FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.16

FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT

        THIS FIRST AMENDMENT (this "Amendment"), dated as of August 14, 2003, amends and modifies a certain Amended and Restated Credit Agreement, dated as of December 30, 2002 (the "Credit Agreement"), among AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY, an Iowa corporation (the "Borrower"), the banks named therein (the "Banks"), the Banks named therein, WEST DES MOINES STATE BANK, an Iowa state bank, as Co-Agent (in such capacity, the "Co-Agent"), FLEET NATIONAL BANK, a national banking association, as Documentation Agent (in such capacity, the "Documentation Agent") and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent for the Banks (in such capacity, the "Agent"). Terms not otherwise expressly defined herein shall have the meanings set forth in the Credit Agreement.

        FOR VALUE RECEIVED, the Borrower, the Banks and the Agent agree that the Credit Agreement is amended as follows:

ARTICLE I—AMENDMENTS TO THE CREDIT AGREEMENT

        1.1    Reinsurance.    Section 9.13(a)(i) is amended to read as follows:

"(i) those treaties existing on the date of this Agreement and described on Schedule 9.13 hereto, and that treaty described on Schedule 9.13 to the First Amendment hereof,"

        1.2    Event of Default.    Section 10.1(m) is amended to read as follows:

"(m) the financial strength rating of AEILIC by A. M. Best or by Standard & Poor's is reduced to less than "B++', in the case of A.M. Best, or to less than "BBB+', in the case of Standard & Poor's, and 30 days elapse following such reduction."

        1.3    Construction.    All references in the Credit Agreement to "this Agreement", "herein" and similar references shall be deemed to refer to the Credit Agreement as amended by this Amendment.

ARTICLE II—REPRESENTATIONS AND WARRANTIES

        To induce the Agent and the Banks to enter into this Amendment and to make and maintain the Loans under the Credit Agreement as amended hereby, the Borrower hereby warrants and represents to the Agent and the Banks that it is duly authorized to execute and deliver this Amendment, and to perform its obligations under the Credit Agreement as amended hereby, and that this Amendment constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms.

ARTICLE III—CONDITIONS

        This Amendment shall become effective on the date first set forth above, provided, however, that the effectiveness of this Amendment is subject to the satisfaction of each of the following conditions precedent:

        3.1    Warranties.    After giving effect to this Amendment, the representations and warranties in Article VII of the Credit Agreement shall be true and correct as though made on the date hereof, except for changes that are permitted by the terms of the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition.

        3.2    Defaults.    After giving effect to this Amendment, no Default and no Event of Default shall have occurred and be continuing under the Credit Agreement. The execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied with the foregoing condition.

        3.3    Execution.

        (a)   The Borrower, the Agent and the Banks shall have executed and delivered this Amendment; and

        (b)   AEISC and AEILIC shall have executed and delivered the Acknowledgements attached hereto.

ARTICLE IV—GENERAL

        4.1    Expenses.    The Borrower agrees to reimburse the Agent upon demand for all reasonable expenses (including reasonable attorneys' fees and legal expenses) incurred by this Agent in the preparation, negotiation and execution of this Amendment and any other document required to be furnished herewith, and in enforcing the obligations of the Borrower hereunder, and to pay and save the Agent harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Amendment, which obligations of the Borrower shall survive any termination of the Credit Agreement.

        4.2    Counterparts.    This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same instrument.

        4.3    Severability.    Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provisions in any other jurisdiction.

        4.4    Law.    This Amendment shall be a contract made under the laws of the State of Minnesota, which laws shall govern all the rights and duties hereunder.

        4.5    Successors; Enforceability.    This Amendment shall be binding upon the Borrower, the Banks, the Agents and their respective successors and assigns, and shall inure to the benefit of the Borrower, the Agents, the Banks and the successors and assigns of the Banks and the Agents. Except as hereby amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects.

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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed at Minneapolis, Minnesota by their respective officers thereunto duly authorized as of the date first written above.

		AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
		By:	/s/  XXXXX X. XXXXX
		Title:
		U.S. BANK NATIONAL ASSOCIATION, as Agent and as a Bank
		By:
		Title:
		WEST DES MOINES STATE BANK, as Co-Agent and as a Bank
		By:
		Title:
		FLEET NATIONAL BANK, as Documentation Agent and as a Bank
		By:
		Title:

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ACKNOWLEDGMENT

        The undersigned has entered into a Third Amended and Restated Security Agreement, dated as of April 6, 2000 (the "Security Agreement") in favor of U.S. Bank National Association, as Agent for the Banks securing the "Obligations" as defined in the Credit Agreement (defined in the foregoing Amendment). The undersigned hereby acknowledges that the "Obligations" include the obligations of the Borrower under the Credit Agreement as amended by the foregoing Amendment. The undersigned hereby confirms that the Security Agreement remains in full force and effect, enforceable against the undersigned in accordance with its terms.

		AMERICAN EQUITY INVESTMENT SERVICE COMPANY
		By:	/s/  XXXXX X. XXXXX
		Title:

ACKNOWLEDGMENT

        The undersigned has entered into a Consent and Agreement to Security Agreement, dated as of April 6, 2000 (the "Consent") in favor of U.S. Bank National Association, as Agent for the Banks. The undersigned hereby acknowledges that the "Obligations" specified in the Consent include the obligations of the Borrower under the Credit Agreement as amended by the foregoing Amendment. The undersigned hereby confirms that the Consent remains in full force and effect, enforceable against the undersigned in accordance with its terms.

		AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
		By:	/s/  XXXXX X. XXXXXXXXXX
		Title:	Sr. V.P. & Secty.

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Schedule 9.13
to
First Amendment

        1.     Coinsurance and Yearly Renewable Term Reinsurance between: HANNOVER LIFE REASSURANCE COMPANY OF AMERICA and AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY.

Effective Date: August 14, 2003.

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