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TRUST PREFERRED 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.............................................................1
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..................................6
Section 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE......................6
Section 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.................7
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT................7
Section 2.6 EVENTS OF DEFAULT; WAIVER.......................................7
Section 2.7 EVENT OF DEFAULT; NOTICE........................................7
Section 2.8 CONFLICTING INTERESTS...........................................8
ARTICLE III
POWERS, DUTIES AND RIGHTS
OF PREFERRED GUARANTEE TRUSTEE.............................................................8
Section 3.1 POWERS AND DUTIES OF THE PREFERRED
GUARANTEE TRUSTEE...............................................8
Section 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE..................10
Section 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
TRUST PREFERRED SECURITIES GUARANTEE...........................13
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE...............................................................13
Section 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.......................13
Section 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF
PREFERRED GUARANTEE TRUSTEE....................................14
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ARTICLE V
TRUST PREFERRED SECURITIES GUARANTEE......................................................15
Section 5.1 TRUST PREFERRED SECURITIES GUARANTEE...........................15
Section 5.2 SUBORDINATION..................................................15
Section 5.3 WAIVER OF NOTICE AND DEMAND....................................15
Section 5.4 OBLIGATIONS NOT AFFECTED.......................................15
Section 5.6 GUARANTEE OF PAYMENT...........................................17
Section 5.7 SUBROGATION....................................................17
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...............................................................................19
Section 7.1 TERMINATION....................................................19
ARTICLE VIII
INDEMNIFICATION...........................................................................20
Section 8.1 EXCULPATION....................................................20
Section 8.2 INDEMNIFICATION................................................20
ARTICLE IX
MISCELLANEOUS.............................................................................21
Section 9.1 SUCCESSORS AND ASSIGNS.........................................21
Section 9.2 AMENDMENTS.....................................................21
Section 9.3 NOTICES........................................................21
Section 9.4 BENEFIT........................................................22
Section 9.5 GOVERNING LAW..................................................22
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TRUST
PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST
PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Trust Preferred
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 "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Preferred Securities (as defined herein) of American
Equity Capital Trust 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 [-] preferred securities, having an aggregate liquidation amount of
$[-] designated the "[-]% Trust Preferred Securities" (the "Trust Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Trust Preferred Securities Guarantee, to guarantee
the obligations of the Trust to the Holders of Trust Preferred Securities on the
terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Common Securities Guarantee") on substantially identical
terms to this Trust Preferred Securities Guarantee for the benefit of the
holders of the Trust Common Securities (as defined herein), except that if an
Indenture Event of Default (as defined herein) has occurred and is continuing,
the rights of holders of the Trust Common Securities to receive Guarantee
Payments (as defined in the Trust Common Securities Guarantee) under the Trust
Common Securities Guarantee shall be subordinated to the rights of Holders of
Trust Preferred Securities to receive Guarantee Payments (as defined herein)
under this Trust Preferred Securities Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder of Trust
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS AND INTERPRETATION.
In this Trust Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date hereof have
the same meaning when used in this Trust Preferred Securities Guarantee unless
otherwise defined in the Trust Preferred Securities Guarantee;
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Trust Preferred Securities Guarantee"
or "this Trust Preferred Securities Guarantee" are to this Trust Preferred
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections of this Trust Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Trust Preferred Securities Guarantee, unless otherwise
defined in this Trust Preferred Securities Guarantee or unless the context
otherwise requires;
(g) a reference to the singular includes the plural and vice
versa;
(h) a reference to any Person shall include its successors and
assigns;
(i) a reference to any agreement or instrument shall mean such
agreement or instrument, as supplemented, modified, amended, or amended and
restated, and in effect from time to time; and
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(j) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule or regulation.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or day on which
banking institutions in West Des Moines,
Iowa or in Wilmington, Delaware are
authorized or required by any applicable law or executive order to close.
"Company Common Stock" means the common stock, par value $1.00 per share,
of the Guarantor.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Trust Preferred Securities Guarantee is located at One
Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000.
"Covered Person" means any Holder or beneficial owner of Trust Preferred
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 Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Trust: (i) any accrued and unpaid Distributions
(as defined in the Declaration) that are required to be paid on such Trust
Preferred Securities to the extent the Trust shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to any Trust Preferred Securities called for redemption by the Trust to the
extent the Trust has funds available therefor, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with a distribution of the Debentures to the Holders in exchange for
Trust Preferred Securities or the redemption of all of the Trust Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the total liquidation amount and all accrued and unpaid Distributions on the
Trust Preferred Securities to the date of payment, to the extent the Trust shall
have funds available therefor, and (b) the amount of assets of the Trust
remaining available for distribution to Holders upon liquidation of the Trust
(in either case, the "Liquidation Distribution"). If an Indenture Event of
Default has occurred and is continuing, the rights of holders of the Trust
Common Securities to receive Guarantee Payments under the Trust Common
Securities Guarantee are subordinate to the rights of Holders of Trust Preferred
Securities to receive Guarantee Payments under this 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 Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Trust Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Indenture, dated as of [-], 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 Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Trust
Preferred Securities, voting separately as a class, of more than 50% of the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Trust
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Trust Preferred Securities Guarantee shall include:
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(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means First Union Trust Company, National
Association, until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Trust Preferred
Securities Guarantee and thereafter means each such Successor Preferred
Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
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ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act, which provisions are incorporated by
reference in and made part of this Trust Preferred Securities Guarantee and this
Trust Preferred Securities Guarantee shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Trust
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
Section 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Trust Preferred
Securities ("List of Holders") as of such date, (i) within 14 days after each
record date for payment of Distributions, and (ii) at any other time within 30
days of receipt by the Trust of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee; provided that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Preferred Guarantee Trustee by the
Guarantor. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE. Within 60 days
after December 31 of each year, the Preferred Guarantee Trustee shall provide to
the Holders of the Trust Preferred Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
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Section 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE. The
Guarantor shall provide to the Preferred Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Trust
Preferred Securities Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
Section 2.6 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of Trust Preferred Securities may, by vote, on behalf of the
Holders of all of the Trust Preferred Securities, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Trust Preferred Securities Guarantee,
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
Section 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Trust Preferred Securities, notices of all Events
of Default of which the Preferred Guarantee Trustee is deemed to have knowledge
(as defined in Section 2.7(b)), unless such defaults have been cured before the
giving of such notice; provided that the Preferred Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Trust Preferred
Securities.
(b) The Preferred Guarantee Trustee shall be deemed to have
knowledge of an Event of Default if (i) the Preferred Guarantee Trustee shall
have received written notice of such Event of Default or (ii) a Responsible
Officer of the Preferred Guarantee Trustee charged with the administration of
the Declaration shall have obtained actual knowledge of such Event of Default.
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Section 2.8 CONFLICTING INTERESTS. The Declaration shall be deemed to
be specifically described in this Trust Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS
OF PREFERRED GUARANTEE TRUSTEE
Section 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Trust Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of the Trust
Preferred Securities, and the Preferred Guarantee Trustee shall not transfer
this Trust Preferred Securities Guarantee to any Person except a Holder of Trust
Preferred Securities exercising his or her rights pursuant to Section 5.5(b) or
to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default of which the Preferred Guarantee
Trustee is deemed to have knowledge (as defined in Section 2.7(b)) has occurred
and is continuing, the Preferred Guarantee Trustee shall enforce this Trust
Preferred Securities Guarantee for the benefit of the Holders of the Trust
Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Trust Preferred Securities Guarantee, and no implied covenants
shall be read into this Trust Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and of which the Preferred
Guarantee Trustee is deemed to have knowledge (as defined in Section 2.7(b)),
the Preferred Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Trust Preferred Securities Guarantee, and use the same
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.
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(d) No provision of this Trust Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Trust Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Trust Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Preferred Guarantee Trustee and
conforming to the requirements of this Trust Pre ferred Securities
Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Preferred Guarantee Trustee, the Preferred Guarantee Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Preferred
Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
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(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Trust Preferred Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust or
power conferred upon the Preferred Guarantee Trustee under this Trust
Preferred Securities Guarantee; and
(iv) no provision of this Trust Preferred Securities
Guarantee shall require the Preferred Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers, if the Preferred Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reason ably assured to it under the terms of this Trust Preferred
Securities Guarantee or indemnity, reasonably satisfactory to the
Preferred Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
Section 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of the Guarantor contemplated
by this Trust Preferred Securities Guarantee shall be sufficiently
evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust
Preferred Securities Guarantee, the Preferred Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon
an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel of its selection, and the written advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice
or opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Preferred Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Trust Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Trust Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred Guarantee
Trustee such security and indemnity, reasonably satisfactory to the
Preferred Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
that nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Trust Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
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(viii) The Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and
the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Trust Preferred
Securities, and the signature of the Preferred Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the
Preferred Guarantee Trustee to so act or as to its compliance with any of
the terms and provisions of this Trust Preferred Securities Guarantee,
both of which shall be conclusively evidenced by the Preferred Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Trust
Preferred Securities Guarantee the Preferred Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Trust Preferred Securities, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Preferred Securities
Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law to perform any such act or acts or
to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Preferred Guarantee Trustee shall be construed to be
a duty.
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Section 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF TRUST PREFERRED
SECURITIES GUARANTEE. The recitals contained in this Trust Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the Preferred
Guarantee Trustee does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the validity or
sufficiency of this Trust Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
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(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(c), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor.
(c) The Preferred Guarantee Trustee shall hold office and
shall not be removed in accordance with Section 4.2(a) or resign in accordance
with Section 4.2(b) unless and until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor
and, in the case of a resignation in accordance with Section 4.2(b), the
resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery to the Guarantor of an instrument of removal or
resignation, the resigning or removed Preferred Guarantee Trustee may petition
any court of competent jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Trust Preferred Securities
Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.
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ARTICLE V
TRUST PREFERRED SECURITIES GUARANTEE
Section 5.1 TRUST PREFERRED SECURITIES GUARANTEE. The Guarantor
irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the
Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
Section 5.2 SUBORDINATION. If an Indenture Event of Default has occurred
and is continuing, the rights of holders of Trust Common Securities to receive
Guarantee Payments under the Trust Common Securities Guarantee are subordinate
to the rights of Holders of Trust Preferred Securities to receive Guarantee
Payments under this Trust Preferred Securities Guarantee.
Section 5.3 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of this Trust Preferred Securities Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Trust or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 5.4 OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Trust Preferred Securities
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Trust Preferred Securities to be
performed or observed by the Trust;
(b) the extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Trust Preferred Securities or
the extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Trust Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
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(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.4 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.5 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the
Trust Preferred Securities have the right to direct the time, method and place
of the conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Trust Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Trust Preferred Securities Guarantee.
(b) Any Holder of Trust Preferred Securities may institute a
legal proceeding against the Guarantor to enforce the obligations of the
Guarantor under this Trust Preferred Securities Guarantee without first
instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other Person.
(c) If an Indenture Event of Default constituting the failure
to pay interest, principal or premium, if any, on the Debentures on the date
such interest, principal or premium, if any, is otherwise payable has occurred
and is continuing, then a Holder of Trust Preferred Securities may directly, at
any time on or after the respective due date specified in the Debentures for
such payment, institute a proceeding for enforcement of payment to such Holder
of the interest, principal or premium, if any, on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Trust
Preferred Securities of such Holder. The Holders of Trust Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures unless the Property Trustee (as defined in the Indenture)
fails to do so.
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Section 5.6 GUARANTEE OF PAYMENT. This Trust Preferred Securities
Guarantee creates a guarantee of payment and not of collection.
Section 5.7 SUBROGATION. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Trust Preferred Securities against the Trust in
respect of any amounts paid to such Holders by the Guarantor under this Trust
Preferred Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Trust Preferred Securities Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Trust Preferred Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
Section 5.8 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Trust with
respect to the Trust Preferred Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Trust Preferred Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.4 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 LIMITATION OF TRANSACTIONS. So long as any Trust Preferred
Securities remain outstanding, if (i) the Guarantor has exercised its option to
defer interest payments on the Debentures by extending the interest payment
period and such extension shall be continuing, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under the Guarantee or
(iii) there shall have occurred and be continuing any event that, with the
giving of notice or the lapse of time or both, would constitute an Indenture
Event of Default, then the Guarantor shall not (a) declare or pay dividends on,
or make a distribution with respect to, or redeem or purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock (other than
(1) purchases or acquisitions of shares of Company Common Stock (or Company
Common Stock equivalents) in connection with the satisfaction by the Guarantor
of its obligations under any employee benefit or agent plans or the satisfaction
by the Guarantor of its obligations pursuant to any contract or security
requiring the Guarantor to purchase shares of Company Common Stock (or Company
Common Stock equivalents), (2) purchases of shares of Company Common Stock (or
Company Common Stock equivalents) from officers or employees of the Guarantor or
its subsidiaries upon termination of employment or retirement not pursuant to
any obligation under any contract or security requiring the Guarantor to
purchase shares of Company Common Stock (or Company Common Stock equivalents),
(3) as a result of a reclassification of the Guarantor's capital stock or the
exchange or conversion of one class or series of the Guarantor's capital stock
for another class or series of the Guarantor's capital stock, (4) dividends or
distributions of shares of Company Common Stock on Company Common Stock or (5)
the purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), (b) make any payment of principal of
(premium, if any) or interest on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Guarantor that rank PARI PASSU
with or junior to the Debentures and (c) make any guarantee payments with
respect to any of the foregoing (other than pursuant to the Trust Preferred
Securities Guarantee).
Section 6.2 RANKING.
(a) This Trust Preferred Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) senior to the
Guarantor's common stock, (ii) PARI PASSU with the most senior preferred or
preference securities now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor with respect to any
preferred or preference securities of the Guarantor or any Affiliate of the
Guarantor, and (iii) junior and subordinate in right of payment to all other
liabilities of the Guarantor except any liabilities that may be PARI PASSU
expressly by their terms.
(b) The holders of any obligations of the Guarantor that are
senior in priority to the obligations under this Trust Preferred Securities
Guarantee will be entitled to all of the rights inuring to the holders of
"Senior Debt" under Article 12 of the Indenture, and the Holders of the Trust
Preferred Securities will be subject to all of the terms and conditions of such
Article 12 with respect to any claims or rights hereunder with the same effect
as though fully set forth herein.
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ARTICLE VII
TERMINATION
Section 7.1 TERMINATION. This Trust Preferred Securities Guarantee
shall terminate as to each Holder of Trust Preferred Securities upon (i) full
payment of the applicable Redemption Price (as defined in the Declaration) with
respect to all Trust Preferred Securities, (ii) the distribution of the
Debentures held by the Trust to the Holders of all of the Trust Preferred
Securities of the Trust 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 Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Trust Preferred Securities must
restore payment of any sums paid under the Trust Preferred Securities or under
this Trust Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Trust
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Trust Preferred Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Trust Preferred
Securities might properly be paid.
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Section 8.2 INDEMNIFICATION. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
Section 9.1 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Trust Preferred Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Trust Preferred Securities
then outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor's assets to another entity, each as permitted by the Indenture, the
Guarantor may not assign its rights or delegate its obligations under this Trust
Preferred Securities Guarantee without the prior approval of the Holders of at
least a Majority in liquidation amount of the Trust Preferred Securities.
Section 9.2 AMENDMENTS. Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Trust Preferred Securities Guarantee may be
amended only with the prior approval of the Holders of at least a Majority in
liquidation amount of the Trust Preferred Securities. The provisions of Section
12.2 of the Declaration with respect to meetings of Holders of the Trust
Preferred Securities apply to the giving of such approval.
Section 9.3 NOTICES. All notices provided for in this Trust Preferred
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, sent by facsimile or mailed by registered or
certified mail, as follows:
(a) if given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders of
the Trust Preferred Securities):
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First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Trust Preferred Securities):
American Equity Investment Life Holding Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxx Xxxxxx, Xxxx 00000
Attention: Chief Financial Officer
(c) If given to any Holder of Trust Preferred Securities, at the
address set forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4 BENEFIT. This Trust Preferred Securities Guarantee is solely
for the benefit of the Holders of the Trust Preferred Securities and, subject to
Section 3.1(a), is not separately transferable from the Trust Preferred
Securities.
Section 9.5 GOVERNING LAW. THIS TRUST PREFERRED SECURITIES GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND 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 PREFERRED 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 Preferred
Guarantee Trustee
By:
------------------------------
Name:
Title:
