Document:

Exhibit
10.26

 

STOCK PURCHASE AGREEMENT

 

This Stock
Purchase Agreement (this “Agreement”), dated as of April 15, 2004, is
entered into by and between Assured Guaranty Re Overseas Ltd. (formerly known
as ACE Capital Re Overseas Ltd.), an insurance company registered and licensed
under the laws of the Islands of Bermuda (“Seller”), and ACE Bermuda Insurance
Ltd., an insurance company registered and licensed under the laws of the
Islands of Bermuda (“Buyer”).

 

WITNESSETH:

 

WHEREAS,
Seller is the beneficial and record holder of all of the issued and outstanding
shares of capital stock (the “Shares”) of ACE Capital Title Reinsurance
Company, a New York domiciled insurance company (the “Company”); and

 

WHEREAS,
Seller wishes to sell, and Buyer wishes to purchase, the Shares in accordance
with the terms and condition of this Agreement.

 

NOW THEREFORE, in
consideration of the premises set forth above, and subject to the terms and
conditions stated herein, the parties hereto agree as follows:

 

ARTICLE I

SALE AND PURCHASE OF SHARES

 

Section 1.1.                  Sale of Shares; Purchase Price.  Subject to the terms and conditions hereinafter set forth, Seller
hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from
Seller, the Shares at an aggregate purchase price equal to USD39,342,869 (the
“Purchase Price”).

 

Section 1.2.                  Payment of Purchase Price.  Concurrently with the execution of this Agreement, Buyer shall
deliver to Seller a non-negotiable note (in the form attached hereto as Exhibit
A) in an amount equal to the Purchase Price.

 

Section 1.3.                  Delivery of Shares.  Concurrently with the execution of this Agreement but in no event
prior to Seller’s receipt of the Purchase Price, Seller shall deliver to Buyer
all stock certificates representing the Shares.  Such Shares shall be duly endorsed to Buyer or accompanied by
duly executed instruments of transfer in the form attached hereto as Exhibit B.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller
represents and warrants to Buyer as follows:

 

Section 2.1.                  Organization, Standing and
Authority of Seller.  Seller is a company duly organized, validly
existing and in good standing under the laws of the Islands of Bermuda

 

 

and
has all requisite power and authority to execute, deliver and perform this
Agreement and the transactions contemplated hereby.

 

Section 2.2.                  Execution and Delivery.  This Agreement has been duly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller enforceable against Seller
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).

 

Section 2.3.                  Consents and Approvals.  The execution and delivery by Seller of this Agreement, the
performance by Seller of its obligations hereunder and the consummation by
Seller and the validity of the transactions contemplated hereby do not require
Seller to obtain any consent, approval or action of, or make any filing with or
give any notice to, any corporation, person or firm or any public, governmental
or regulatory body or judicial authority.

 

Section 2.4.                  Noncontravention. 
The execution, delivery and
performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate the
certificate of incorporation or bylaws of Seller or of the Company or (ii)
violate any applicable law, rule, regulation, judgment, injunction, order or
decree.

 

Section 2.5.                  Capitalization; Title to Shares.  The authorized capital stock of the Company consists of 200,000
shares of common stock, 200,000 shares of which are issued and outstanding and
comprise the Shares.  Seller owns
beneficially and of record, free and clear of any claim, charge, preferential
arrangement, lien or other encumbrance, all of the Shares. Upon payment for the
Shares as herein provided, Buyer will acquire good and marketable title
thereto, free and clear of any claim, option, call, subscription, warrant,
charge, preferential arrangement, lien or other encumbrance.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer
represents and warrants to Seller as follows

 

Section 3.1.                  Organization, Standing and
Authority of Buyer.  Buyer is a company duly organized, validly
existing and in good standing under the laws of the Cayman Islands and has all
requisite power and authority to execute, deliver and perform this Agreement
and the transactions contemplated hereby.

 

Section 3.2                   Execution and Delivery.  This Agreement has been duly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer, enforceable against it
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of

 

2

 

creditors’
rights generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law).

 

Section 3.3.                  Consents and Approval.  The execution and delivery by Buyer of this Agreement, the
performance by Buyer of its obligations hereunder and the consummation by Buyer
and the validity of the transactions contemplated hereby do not require Buyer
to obtain any consent, approval or action of, or make any filing with or give
any notice to, any corporation, person or firm or any public, governmental or
regulatory body or judicial authority.

 

Section 3.4.                  Noncontravention. 
The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate the certificate of
incorporation or bylaws of Buyer or (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree.

 

Section 3.5.                  Investment
Intent.  Buyer is acquiring the Shares
for its own account and not for the purpose of a distribution.  Buyer will refrain from transferring or
otherwise disposing of any of the Shares, or any interest therein, in such
manner as to violate any registration provision of the Securities Act of 1933
or any applicable state “blue sky” laws.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1.                  Notices.  Any notice or other communication required or permitted to be
given hereunder shall be deemed given (i) two business days after being sent by
Federal Express or any other recognized overnight courier service providing
delivery confirmation or (ii) five business days after mailing by certified
mail, valid postage prepaid and with return receipt requested, in each case
addressed as follows to the person or entity to be notified:

 

If to Buyer:

 

ACE
Bermuda Insurance Ltd.

The
ACE Building

17
Woodbourne Avenue

Hamilton,
Bermuda HM 08

Attention:  General Counsel

Telephone:
(441) 295-5200

Facsimile:
(441) 295-5221

 

If to Seller:

 

Assured
Guaranty Re Overseas Ltd.

Victoria
Hall

11
Victoria Street

 

3

 

Hamilton HM HX, Bermuda

Attention:
Corporate Secretary

Telephone:
(441) 297-9730

Facsimile:
(441) 297-9704

 

with
a copy to:

 

ACE
Capital Re Inc.

1325
Avenue of the Americas

New
York, NY 10019

Attention:
General Counsel

Telephone:
(212) 974-0100

Facsimile:
(212) 581-3268

 

Either party may, by notice given in
accordance with this Section 4.1 to the other party, designate another
address or person for receipt of notices hereunder.

 

Section 4.2.                  Entire Agreement.  This Agreement (including the Exhibits hereto) contains the
entire agreement between the parties with respect to the purchase of the Shares,
and supersedes all prior agreements, written or oral, with respect thereto.

 

Section 4.3.                  Waivers and Amendment;
Non-Contractual Remedies. Preservation of 
Remedies.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance.  No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any waiver on the part of any party
of any such right, power or privilege, nor any single or partial exercise of
any such right, power or privilege, preclude any further exercise thereof or
the exercise of any other such right, power or privilege. The rights and
remedies provided herein are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity.

 

Section 4.4.                  Survival of Representations and
Warranties.  Each of Seller and Buyer has the right to
rely fully upon the representations, warranties, covenants and agreements of
the other party contained in this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the closing hereunder.

 

Section 4.5.                  Governing Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without reference to the conflicts of
law rules thereof.

 

Section 4.6.                  Binding Effect; No Assignment.  This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns.  Neither this Agreement, nor any right
hereunder, may be assigned by either party without the written consent of the
other party hereto.

 

Section 4.7.                  No Third Party Beneficiaries.  Nothing in this Agreement is intended or

 

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shall
be construed to give any person, other than the parties hereto, any legal or
equitable right, remedy or claim under, or in respect of, this Agreement or any
provision contained herein.

 

Section 4.8.                  Counterparts.  This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.  Each counterpart may
consist of a number of copies hereof, each signed by less than all, but
together signed by all, of the parties hereto.

 

Section 4.9.                  Headings.  The headings in this Agreement are for reference only, and shall
not affect the interpretation of this Agreement.

 

Section 4.10.               Further Assurances.                  Each of Seller and Buyer shall,
at its own cost and expense, execute and do all such deeds, documents, acts and
things as the other party may from time to time reasonably request as may be
necessary to give full effect to this Agreement.

 

Section 4.11.               Books and Records.                   Seller shall transfer to Buyer
all of the books and records of the Company (including without limitation all
legal, underwriting and claims files) and all other data and information
related to the operation and business of the Company and its in-force book of
business as the Buyer shall reasonably request.

 

Section 4.12.  Transitional Services.  Seller will provide to the Company such
accounting services as are reasonably necessary for the Company to prepare its
second quarter 2004 GAAP and statutory financial statements (including all
investment accounting, accounts receivable and payables).  Seller will also prepare and submit on
behalf of the Company all statutory filings required to be made by the Company
on or prior to June 30, 2004 or in respect of the calendar quarter ended
June 30, 2004.

 

 

[The next page is the
signature page.]

 

5

 

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

 

 

	
  ASSURED GUARANTY RE OVERSEAS LTD.

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACE BERMUDA INSURANCE LTD.

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

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EXHIBIT A

 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAW.  THE HOLDER HEREOF AGREES FOR THE BENEFIT OF THE MAKER THAT THIS
NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON.

 

ACE BERMUDA INSURANCE LTD.

 

FOR
VALUE RECEIVED, the undersigned, ACE BERMUDA INSURANCE LTD., hereby promises to
pay ASSURED GUARANTY RE OVERSEAS LTD. on the Maturity Date the sum of [                      ] ($), together
with interest thereon (computed on the basis of a 360-day year of twelve 30-day
months and compounded quarterly) at the rate of 1.5% per annum from the date
hereof.

 

This
Note is made by ACE Bermuda Insurance Ltd. as consideration for the purchase of
100% of the outstanding shares of
capital stock of ACE Capital Title Reinsurance Company pursuant to the
Stock Purchase Agreement, dated as of [           ], 2004, between ACE Bermuda Insurance Ltd. and Assured
Guaranty Re Overseas Ltd.

 

This
Note may be prepaid at any time.  Any
overdue principal of, or interest on, this Note will bear interest, payable on
demand, for each day until paid at a rate per annum equal to 2% per annum plus
the rate otherwise payable hereunder.

 

Payments
of principal hereof and interest hereon shall be made in lawful money of the
United States of America.

 

This
Note shall be governed by and construed in accordance with the laws of the
State of New York, without regard to principles regarding choice of law.

 

As
used herein, “Maturity Date” means
the earlier of (i) June 30, 2004 and (ii) the date of the closing of the
initial public offering of shares of Assured Guaranty Ltd.

 

 

	
   

  	
  ACE BERMUDA INSURANCE LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date: [Insert date of SPA]

  

 

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EXHIBIT B

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR
VALUE RECEIVED, Assured Guaranty Re Overseas Ltd. hereby sells, assigns and
transfers unto ACE Bermuda Insurance Ltd. 200,000 shares of common stock of ACE
Capital Title Reinsurance Company (the “Company”) standing in our name on the
books of the Company, represented by Certificate Nos. 1 and 2, and Seller
herewith directs that such stock certificates be transferred on the books of
the Company with full power of substitution in the premises.

 

	
  April [              ],
  2004

  	
   

  
	
   

  	
   

  
	
  Assured Guaranty Re
  Overseas Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

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Exhibit 10.48  

 
 

COMMUTATION AND SETTLEMENT AGREEMENT
  (hereinafter referred to as this "Agreement")    
    

This
Agreement is entered into by and between ACE Capital Re International, Ltd. (hereinafter referred to as the
"Company") and ACE Bermuda Insurance Ltd. (hereinafter referred to as the
"Reinsurer") and made effective 11:59:59 p.m. Local Standard Time, December 31, 2003 (the "Commutation
Date"). 

        WHEREAS,
the Company and Reinsurer are parties to the Per Contract Excess of Loss Reinsurance Agreement for the term incepting December 31, 2001 and originally terminating December 31,
2026 (hereinafter referred to as the "Contract"), which is attached hereto and made part of this Agreement; and 

        WHEREAS,
the Company and Reinsurer desire to fully and finally settle and commute all obligations and liabilities, known and unknown, of the Company and the Reinsurer under the Contract. 

        NOW,
THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, IT IS AGREED BY AND BETWEEN THE REINSURER AND THE COMPANY THAT: 

	1.
	As
consideration for the following release, the Reinsurer shall pay the Company the Commutation Amount no later than January 31, 2004, subject to the Reinsurer's receipt of an original
copy of this Agreement, having been fully executed by the parties hereto. 

The
"Commutation Amount" shall equal the sum of the Principal and Return, as defined below: 

"Principal"
shall equal One hundred thirty one million, nine hundred thirty seven thousand, two hundred eighty five United States dollars ($131,937,285); 

"Return"
shall equal: [Principal] x [Lehman Intermediate Rate]; and 

"Lehman
Intermediate Rate" shall mean the year-to-date total return of the Lehman Brothers U.S. Intermediate Aggregate Bond Index, determined for the period January 1, 2004 through the date of
transfer by the Reinsurer of the payment of the Commutation Amount. 

	2.
	Subject
to the execution of the Agreement by the parties hereto and payment by the Reinsurer of the Commutation amount as required pursuant to paragraph 1 above, as of the
Communication Date, the Company releases and discharges the Reinsurer and its predecessors, successors, parent, subsidiaries, affiliates, assigns, agents, employees, officers, directors and
shareholders (collectively, the "Reinsurer's Related Parties") from any and all present and future obligations, claims, demands, liabilities and/or losses whatsoever, all whether known or unknown,
reported or unreported, and whether currently existing or arising in the future, including, but not limited to, all claims (including, but not limited to those claims for which notices have been
submitted to the Reinsurer), obligations, offsets, debts, demands, actions, causes of actions, suits, duties, sums of money, covenants, contracts, controversies, agreements, reckonings, bonds, bills,
promises, doings, omissions, damages, liability for payment of interest, judgments, costs, expenses, losses, adjustments, accounts, representations and warranties whatsoever, which the Company or the
Company's Related Parties (as defined below) ever had, now have, or hereinafter may have, whether grounded in law or equity, in contract or in tort, against the Reinsurer or the Reinsurer's Related
Parties by reason of any matter whatsoever arising out of or related to the Contract, it being the 

1

 

intention
of the parties that this release operate as a full and final settlement of the Reinsurer's or the Reinsurer's Related Parties' current and future obligations and liabilities to the Company
arising out of or related to the Contract. 

	3.
	Subject
to the release by the Company of the Reinsurer and the Reinsurer's Related Parties as provided for in Paragraph 2 herein, the Reinsurer hereby releases and discharges the
Company and its predecessors, successors, parent, subsidiaries, affiliates, assigns, agents, executors, administrators, employees, officers, directors and shareholders (collectively, the "Company's
Related Parties") from any and all present and future obligations, claims, demands, liabilities, and/or losses whatsoever, all whether known or unknown, reported or unreported, and whether currently
existing or arising in the future, including, but not limited to, all claims, obligations, offsets, debts, demands, actions, causes of action, suits, duties, sums of money, covenants, contracts,
controversies, agreement, reckonings, bonds, bills, promises, doings, omissions, damages, liability for payment of interest, judgments, costs, expenses, losses, adjustment, accounts, representations
and warranties whatsoever, which the Reinsurer or the Reinsurer's Related Parties ever had, now have, or hereinafter may have, whether grounded in law or equity, in contract or in tort, against the
Company or the Company's Related Parties by reason of any matter whatsoever arising out of or related to the Contract, it being the intention of the parties that this release operate as a full and
final settlement of the Company's or the Company's Related Parties' current and future obligations and liabilities to the Reinsurer arising out of or related to the Contract.

	4.
	Each
party acknowledges that the fair consideration specified in Paragraph 1 and the mutual releases set forth in Paragraphs 2 and 3 of this Agreement constitute adequate and fair
consideration and this Agreement shall operate as a complete accord, satisfaction, settlement and commutation of all of its obligations under the Contract.

	5.
	The
parties hereto expressly warrant and represent that they are companies in good standing in their respective places of domicile; that the execution of this Agreement is fully
authorized by each of them; that the person or persons executing this Agreement have the necessary and appropriate authority to do so; that there are no pending agreements, transactions, or
negotiations to which any of them are a party that would render this Agreement or any part thereof void, voidable, or unenforceable; and that no authorization, consent or approval of any government
entity is required to make this Agreement valid and binding upon them and that no claim or loss being paid or settled by this Agreement has been previously assigned, sold or transferred to any other
person or entity. The parties hereto further warrant, each to the other, that they have not transferred, assigned or contracted to transfer or assign to any person, corporation, company or entity any
of their rights, title, benefit or obligations arising out of or in connection with the Contract, including without limitation any balances, accounts, costs, claims, counterclaims or demands which are
within the contemplation of this Agreement.

	6.
	This
Agreement contains the entire agreement between the parties as respects its subject matter. All discussions and agreements previously entertained between the parties concerning
the subject matter of the commutations are merged into this Agreement. This Agreement may not be modified or amended, or any of its provisions waived, except by an instrument in writing, signed by the
parties hereunder.

	7.
	Any
dispute, controversy or claim arising out of or relating to this Agreement shall be subject to arbitration in accordance with the provisions of section 13,  Arbitration, of the General Conditions of the
Contract.

	8.
	This
Agreement shall be governed and construed in accordance with the laws of Bermuda, notwithstanding the venue of any arbitration proceeding. 

2

 

	9.
	This
Agreement is solely between the Company and the Reinsurer, and nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of
any third parties or any persons not parties to this Agreement.

	10.
	This
Agreement may be executed and delivered in counterparts, each of which, when so executed and delivered shall constitute an original and all of such counterparts shall together
constitute one and the same instrument. 

        IN
WITNESS WHEREOF, this Agreement has been executed by the following individuals authorized to act on behalf of the parties: 

	For and on Behalf of:	 	For and on Behalf of:
	
ACE BERMUDA INSURANCE LTD.	
 	

ACE CAPITAL RE INTERNATIONAL, LTD.
	in Hamilton, Bermuda	 	in Hamilton, Bermuda
	
/s/  PIERRE SAMSON      
 Name:  Pierre Samson

Title:    President

Date:    Ace Financial Solutions International	
 	

/s/  CARLA RANUM      
 Name:  Carla Ranum

Title:    Vice President

Date:    January 6, 2004

January
7, 2004 

3

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COMMUTATION AND SETTLEMENT AGREEMENT (hereinafter referred to as this " Agreement " )

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