsurer does not notify the Company, the
         Reinsurer will report the net consideration determined by the Company
         in its tax return for the previous calendar year.

15.7     If the calculation of the net consideration is contested, the parties
         will act in good faith to reach an agreement as to the correct amount
         within thirty (30) days of the date that the Company receives the
         Reinsurer's alternative calculation. If the parties reach agreement on
         an amount of net consideration, each party shall report such amount in
         their respective tax returns for the previous calendar year. If the
         parties are unable to reach an agreement on the amount of the net
         consideration, then the dispute will be resolved pursuant to Article
         XIV of this Agreement.

                                   ARTICLE XVI
                            MISCELLANEOUS PROVISIONS

16.1     HEADINGS AND SCHEDULES. Headings used herein are not a part of this
         Agreement or related documents and shall not affect the terms hereof.
         The attached Schedules A, B, C, and D are a part of this Agreement.

                                       12
<Page>

16.2     NOTICES. All notices and communications hereunder shall be in writing
         and shall become effective when received. Any written notice shall be
         sent by either certified or registered mail, return receipt requested,
         or overnight delivery service (providing for delivery receipt) or
         delivered by hand. All notices or communications under this Agreement
         shall be addressed as follows:

              If to the Company:

              American Equity Investment Life Insurance Company
              5000 Westown Parkway, Suite 300
              West Des Moines, IA 50266
              Attention:

              If to the Reinsurer:

              EquiTrust Life Insurance Company
              5400 University Ave
              West Des Moines IA 50266
              Attention:

16.3     SUCCESSORS AND ASSIGNS. This Agreement and related documents cannot be
         assigned by either party without the prior written consent of the
         other. The provisions of this Agreement and related documents shall be
         binding upon and inure to the benefit of and be enforceable by the
         parties hereto and their respective successor and assigns as permitted
         herein.

16.4     EXECUTION IN COUNTERPARTS. This Agreement and related documents may be
         executed by the parties hereto in any number of counterparts, and by
         each of the parties hereto in separate counterparts, each of which
         counterparts, when so executed and delivered, shall be deemed to be an
         original, but all such counterparts shall together constitute but one
         and the same instrument.

16.5     ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
         the parties hereto. This Agreement supersedes all prior discussions,
         negotiations, understandings, commitments and agreements with respect
         to the subject matter hereof. Any amendment or modification of this
         Agreement will not be effective unless made in writing and signed by
         the parties hereto.

16.6     REGULATORY APPROVAL OF AMENDMENTS. When and if, under insurance, public
         health or other applicable laws or regulations, the approval of any
         amendment to this Agreement or related documents by one or more
         federal, state or local regulatory authorities is required, the
         amendment shall not take effect unless and until all such necessary
         approvals have been received by the Company.

16.7     GOVERNING LAW. This Agreement and related  documents  shall be
         governed by and construed in accordance with the laws of the State of
         lowa.

                                       13
<Page>

16.8     WAIVERS AND REMEDIES. The waiver by any of the parties of any other
         party's prompt and complete performance or breach or violation, of any
         provisions of this Agreement and related documents shall not operate or
         be construed as a waiver of any subsequent breach or violation, and the
         waiver by any of the parties to exercise any right or remedy which it
         may possess hereunder shall not operate or be construed as a bar to the
         exercise of such right or remedy by such party upon the occurrence of
         any subsequent breach or violation.

16.9     SEVERABILITY. In the event any section or provision of this Agreement
         or related documents is found to be void and unenforceable by a court
         of competent jurisdiction, the remaining sections and provisions of
         this Agreement or related documents shall nevertheless be binding upon
         the parties with the same force and effect as though the void or
         unenforceable part had not been severed or deleted.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representative.

EQUITRUST                                         AMERICAN EQUITY INVESTMENT
LIFE INSURANCE CO.                                LIFE INSURANCE COMPANY

By: /s/ William J. Oddy                           By: /s/ D.J. Noble
    -------------------                               --------------

Name: William J. Oddy                             Name: D.J. Noble

Title: CEO                                        Title: Chairman

Date: December 18, 2001                           Date: December 19, 2001

                                       14
<Page>

                                   SCHEDULE A

                          CONTRACTS AND RISKS REINSURED

Company agrees to cede to the Reinsurer, and the Reinsurer agrees to accept from
the Company, the Quota Share reinsurance participation for the risks as
scheduled below that are not currently reinsured under another agreement:

<Table>
<Caption>
PERIOD OF POLICY ISSUE                          QUOTA SHARE
<S>                                              <C>
August 1, 2001 through December 31, 2001         70%
2002                                             40%
2003                                             40%
</Table>

REINSURED CONTRACTS

FPDA- 1(3%)
FPDA-2
FPDA-3
FPDA-4
FPDA-5
FPDA-6
I-2000
I-2001
INDEX
INDEX-12
INDEX-13
INDEX-15
INDEX-16
INDEX-17
INDEX-18
INDEX-19
INDEX-5
INDEX-6
INDEX-8
INDEXP3
SUPER-7
SPDA-2
SPDA-5

State variations of the listed products are included under this agreement

Effective date of this Schedule: August 1, 2001

                                       15
<Page>

                                   SCHEDULE B

                                     Part I

                            MONTHLY ACCOUNTING REPORT

             (For qualified and non-qualified business, separately)
            (All amounts are net of reinsurance to other reinsurers)

I.       PREMIUM
                                                              ------------------

II.      OPTION SETTLEMENTS
                                                              ------------------

III.     CLAIMS
                                                              ------------------

IV.      COMMISSION ALLOWANCE
                                                              ------------------

V.       ACQUISITION EXPENSE ALLOWANCE
                                                              ------------------

VI.      MAINTENANCE EXPENSE ALLOWANCE
                                                              ------------------

VII.     OPTION COSTS
                                                              ------------------

VIII.    Net (I + II - III - IV - V - VI - VII)
                                                              ------------------

IX.      Reinsured%
                                                              ------------------

X.       Settlement Amount
         (VIII times IX)                                      ------------------

XI.      Accumulated Settlement Amount
                                                              ------------------

                                     Part II
                        Quarterly Accounting Information

RESERVES - END OF PERIOD

Account Value
                                                              ------------------

Reserves
                                                              ------------------

ACCOUNT PAYABLE
                                                              ------------------

AMORTIZATION OF OPTION COST
                                                              ------------------

                                       16
<Page>

                                   SCHEDULE C

             COMMISSION AND EXPENSE ALLOWANCE FOR REINSURED POLICIES

The Reinsurer will grant to the Company the quota share percentage of the
following commission and expense allowances on the business reinsured:

<Table>
ANNUAL PER POLICY EXPENSE ALLOWANCES
<S>                                     <C>
Acquisition Expense                     $  125
Maintenance Expense                     $   50
</Table>

The Maintenance Expense Allowance will be calculated on a monthly basis as
follows:

         (C/12) * (A + B)/2  where

         A is the number of policies inforce as of the beginning of each
           month, and
         B is the number of policies inforce as of the end of the each
           month, and
         C is the annual per policy expense allowance.

The Acquisition Expense Allowance shall be adjusted from time to time to reflect
the per policy expense deferrable under Generally Accepted Accounting
Principles.

COMMISSION EXPENSE ALLOWANCES

The commission expense allowance shall be an amount as determined by the Company
based upon their published commission schedules and shall be the Quota Share
portion of commissions actually paid.

                                       17
<Page>

                                   SCHEDULE D

                             GAAP ACCOUNTING REPORT

            (All amounts are net of reinsurance to other reinsurers)

<Table>
<Caption>
                                                                EIA                  Traditional
<S>      <C>                                                  <C>                    <C>
I.       BEGINNING GAAP RESERVE
                                                              ------------------     -------------------

II.      LESS: BEGINNING OF PERIOD                                                   Not Applicable
                                                              ------------------
            accumulated interest credits
            + embedded derivative - current year option
            + embedded derivative - forward starting option

III.     BEGINNING ACCOUNT VALUE HOST CONTRACT (I - II)
                                                              ------------------     -------------------

IV.      PREMIUMS
                                                              ------------------     -------------------

V.       INTEREST CREDITED
                                                              ------------------     -------------------

VI.      BONUS INTEREST CREDITED
                                                              ------------------     -------------------

VII.     BENEFITS
                                                              ------------------     -------------------

VIII.    SURRENDER CHARGES
                                                              ------------------     -------------------

IX.      PORTION OF PREMIUMS AND BENEFITS
         RELATING TO EMBEDDED DERIVATIVES AND/OR
         ACCUMULATED INDEX CREDITS                                                   Not Applicable
                                                              ------------------

X.       ENDING ACCOUNT VALUE HOST CONTRACT
         (III + IV + V+ VI- VII - VIII- IX)
                                                              ------------------     -------------------

XI.      ADD: END OF PERIOD                                                          Not Applicable
                                                              ------------------
         accumulated interest credits
          + embedded derivative - current year option
          + embedded derivative - forward starting option

XII.     ENDING GAAP RESERVE (X + XI)
                                                              ------------------     -------------------

RESERVES - END OF PERIOD (BY ISSUE YEAR)
                                                              ------------------     -------------------

POLICY COUNT - END OF PERIOD (BY ISSUE YEAR)
                                                              ------------------     -------------------
</Table>

                                       18
<Page>

                    FIRST AMENDMENT TO COINSURANCE AGREEMENT

     This First Amendment to the Coinsurance Agreement ("First Amendment") is
made and entered into by and between EquiTrust Life Insurance Company
("Reinsurer") and American Equity Investment Life Insurance Company ("Company")
and shall be effective August 1, 2001.

     WHEREAS, the Reinsurer and Company wish to amend the Coinsurance Agreement
entered into between the parties with an effective date of August 1, 2001 (the
"Coinsurance Agreement").

     NOW, THEREFORE, the Coinsurance Agreement is hereby amended by adding the
following definitions to Article I:

     ESTIMATED PAYMENT means the amount paid by the Company to the Reinsurer as
an estimate of the Settlement Amount as specified in Section 10.3.

     NET SETTLEMENT AMOUNT means the Settlement Amount as determined by Schedule
B less the estimated Settlement Amount paid by the Company to the Reinsurer.

     NOW, THEREFORE, the Coinsurance Agreement is hereby further amended by
deleting Section 10.3 and replacing it with the following:

     SETTLEMENTS. At the beginning of each month the Company shall make an
estimate of the Settlement Amount in accordance with Schedule B and, if
positive, shall remit that amount to the Reinsurer by the 3rd Business Day of
the month. On a monthly basis the Reinsurer or the Company, as the case may be,
shall pay the Net Settlement Amount, to the other party within ten (10) Business
Days of the receipt or submission of the Monthly Accounting Report.

     NOW, THEREFORE, the Coinsurance Agreement is hereby further amended by
deleting Section 10.4 and replacing it with the following:

     ACCUMULATION OF NET SETTLEMENT. If the Net Settlement is not paid by the
due date, interest shall accumulate at the Accrual Rate from the due date of the
payment until such time that the Net Settlement is paid. If the Estimated
Payment is not within 25% of the Settlement Amount, the Net Settlement Amount
shall be accumulated from the middle of the accounting period to the due date at
the Accrual Rate.

     NOW, THEREFORE, the Coinsurance Agreement is hereby further amended by
deleting Section 12.1 (c) and replacing it with the following:

     In addition to the final Settlement Amount, the Reinsurer shall pay to the
Company its quota share portion of the account values of the Reinsured Policies.

     NOW, THEREFORE, the Coinsurance Agreement is hereby further amended by
deleting Schedule B and replacing it with the following:

                                       19
<Page>

                                   SCHEDULE B

                                     Part I

                            MONTHLY ACCOUNTING REPORT

             (For qualified and non-qualified business, separately)
            (All amounts are net of reinsurance to other reinsurers)

XII.     PREMIUM
                                                              ------------------

XIII.    OPTION SETTLEMENTS
                                                              ------------------

XIV.     CLAIMS
                                                              ------------------

XV.      COMMISSION ALLOWANCE
                                                              ------------------

XVI.     ACQUISITION EXPENSE ALLOWANCE
                                                              ------------------

XVII.    MAINTENANCE EXPENSE ALLOWANCE
                                                              ------------------

XVIII.   OPTION COSTS
                                                              ------------------

XIX.     Net (I + II - III - IV - V - VI - VII)
                                                              ------------------

XX.      Reinsured %
                                                              ------------------

XXI.     Settlement Amount
         (VIII times IX)                                      ------------------

XXII.    Estimated Payment
                                                              ------------------

XXIII.   Net Settlement Amount (X - XI)
                                                              ------------------

                                     Part II
                        Quarterly Accounting Information

RESERVES - END OF PERIOD

Account Value
                                                              ------------------

Reserves
                                                              ------------------

ACCOUNT PAYABLE
                                                              ------------------

AMORTIZATION OF OPTION COST
                                                              ------------------

                                       20
<Page>

     IN WITNESS WHEREOF, the parties have executed this First Amendment
effective August 1, 2001.

EQUITRUST                                         AMERICAN EQUITY INVESTMENT
LIFE INSURANCE COMPANY                            LIFE INSURANCE COMPANY

By:/s/ William J. Oddy                            By: /s/ D.J. Noble
   -------------------                                --------------

Name: William J. Oddy                             Name: D.J. Noble

Title: CEO                                        Title: Chairman

Date: February 18, 2002                           Date: February 26, 2002

                                       21<Page>

                                                                    EXHIBIT 10.1

                                ITS NETWORKS INC.
             2002 STOCK OPTION, SAR AND STOCK BONUS CONSULTANT PLAN

                                    ARTICLE 1

                               GENERAL PROVISIONS

1.1 PURPOSE. The purpose of the ITS Networks Inc. 2002 Stock Option, SAR and
Stock Bonus Consultant Plan (the "Plan") shall be to retain and compensate
independent consultants (the "Participants") of ITS Networks Inc. (the
"Company") and its subsidiaries, if any, by way of granting (i) non-qualified
stock options ("Stock Options"), (ii) non-qualified stock options with stock
appreciation rights attached ("Stock Option SAR's"), and (iii) stock bonuses.
Directors, officers and employees of the Company are not eligible to
participate in this Plan. In addition, no person shall be a Participant in
this Plan in consideration for consulting or other services related to
capital raising activities for the Company or related to any stock promotion
activities for the Company. For the purpose of this Plan, Stock Option SAR's
are sometimes collectively herein called "SAR's;" and Stock Options. The
Stock Options to be granted are intended to be "non-qualified stock options"
as described in Sections 83 and 421 of the Code. Furthermore, under the Plan,
the terms "parent" and "subsidiary" shall have the same meaning as set forth
in Subsections (e) and (f) of Section 425 of the Code unless the context
herein clearly indicates to the contrary.

1.2 GENERAL. The terms and provisions of this Article I shall be applicable
to Stock Options and SAR's unless the context herein clearly indicates to the
contrary.

1.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Stock
Plan Committee (the "Committee") appointed by the Board of Directors (the
"Board") of the Company and consisting of at least one member from the Board.
The members of the Committee shall serve at the pleasure of the Board. The
Committee shall have the power where consistent with the general purpose and
intent of the Plan to (i) modify the requirements of the Plan to conform with
the law or to meet special circumstances not anticipated or covered in the
Plan, (ii) suspend or discontinue the Plan, (iii) establish policies and (iv)
adopt rules and regulations and prescribe forms for carrying out the purposes
and provisions of the Plan including the form of any "stock option
agreements" ("Stock Option Agreements"). Unless otherwise provided in the
Plan, the Committee shall have the authority to interpret and construe the
Plan, and determine all questions arising under the Plan and any agreement
made pursuant to the Plan. Any interpretation, decision or determination made
by the Committee shall be final, binding and conclusive. A majority of the
Committee shall constitute a quorum, and an act of the majority of the
members present at any meeting at which a quorum is present shall be the act
of the Committee.

1.4 SHARES SUBJECT TO THE PLAN. Shares of stock ("Stock") covered by Stock
Options, SAR's, and stock bonuses shall consist of 2,000,000 shares of the
Common Stock, $.001 par value, of the Company. Either authorized and unissued
shares or treasury shares may be delivered pursuant to the Plan. If any
Option for shares of Stock, granted to a Participant lapses, or is otherwise
terminated, the Committee may grant Stock Options, SAR's and stock bonuses
for such shares of Stock to other Participants. However, neither Stock
Options nor SAR's shall be granted again for shares of Stock which have been
subject to SAR's which are surrendered in exchange for cash or shares of
Stock issued pursuant to the exercise of SAR's as provided in Article II
hereof.

1.5 PARTICIPATION IN THE PLAN. The Committee shall determine from time to
time those Participants who are to be granted Stock Options, SAR's and stock
bonuses and the number of shares of Stock covered thereby.

1.6 DETERMINATION OF FAIR MARKET VALUE. As used in the Plan, "fair market
value" shall mean on any particular day (i) if the Stock is listed or
admitted for trading on any national securities exchange or the National
Market System of the National Association of Securities Dealers, Inc.
Automated Quotation System, the last sale price, or if no sale occurred, the
mean between the closing high bid and low asked quotations, for such day of
the Stock on the principal securities exchange on which shares of Stock are
listed, (ii) if Stock is not traded on any national securities exchange but
is quoted on the National Association of Securities Dealers, Inc., Automated
Quotation System, the NASD electronic bulletin board, or any similar system
of automated dissemination of quotations or securities prices in common use,
the mean between the closing high bid and low asked quotations for such day
of the Stock on such system, (iii) if neither clause (i) nor (ii) is
applicable, the mean between the high bid and low asked quotations for the
Stock as reported by the National Quotation Bureau, Incorporated if at least
two securities dealers have inserted both bid and asked quotations for shares
of the Stock on at least five (5) of the ten (10) preceding days, (iv) in
lieu of the above, if actual transactions in the shares

<Page>

of Stock are reported on a consolidated transaction reporting system, the
last sale price of the shares of Stock on such system or, (v) if none of the
conditions set forth above is met, the fair market value of shares of Stock
as determined by the Board. Provided, for purposes of determining "fair
market value" of the Common Stock of the Company, such value shall be
determined without regard to any restriction other than a restriction which
will never lapse.

1.7 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The aggregate number of
shares of Stock under Stock Options granted under the Plan, the Option Price
and the total number of shares of Stock which may be purchased by a
Participant on exercise of a Stock Option shall be approximately adjusted by
the Committee to reflect any recapitalization, stock split, merger,
consolidation, reorganization, combination, liquidation, stock dividend or
similar transaction involving the Company except that a dissolution or
liquidation of the Company or a merger or consolidation in which the Company
is not the surviving or the resulting corporation, shall cause the Plan and
any Stock Option, or SAR granted thereunder, to terminate upon the effective
date of such dissolution, liquidation, merger or consolidation. Provided,
that for the purposes of this Section 1.7, if any merger, consolidation or
combination occurs in which the Company is not the surviving corporation and
is the result of a mere change in the identity, form or place of organization
of the Company accomplished in accordance with Section 368(a)(1)(F) of the
Code, then, such event will not cause a termination. Appropriate adjustment
may also be made by the Committee in the terms of a SAR to reflect any of the
foregoing changes.

1.8 AMENDMENT AND TERMINATION OF THE PLAN. The Plan shall terminate at
midnight, March 26, 2007, but prior thereto may be altered, changed,
modified, amended or terminated by written amendment approved by the Board.
Provided, that no action of the Board may, without the approval of the Board
of Directors, increase the aggregate number of shares of Stock which may be
purchased under Stock Options, SAR's or stock bonuses granted under the Plan;
or withdraw the administration of the Plan from the Committee. Except as
provided in this Article I, no amendment, modification or termination of the
Plan shall in any manner adversely affect any Stock Option or SAR theretofore
granted under the Plan without the consent of the affected Participant.

1.9 EFFECTIVE DATE. The Plan shall be effective March 27, 2002.

1.10 SECURITIES LAW REQUIREMENTS. The Company shall have no liability to
issue any Stock hereunder unless the issuance of such shares would comply
with any applicable federal or state securities laws or any other applicable
law or regulations thereunder.

1.11 SEPARATE CERTIFICATES. Separate certificates representing the Common
Stock of the Company to be delivered to a Participant upon the exercise of
any Stock Option, or SAR will be issued to such Participant.

1.12 PAYMENT FOR STOCK; RECEIPT OF STOCK OR CASH IN LIEU OF PAYMENT.

         (a) PAYMENT FOR STOCK. Payment for shares of Stock acquired under
this Plan shall be made in full and in cash or check made payable to the
Company. Provided, payment for shares of Stock purchased under this Plan may
also be made in Common Stock of the Company or a combination of cash and
Common Stock of the Company in the event that the purchase of shares is
pursuant to the exercise of rights under an SAR attached to the Option and
which is exercisable on the date of exercise of the Option. In the event that
Common Stock of the Company is utilized in consideration for the purchase of
Stock upon the exercise of a Stock Option, then, such Common Stock shall be
valued at the "fair market value" as defined in Section 1.6 of the Plan.

         (b) RECEIPT OF STOCK OR CASH IN LIEU OF PAYMENT. Furthermore, a
Participant may exercise an Option without payment of the Option Price in the
event that the exercise is pursuant to rights under an SAR attached to the
Option and which is exercisable on the date of exercise of the Option. In the
event an Option with an SAR attached is exercised without payment of the
Option Price, the Participant shall be entitled to receive either (i) a cash
payment from the Company equal to the excess of the total fair market value
of the shares of Stock on such date as determined with respect to which the
Option is being exercised over the total cash Option Price of such shares of
Stock as set forth in the Option or (ii) that number of whole shares of Stock
as is determined by dividing (A) an amount equal to the fair market value per
share of Stock on the date of exercise into (B) an amount equal to the excess
of the total fair market value of the shares of Stock on such date with
respect to which the Option is being exercised over the total cash Option
Price of such shares of Stock as set forth in the Option, and fractional
shares will be rounded to the next lowest number and the Participant will
receive cash in lieu thereof.

1.13 INCURRENCE OF DISABILITY. A Participant shall be deemed to have
terminated consulting and incurred a disability ("Disability") if such
Participant suffers a physical or mental condition which, in the judgment of
the Committee, totally and permanently prevents a Participant from engaging
in any substantial gainful consulting with the Company or a subsidiary.

1.14 GRANTS OF OPTIONS AND STOCK OPTION AGREEMENT. Each Stock Option and/or
SAR granted under this Plan shall be evidenced by the minutes of a meeting of
the Committee or by the written consent of the Committee and by a written
Stock Option Agreement effective on the date of grant and executed by the
Company and the Participant. Each Option granted hereunder shall contain such
terms, restrictions and conditions as the Committee may determine, which
terms, restrictions and conditions may or may not be the same in each case.

<Page>

1.15 USE OF PROCEEDS. The proceeds received by the Company from the sale of
Stock pursuant to the exercise of Options granted under the Plan shall be
added to the Company's general funds and used for general corporate purposes.

1.16 NON-TRANSFERABILITY OF OPTIONS. Except as otherwise herein provided, any
Option or SAR granted shall not be transferable otherwise than by will or the
laws of descent and distribution, and the Option may be exercised, during the
lifetime of the Participant, only by him or her. More particularly (but
without limiting the generality of the foregoing), the Option and/or SAR may
not be assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of law and
shall not be subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition
of the Option and/or SAR contrary to the provisions hereof shall be null and
void and without effect.

1.17 ADDITIONAL DOCUMENTS ON DEATH OF PARTICIPANT. No transfer of an Option
and/or SAR by the Participant by will or the laws of descent and distribution
shall be effective to bind the Company unless the Company shall have been
furnished with written notice and an unauthenticated copy of the will and/or
such other evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the successor to the Option
and/or SAR of the terms and conditions of such Option and/or SAR.

1.18 CHANGES IN CONSULTANT RELATIONSHIPS. So long as the Participant shall
continue to be a consultant of the Company or any one of its subsidiaries,
any Option granted to him or her shall not be affected by any change of
duties or position. Nothing in the Plan or in any Stock Option Agreement
which relates to the Plan shall confer upon any Participant any right to
continue as a consultant of the Company or of any of its subsidiaries, or
interfere in any way with the right of the Company or any of its subsidiaries
to terminate the consulting arrangement at any time.

1.19 SHAREHOLDER RIGHTS. No Participant shall have a right as a shareholder
with respect to any shares of Stock subject to an Option prior to the
purchase of such shares of Stock by exercise of the Option.

1.20 RIGHT TO EXERCISE UPON COMPANY CEASING TO EXIST. Where dissolution or
liquidation of the Company or any merger consolidation or combination in
which the Company is not the surviving corporation occurs, the Participant
shall have the right immediately prior to such dissolution, liquidation,
merger, consolidation or combination, as the case may be, to exercise, in
whole or in part, his or her then remaining Options whether or not then
exercisable, but limited to that number of shares that can be acquired
without causing the Participant to have an "excess parachute payment" as
determined under Section 280G of the Code determined by taking into account
all of Participant's "parachute payments" determined under Section 280G of
the Code. Provided, the foregoing notwithstanding, after the Participant has
been afforded the opportunity to exercise his or her then remaining Options
as provided in this Section 1.21, and to the extent such Options are not
timely exercised as provided in this Section 1.21, then, the terms and
provisions of this Plan and any Stock Option Agreement will thereafter
continue in effect, and the Participant will be entitled to exercise any such
remaining and unexercised Options in accordance with the terms and provisions
of this Plan and such Stock Option Agreement as such Options thereafter
become exercisable. Provided further, that for the purposes of this Section
1.21, if any merger, consolidation or combination occurs in which the Company
is not the surviving corporation and is the result of a mere change in the
identity, form, or place of organization of the Company accomplished in
accordance with Section 368(a)(1)(F) of the Code, then, such event shall not
cause an acceleration of the exercisability of any such Options granted
hereunder.

1.21 ASSUMPTION OF OUTSTANDING OPTIONS AND SAR'S. To the extent permitted by
the then applicable provisions of the Code, any successor to the Company
succeeding to, or assigned the business of, the Company as the result of or
in connection with a corporate merger, consolidation, combination,
reorganization or liquidation transaction shall assume Options and SAR's
outstanding under the Plan or issue new Options and/or SAR's in place of
outstanding Options and/or SAR's under the Plan, as determined in its sole
discretion.

                                   ARTICLE II

                       TERMS OF STOCK OPTIONS AND EXERCISE

2.1 GENERAL TERMS.

         (a) GRANT AND TERMS FOR STOCK OPTIONS. Stock Options shall be
granted by the Committee on the following terms and conditions: No Stock
Option shall be exercisable within six months from the date of grant (except
as specifically provided in Subsection 2.l(c) hereof, with regard to the
death or Disability of a Participant), nor more than five years after the
date of grant. Subject to such limitation, the Committee shall have the
discretion to fix the period (the "Option Period") during which any Stock
Option may be exercised. Stock Options granted shall not be transferable
except by will or by the laws of descent and distribution, Stock Options
shall be exercisable only by the Participant while actively retained as a
consultant by the Company or a subsidiary, except that (i) any such Stock
Option granted and which is otherwise exercisable, may be exercised by the
personal representative of a deceased Participant within 12 months after the
death of such Participant (but not beyond the Option Period of such Stock
Option), (ii) if a Participant terminates his position as a consultant with
the Company or a subsidiary on account of Retirement, such

<Page>

Participant may exercise any Stock Option which is otherwise exercisable at
any time within three months of such date of termination and (iii) if a
Participant terminates his position as a consultant with the Company or a
subsidiary on account of incurring a Disability, such Participant may
exercise any Stock Option which is otherwise exercisable at any time within
12 months of such date of termination. If a Participant should die during the
applicable three-month or 12-month period following the date of such
Participant's termination on account of Disability, the rights of the
personal representative of such deceased Participant as such relate to any
Stock Options granted to such deceased Participant shall be governed in
accordance with Subsection 2.1(a)(i) of this Article II.

         (b) OPTION PRICE. The option price ("Option Price") for shares of
Stock subject to a Stock Option shall be determined by the Committee, but in
no event shall the Option Price of Stock Options be less than 85% of the
"fair market value" of the Stock on the date of grant.

         (c) ACCELERATION OF OTHERWISE UNEXERCISABLE STOCK OPTION ON DEATH,
DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The Committee, in its sole
discretion, may permit (i) a Participant who terminates his position as a
consultant due to a Disability, (ii) the personal representative of a
deceased Participant, or (iii) any other Participant who terminates his
position as a consultant upon the occurrence of special circumstances (as
determined by the Committee) to exercise and purchase (within three months of
such date of termination of consulting arrangement, or 12 months in the case
of a deceased or disabled Participant; all or any part of the shares subject
to Stock Option on the date of the Participant's Disability, death, or as the
Committee otherwise so determines, notwithstanding that all installments, if
any, with respect to such Stock Option, had not accrued on such date.
Provided, such discretionary authority of the Committee shall not be
exercised with respect to any Stock Option (or portion thereof) if the
applicable six-month waiting period for exercise had not expired except in
the event of the death or disability of the Participant when the personal
representative of the deceased Participant or the disabled Participant may,
with the consent of the Committee, exercise such Stock Option notwithstanding
the fact that the applicable six-month waiting period had not yet expired.

         (d) NUMBER OF STOCK OPTIONS GRANTED. Participants may be granted
more than one Stock Option. In making any such determination, the Committee
shall obtain the advice and recommendation of the officers of the Company or
a subsidiary which have supervisory authority over such Participants. The
granting of a Stock Option under the Plan shall not affect any outstanding
Stock Option previously granted to a Participant under the Plan.

         (e) NOTICE OF EXERCISE STOCK OPTION. Upon exercise of a stock
option, a Participant shall give written notice to the Secretary of the
Company, or other officer designated by the Committee, at the Company's main
office in Spain. No Stock shall be issued to any Participant until the
Company receives full payment for the Stock purchased, if applicable, and any
required state and federal withholding taxes.

                                   ARTICLE III

                                      SAR'S

3.1 GENERAL TERMS.

         (a) GRANT AND TERMS OF SAR'S. The Committee may grant SAR's to
Participants in connection with Stock Options granted under the Plan. SAR's
shall not be exercisable (i) earlier than six months from the date of grant
except as specifically provided in Subsection 3.l(b) hereof in the case of
the death or Disability of a Participant, and (ii) shall terminate at such
time as the Committee determines and shall be exercised only upon surrender
of the related Stock Option and only to the extent that the related Stock
Option (or the portion thereof as to which the SAR is exercisable) is
exercised. SAR's may be exercised only by the Participant while actively
engaged as a consultant by the Company or a subsidiary except that (i) any
SAR's previously granted to a Participant which are otherwise exercisable may
be exercised, with the approval of the Committee, by the personal
representative of a deceased Participant, even if such death should occur
within six months of the date of grant (but not beyond the expiration date of
such SAR), and (ii) if a Participant terminates his position as a consultant
with the Company or a subsidiary, as the case may be, on account of incurring
a Disability, such Participant may exercise any SAR's which are otherwise
exercisable, with the approval of the Committee, anytime within 12 months of
termination by Disability. If a Participant should die during the applicable
three-month period following the applicable 12 month period following the
date of termination on account of Disability, the rights of the personal
representative of such deceased Participant as such relate to any SAR's
granted to such deceased Participant shall be governed in accordance with (i)
of the second sentence of this Subsection 3.l(a) of this Article III. The
applicable SAR shall (i) terminate upon the termination of the underlying
Stock Option, as the case may be, (ii) only be transferable at the same time
and under the same conditions as the underlying Stock Option is transferable,
(iii) only be exercised when the underlying Stock Option is exercised, and
(iv) may be exercised only if there is a positive spread between the Option
Price, as applicable and the "fair market value" of the Stock for which the
SAR is exercised.

         (b) ACCELERATION OF OTHERWISE UNEXERCISABLE SAR'S UPON DEATH,
DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The Committee, in its sole
discretion, may permit (i) a Participant who terminates his position as a
consultant with the Company or a

<Page>

subsidiary due to a Disability, (ii) the personal representative of such
deceased Participant, or (iii) any other Participant who terminates
employment as a consultant with the Company or a subsidiary upon the
occurrence of special circumstances (as determined by the Committee) to
exercise (within 12 months in the case of a disabled or deceased Participant)
all or any part of any such SAR's previously granted to such Participant as
of the date of such Participant's Disability, death, or as the Committee
otherwise so determines, notwithstanding that all installments, if any with
respect to such SAR's, had not accrued on such date. Provided, such
discretionary authority of the Committee may not be exercised with respect to
any SAR (or portion thereof if the applicable six-month waiting period for
exercise had not expired as of such date, except (i) in the event of the
Disability of the Participant or (ii) the death of the Participant, when such
disabled Participant or the personal representative of such deceased
Participant may, with the consent of the Committee, exercise such SAR's
notwithstanding the fact that the applicable six-month waiting period had not
yet expired.

         (C) FORM OF PAYMENT OF SAR'S. The Participant may request the method
and combination of payment upon the exercise of a SAR; however, the Committee
has the final authority to determine whether the value of the SAR shall be
paid in cash or shares of Stock or both. Upon exercise of a SAR, the holder
is entitled to receive the excess amount of the "fair market value" of the
Stock (as of the date of exercise) for which the SAR is exercised over the
Option Price, as applicable, under the related Stock Option, as the case may
be. All applicable federal and state withholding taxes will be paid by the
Participant to the Company upon the exercise of a SAR since the excess amount
described above will be required to be included within taxable income in
accordance with Sections 61 and 83 of the Code.

                                      ITS Networks Inc.

                             By:      /s/ Gustavo Gomez
                                      ------------------------------------------
                                      Gustavo Gomez, President
                                      Date Plan adopted and approved by the
                                        Board of Directors:
                                      March 27, 2002

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