Second Amendment to Stockholders' Agreement



 Exhibit 10.26b 
  
 SECOND AMENDMENT TO STOCKHOLDERS AGREEMENT 
  
 SECOND AMENDMENT TO THE STOCKHOLDERS AGREEMENT dated as of February 25, 2004 (this “Second Amendment”), by and
among the parties signatory hereto. 
  
 RECITALS 

 
 WHEREAS, FGIC Corporation, a Delaware corporation and successor by merger
to Falcons Acquisition Corp., a Delaware corporation (the “Company”), The PMI Group, Inc., a Delaware corporation (together with any Affiliated transferee within the contemplation of Section 2.5 of the Stockholders Agreement,
(“PMI”), Blackstone Capital Partners IV L.P., a Delaware limited partnership (“BCP IV”), Blackstone Capital Partners IV-A L.P., a Delaware limited partnership (“BCP IV-A”),
Blackstone Family Investment Partnership IV-A L.P., a Delaware limited partnership (“BFIP IV-A”, and together with BCP IV, BCP IV-A and any other Affiliated transferee within the contemplation of Section 2.5 of the
Stockholders Agreement, “Blackstone”), Cypress Merchant Banking Partners II L.P., a Delaware limited partnership (“Cypress Onshore”), Cypress Merchant Banking II C.V., a Netherlands limited partnership
(“Cypress Offshore”), Cypress Side-by-Side LLC, a Delaware limited liability company (“Cypress Side-by-Side”), 55 Street Partners II L.P., a Delaware limited partnership (“Cypress 55
Street”), Cypress FGIC Investors LLC, a Delaware limited liability company, as a “Cypress Vehicle” (as described in the Stockholders Agreement) (“Cypress/FGIC,”and together with Cypress Onshore, Cypress
Offshore, Cypress Side- by-Side, Cypress 55 Street, any other “Cypress Vehicle,” any “Cypress Coinvestor” (as described in the Stockholders Agreement) and any other Affiliated transferee within the contemplation of Section 2.5 of
the Stockholders Agreement, “Cypress”), CIVC/FGIC Investment Company LLC, a Delaware limited liability company, as a “CIVC Vehicle” (as described in the Stockholders Agreement) (“CIVC/FGIC”),
CIVC Partners Fund III, L.P., a Delaware limited partnership (“CIVC Fund III”), CIVC Partners Fund IIIA, L.P., a Delaware limited partnership (“Cypress Fund IIIA,” and together with CIVC/FGIC, C1VC
Fund III any other “CIVC Vehicle” and any other Affiliated transferee within the contemplation of Section 2.5 of the Stockholders Agreement, “CIVC”) and together with PMI, Blackstone and Cypress, the
“Investors”) and the management investors listed on Annex A to the Stockholders Agreement and any other management investors who subsequently become a party thereto (the “Management Investors”), have
entered into a Stockholders Agreement dated as of August 3, 2003, as amended by a First Amendment to the Stockholders Agreement dated as of December 18, 2003, (as so amended, the “Stockholders Agreement”); 
  
 WHEREAS, pursuant to Section 9.3(a) of the Stockholders Agreement, the
Stockholders Agreement may be amended, modified or supplemented; and 
  
 WHEREAS, the parties hereto desire to amend the Stockholders Agreement. 







 NOW, THEREFORE, in consideration of the foregoing premises, and the covenants, promises and
representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the parties hereto hereby agree as follows: 
  
 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings assigned in the Stockholders Agreement. 
  
 2. Amendments to Section 3.3. Section 3.3 of the Stockholders Agreement is hereby amended as follows: 
  

	 	a.	In the first sentence of Section 3.3, the word “shall” is hereby changed to “may”. 

  

	 	b.	The following language is hereby added to the end of the second sentence of Section 3.3: 

  
 “; provided, however, that a committee of the Company Board shall be authorized and permitted to take
actions on behalf of the Company Board, by unanimous approval of all committee members, on such matters as may from time to time be specified by resolution adopted by a majority of the entire Company Board, and any committee action (positive or
negative) in respect of any such matter may thereafter be submitted to the entire Company Board for further or different action.” 
  

	 	c.	The third and fourth sentences of Section 3.3 are hereby amended and restated in their entirety to read as follows: 

  
 “Except as may be required by applicable Law or the listing standards
of the New York Stock Exchange or the Nasdaq Stock Market, as applicable, each Principal Investor shall have one representative on all committees of the Company Board and each Investor shall have the right to have one observer attend committee
meetings. Unless each Investor otherwise agrees, the board of directors of Financial Guaranty Insurance Company and each committee thereof, if any, shall be composed of the same directors and with the same voting rights and restrictions as the
Company Board and its corresponding committees.” 
  
 3.
Reference to this Second Amendment and Effect on the Stockholders Agreement. From and after the date hereof, each reference in the Stockholders Agreement to “this Stockholders Agreement”, “hereunder”, “herein” or
words of like import shall mean and be a reference to the Stockholders Agreement as affected and amended hereby. The Stockholders Agreement, as affected and amended hereby, shall remain in full force and effect and the Stockholders Agreement is
hereby ratified and confirmed in all respects. 
  

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 4. General Provisions. 
  
 (a) Governing Law; Submission to Jurisdiction; Waivers. This Second Amendment shall be governed by, and construed in
accordance with, the internal Laws of the State of New York. Each of the parties agrees that any dispute, controversy, or claim arising out of or relating to the transactions contemplated by this Second Amendment, or the validity, interpretation,
breach of termination of this Second Amendment, shall be resolved only in the Courts of the State of New York sitting in the County of New York or the United States District Court for the Southern District of New York and the appellate courts having
jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, each of the parties irrevocably and unconditionally (i) submits for itself and its property in any Action relating to this Second
Amendment, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Courts of the State of New York sitting in the County of New York, the court of the United States of America for the Southern
District of New York, and appellate courts having jurisdiction of appeals from any of the forgoing, and agrees that all claims in respect of any such Action shall be heard and determined in such New York State court or, to the extent permitted by
law, in such federal court; (ii) consents that any such Action may and shall be brought in such courts and waives any objection that it may now or thereafter have to the venue or jurisdiction of any such Action in any such court or that such Action
was brought in an inconvenient court and agrees not to plead or claim the same; (iii) waives all right to trial by jury in any Action (whether based on contract, tort or otherwise) arising out of or relating to this Second Amendment or its
performance under or the enforcement of this Second Amendment; (iv) agrees that service of process in any such Action may be effected by mailing a copy of such process by registered or certified mail, postage prepaid, to such party at its address as
provided in Section 9.5 of the Stockholders Agreement; and (v) agrees that nothing in this Second Amendment shall affect the right to effect service of process in any other manner permitted by the Laws of the State of New York. 
  
 (b) Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Second Amendment. 
  
 (c) Counterparts. This Second Amendment may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement. 
  
 [Signature Page
Follows] 
  

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 IN WITNESS WHEREOF, the parties hereby have executed this Second Amendment as of the date first above
written. 
  

			
	FGIC CORPORATION
		
	By:	 	 /s/ Frank J. Bivona


	Name:	 	Frank J. Bivona
	Title:	 	Chief Executive Officer
	
	THE PMI GROUP, INC.
		
	By:	 	 /s/ Bradley M. Shuster


	Name:	 	Bradley M. Shuster
	Title:	 	President, International and
	 	 	Strategic Investments
	
	BLACKSTONE CAPITAL PARTNERS IV L.P.
		
	By:	 	Blackstone Management Associates IV L.L.C.,
	 	 	its General Partner
		
	By:	 	 /s/ Bret Pearlman


	Name:	 	Bret Pearlman
	Title:	 	Senior Managing Director
	
	BLACKSTONE CAPITAL PARTNERS IV-A L.P.
		
	By:	 	Blackstone Management Associates IV L.L.C.,
	 	 	its General Partner
		
	By:	 	 /s/ Bret Pearlman


	Name:	 	Bret Pearlman
	Title:	 	Senior Managing Director


  

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	BLACKSTONE FAMILY INVESTMENT
	PARTNERSHIP IV-A, L.P.
		
	By:	 	Blackstone Management Associates IV L.L.C.,
	 	 	its General Partner
		
	By:	 	 /s/ Bret Pearlman


	Name:	 	Bret Pearlman
	Title:	 	Senior Managing Director
	
	CYPRESS MERCHANT BANKING
	PARTNERS II L.P.
		
	By:	 	Cypress Associates II LLC, as general partner
		
	By:	 	 /s/ William Spiegel


	Name:	 	William Spiegel
	Title:	 	Managing Director
	
	CYPRESS MERCHANT BANKING II C.V.
		
	By:	 	Cypress Associates II LLC,
	 	 	as managing general partner
		
	By:	 	 /s/ William Spiegel


	Name:	 	William Spiegel
	Title:	 	Managing Director
	
	CYPRESS SIDE-BY-SIDE LLC
		
	By:	 	 /s/ William Spiegel


	Name:	 	William Spiegel
	Title:	 	Managing Director


  

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	55 STREET PARTNERS II L.P.
	
	By: Cypress Associates II LLC, as general partner
		
	By:	 	 /s/ William Spiegel


	Name:	 	William Spiegel
	Title:	 	Managing Director
	
	CYPRESS FGIC INVESTORS LLC
		
	By:	 	Cypress Merchant Banking Partner II L.P.,
	 	 	as Managing Member
		
	By:	 	Cypress Associates II LLC,
	 	 	as general partner
		
	By:	 	 /s/ William Spiegel


	Name:	 	William Spiegel
	Title:	 	Managing Director
	
	CIVC/FGIC INVESTMENT COMPANY LLC
	as a CIVC Vehicle (as defined herein)
		
	By:	 	CIVC Partners, L.P.,
	 	 	its Managing Member
		
	By:	 	CIVC Management GP, LLC,
	 	 	its General Partner
		
	By:	 	 /s/ Dan Helle


	Name:	 	Dan Helle
	Title:	 	Managing Director


  

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	CIVC PARTNERS FUND HI, L.P.
		
	By:	 	CIVC GP III, L.P.,
	 	 	its General Partner
		
	By:	 	GPIII, LLC,
	 	 	its General Partner
		
	By:	 	 /s/ Dan Helle


	Name:	 	Dan Helle
	Title:	 	Managing Director
	
	CIVC PARTNERS FUND IIIA, L.P.
		
	By:	 	CIVC GP IHA, L.P.,
	 	 	its General Partner
		
	By:	 	CIVC GP, LLC,
	 	 	its General Partner
		
	By:	 	 /s/ Dan Helle


	Name:	 	Dan Helle
	Title:	 	Managing Director


  

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