EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
($400,000,000 UNSECURED SENIOR REVOLVING CREDIT FACILITY)
     This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Second Amendment”), dated
as of November 30, 2010, is entered into by and among ALLIED WORLD ASSURANCE
COMPANY HOLDINGS, LTD, an exempted company incorporated in Bermuda (“Holdings”),
ALLIED WORLD ASSURANCE COMPANY, LTD, an exempted company incorporated in Bermuda
(“Allied World,” and together with Holdings, the “Borrowers”), ALLIED WORLD
ASSURANCE COMPANY HOLDINGS, AG, a Swiss corporation (“Swiss Holdings” and
together with the Borrowers, the “Credit Parties”), the Lenders party hereto,
and WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wachovia
Bank, National Association, “Wells Fargo”), as Administrative Agent, L/C Agent
and Fronting Bank for the Lenders.
RECITALS
     A. The Borrowers, the several lenders from time to time party thereto (the
“Lenders”), the Administrative Agent and Bank of America, N.A., as Syndication
Agent, are party to the Credit Agreement, dated as of November 27, 2007 (as
amended by the First Amendment to Credit Agreement, dated as of February 25,
2010, and as further amended, supplemented, restated or otherwise modified from
time to time, the “Unsecured Credit Agreement”), pursuant to which the Lenders
have made available to the Borrowers a revolving credit facility for the making
of revolving loans and for the issuance of standby letters of credit for the
account of the Borrowers in the aggregate principal amount of $400,000,000.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Unsecured Credit Agreement.
     B. Upon receipt of the requisite shareholder and governmental approvals and
the satisfaction or waiver of certain conditions, the Borrowers desire to enter
into the following series of transactions (the “Redomestication Transactions”)
pursuant to the Scheme of Arrangement attached as Annex A to Holding’s
definitive proxy statement dated as of October 14, 2010 (the “Scheme of
Arrangement”): (i) all outstanding Capital Stock of Holdings shall be cancelled,
(ii) Holdings shall issue new Capital Stock to Swiss Holdings (which will
constitute all of Holdings’ issued Capital Stock at such time), thus becoming a
direct Wholly Owned subsidiary of Swiss Holdings, and (iii) Swiss Holdings shall
issue Capital Stock on a one-for-one basis to the holders of the outstanding
Capital Stock of Holdings that has been cancelled.
     C. The Borrowers have requested the consent of the Required Lenders to
enter into the Redomestication Transactions prior to the consummation thereof
and to amend the Unsecured Credit Agreement effective upon the consummation
thereof, all on the terms and conditions set forth herein.

 

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STATEMENT OF AGREEMENT
     NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CONSENT
     The Required Lenders hereby consent to the Redomestication Transactions,
provided that the consent set forth herein shall terminate as set forth below
upon the earliest to occur of the following (each, a “Consent Termination
Event”): (i) 5:00 p.m. EDT on December 31, 2010, unless both the Redomestication
Transactions shall have been consummated in accordance with the Scheme of
Arrangement and the conditions set forth in Article III hereof have been
satisfied by such time; (ii) the date upon which the board of directors of
Holdings, the shareholders of Holdings or the Supreme Court of Bermuda shall
have withdrawn or withheld its approval of the Redomestication Transactions or
qualified or modified such approval in any manner adverse to the Lenders in any
material respect; or (iii) the occurrence or continuance of any Default or Event
of Default prior to the consummation of the Redomestication Transactions. Upon
the occurrence of any Consent Termination Event, the consent set forth in this
Article I shall upon written notice of the Administrative Agent to the Borrowers
terminate and be of no further force or effect, and all rights and remedies of
the Administrative Agent and the Lenders under the Unsecured Credit Agreement
and any other Credit Document with respect to the matters set forth in this
Article I shall, without any further action by any person, automatically be
reinstated as if the consent set forth in this Article I had not become
effective. The consent contained in this Article I is a consent under the
Unsecured Credit Agreement and shall not constitute or be deemed to be a waiver
of, consent to or departure from, any other term or provision in the Unsecured
Credit Agreement, which shall continue in full force and effect, nor shall this
consent constitute a course of dealing among the parties.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
     2.1 Amendments to the Unsecured Credit Agreement. Effective upon the
consummation of the Redomestication Transactions, the Unsecured Credit Agreement
is hereby amended as set forth in the composite conformed copy of the Unsecured
Credit Agreement attached hereto as Exhibit A-1 with the changes indicated as
blacklined additions or deletions in the composite conformed copy of the
Unsecured Credit Agreement attached hereto as Exhibit A-2.
     2.2 Amendments to Exhibits to the Unsecured Credit Agreement. Effective
upon the consummation of the Redomestication Transactions, Exhibit D (Form of
Compliance Certificate) to the Unsecured Credit Agreement is hereby deleted in
its entirety and replaced with the new Exhibit D to the Unsecured Credit
Agreement attached hereto as Exhibit B.

 

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     2.3 Amendments to Schedules to the Credit Agreement. Effective upon the
consummation of the Redomestication Transactions, Schedules 1.1(a)(Commitments
and Notice Addresses), 5.4 (Licenses) and 5.7 (Subsidiaries) to the Unsecured
Credit Agreement are hereby deleted in their entirety and replaced with the new
Schedules 1.1(a), 5.4 and 5.7 to the Unsecured Credit Agreement attached hereto
as Exhibit C.
ARTICLE III
CONDITIONS OF EFFECTIVENESS
     3.1 The consent set forth in Article I hereof shall become effective as of
the date (the “Consent Effective Date”) when, and only when, the Administrative
Agent shall have received an executed counterpart hereof from each of the Credit
Parties and the Required Lenders.
     3.2 The amendments set forth in Article II hereof shall become effective as
of the date (the “Second Amendment Effective Date”) when, and only when, each of
the following conditions precedent shall have been satisfied:
     (a) The Administrative Agent shall have received evidence reasonably
satisfactory to it that the closing of the Redomestication Transactions in
accordance with the Scheme of Arrangement has occurred without any amendment or
modification thereto that, in the reasonable determination of the Administrative
Agent, would be adverse in any material respect to the rights or interests of
the Lenders, including without limitation, copies of all court orders and
governmental certificates and orders sanctioning the consummation of the
Redomestication Transactions;
     (b) The Administrative Agent shall have received a legal opinion from
counsel to the Credit Parties, in form and substance reasonably satisfactory to
the Administrative Agent, addressing such matters as the Administrative Agent
may reasonably request;
     (c) The Administrative Agent shall have received a certificate, signed by a
Responsible Officer of each Credit Party, in form and substance reasonably
satisfactory to the Administrative Agent, certifying that no Default or Event of
Default exists, both immediately before and after giving effect to this Second
Amendment;
     (d) The Administrative Agent shall have received a certificate of the
secretary, an assistant secretary or other appropriate officer of Swiss
Holdings, in form and substance reasonably satisfactory to the Administrative
Agent, certifying (i) that attached thereto is a true and complete copy of the
Articles of Association and all amendments thereto of Swiss Holdings, certified
as of a recent date by the appropriate Governmental Authority of its
jurisdiction of organization, and that the same has not been amended since the
date of such certification, and (ii) that attached thereto is a true and
complete copy of resolutions adopted by the board of directors (or similar
governing body) of Swiss Holdings authorizing the execution, delivery and
performance of this Second Amendment and its joinder to the Unsecured Credit
Agreement as a Guarantor, and as to the incumbency and genuineness of the
signature of each officer of Swiss Holdings executing this Second Amendment or
any of the other Credit Documents, and attaching all such copies of the
documents described above;

 

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     (e) On the Second Amendment Effective Date, the representations and
warranties set forth in Article IV hereof shall be true and correct; and
     (f) The Credit Parties shall have paid all reasonable out-of-pocket costs
and expenses of the Administrative Agent in connection with the preparation,
negotiation, execution and delivery of this Second Amendment (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent with respect thereto).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     Each Credit Party hereby represents and warrants, on and as of the Second
Amendment Effective Date, that (i) the representations and warranties contained
in the Unsecured Credit Agreement and the other Credit Documents qualified as to
materiality are true and correct and those not so qualified are true and correct
in all material respects, both immediately before and after giving effect to
this Second Amendment (except to the extent any such representation or warranty
is expressly stated to have been made as of a specific date, in which case such
representation or warranty is true and correct (if qualified as to materiality)
or true and correct in all material respects (if not so qualified), in each case
only on and as of such specific date), (ii) this Second Amendment has been duly
authorized, executed and delivered by such Credit Party and constitutes the
legal, valid and binding obligation of such Credit Party enforceable against it
in accordance with its terms, (iii) no Default or Event of Default shall have
occurred and be continuing on the Second Amendment Effective Date, both
immediately before and after giving effect to the Second Amendment and (iv) the
Redomestication Transactions have been consummated in accordance with the terms
and conditions of the Scheme of Arrangement without any waiver, modification or
consent thereunder that is adverse to the Lenders in any material respect and no
law or regulation will be applicable, or event will have occurred, nor will any
litigation or investigation be pending or threatened, that could reasonably be
expected to impose materially adverse conditions, or which could reasonably be
expected to have a Material Adverse Effect.
ARTICLE V
ACKNOWLEDGEMENT AND CONFIRMATION
     Each party to this Second Amendment hereby confirms and agrees that, after
giving effect to this Second Amendment, and except as expressly amended hereby,
the Unsecured Credit Agreement and the other Credit Documents to which it is a
party remain in full force and effect and enforceable against such party in
accordance with their respective terms and shall not be discharged, diminished,
limited or otherwise affected in any respect. Each Credit Party represents and
warrants to the Lenders that as of the Second Amendment Effective Date it has no
knowledge of any claims, counterclaims, offsets, or defenses to or with respect
to its obligations under the Credit Documents, or if such Credit Party has any
such claims, counterclaims, offsets, or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished, and released in consideration of the execution of this

 

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Second Amendment. This acknowledgement and confirmation by each Credit Party is
made and delivered to induce the Administrative Agent and the Lenders to enter
into this Second Amendment, and each Credit Party acknowledges that the
Administrative Agent and the Lenders would not enter into this Second Amendment
in the absence of the acknowledgement and confirmation contained herein.
     For the avoidance of doubt, each party to this Second Amendment hereby
confirms and agrees that the Closing Date under the Unsecured Credit Agreement
occurred, and all conditions precedent set forth in Section 4.1 of the Unsecured
Credit Agreement were satisfied, on November 27, 2007.
ARTICLE VI
MISCELLANEOUS
     6.1 Joinder of Swiss Holdings to Credit Agreement. Swiss Holdings agrees to
be bound, from and after the Second Amendment Effective Date, by all of the
provisions of the Unsecured Credit Agreement and the other Credit Documents
specifically applicable to Swiss Holdings or to a “Guarantor,” and agrees that
it shall, on and as of the Second Amendment Effective Date, be a party to the
Unsecured Credit Agreement, as amended hereby, and a “Guarantor” for all
purposes thereof to the same extent as if originally a party thereto.
     6.2 Governing Law. This Second Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law rules).
     6.3 Credit Document. As used in the Unsecured Credit Agreement,
“hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless the
context otherwise requires, mean the Unsecured Credit Agreement after amendment
by this Second Amendment. Any reference to the Unsecured Credit Agreement or any
of the other Credit Documents herein or in any such documents shall refer to the
Unsecured Credit Agreement and Credit Documents as amended hereby. This Second
Amendment is limited to the matters expressly set forth herein, and shall not
constitute or be deemed to constitute an amendment, modification or waiver of
any provision of the Unsecured Credit Agreement except as expressly set forth
herein. This Second Amendment shall constitute a Credit Document under the terms
of the Unsecured Credit Agreement.
     6.4 Expenses. The Credit Parties shall (i) pay all reasonable fees and
expenses of counsel to the Administrative Agent, and (ii) reimburse the
Administrative Agent for all reasonable out-of-pocket costs and expenses, in
each case, in connection with the preparation, negotiation, execution and
delivery of this Second Amendment and the other Credit Documents delivered in
connection herewith.
     6.5 Severability. To the extent any provision of this Second Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction,

 

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without prohibiting or invalidating such provision in any other jurisdiction or
the remaining provisions of this Second Amendment in any jurisdiction.
     6.6 Successors and Assigns. This Second Amendment shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto.
     6.7 Construction. The headings of the various sections and subsections of
this Second Amendment have been inserted for convenience only and shall not in
any way affect the meaning or construction of any of the provisions hereof.
     6.8 Counterparts; Integration. This Second Amendment may be executed and
delivered via facsimile or electronic mail with the same force and effect as if
an original were executed and may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures hereto
were upon the same instrument. This Second Amendment constitutes the entire
contract among the parties hereto with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof.
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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their duly authorized officers as of the date first above
written.

            ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
      By:   /s/ Scott A. Carmilani         Name:   Scott A. Carmilani       
Title:   President and Chief Executive Officer            By:   /s/ Joan H.
Dillard         Name:   Joan H. Dillard        Title:   Executive Vice President
and
Chief Financial Officer        ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
      By:   /s/ Joan H. Dillard         Name:   Joan H. Dillard        Title:  
Executive Vice President and
Chief Financial Officer            By:   /s/ Marchelle D. Lewis         Name:  
Marchelle D. Lewis        Title:   Senior Vice President and Treasurer       
ALLIED WORLD ASSURANCE COMPANY, LTD
      By:   /s/ Joan H. Dillard         Name:   Joan H. Dillard        Title:  
Executive Vice President and
Chief Financial Officer            By:   /s/ Marchelle D. Lewis         Name:  
Marchelle D. Lewis        Title:   Senior Vice President and Treasurer     

SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT

 

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          LENDERS:   WELLS FARGO BANK, NATIONAL
ASSOCIATION (as successor by merger to
Wachovia Bank, National Association), as the
Administrative Agent, the L/C Agent, a
Fronting Bank and as a Lender
      By:   /s/ Casey Connelly         Name:   Casey Connelly        Title:  
Vice President     

SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT

 

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            Bank of America, N.A.
      By:   /s/ Brady Fife         Name:   Brady Fife        Title:   Director 
      The Bank of N.T. Butterfield & Son Limited
      By:   /s/ Alan Day         Name:   Alan Day        Title:   Vice
President, Corporate Banking        The Bank of N.T. Butterfield & Son Limited
      By:   /s/ Daniel McCleary         Name:   Daniel McCleary        Title:  
Vice President, Credit Risk Management        The Bank of New York Mellon, as a
Lender
      By:   /s/ Michael Pensari         Name:   Michael Pensari        Title:  
V.P.        Barclays Bank PLC
      By:   /s/ Kevin Cullen         Name:   Kevin Cullen        Title:  
Director        Credit Agricole Corporate & Investment Bank
      By:   /s/ Charles Kornberger         Name:   Charles Kornberger       
Title:   Managing Director            By:   /s/ Gina Harth-Cryde         Name:  
Gina Harth-Cryde        Title:   Managing Director     

SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT

 

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            Deutsche Bank AG New York Branch
      By:   /s/ John S. McGill         Name:   John S. McGill        Title:  
Director            By:   /s/ Kathleen Bowers         Name:   Kathleen Bowers   
    Title:   Director        ING Bank, N.V., London Branch
      By:   /s/ N J Marchant         Name:   N J Marchant        Title:  
Director            By:   /s/ M E R Sharman         Name:   M E R Sharman       
Title:   Managing Director        JPMorgan Chase Bank, N.A.
      By:   /s/ Melvin D. Jackson         Name:   Melvin D. Jackson       
Title:   Vice President        Lloyds TSB Bank PLC, as a Lender
      By:   /s/ Richard Herder         Name:   Richard Herder        Title:  
Managing Director            By:   /s/ Morgan Beanland         Name:   Morgan
Beanland        Title:   Senior Vice President        Suntrust Bank
      By:   /s/ K. Scott Bazemore         Name:   K. Scott Bazemore       
Title:   Vice President     

SIGNATURE PAGE TO
SECOND AMENDMENT TO CREDIT AGREEMENT