OSG 8-K
Octave Specialty Group Inc (OSG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 7, 2025 (
(Exact name of Registrant as specified in its charter)
| (State of incorporation) |
(Commission file number) |
(I.R.S. employer identification no.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
Name of each exchange | ||
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Amendment to AAC Sale Agreement
As previously disclosed, on June 4, 2024, Ambac Financial Group, Inc., a Delaware corporation (the “Company”) entered into a stock purchase agreement (the “AAC Sale Agreement”) with American Acorn Corporation, a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P. (“Buyer”), pursuant to which, subject to the conditions set forth therein, the Company will sell to Buyer all of the issued and outstanding shares of common stock, par value $2.50 per share, of Ambac Assurance Corporation, a Wisconsin stock insurance company and wholly-owned subsidiary of the Company (the “AAC Transaction”).
On July 3, 2025, the parties to the AAC Sale Agreement entered into the First Amendment to the AAC Sale Agreement (the “First Amendment”), pursuant to which the parties agreed to extend the End Date (as defined in the AAC Sale Agreement) to December 31, 2025, subject to an automatic 90-day extension if regulatory approvals have not been obtained by the End Date. The description of the First Amendment in this report is qualified in its entirety by reference to the full text of the First Amendment, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Letter Agreement
Overview
On July 3, 2025, the parties to the AAC Sale Agreement entered into a Letter Agreement (the “Letter Agreement”), pursuant to which, among other things, the parties entered into a new agreement with respect to the Warrant (as defined in the AAC Sale Agreement) and amended certain terms of the Investor Rights Agreement (as defined in the AAC Sale Agreement). The description of the Letter Agreement in this report is qualified in its entirety by reference to the full text of the Letter Agreement, the form of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Conversion of Warrant
As previously disclosed, pursuant to the AAC Sale Agreement, at the closing of the AAC Transaction (the “Closing”), the Company will issue to Buyer or its designee (the “Investor”) the Warrant. Pursuant to the Letter Agreement, following the close of business on the six-month anniversary of the Closing (the “Lock-Up Termination Date”) and until the expiration of the Warrant Term (as defined in the Warrant), the Investor may, once in the first six-month period following the Lock-Up Termination Date and then, once in any three-month period following the end of such six-month period, convert up to the lesser of (a) the amount of the unexercised and unconverted Warrant and (b) one-third of the original amount of the Warrant. The Warrant may be converted, at the Company’s option, for (i) the number of Warrant Shares (as defined in the Warrant) for which the Investor has elected to convert or (ii) a cash payment, in each case based on the Black-Scholes Value (as defined in the Letter Agreement) of the number of Warrant Shares for which the Investor has elected to convert, or (iii) a combination of Warrant Shares and cash. The sum of all amounts paid by the Company (whether in the form of Warrant Shares or cash) to Investor or its Affiliates with respect to the Warrant upon conversion of the Warrant (including conversions in connection with a Change of Control (as defined in the Letter Agreement)) will not exceed $70 million in the aggregate.
Standstill
Subject to certain exceptions, without the prior written approval of the board of directors of the Company (the “Board”), from the Closing until the date on which the Investor and its Affiliates no longer beneficially owns any portion of the Warrant, the Investor will not, and will cause each of its Affiliates not to, directly or indirectly, make any public or private proposal or offer to the Company, the Board (or any committee or member thereof) or any stockholder or group of stockholders of the Company that, if consummated, could reasonably be expected to result in a Change of Control; provided that the standstill no longer applies from and after the time at which the Company enters into a merger, consolidation, business combination, restructuring or similar transaction with any third party.
Payment Upon Change of Control
In the event of a Change of Control of the Company, the Investor will be entitled to receive a cash payment equal to the Black-Scholes Value of the unexercised and unconverted portion of the Warrant, to be calculated on the basis set forth in the Letter Agreement.
Investor Rights Agreement
As previously disclosed, pursuant to the AAC Sale Agreement, at the Closing, the Company will enter into the Investor Rights Agreement by and between the Company and the Investor. Pursuant to the Letter Agreement, the Investor Rights Agreement will be amended such that the Investor will no longer have the right to designate one director to the Board in connection with the AAC Transaction.
Leases and Company Payments
The Letter Agreement provides for the parties to cooperate on certain potential arrangements with respect to the Company’s office leases. The Investor also agreed to waive any claim, dispute or adjustment to the purchase price for Company Payments (as defined in the AAC Sale Agreement) from April 1, 2024 through March 31, 2025 and for certain Company Payments related to compensation from March 31, 2025 through the Closing, subject to the terms set forth in the Letter Agreement.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under “Letter Agreement – Conversion of Warrant” relating to the issuance of the Warrant is incorporated by reference in this Item 3.02.
Item 7.01. Regulation FD Disclosure.
On July 7, 2025, the Company issued a press release to announce the First Amendment and the Letter Agreement, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to this Item 7.01, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended or the Exchange Act.
Forward-Looking Statements
In this report, there are statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements, include, among others, those discussed under “Risk Factors” in our most recent SEC filed quarterly or annual report, the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the AAC Sale Agreement; the outcome of any legal proceedings that may be instituted against the parties to the AAC Sale Agreement; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the AAC Transaction), and to satisfy any of the other conditions to AAC Transaction on a timely basis or at all; the possibility that the AAC Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the AAC Transaction; the ability of the parties to consummate the AAC Transaction and the timing of the AAC Transaction; and other factors that may affect future results of the Company. Furthermore,
such forward-looking statements speak only as of the date of this report. Except as required by law, the parties undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to the parties, (ii) that the parties currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect the future results of the Company.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits. The following exhibits are filed as part of this Current Report on Form 8-K:
EXHIBIT INDEX
| Exhibit Number |
Exhibit Description | |
| 2.1 | First Amendment to the Stock Purchase Agreement, by and between Ambac Financial Group, Inc. and American Acorn Corporation, dated as of July 3, 2025. | |
| 10.1 | Letter Agreement, by and between Ambac Financial Group, Inc. and American Acorn Corporation, dated as of July 3, 2025.* | |
| 99.1 | Press Release dated July 7, 2025. | |
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| * | Certain schedules and other similar attachments to such agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish a copy of such omitted documents to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Ambac Financial Group, Inc. | ||||||
| (Registrant) | ||||||
| Dated: July 7, 2025 | By: | /s/ William J. White | ||||
| William J. White | ||||||
| First Vice President, Secretary and Assistant General Counsel | ||||||
Exhibit 2.1
FIRST AMENDMENT
TO
STOCK PURCHASE AGREEMENT
This First Amendment (this “Amendment”) to the Stock Purchase Agreement (as defined below), dated as of July 3, 2025, is entered into by and between Ambac Financial Group, Inc., a Delaware corporation (“AFG”) and American Acorn Corporation (“Acorn”), a Delaware corporation. AFG and Acorn are also each referred to herein as a “Party” and, collectively, as the “Parties.” Capitalized terms used but not defined in this Amendment shall have the meanings given to such terms in the Stock Purchase Agreement.
RECITALS
WHEREAS, AFG and Acorn entered into the Stock Purchase Agreement on June 4, 2024 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Stock Purchase Agreement”);
WHEREAS, pursuant to Section 9.3 of the Stock Purchase Agreement, the Stock Purchase Agreement may be amended or modified only by a written instrument executed by the Party against whom enforcement of the amendment or modification is sought; and
WHEREAS, the Parties desire to amend the Stock Purchase Agreement on the terms set out in this Amendment.
NOW THEREFORE, in consideration of their mutual promises under this Amendment, the benefits to be derived by each Party, and other good and valuable consideration, the Parties hereby agree as follows:
AGREEMENT
Section 1. Amendment to the Stock Purchase Agreement.
1.1 The first paragraph of Section 1.3 of the Stock Purchase Agreement is hereby amended and restated in its entirety as follows:
“The closing of the purchase and sale of the Shares contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m., New York City time, at the offices of Debevoise & Plimpton LLP, 66 Hudson Boulevard, New York, New York 10001 (or such other place as Seller and Buyer may agree in writing) (a) on the date that is the last Business Day of the calendar month during which the last of the conditions set forth in Article 6 to be so satisfied or waived has been so satisfied or waived in accordance with this Agreement (other than those conditions that by their terms are to be satisfied by actions taken at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing) (the “Condition Satisfaction”) or (b) at another date, time or place that is mutually agreed to in writing by Seller and Buyer. The date on which the Closing takes place shall be the “Closing Date.” At the Closing:”
1.2 Section 7.1(b)(i) of the Stock Purchase Agreement is hereby amended and restated in its entirety as follows:
“(i) the Closing shall not have been consummated on or before December 31, 2025 (the “End Date”); provided, however, that if the Closing has not occurred due solely to the failure of the conditions to Closing set forth in Section 6.1(a) to be satisfied, the End Date shall be automatically extended for an additional ninety (90) days and the parties agree to continue to use their respective reasonable best efforts to satisfy such Closing conditions (such extended End Date, as so extended, shall be the “End Date” for all purposes under this Agreement); provided, further, that the right to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such time;”
Section 2. No Waiver. Except as expressly provided herein, this Amendment shall not constitute an amendment, modification or waiver of any provision of the Stock Purchase Agreement or any rights or obligations of any party in, under or with respect to the Stock Purchase Agreement and shall not be effective for any other purpose (including any future interpretation of any provision of the Stock Purchase Agreement not amended herein) or transaction. Except as modified by this Amendment, the Stock Purchase Agreement shall continue in full force and effect.
Section 3. References. Any references to the Stock Purchase Agreement, and any reference in the Stock Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or any other word or words of similar import, in each case, shall reference the Stock Purchase Agreement as amended by this Amendment.
Section 4. Entire Agreement. The Stock Purchase Agreement, as amended by this Amendment, constitutes the entire agreement between the Parties hereto with respect to the subject matter of this Amendment, superseding any and all prior negotiations, discussions, agreements and understandings, whether oral or written, relating to such subject matter.
Section 5. Miscellaneous. The provisions of each of Section 9.2 (Notices), Section 9.3 (Amendment; Waivers, etc.), Section 9.4 (Expenses), Section 9.5 (Governing Law, etc.), Section 9.6 (Successors and Assigns), Section 9.7 (Entire Agreement), Section 9.8 (Severability), Section 9.9 (Counterparts; Effectiveness; Third-Party Beneficiaries), Section 9.11 (Specific Performance), and Section 9.13 (Waiver of Conflicts; Attorney-Client Privilege) of the Stock Purchase Agreement are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein.
[Signature pages follow]
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IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the date first set forth above.
| AMBAC FINANCIAL GROUP, INC. | ||
| By: | /s/ Claude LeBlanc | |
| Name: Claude LeBlanc Title: President and Chief Executive Officer | ||
[Signature Page – First Amendment to Stock Purchase Agreement]
IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the date first set forth above.
| AMERICAN ACORN CORPORATION | ||
| By: | /s/ Greg Share | |
| Name: Greg Share Title: President | ||
| By: | /s/ Patrick George | |
| Name: Patrick George Title: Vice President and Secretary | ||
[Signature Page – First Amendment to Stock Purchase Agreement]
Exhibit 10.1
AMBAC FINANCIAL GROUP, INC.
One World Trade Center, 40th Floor
New York, New York 10007
July 3, 2025
American Acorn Corporation
c/o Oaktree Capital Management, L.P.
333 S. Grand Ave., 28th Floor
Los Angeles, CA 90071
| Re: | Letter Agreement |
Ladies and Gentlemen:
This letter agreement (this “Letter Agreement”) is made and entered into between Ambac Financial Group, Inc. (the “Company”) and American Acorn Corporation (“Investor” and, collectively with the Company, the “Parties”), effective as of July 3, 2025. Unless otherwise specified, capitalized terms used but not defined herein shall have the meanings given to them in the Form of Warrant, attached as Exhibit A to the Stock Purchase Agreement (as defined below).
WHEREAS, the Company and Investor entered into that certain Stock Purchase Agreement, dated as of June 4, 2024 (the “Stock Purchase Agreement”), as amended by that certain First Amendment between the Parties on the date hereof;
WHEREAS, pursuant to the Stock Purchase Agreement, Investor has agreed to acquire all of the issued and outstanding shares of common stock, par value $2.50 per share, of Ambac Assurance Corporation (“AAC”), a Wisconsin stock insurance company (the “AAC Common Stock”);
WHEREAS, in connection with and pursuant to the Stock Purchase Agreement, at the closing of the purchase and sale of the AAC Common Stock contemplated by the Stock Purchase Agreement (the “Closing”), the Company shall issue to Investor a warrant (the “Warrant”) exercisable for 5,092,707 shares of common stock, par value $0.01, per share of the Company (“Company Common Stock”); and
WHEREAS, in connection with and pursuant to the Stock Purchase Agreement, at the Closing, the Company and Investor shall enter into an Investor Rights Agreement (the “Investor Rights Agreement”).
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NOW, THEREFORE, in consideration of the mutual and several promises and undertakings contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:
1. Definitions.
| (a) | “Black-Scholes Value” means the value of the Warrant based on the Black-Scholes Option Pricing Model obtained from the “OVME” function on Bloomberg Financial Markets determined as of the date that is one Business Day prior to the date of conversion of the Warrant and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the applicable Conversion Date and the Warrant Term, (ii) an implied volatility equal to the BVOL model selected on Bloomberg Financial Markets, (iii) the underlying price per share of Company Common Stock shall be the 20-day volume-weighted average price (using the “VWAP” function on Bloomberg Financial Markets and the “Bloomberg Definition” methodology) (“VWAP”), (iv) a remaining conversion time equal to the remaining Warrant Term and (v) a dividend yield shown on the OVME screen. |
| (b) | “Change of Control” means, with respect to the Company, a transaction or series of transactions pursuant to which (i) a Person or group of Persons acting in concert, other than the Company or any subsidiary of the Company, becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of the Company Common Stock then outstanding immediately following such transaction(s) or (ii) all or substantially all of the assets of the Company are sold, except as set forth on Schedule A. |
| (c) | “Conversion Date” means, for any given conversion of the Warrant, the date on which the conditions to such conversion as set forth in Section 2 of this Letter Agreement shall have been satisfied at or prior to 5:00 p.m., Eastern Time, on a Business Day, including, without limitation, the receipt by the Company of the Conversion Notice and the Warrant. |
| (d) | “Fair Market Value” means, (i) with respect to the Company Common Stock, as of any particular date the 20-day VWAP for the Common Stock and (ii) with respect to (x) any other property and (y) if at any time the Company Common Stock is not listed on any market or exchange of The Nasdaq Stock Market, LLC or the New York Stock Exchange, the fair market value per share as determined in good faith by the Board; provided that if the Holder objects in writing to the Board’s calculation of Fair Market Value within ten (10) days of receipt of written notice thereof, the valuation dispute resolution procedure set forth in Section 7 hereof shall be invoked to determine Fair Market Value. |
| (e) | “Permitted Affiliates” means with respect to a person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such first person (for purposes of this definition, “controls,” “controlled by” and “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person through the ownership of fifty percent (50%) or more of the voting securities or partnership or other ownership interests); provided that, Permitted Affiliates shall not include any Competitor or Activist Investor. |
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| (f) | “Warrant Term” means any time after the date of the Warrant and prior to 5:00 p.m., Eastern Time, on the date that is 78 months after the Closing or, if such day is not a Business Day, on the immediately following Business Day. |
2. Conversion Procedure. From the Lock-Up Termination Date and until the termination of the Warrant Term, once in the first six-month period following the Lock-Up Termination Date and once in any three-month period following the end of such six-month period, the Holder may convert up to the lesser of (a) the amount of the unexercised and unconverted Warrant and (b) one-third of the original amount of the Warrant. The Warrant may be converted at the Company’s option for (i) the number of Warrant Shares for which the Holder has elected to convert or (ii) a cash payment, in each case based on the Black-Scholes Value of the number of Warrant Shares for which the Holder has elected to convert, or a combination of Warrant Shares and cash, upon surrender of the Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to the Warrant in the case of its loss, theft or destruction), together with a Conversion Notice in the form attached hereto as Exhibit A (each, a “Conversion Notice”), duly completed (including specifying the number of Warrant Shares to be converted) and executed. Notwithstanding anything to the contrary in this Letter Agreement, the sum of all amounts paid by the Company (whether in the form of Warrant Shares or cash) to Holder or its Affiliates with respect to the Warrant upon conversion of the Warrant (including conversions in connection with a Change of Control as set forth in Section 5 of this Letter Agreement) shall not exceed $70 million in the aggregate. Unless the purchase rights represented by the Warrant shall have expired or the Warrant shall have been fully exercised or fully converted, the Company shall, at the time of delivery of the cash payment or the Warrant Shares, as applicable, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised or unconverted Warrant Shares called for by the Warrant. Such new Warrant shall in all other respects be identical to the Warrant.
3. Cashless Conversion. If the conversion of the Warrant shall be made by issuing Warrant Shares then issuable upon conversion of all or any part of the Warrant on a net basis such that, without payment of any cash consideration or other immediately available funds, the Holder shall surrender the Warrant in exchange for the number of Warrant Shares as is computed using the following formula (a cashless conversion):
X = Y * A ÷ B
Where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the total number of Warrant Shares for which the Holder has elected to convert the Warrant pursuant to Section 2 of this Letter Agreement.
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A = the Black-Scholes Value of one Warrant Share as on the applicable Conversion Date.
B = the Fair Market Value of one Warrant Share as of the applicable Conversion Date.
4. Standstill. Without the prior written approval of the Board, from the Closing until the date on which Investor and its Affiliates no longer beneficially owns any portion of the Warrant that remains unexercised, Investor shall not, and shall cause each of its Affiliates not to, directly or indirectly, make any public or private proposal or offer to the Company, the Board (or any committee or member thereof) or any stockholder or group of stockholders of the Company that, if consummated, could reasonably be expected to result in a Change of Control, in each case, subject to Section 3.01(c) of the form of Investor Rights Agreement attached as Exhibit D to the Stock Purchase Agreement. For clarity, this Section 4 shall not restrict Investor or its Affiliates from acquiring, selling or trading any equity or debt securities of the Company or AAC.
5. Payment Upon Change of Control. To the extent any portion of the Warrant remains unexercised and unconverted, upon a Change of Control of the Company, the Holder shall receive from the Company, prior to or concurrently with the closing of such transaction, a cash payment equal to the Black-Scholes Value, calculated as set forth in the definition thereof, except based on (a) an implied volatility that is the greater of (i) the BVOL value shown on Bloomberg Financial Markets at the close of the first trading day following the date of public announcement of such transaction or the date such transaction becomes public knowledge (collectively, the “Announcement”) and (ii) the simple average of the BVOL values shown on Bloomberg Financial Markets for the twenty (20) trading days prior to the Announcement and (b) a price per share of Company Common Stock equal to the greater of the 20-day VWAP prior to the Announcement and the value of the consideration per share of Company Common Stock payable pursuant to the terms of the Change of Control transaction.
6. Investor Designee. Investor and the Company hereby agree that Article 4 of the form of Investor Rights Agreement attached as Exhibit D to the Stock Purchase Agreement is hereby deleted in its entirety and Investor shall have no right to designate or appoint any Director or observer to the Board.
7. Valuation Dispute Resolution. In the case of any dispute as to the determination of the Fair Market Value of any Company Common Stock or Warrant Shares to be issued, withheld or otherwise determined, the calculation of the Aggregate Exercise Price or any other computation or valuation of the Black-Scholes Value or the Fair Market Value required to be made hereunder or in connection herewith, in the event the Holder, on the one hand, and the Company, on the other hand, are unable to settle such dispute within ten (10) Business Days, then either party may elect to submit the disputed matter(s) for resolution by an accounting firm of nationally recognized standing as may be mutually agreed upon by the Holder and the Company. Such firm’s determination of such disputed matter(s) shall be binding upon all parties absent demonstrable error. The fees and expenses of the accounting firm pursuant to this Section 7 shall be borne by the Company, on the one hand, and the Holder, on the other hand, based upon the percentage which the aggregate portion of the contested amount not awarded to each party bears to the aggregate amount actually contested by such party. For example, if the Company claims the Fair Market
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Value is $1,000 for a given property and the Holder contests that the Fair Market Value of such property is only $500 (i.e., $500 is being contested) and if the accounting firm ultimately resolves the dispute by determining a Fair Market Value of $800 for such property, then the costs and expenses of the accounting firm will be allocated 60% (i.e., 300 ÷ 500) to the Holder and 40% (i.e., 200 ÷ 500) to the Company.
8. State Street Lease. Notwithstanding anything set forth in the Stock Purchase Agreement, at or prior to the Closing, the Company may, at its option and subject to the terms therein, assign to Investor its right, title and interest in and to the Lease, dated March 1, 2011, by and between One State Street, LLC and the Company (as successor-in-interest to AAC), as amended by the Modification of Lease, dated September 8, 2015 (collectively, the “State Street Lease”); provided that, prior to such assignment, Investor has received approval from the Wisconsin Office of the Commissioner of Insurance (“OCI”) to assign the State Street Lease to AAC following the Closing; provided further, that the Company shall promptly deliver to Investor written notice of any such proposed assignment, but in no event less than five (5) Business Days prior to the effective date of such assignment. Investor shall use reasonable best efforts to obtain the approval from OCI referred to in the proviso of the immediately preceding sentence. If the Company exercises its option to assign the State Street Lease pursuant to this Section 8, then (i) Investor shall accept and assume all of the Company’s right, title and interest in and to, and assume all of the Company’s obligations and liabilities under, the State Street Lease and (ii) the Company shall, on the effective date of such assignment, pay to Investor an amount equal to the sum of the cumulative net dollar value (after taking into account the payments to be made by the sublessee) of (i) all remaining lease payments, (ii) the projected New York City Commercial Rent Tax (“CRT”), (iii) the cost to maintain the insurance coverages required under the lease and (iv) projected net expenses, including porter fees and new condenser water charges, in each case, for the duration of the applicable term. In addition, the Company agrees (a) to pay for any restoration works or furniture removal required under the State Street Lease and (b) to indemnify Investor and its Affiliates, to the fullest extent permitted by applicable law, for any costs and expenses under the State Street Lease, if assigned, in excess of the amount prepaid by the Company to Investor pursuant to this Section 8; provided that such indemnity shall not apply to any costs and expenses under the State Street Lease incurred to the extent as a direct result of (i) Investor’s failure to pay when due the amounts described in this Section 8 as required by the State Street Lease and (ii) Investor’s failure to comply with the terms of the State Street Lease.
9. One World Sublease. Notwithstanding anything set forth in the Stock Purchase Agreement, at or prior to the Closing, the Company may, at its option and subject to the terms therein, assign to Investor its right, title and interest in and to the Sublease, dated January 30, 2019, by and between Advance Magazine Publishers Inc. d/b/a Conde Nast and the Company (as successor-in-interest to AAC) (the “One World Sublease”); provided that, prior to such assignment, Investor has received approval from OCI to assign the One World Sublease to AAC following the Closing; provided further that, if requested by the Company, the Parties will negotiate in good faith an alternative arrangement to effect an assignment, whereby the Investor is assigned the rights and obligations of the Company under such sublease and the Company is relieved of its lease obligations thereunder; provided further, that the Company shall promptly deliver to Investor written notice of any such proposed assignment or alternative arrangement, as applicable, but in no event less than five (5) business days prior to the effective date of such assignment or alternative arrangement. Investor shall use reasonable best efforts to obtain the
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approval from OCI referred to in the proviso of the immediately preceding sentence. If the Company exercises its option to assign the One World Sublease pursuant to this Section 9, then (i) Investor shall accept and assume all of the Company’s right, title and interest in and to, and assume all of the Company’s obligations and liabilities under, the One World Sublease and (ii) the Company shall, on the effective date of such assignment or alternative arrangement, pay to Investor an amount equal to the sum of (as applicable) the cumulative dollar value of (i) all remaining lease payments through January 23, 2027, (ii) the Termination Payment (as defined in the One World Sublease), (iii) the projected CRT, (iv) the projected remaining Overhead Allocation Amount (as defined in the Lease (as such term is defined in the One World Sublease)), (v) the cost to maintain the insurance coverages required under the sublease and (vi) all projected remaining variable costs, including electrical, condenser water and tax allocation, in each case, for the duration of the applicable term. In addition, the Company agrees (a) to pay for any restoration or furniture removal works required under the One World Sublease upon termination of the One World Sublease and (b) to indemnify Investor and its Affiliates, to the fullest extent permitted by applicable law, for any costs and expenses under the One World Sublease, if assigned, in excess of the amount prepaid by the Company to Investor pursuant to this Section 9; provided, that such indemnity shall not apply to any costs and expenses under the One World Sublease or the State Street Lease incurred to the extent as a direct result of (i) Investor’s failure to pay when due the amounts described in this Section 9 as required by the One World Sublease and (ii) Investor’s failure to comply with the terms of the One World Sublease 9. In addition, if the landlord under the One World Sublease agrees to accept a letter of credit from the Company in lieu of Investor or AAC, as applicable, and if permitted by the provider of the existing letter of credit under the One World Sublease, the Company will maintain its existing letter of credit for the benefit of Advance Magazine Publishers, Inc., D/B/A Conde Nast, until the later of (i) the termination effective date of the One World Sublease and (ii) the completion of any required restoration works thereunder; provided that, in the event that (a) the landlord does not accept a letter of credit from the Company or (b) the letter of credit provider does not permit the Company to maintain its existing letter of credit and, Investor or AAC , as applicable, is required to provide a letter of credit as a result of assignment of the One World Sublease or the alternative arrangement, as applicable, the Company shall provide any collateral required to be posted to support the provision of such letter of credit. The Company and Investor agree to work together in good faith to structure the prepayment to Investor with respect to the One World Sublease in a tax efficient manner.
10. Indemnification re Sublease. If the Company exercises its option to assign the State Street Lease pursuant to Section 8, then the Company shall indemnify and hold harmless Investor, to the fullest extent permitted by applicable law, for any default in payment of rent by the sublessee under the Agreement of Sublease, dated January 30, 2019, by and between the Company (as successor-in-interest to AAC) and Women in Need, Inc. (the “Agreement of Sublease”); provided that, such indemnification shall not survive the expiration (as of the date hereof) or earlier termination of the State Street Lease. The amount payable by the Company pursuant to this Section 10 shall not exceed the amount of the default in payment of rent by the sublessee under the Agreement of Sublease.
11. Company Payments. Notwithstanding anything set forth in the Stock Purchase Agreement, Investor (a) waives (i) any rights or remedies it may have relating to Company Payments (as defined in the Stock Purchase Agreement) paid, accrued or incurred with respect to all periods beginning on April 1, 2024 and ending on March 31, 2025, in each case, that have been
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recorded in Ambac’s books and records as of March 31, 2025, an accurate copy of which has been made available to Investor; provided that with respect to any such paid, accrued or incurred amounts that are Specified Expenses, any amount in excess of the amount properly allocated to AAC or its Subsidiaries in accordance with Schedule B is not waived and shall be Company Payments and (b) agrees that (i) the Adjustment Amount (as defined in the Stock Purchase Agreement) shall not include the foregoing waived Company Payments and (ii) the penultimate sentence of Section 1.2(c)(ii) of the Stock Purchase Agreement shall not apply to the foregoing waived Company Payments. Further, notwithstanding anything set forth in the Stock Purchase Agreement, the Parties agree that, for all purposes under the Stock Purchase Agreement, (a) any net amounts related to compensation paid, accrued or incurred by or otherwise allocated to AAC or any of its Subsidiaries consistent with prior practice from and after March 31, 2025 through the Closing under the Intercompany Allocation Agreement (as defined in the Stock Purchase Agreement), and not exceeding the Monthly Cap (as defined below), shall not be Company Payments under the Stock Purchase Agreement, (b) any such net amounts paid, accrued or incurred by or otherwise allocated to AAC or any of its Subsidiaries for the foregoing period in excess of the Monthly Cap shall be Company Payments and (c) with respect to any Specified Expenses paid, accrued or incurred by or otherwise allocated to AAC or any of its Subsidiaries from and after March 31, 2025 through the Closing Date, any amount in excess of the amount properly allocated to AAC or its Subsidiaries in accordance with Schedule B shall be Company Payments. For purposes of this Section 11, “Monthly Cap” means an average of $650,000 per month over the applicable period for net amounts related to compensation as allocated under the Intercompany Allocation Agreement.
12. Tameside Side Letter. Reference is made to that certain Side Letter, dated September 12, 2024, by and between the Parties relating to the Stock Purchase Agreement (the “Tameside Side Letter”), the Parties hereby agree that Section 3(iii) of the Tameside Side Letter shall hereby be amended at restated as the follows: “The Parties agree that NewCo will be transferred to Buyer or its designee automatically and concurrently with the Closing for an aggregate sum of £1.00.”
13. Successors and Assigns. This Letter Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and permitted assigns; provided that, this Letter Agreement and the rights and obligations hereunder shall not be assignable or otherwise transferable by Holder to any third party without the prior written consent of the Company. For the purposes of this Section 13, “third party” means any Person other than a Permitted Affiliate. Upon transfer to a third party, this Letter Agreement shall no longer apply to the portion of the Warrant so transferred.
14. Miscellaneous. The provisions of Sections 9.2 (Notices), 9.3 (Amendments, Waivers, etc.), 9.4 (Expenses), 9.5 (Governing Law, etc.), 9.8 (Severability) and 9.9 (Counterparts; Effectiveness; Third-Party Beneficiaries) of the Stock Purchase Agreement are hereby incorporated by reference into this Letter Agreement, mutatis mutandis, as if fully set forth herein.
[signature page follows]
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| Very truly yours, | ||
| AMBAC FINANCIAL GROUP, INC. | ||
| By: | /s/ Claude LeBlanc | |
| Name: Claude LeBlanc | ||
| Title: President and Chief Executive Officer | ||
| AGREED AND ACCEPTED: | ||
| AMERICAN ACORN CORPORATION | ||
| By: | /s/ Greg Share | |
| Name: Greg Share | ||
| Title: President | ||
| By: | /s/ Patrick George | |
| Name: Patrick George | ||
| Title: Vice President and Secretary | ||
[Signature Page to Letter Agreement]
Exhibit 99.1
Ambac Financial Group and Oaktree announce an extension to the stock purchase agreement for the Financial Guarantee business
NEW YORK – July 7, 2025 – Ambac Financial Group, Inc. (NYSE: AMBC) (“Ambac”) today announced the extension from July 3, 2025, to December 31, 2025 of the term of the stock purchase agreement relating to the sale of its legacy financial guarantee businesses—Ambac Assurance Corporation (“AAC”) and Ambac UK (“AUK”)—to funds managed by Oaktree Capital Management, L.P. (“Oaktree”) for $420 million in cash.
Both Ambac and Oaktree remain fully committed to closing the transaction. Oaktree continues to work with the Wisconsin Office of the Commissioner of Insurance (the “OCI”) to satisfy its remaining closing conditions and obtain final regulatory approval.
“We continue to await final regulatory approval for this strategic transaction and remain aligned with Oaktree and confident in completing the sale,” said Claude LeBlanc, President and CEO of Ambac. “This transaction remains the capstone to our transformation into a pure-play specialty P&C insurance platform, and we look forward to closing it as soon as practicable.”
“Oaktree has been actively working towards, and is committed to, obtaining the final regulatory approval from the OCI to close on the acquisition of AAC and AUK,” said Oaktree Managing Director Greg Share. “We look forward to closing this transaction once such approval is received.”
In addition to the extension, Ambac and Oaktree have agreed to a conversion right for the warrant to purchase Ambac common stock that Oaktree is receiving at the closing of the transaction. Ambac and Oaktree have also agreed to arrangements with respect to Ambac’s existing lease obligations and on the treatment of certain expenses allocated to AAC prior to the closing of the transaction. Full details of the amendment will be disclosed in a Current Report on Form 8-K to be filed by Ambac with the SEC today.
About Ambac
Ambac Financial Group, Inc. (“Ambac”) is an insurance holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical, and business-related information. For more information, please go to www.ambac.com.
The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $203 billion in assets under management as of March 31, 2025. The firm emphasizes an opportunistic, value-oriented, and risk-controlled approach to investments in credit, equity, and real estate. The firm has more than 1,200 employees and offices in 25 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.
Forward-Looking Statements
In this press release, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed under “Risk Factors” in our most recent SEC filed quarterly or annual report.
CONTACTS
Investors:
Charles J. Sebaski
Managing Director, Investor Relations
(212) 208-3177
Media:
Ambac
Kate Smith
Director, Corporate Communications
(212) 208-3452
Source: Ambac Financial Group, Inc.