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TRUST COMMON SECURITIES GUARANTEE AGREEMENT
American Equity Investment Life Holding Company
Dated as of [-]
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION...........................................................2
Section 1.1 DEFINITIONS AND INTERPRETATION.......................................2
ARTICLE II
TRUST INDENTURE ACT......................................................................6
Section 2.1 TRUST INDENTURE ACT; APPLICATION.....................................6
Section 2.2 LISTS OF HOLDERS OF SECURITIES.......................................7
Section 2.3 REPORTS BY THE COMMON GUARANTEE TRUSTEE..............................7
Section 2.4 PERIODIC REPORTS TO COMMON GUARANTEE TRUSTEE.........................7
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.....................7
Section 2.6 EVENTS OF DEFAULT; WAIVER............................................8
Section 2.7 EVENT OF DEFAULT; NOTICE.............................................8
Section 2.8 CONFLICTING INTERESTS................................................8
ARTICLE III
POWERS, DUTIES AND RIGHTS
OF COMMON GUARANTEE TRUSTEE..............................................................8
Section 3.1 POWERS AND DUTIES OF THE COMMON GUARANTEE
TRUSTEE..............................................................9
Section 3.2 CERTAIN RIGHTS OF COMMON GUARANTEE TRUSTEE..........................11
Section 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF TRUST
COMMON SECURITIES GUARANTEE.........................................14
ARTICLE IV
COMMON GUARANTEE TRUSTEE................................................................14
Section 4.1 COMMON GUARANTEE TRUSTEE; ELIGIBILITY...............................14
Section 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF
COMMON GUARANTEE TRUSTEE............................................15
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ARTICLE V
TRUST COMMON SECURITIES GUARANTEE.......................................................15
Section 5.1 TRUST COMMON SECURITIES GUARANTEE...................................16
Section 5.2 SUBORDINATION.......................................................16
Section 5.3 WAIVER OF NOTICE AND DEMAND.........................................16
Section 5.4 OBLIGATIONS NOT AFFECTED............................................16
Section 5.5 RIGHTS OF HOLDERS...................................................17
Section 5.6 GUARANTEE OF PAYMENT................................................18
Section 5.7 SUBROGATION.........................................................18
Section 5.8 INDEPENDENT OBLIGATIONS.............................................18
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION...............................................18
Section 6.1 LIMITATION OF TRANSACTIONS..........................................18
Section 6.2 RANKING.............................................................19
ARTICLE VII
TERMINATION.............................................................................20
Section 7.1 TERMINATION.........................................................20
ARTICLE VIII
INDEMNIFICATION.........................................................................20
Section 8.1 EXCULPATION.........................................................20
Section 8.2 INDEMNIFICATION.....................................................21
ARTICLE IX
MISCELLANEOUS...........................................................................21
Section 9.1 SUCCESSORS AND ASSIGNS..............................................21
Section 9.2 AMENDMENTS..........................................................21
Section 9.3 NOTICES.............................................................22
Section 9.4 BENEFIT.............................................................22
Section 9.5 GOVERNING LAW.......................................................22
TRUST COMMON SECURITIES GUARANTEE AGREEMENT
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This
TRUST COMMON SECURITIES GUARANTEE AGREEMENT (this "Trust Common
Securities Guarantee"), dated as of [-], is executed and delivered by
American
Equity Investment Life Holding Company, an
Iowa corporation (the "Guarantor"),
and First Union Trust Company, National Association, as trustee (the "Common
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Common Securities (as defined herein) of American
Equity Capital Trust III, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust,
dated as of [-] (the "Declaration"), among the trustees of the Trust named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
on the date hereof [-] common securities, having an aggregate liquidation amount
of $[-] designated the "Trust Common Securities" (the "Trust Common
Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Common Securities Guarantee, to guarantee the
obligations of the Trust to the Holders of Trust Common Securities on the terms
and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Preferred Securities Guarantee") on substantially
identical terms to this Trust Common Securities Guarantee for the benefit of the
holders of the Trust Preferred Securities (as defined herein), except that if an
Indenture Event of Default (as defined herein) has occurred and is continuing,
the rights of holders of the Trust Common Securities to receive Guarantee
Payments (as defined herein) under the Trust Common Securities Guarantee shall
be subordinated to the rights of Holders of Trust Preferred Securities to
receive Guarantee Payments (as defined in the Trust Preferred Securities
Guarantee) under this Trust Common Securities Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Trust Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Trust Common
Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS AND INTERPRETATION.
In this Trust Common Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Trust Common Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date hereof have
the same meaning when used in this Trust Common Securities Guarantee unless
otherwise defined in the Trust Common Securities Guarantee;
(c) a term defined anywhere in this Trust Common Securities
Guarantee has the same meaning throughout;
(d) all references to "the Trust Common Securities Guarantee"
or "this Trust Common Securities Guarantee" are to this Trust Common Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Trust Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Trust Common
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Trust Common Securities Guarantee, unless otherwise
defined in this Trust Common Securities Guarantee or unless the context
otherwise requires;
(g) a reference to the singular includes the plural and vice
versa;
(h) a reference to any Person shall include its successors and
assigns;
(i) a reference to any agreement or instrument shall mean such
agreement or instrument, as supplemented, modified, amended, or amended and
restated, and in effect from time to time; and
(j) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule or regulation.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
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"Business Day" means any day other than a Saturday, Sunday or day on
which banking institutions in West Des Moines,
Iowa or in Wilmington, Delaware
are authorized or required by any applicable law or executive order to close.
"Common Guarantee Trustee" means First Union Trust Company, National
Association, until a Successor Common Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Trust Common
Securities Guarantee and thereafter means each such Successor Common Guarantee
Trustee.
"Company Common Stock" means the common stock, par value $1.00 per
share, of the Guarantor.
"Corporate Trust Office" means the office of the Common Guarantee
Trustee at which the corporate trust business of the Common Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Trust Common Securities Guarantee is located at One
▇▇▇▇▇▇ Square, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Covered Person" means any Holder or beneficial owner of Trust Common
Securities.
"Debentures" means the [-]% Junior Subordinated Debentures due [-] of
the Guarantor held by the Property Trustee (as defined in the Declaration).
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Common Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Common Securities, to the extent
not paid or made by the Trust: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Trust Common
Securities to the extent the Trust shall have funds available therefor, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect to any Trust Common Securities
called for redemption by the Trust to the extent the Trust has funds available
therefor, and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with a distribution of the
Debentures to the Holders in exchange for Trust Common Securities or the
redemption of all of the Trust Common Securities as provided in the
Declaration), the lesser of (a) the aggregate of the total liquidation amount
and all accrued and unpaid Distributions on the Trust Common Securities to the
date of payment, to the extent the Trust shall have funds available therefor,
and (b) the amount of assets of the Trust remaining available for distribution
to Holders upon liquidation of the Trust (in either case, the "Liquidation
Distribution"). If an Indenture Event of Default has occurred and is continuing,
the rights of holders of the Trust Common Securities to receive Guarantee
Payments under this Trust Common Securities Guarantee are subordinate to the
rights of Holders of Trust Preferred Securities to receive Guarantee Payments
under the Trust Preferred Securities Guarantee.
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"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Trust Common Securities.
"Indemnified Person" means the Common Guarantee Trustee, any Affiliate
of the Common Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Common Guarantee Trustee.
"Indenture" means the Indenture, dated as of [-], among the Guarantor
and First Union Trust Company, National Association, as trustee, pursuant to
which the Debentures are to be issued to the Property Trustee of the Trust.
"Indenture Event of Default" means an "Indenture Event of Default" as
defined in the Indenture.
"Indenture Trustee" means the Person acting as trustee under the
Indenture, initially First Union Trust Company, National Association.
"Majority in liquidation amount of the Trust Common Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Trust
Common Securities, voting separately as a class, of more than 50% of the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Trust Common
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Common Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the 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;
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(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Common Guarantee
Trustee, any officer within the Corporate Trust Office of the Common Guarantee
Trustee, including any vice president, any assistant vice president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Common Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Common Guarantee Trustee" means a successor Common Guarantee
Trustee possessing the qualifications to act as Common Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Preferred Securities" means the securities representing
preferred undivided beneficial interests in the assets of the Trust.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Trust Common Securities Guarantee is subject to the
provisions of the Trust Indenture Act that would be required to be part of this
Trust Common Securities Guarantee were this Trust Common Securities Guarantee to
be qualified under the Trust Indenture Act, which provisions are incorporated by
reference in and made part of this Trust Common Securities Guarantee and this
Trust Common Securities Guarantee shall, to the extent applicable, be governed
by such provisions; and
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(b) if and to the extent that any provision of this Trust
Common Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
Section 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Common Guarantee Trustee
with a list, in such form as the Common Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Trust Common
Securities ("List of Holders") as of such date, (i) within 14 days after each
record date for payment of Distributions, and (ii) at any other time within 30
days of receipt by the Trust of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the Common
Guarantee Trustee; provided that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Common Guarantee Trustee by the
Guarantor. The Common Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Common Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 REPORTS BY THE COMMON GUARANTEE TRUSTEE. Within 60 days
after December 31of each year, the Common Guarantee Trustee shall provide to the
Holders of the Trust Common Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Common Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 PERIODIC REPORTS TO COMMON GUARANTEE TRUSTEE. The
Guarantor shall provide to the Common Guarantee Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Common Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Trust
Common Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
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Section 2.6 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of Trust Common Securities may, by vote, on behalf of the
Holders of all of the Trust Common Securities, waive any past Event of Default
and its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Common Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Common Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Trust Common Securities, notices of all Events of
Default of which the Common Guarantee Trustee is deemed to have knowledge (as
defined in Section 2.7(b)), unless such defaults have been cured before the
giving of such notice; provided that the Common Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Common Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Trust Common Securities.
(b) The Common Guarantee Trustee shall be deemed to have
knowledge of an Event of Default if (i) the Common Guarantee Trustee shall have
received written notice of such Event of Default or (ii) a Responsible Officer
of the Common Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge of such Event of Default.
Section 2.8 CONFLICTING INTERESTS. The Declaration shall be deemed
to be specifically described in this Trust Common Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS
OF COMMON GUARANTEE TRUSTEE
Section 3.1 POWERS AND DUTIES OF THE COMMON GUARANTEE TRUSTEE.
(a) This Trust Common Securities Guarantee shall be held by the
Common Guarantee Trustee for the benefit of the Holders of the Trust Common
Securities, and the Common Guarantee Trustee shall not transfer this Trust
Common Securities Guarantee to any Person except a Holder of Trust Common
Securities exercising his or her rights pursuant to Section 5.5(b) or to a
Successor Common Guarantee Trustee on acceptance by such Successor Common
Guarantee Trustee of its appointment to act as Successor Common Guarantee
Trustee. The right, title and interest of the Common Guarantee Trustee shall
automatically vest in any Successor Common Guarantee Trustee, and such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Common Guarantee Trustee.
(b) If an Event of Default of which the Common Guarantee
Trustee is deemed to have knowledge (as defined in Section 2.7(b)) has occurred
and is continuing, the Common Guarantee Trustee shall enforce this Trust Common
Securities Guarantee for the benefit of the Holders of the Trust Common
Securities.
(c) The Common Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Trust Common Securities Guarantee, and no implied covenants shall
be read into this Trust Common Securities Guarantee against the Common Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and of which the Common Guarantee Trustee is
deemed to have knowledge (as defined in Section 2.7(b)), the Common Guarantee
Trustee shall exercise such of the rights and powers vested in it by this Trust
Common Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(d) No provision of this Trust Common Securities Guarantee
shall be construed to relieve the Common Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Common Guarantee Trustee shall be determined solely by the
express provisions of this Common Securi ties Guarantee, and
the Common Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Trust Common Securities
Guarantee, and no implied covenants or obligations shall be
read into this Trust Common Securities Guarantee against the
Common Guarantee Trustee; and
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(B) in the absence of bad faith on the
part of the Common Guarantee Trustee, the Common Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Common Guarantee Trustee and conforming to the requirements
of this Trust Com mon Securities Guarantee; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Common Guarantee Trustee, the Common Guarantee Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Common
Securities Guarantee;
(ii) the Common Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Common Guarantee Trustee, unless it shall be proved
that the Common Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Common Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Trust Common Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Common Guarantee Trustee, or exercising any
trust or power conferred upon the Common Guarantee Trustee under this
Trust Common Securities Guarantee; and
(iv) no provision of this Trust Common Securities
Guarantee shall require the Common Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Common Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is
not reason ably assured to it under the terms of this Trust Common
Securities Guarantee or indemnity, reasonably satisfactory to the
Common Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
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Section 3.2 CERTAIN RIGHTS OF COMMON GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Common Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining
from acting upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Trust Common Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust
Common Securities Guarantee, the Common Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Common Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Common Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Common Guarantee Trustee may consult
with counsel of its selection, and the written advice or opinion of
such counsel with respect to legal matters shall be full and complete
authoriza tion and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees. The Common
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administra tion of this Trust Common Securities
Guarantee from any court of competent jurisdiction.
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(vi) The Common Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers vested in
it by this Trust Common Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to the
Common Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Common Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Common
Guarantee Trustee; provided that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Common Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Trust Common Securities
Guarantee.
(vii) The Common Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Common Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Common Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or attor
neys, and the Common Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Common Guarantee
Trustee or its agents hereunder shall bind the Holders of the Trust
Common Securities, and the signature of the Common Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the authority
of the Common Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Trust Common Securities
Guarantee, both of which shall be conclusively evidenced by the Common
Guarantee Trustee's or its agent's taking such action.
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(x) Whenever in the administration of this Trust
Common Securities Guarantee the Common Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Common Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Trust Common Securities, (ii) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Common Guarantee Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Trust Common
Securities Guarantee.
(b) No provision of this Trust Common Securities Guarantee
shall be deemed to impose any duty or obligation on the Common Guarantee Trustee
to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Common Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Common Guarantee Trustee shall be construed to be a duty.
Section 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF TRUST
COMMON SECURITIES GUARANTEE. The recitals contained in this Trust Common
Securities Guarantee shall be taken as the statements of the Guarantor, and the
Common Guarantee Trustee does not assume any responsibility for their
correctness. The Common Guarantee Trustee makes no representation as to the
validity or sufficiency of this Trust Common Securities Guarantee.
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ARTICLE IV
COMMON GUARANTEE TRUSTEE
Section 4.1 COMMON GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Common Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Common Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Common Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Common Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Common Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
Section 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF COMMON
GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(c), the Common Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Common Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Common Guarantee Trustee and delivered to
the Guarantor.
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(c) The Common Guarantee Trustee shall hold office and shall
not be removed in accordance with Section 4.2(a) or resign in accordance with
Section 4.2(b) unless and until a Successor Common Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Common Guarantee Trustee and delivered to the Guarantor and, in
the case of a resignation in accordance with Section 4.2(b), the resigning
Common Guarantee Trustee.
(d) If no Successor Common Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of removal or resignation,
the resigning or removed Common Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor Common Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Common Guarantee Trustee.
(e) No Common Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Common Guarantee Trustee.
(f) Upon termination of this Trust Common Securities Guarantee
or removal or resignation of the Common Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Common Guarantee Trustee all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE V
TRUST COMMON SECURITIES GUARANTEE
Section 5.1 TRUST COMMON SECURITIES GUARANTEE. The Guarantor
irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the
Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
Section 5.2 SUBORDINATION. If an Indenture Event of Default has
occurred and is continuing, the rights of holders of Trust Common Securities to
receive Guarantee Payments under this Trust Common Securities Guarantee are
subordinate to the rights of Holders of Trust Preferred Securities to receive
Guarantee Payments under the Trust Preferred Securities Guarantee.
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Section 5.3 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Trust Common Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Trust or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
Section 5.4 OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Trust Common Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Trust Common Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Trust Common Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust Common Securities (other than an extension
of time for payment of Distributions, Redemption Price, Liquidation Distribution
or other sum payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Trust Common
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Trust
Common Securities;
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(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.4 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.5 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the
Trust Common Securities have the right to direct the time, method and place of
the conducting of any proceeding for any remedy available to the Common
Guarantee Trustee in respect of this Trust Common Securities Guarantee or
exercising any trust or power conferred upon the Common Guarantee Trustee under
this Trust Common Securities Guarantee.
(b) Any Holder of Trust Common Securities may institute a legal
proceeding against the Guarantor to enforce the obligations of the Guarantor
under this Trust Common Securities Guarantee without first instituting a legal
proceeding against the Trust, the Common Guarantee Trustee or any other Person.
(c) If an Indenture Event of Default constituting the failure
to pay interest, principal or premium, if any, on the Debentures on the date
such interest, principal or premium, if any, is otherwise payable has occurred
and is continuing, then a Holder of Trust Common Securities may directly, at any
time on or after the respective due date specified in the Debentures for such
payment, institute a proceeding for enforcement of payment to such Holder of the
interest, principal or premium, if any, on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Common Securities
of such Holder. The Holders of Trust Common Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures
unless the Property Trustee (as defined in the Indenture) fails to do so.
Section 5.6 GUARANTEE OF PAYMENT. This Trust Common Securities
Guarantee creates a guarantee of payment and not of collection.
Section 5.7 SUBROGATION. The Guarantor shall be subrogated to all
(if any) rights of the Holders of Trust Common Securities against the Trust in
respect of any amounts paid to such Holders by the Guarantor under this Trust
Common Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Trust Common Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Trust Common Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
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Section 5.8 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Trust
with respect to the Trust Common Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Trust Common Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.4 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 LIMITATION OF TRANSACTIONS. So long as any Trust Common
Securities remain outstanding, if (i) the Guarantor has exercised its option to
defer interest payments on the Debentures by extending the interest payment
period and such extension shall be continuing, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under the Trust Common
Securities Guarantee or (iii) there shall have occurred and be continuing any
event that, with the giving of notice or the lapse of time or both, would
constitute an Indenture Event of Default, then the Guarantor shall not (a)
declare or pay dividends on, or make a distribution with respect to, or redeem
or purchase or acquire, or make a liquidation payment with respect to, any of
its capital stock (other than (1) purchases or acquisitions of shares of Company
Common Stock (or Company Common Stock equivalents) in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit or
agent plans or the satisfaction by the Guarantor of its obligations pursuant to
any contract or security requiring the Guarantor to purchase shares of Company
Common Stock (or Company Common Stock equivalents), (2) purchases of shares of
Company Common Stock (or Company Common Stock equivalents) from officers or
employees of the Guarantor or its subsidiaries upon termination of employment or
retirement not pursuant to any obligation under any contract or security
requiring the Guarantor to purchase shares of Company Common Stock (or Company
Common Stock equivalents), (3) as a result of a reclassification of the
Guarantor's capital stock or the exchange or conversion of one class or series
of the Guarantor's capital stock for another class or series of the Guarantor's
capital stock, (4) dividends or distributions of shares of Company Common Stock
on Company Common Stock or (5) the purchase of fractional interests in shares of
the Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged), (b) make
any payment of principal of (premium, if any) or interest on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Guarantor that rank PARI PASSU with or junior to the Debentures and (c) make any
guarantee payments with respect to any of the foregoing (other than pursuant to
the Trust Common Securities Guarantee).
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Section 6.2 RANKING.
(a) This Trust Common Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) senior to the
Guarantor's common stock, (ii) PARI PASSU with the most senior preferred or
preference securities now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor with respect to any
preferred or preference securities of the Guarantor or any Affiliate of the
Guarantor, and (iii) junior and subordinate in right of payment to all other
liabilities of the Guarantor except any liabilities that may be PARI PASSU
expressly by their terms.
(b) The holders of any obligations of the Guarantor that are
senior in priority to the obligations under this Trust Common Securities
Guarantee will be entitled to all of the rights inuring to the holders of
"Senior Debt" under Article 12 of the Indenture, and the Holders of the Trust
Common Securities will be subject to all of the terms and conditions of such
Article 12 with respect to any claims or rights hereunder with the same effect
as though fully set forth herein.
ARTICLE VII
TERMINATION
Section 7.1 TERMINATION. This Trust Common Securities Guarantee
shall terminate as to each Holder of Trust Common Securities upon (i) full
payment of the applicable Redemption Price (as defined in the Declaration) with
respect to all Trust Common Securities, (ii) the distribution of the Debentures
held by the Trust to the Holders of all of the Trust Common Securities of the
Trust or (iii) liquidation of the Trust, and will terminate completely upon full
payment of the amounts payable in accordance with the Declaration of the Trust.
Notwithstanding the foregoing, this Trust Common Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Common Securities must restore payment of any sums paid
under the Trust Common Securities or under this Trust Common Securities
Guarantee.
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ARTICLE VIII
INDEMNIFICATION
Section 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Trust
Common Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Trust Common Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Trust Common Securities
might properly be paid.
Section 8.2 INDEMNIFICATION. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Common Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Trust Common Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Trust Common Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor's assets to another entity, each as permitted by the Indenture, the
Guarantor may not assign its rights or delegate its obligations under this Trust
Common Securities Guarantee without the prior approval of the Holders of at
least a Majority in liquidation amount of the Trust Common Securities.
Section 9.2 AMENDMENTS. Except with respect to any changes that do
not materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Trust Common Securities Guarantee may be
amended only with the prior approval of the Holders of at least a Majority in
liquidation amount of the Trust Common Securities. The provisions of Section
12.2 of the Declaration with respect to meetings of Holders of the Trust Common
Securities apply to the giving of such approval.
Section 9.3 NOTICES. All notices provided for in this Trust Common
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, sent by facsimile or mailed by registered or
certified mail, as follows:
(a) if given to the Common Guarantee Trustee, at the Common
Guarantee Trustee's mailing address set forth below (or such other address as
the Common Guarantee Trustee may give notice of to the Holders of the Trust
Common Securities):
First Union Trust Company, National Association
One ▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
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(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Trust Common Securities):
American Equity Investment Life Holding Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(c) If given to any Holder of Trust Common Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4 BENEFIT. This Trust Common Securities Guarantee is
solely for the benefit of the Holders of the Trust Common Securities and,
subject to Section 3.1(a), is not separately transferable from the Trust Common
Securities.
Section 9.5 GOVERNING LAW. THIS TRUST COMMON SECURITIES GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTER PRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF
IOWA AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH
LAWS WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
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THIS TRUST COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY
By:
--------------------------------
Name:
Title:
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as Common
Guarantee Trustee
By:
--------------------------------
Name:
Title: