Complex sentence: Spain had agreed peace in 1604 with the new Stuart dynasty, was pre-occupied with ending its own costly war with the Dutch Republic with an acceptable peace; and so the Spanish king was intent on honouring the treaty with the king of England.
Split into simpler sentences: Spain had agreed peace in 1604 with the new Stuart dynasty, was persuing an end to its own costly war with the Dutch Republic with an acceptable peace. With this in mind, the Spanish king was intent on honouring the treaty with the king of England.