EXHIBIT II
STOCK OPTION PURCHASE AGREEMENT
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This Stock Option Purchase Agreement, dated as of November 20, 1997
(this "Agreement"), is made between and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ (collectively the "Sellers," and each
individually a "Seller"), High Ridge Capital Partners Limited Partnership, a
Delaware limited partnership (the "Fund"), and The Seibels ▇▇▇▇▇ Group, Inc., a
South Carolina corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, pursuant to the terms of a Stock Option Agreement, dated as of
January 30, 1996, among the Sellers and the Company (the "Stock Option
Agreement") and a Stock Purchase Agreement, dated as of January 29, 1996, among
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Company (the "Stock Purchase
Agreement"), the Sellers own options (the "Options") to purchase an aggregate of
1,562,500 shares of the common stock, par value $1.00 per share, of the Company
(the "Common Stock");
WHEREAS, one half of the Options expire on December 31, 1998 (the "1998
Options") and one half of the Options expire on December 31, 2000 (the "2000
Options"); and
WHEREAS, the Sellers propose to sell and assign a portion of such
Options to the Fund, the Fund has agreed to purchase such
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portion of such Options, and the Company has consented to such sale and
assignment, all in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the promises, representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Sellers, jointly and severally, and the Fund and the Company hereby agree as
follows:
1. Sale and Assignment.
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Upon the terms and subject to the conditions contained herein, on the
fifth business day following the satisfaction of the conditions set forth in
Section 7 of this Agreement (the "Closing Date"), each of the Sellers shall
sell, transfer and assign to the Fund, Options for the purchase of the number of
shares of the Common Stock of the Company set forth next to the name of such
Seller below in this Section 1, together with all rights and interests attendant
to such Options pursuant to the Stock Option Agreement and the Stock Purchase
Agreement (other than Sections 6.1 and 7.2 thereof), and the Fund shall pay to
each of the Sellers cash in the aggregate amount of $1:
Number of Shares Number of Shares
Name 1998 Options 2000 Options
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 281,250 281,250
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 56,250 56,250
▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ 14,062 14,062
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351,562 351,562
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2. Company' Consent and Acknowledgement. The Company hereby consents,
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pursuant to Section 3.2 of the Stock Option Agreement and Section 6.4(3) of the
Stock Purchase Agreement and otherwise, to the sale and transfer of Options by
the Sellers to the Fund as provided herein. The Company acknowledges and agrees
that as to such Options, the terms of the Stock Option Agreement will continue
to apply and shall be enforceable in accordance with their terms by and against
the Fund, including without limitation Section 2.4 thereof, which makes
applicable to shares of Common Stock purchased through exercise of the Options
the provisions of Section 7 of the Stock Purchase Agreement, which provide
registration rights with respect to such shares. For purposes of such Section 7,
the Fund shall be deemed a Purchaser thereunder and shall have the same rights
as other Purchasers with respect to its shares (other than Section 7.2 thereof).
3. The Fund's Agreement to be Bound.
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The Fund hereby acknowledges and agrees that with respect to the Options
purchased hereunder, and any shares of Common Stock acquired through the
exercise thereof, it shall be bound by the terms of the Stock Option Agreement,
including without limitation Sections 2.6 and 3.2 thereof, which among other
things restrict transfers of the Options and shares of Common Stock acquired
through the exercise thereof.
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Without limiting the generality of the foregoing, the Fund hereby
acknowledges and agrees it shall be bound by the provisions of Section 5.4 of
the Stock Purchase Agreement entitled "Securities Act of 1933" (including
Sections 5.4.1 and 5.4.2 thereunder), Section 5.3 of the Stock Purchase
Agreement entitled "The Shares", Section 5.4 of the Stock Purchase Agreement
entitled "Cooperation with Filings", Section 6.4 of the Stock Purchase Agreement
entitled "Restrictions on Resale" and Section 9 of the Stock Purchase Agreement
entitled "Indemnification by the Purchasers" of the Stock Purchase Agreement
(including Sections 9.1 and 9.2 thereunder) provided, however, that the Fund
shall not provide indemnification with respect to the acts or omissions of any
other Purchaser.
4. Contingent Payment Obligation.
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In the event that the Fund should exercise any of the 1998 Options, or
transfer, sell or assign any of the 1998 Options to a party other than a party
controlled by or under common control with the Fund, the Fund shall, within 10
days after any such transaction, pay in cash to the Sellers, pro rata in
proportion to the 1998 Options sold by the respective Sellers hereunder, an
amount equal to the product of $2 and the number of shares of Common Stock
subject to such 1998 Options exercised, transferred, sold or assigned by the
Fund. In the event of any stock dividend, stock split, combination of shares or
other similar change with respect to the Common Stock of the Company, the amount
payable by the Fund under this Section 4 shall be adjusted accordingly.
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5. Representations and Warranties by Sellers.
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Each Seller jointly and severally represents, warrants and covenants as
follows:
(a) The Sellers have all right, title and interest in and to the
Options, subject to no lien, encumbrance or right of any other party.
(b) The execution, delivery and performance of this Agreement by the
Sellers does not conflict with, or constitute a default under, any agreement or
instrument to which any Seller is a party or is bound.
6. Representations and Warranties by the Fund.
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The Fund represents and warrants as follows:
(a) The Fund is acquiring Options hereunder for investment purposes
only.
(b) The execution, delivery and performance of this Agreement by the
Fund does not conflict with or constitute a default under any agreement or
instrument to which the Fund is a party or is bound.
(c) The Fund is a limited partnership organized under the laws of the
State of Delaware. The execution and delivery of this Agreement, the receipt of
the Options and compliance by the Fund with all of the other provisions of this
Agreement are within the powers and capacity of the Fund.
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(d) Except for a Form 13D under the United States Securities Exchange
Act of 1934, as amended, and Rule 13-d thereunder, and regulatory filings or
approvals with certain state Insurance Departments, no approval, consent or
authorization of, or declaration or filing with, any governmental or judicial
authority is required in connection with the execution and delivery of this
Agreement by the Fund or the performance by the Fund hereunder.
(e) This Agreement has been duly executed by or on behalf of the Fund
and is a valid and binding obligation enforceable against the Fund in accordance
with its terms, except as enforceability thereof may be limited by the exercise
of judicial discretion, the laws of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws from time to time in effect relating to or
affecting generally the enforcement of creditors' rights, and except as
enforcement of remedies may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
7. Condition to Closing. The obligations of each party to this
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Agreement to consummate the transactions contemplated hereby on the Closing Date
are subject to the reasonable satisfaction of each such party that all
regulatory filings required to be made prior to the Closing Date, and all
consents, approvals, permits and authorizations required to be obtained on or
prior to the Closing Date from any governmental authority (including, without
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limitation, the insurance department of any state) in connection with the
transactions contemplated herein shall have been made or obtained, without the
imposition of any material condition, restriction or required undertaking not
expressly set forth in applicable statutes and regulations ("Regulatory
Consents").
8. Covenant to Use All Commercially Reasonable Efforts to Obtain
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Regulatory Consents. Sellers, the Fund and the Company shall, as soon as
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practicable, commence to take all commercially reasonable actions required to
obtain as promptly as practicable all Regulatory Consents necessary to
authorize, approve or permit the consummation of the transactions contemplated
hereby, and Sellers, the Fund and the Company shall cooperate with each other
with respect thereto. In addition, upon the terms and subject to the conditions
herein provided, Sellers, the Fund and the Company covenant and agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions
necessary or appropriate to obtain the Regulatory Consents.
9. Termination. This Agreement may be terminated and the transactions
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contemplated hereby abandoned prior to the Closing Date:
(a) at any time by mutual agreement in writing of the parties hereto;
or
(b) on June 30, 1998 if the Required Consents have not been obtained on
or prior to that date, unless the parties hereto shall agree in writing to
extend the term of this Agreement.
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10. Amendments. No amendment or modification of this Agreement will be
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effective unless it is in writing and duly executed by each party to be charged
thereunder.
11. Counterpart. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HIGH RIDGE CAPITAL PARTNERS LIMITED
PARTNERSHIP
By High Ridge Capital LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Principal
THE SELLERS
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇
THE SEIBELS ▇▇▇▇▇ GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
