Exhibit 10.1
STOCK PURCHASE AGREEMENT
          This STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of
December 14, 2007, by and between Allied World Assurance Company Holdings, Ltd,
a company organized and existing under the laws of Bermuda (the “Company”), and
American International Group, Inc., a Delaware corporation (the “Seller”).
RECITALS:
          WHEREAS, Seller currently owns 100 common shares (the “Subsidiary
Shares”), par value $1 per share, of December Holdings, Ltd. (“Seller
Subsidiary”), a company organized and existing under the laws of Bermuda,
comprising 100% of the issued and outstanding capital stock of Seller
Subsidiary;
          WHEREAS, prior to entering into this Agreement, Seller transferred
11,693,333 outstanding common shares (the “Seller Shares”), par value $0.03 per
share, of the Company (“Common Shares”) to Seller Subsidiary (the “Transfer”),
and Seller currently holds a warrant whereby up to an additional 2,000,000
Common Shares are issuable to Seller pursuant to exercise of the warrant (the
“Warrant Shares”)
          WHEREAS, Seller Subsidiary currently owns the Seller Shares; and
          WHEREAS, on the terms and subject to the conditions of this Agreement,
the Company desires to purchase from Seller all of the Subsidiary Shares and
Seller desires to sell all of the Subsidiary Shares to the Company for the
consideration set forth below.
          NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and Seller hereby agree as follows:
Article I.
SALE AND PURCHASE
     1.1. Agreement to Sell and Purchase. At the Closing (as hereinafter
defined), upon the terms and subject to the conditions of this Agreement, Seller
will sell, transfer, convey, assign and deliver to the Company, and the Company
will purchase, acquire and accept from Seller, the Subsidiary Shares, free and
clear of any and all Liens (as hereinafter defined) (the “Stock Purchase”).
     1.2. Closing. The closing of the Stock Purchase under this Agreement (the
“Closing”) shall take place simultaneously with the signing of this Agreement at
the offices of Appleby, Canon’s Court, 22 Victoria Street, Hamilton, Bermuda. At
the Closing, (i) the Company shall pay to Seller, an amount equal to U.S.
$563,443,688.72, by wire transfer of immediately available funds to the account
specified in writing by Seller, (ii) the Company shall deliver to Seller an
opinion of Bermuda counsel to the Company addressed to Seller in the form
attached

 

--------------------------------------------------------------------------------

 

hereto as Exhibit A and (iii) Seller shall deliver to the Company certificate(s)
representing the Subsidiary Shares being purchased hereunder duly endorsed for
transfer or accompanied by an appropriate share transfer instrument duly
executed in blank.
     1.3. Registration Rights Agreement. Effective as of the Closing and in
consideration of the transactions contemplated hereby, the Company hereby waives
in its entirety Section 2.1(b) of the Registration Rights Agreement, dated
July 17, 2006 (as amended from time to time, the “Registration Rights
Agreement”), by and among Allied World Assurance Company Holdings, Ltd and the
shareholders named therein, to the extent that Section 2.1(b) would otherwise
apply to any Demand Request (as defined in the Registration Rights Agreement)
delivered by Seller with respect to the Warrant Shares, provided that, such
Demand Request covers all Warrant Shares then Beneficially Owned (as defined in
the Registration Rights Agreement) by Seller. Seller hereby agrees that the
Company may amend or otherwise modify the Registration Rights Agreement without
the consent of Seller, provided that, such amendment or modification does not
adversely affect Seller in any material respect.
Article II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
          As of the date hereof, the Company represents and warrants to Seller
as follows:
     2.1. Organization. The Company is an exempted company duly organized,
validly existing and in good standing under the laws of Bermuda.
     2.2. Authorization. The Company has the absolute and unrestricted right,
power, capacity (legal or otherwise) to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action by the
Company and no other corporate actions on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby.
     2.3. Validity. This Agreement has been duly and validly executed by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
     2.4. No Violation. The execution, delivery and performance by the Company
of this Agreement do not, and the consummation by the Company of the
transactions contemplated hereby (including the Transfer) will not, (i) violate
or conflict with any provision of the Company’s memorandum of association or
bye-laws; (ii) violate any provision of any statute, law, code, ordinance,
treaty, policy, judgment, order, injunction, decree, rule, consent, writ,
determination, arbitration award, rule or regulation (collectively, “Laws”) of
or by any federal, state, foreign or other governmental or public body, agency
or authority, or subdivision thereof, instrumentality, subdivision, court,
administrative agency, commission, official or other authority of the United
States, Bermuda or any other country or any state, province, prefect,
municipality, locality or other government or political subdivision thereof, or
any quasi-governmental or

2

--------------------------------------------------------------------------------

 

private body exercising any regulatory, taxing, importing or other governmental
or quasi-governmental authority (collectively, “Governmental or Regulatory
Entity”), applicable to the Company or any of its properties or assets; or
(iii) violate, conflict with, result in a breach of or the loss of any benefit
under, constitute (with due notice or lapse of time or both) a default under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by or rights or obligations under, any of
the terms, conditions or provisions of any contract, note, bond, lease, loan
agreement, mortgage, security agreement, indenture, deed or trust, license,
agreement or instrument to which the Company is a party or by which it is bound
or to which any of its properties, assets or business is subject.
     2.5. Approvals or Consents. No consents, authorizations, waivers, filings,
registrations or approvals are required in connection with the execution and
delivery of this Agreement by the Company, the consummation of the transactions
contemplated hereby or the performance by the Company of its obligations
hereunder.
     2.6. Company SEC Reports; Certain Other Matters. The Company’s periodic
reports filed with the Securities and Exchange Commission, as of the date of
their filing, did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading. The Company
further represents and warrants as of the date hereof as to the matters set
forth on the disclosure schedule delivered to the Seller concurrently with this
Agreement.
     2.7. Transfer. The Directors of the Company have registered the Transfer of
the Seller Shares from Seller to Seller Subsidiary in accordance with the
Company’s bye-laws.
Article III.
REPRESENTATIONS AND WARRANTIES OF SELLER
          As of the date hereof, Seller represents and warrants to the Company
as follows:
     3.1. Organization. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Seller Subsidiary
is an exempted company duly organized and validly existing under the laws of
Bermuda.
     3.2. Capital Stock. As of the date hereof, the authorized capital stock of
Seller Subsidiary consists of 100 shares of common stock, par value $1 per
share, of which 100 shares are issued and outstanding. The Subsidiary Shares
have been duly authorized and validly issued and are fully paid. Seller has, and
upon consummation of the Stock Purchase the Company will have, good and
marketable title to the Subsidiary Shares, free and clear of any and all liens,
security interests, mortgages, rights of first refusal, agreements, limitation
on voting rights, restrictions, levies, claims, pledges, equities, options,
contracts assessments, conditional sale agreements, charges and other
encumbrances or interests of any nature whatsoever, including, without
limitation, voting trusts or agreements or proxies (collectively, “Liens”).
Except for the Subsidiary Shares, no shares of capital stock of Seller
Subsidiary are outstanding. There are no (a) securities convertible into or
exchangeable for any shares of capital stock of Seller Subsidiary, including the
Subsidiary Shares; (b) options, warrants or other rights to purchase or

3

--------------------------------------------------------------------------------

 

subscribe for any shares of capital stock of Seller Subsidiary, including the
Subsidiary Shares; or (c) contracts, commitments, agreements, understandings or
arrangements of any kind (contingent or otherwise) relating to the issuance,
sale or transfer of any shares of capital stock of Seller Subsidiary, including
the Subsidiary Shares.
     3.3. Ownership of Seller Shares. Seller Subsidiary is the sole record,
legal and beneficial owner of the Seller Shares. There are no (a) securities
convertible into or exchangeable for any of the Seller Shares; (b) options,
warrants or other rights to purchase or subscribe for any of the Seller Shares;
or (c) contracts, commitments, agreements, understandings or arrangements of any
kind (contingent or otherwise) relating to the issuance, sale or transfer of any
of the Seller Shares.
     3.4. Title to Seller Shares. Seller Subsidiary has good and marketable
title to the Seller Shares, free and clear of any and all Liens.
     3.5. Authorization. Seller has the absolute and unrestricted right, power,
capacity (legal or otherwise) and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action by Seller and no other corporate actions on the part of Seller
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby.
     3.6. Validity. This Agreement has been duly and validly executed by Seller
and constitutes a valid and binding obligation of Seller, enforceable against it
in accordance with its terms.
     3.7. No Violation. The execution, delivery and performance by Seller of
this Agreement do not, and the consummation by Seller of the Stock Purchase and
the transactions contemplated hereby will not, (i) violate or conflict with any
provision of Seller’s or Seller Subsidiary’s certificate of incorporation,
memorandum of association, by-laws or any other organizational documents of
Seller or Seller Subsidiary; (ii) violate any provision of any Laws of or by
Governmental or Regulatory Entity applicable to Seller or Seller Subsidiary or
any of their respective properties or assets; or (iii) violate, conflict with,
result in a breach of or the loss of any benefit under, constitute (with due
notice or lapse of time or both) a default under, result in the termination of
or a right of termination or cancellation under, accelerate the performance
required by or rights or obligations under, any of the terms, conditions or
provisions of any contract, note, bond, lease, loan agreement, mortgage,
security agreement, indenture, deed or trust, license, agreement or instrument
to which Seller, Seller Subsidiary or any of their respective affiliates is a
party or by which Seller, Seller Subsidiary or any of their respective
affiliates is bound or to which any of Seller’s, Seller Subsidiary’s or their
respective affiliates’ properties, assets or business is subject.
     3.8. Approvals and Consents. No consents, authorizations, waivers, filings,
registrations or approvals are required in connection with the execution and
delivery of this Agreement by Seller, the consummation of the transactions
contemplated hereby or the performance by Seller of its obligations hereunder.

4

--------------------------------------------------------------------------------

 

     3.9. Information Concerning Company. Seller has had the opportunity to
discuss the plans, operations and financial condition of the Company with its
officers and directors and has received all information requested by Seller to
enable Seller to evaluate the decision to sell the Subsidiary Shares pursuant to
this Agreement. Seller acknowledges that the Company may be in possession of
material non-public information about the Company not known to Seller (“Excluded
Information”). Seller hereby waives any and all claims and causes of action now
or hereafter arising against the Company based upon or relating to any alleged
non-disclosure of Excluded Information and further covenants not to assert any
claims against or to sue the Company or any of its directors, officers,
employees, partners, agents or affiliates for any loss, damage or liability
arising from or relating to its sale of the Subsidiary Shares pursuant to this
Agreement based upon or relating to any alleged non-disclosure of Excluded
Information. It is understood and agreed that neither the Company nor Seller
makes any representation or warranty to the other whatsoever with respect to the
business, condition (financial or otherwise), properties, prospects,
creditworthiness, status or affairs of the Company, or with respect to the value
of the Subsidiary Shares or the Seller Shares.
     3.10. No Brokers or Finders. Seller has not retained, employed or used any
broker or finder in connection with the transactions provided for herein or in
connection with the negotiation thereof.
Article IV.
MISCELLANEOUS
     4.1. Expenses. The Company and Seller shall each bear their own expenses
incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby, except for all expenses related to the
organization of Seller Subsidiary, which shall be paid by the Company.
     4.2. Further Assurance. From time to time, at the Company’s request and
without further consideration, Seller will execute and deliver to the Company
such documents and take such other action as the Company may reasonably request
in order to consummate the transactions contemplated hereby.
     4.3. Specific Performance. Nothing herein shall be construed to prevent the
Company or Seller from enforcing, by legal action or otherwise, the terms of
this Agreement. The Company and Seller hereby declare that it is impossible to
measure in money the damages which will accrue to either party or to such
party’s successors or permitted assigns by reason of a failure to perform any of
the obligations under this Agreement and agree that either party shall be
entitled to a decree of specific performance of the terms of this Agreement,
which right will be in addition to any other remedies available to such party.
If the Company or Seller or such party’s heirs, personal representatives, or
assigns institutes any action or proceeding to specifically enforce the
provisions hereof, any person against whom such action or proceeding is brought
hereby waives the claim or defense therein that such party or such personal
representative has an adequate remedy at law, and such person shall not offer in
any such action or proceeding the claim or defense that such remedy at law
exists.

5

--------------------------------------------------------------------------------

 

     4.4. No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the Company and Seller and their respective successors and permitted assigns
and nothing herein, express or implied, is intended to or shall confer upon any
other person or entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
     4.5. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to either party upon any breach or
default of the other party hereto shall impair any such right, power or remedy,
nor shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring.
     4.6. Notices. All notices and other communications required hereunder shall
be in writing and sent by facsimile, delivered personally, delivered by a
recognized next-day courier service or mailed by registered or certified mail.
All such notices and communications shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice:
(a) if to the Company, to:
Allied World Assurance Company Holdings, Ltd
27 Richmond Road
Pembroke HM 08, Bermuda
Attention: Wesley D. Dupont, General Counsel
Facsimile: 441-295-5117
with a copies to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention: Steven A. Seidman
                   Jeffrey Hochman
Facsimile: 212-728-8111

6

--------------------------------------------------------------------------------

 

and
Appleby
Canon’s Court
22 Victoria Street
PO Box HM 1179
Hamilton HM EX
Bermuda
Attention: David R. Lines
Facsimile: 441-298-3366
(b) if to Seller, to:
American International Group, Inc.
70 Pine Street
New York, NY 10270
Attention: Gene Boxer
Facsimile: 212-770-7234
with a copy to:
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Attention: Robert G. DeLaMater
Facsimile: 212-558-3588
     4.7. Entire Agreement; Amendments. This Agreement contains the entire
understanding of the parties. This Agreement may be amended only by a written
instrument duly signed by the Company and Seller.
     4.8. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and Seller and their respective successors and permitted
assigns.
     4.9. Assignment. Neither the Company nor Seller shall transfer or assign
this Agreement or any of their rights, interests, or obligations hereunder, in
whole or in part, whether voluntarily, by operation of law or otherwise, without
the prior written approval of the other party.
     4.10. Headings. The article and section headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of any provision of this Agreement.
     4.11. Severability. The invalidity of any term or terms of this Agreement
will not affect any other term of this Agreement, which will remain in full
force and effect.

7

--------------------------------------------------------------------------------

 

     4.12. Governing Law, Jurisdiction; Waiver Of Jury Trial.
     (a) This Agreement shall be construed, performed and enforced in accordance
with, and governed by, the laws of the State of New York, without giving effect
to the principles of conflicts of laws thereof. Each of the parties hereto
irrevocably elects as the sole judicial forums for the adjudication of any
matters arising under or in connection with this Agreement, and consents to the
jurisdictions of, the courts of the County of New York, State of New York or the
United States of America for the Southern District of New York or the Supreme
Court of Bermuda.
     (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 4.12.
     4.13. Counterparts. This Agreement may be executed simultaneously in
counterparts, both of which shall be deemed an original, but all counterparts so
executed will constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

8

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of
each of the parties hereto as of the day and year first above written.

            ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
      By:   /s/ Scott A. Carmilani         Name:   Scott A. Carmilani       
Title:   President and Chief Executive Officer        AMERICAN INTERNATIONAL
GROUP, INC.
      By:   /s/ Brian T. Schreiber         Name:   Brian T. Schreiber       
Title:   Senior Vice President