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EXHIBIT 10.15(4)
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SHARE PLEDGE AGREEMENT
TO: PAFCO GENERAL INSURANCE COMPANY
WHEREAS Pafco General Insurance Company, a corporation incorporated pursuant to
the laws of the State of Indiana ("Pafco"), lent the sum of $1,700,000 U.S. to
Cliffstan Investments, Inc., a corporation incorporated pursuant to the laws of
the State of Nevada ("Cliffstan"), as evidenced by a note dated September 1,
1989 as amended (the "Note");
AND WHEREAS Pafco obtained as security for the above loan a guarantee of the
amounts due under the note in the amount of $1,700,000 U.S. from Gage North
Holdings Inc., a corporation incorporated pursuant to the laws of Ontario, which
guarantee was supported by a collateral mortgage in the principal amount of
$1,700,000 U.S.;
AND WHEREAS Pafco assigned the note and the security to Granite Reinsurance
Company Ltd., a corporation incorporated pursuant to the laws of Barbados
("Granite Re"), pursuant to an agreement dated September 30, 1992 (the
"Purchase Agreement");
AND WHEREAS by an agreement dated on or about September 1, 1989, Symons
International Group Ltd. ("SIG Ltd.") agreed to discharge the obligations of
Cliffstan under the note;
AND WHEREAS Pafco and Granite Re wish to obtain additional security from
Cliffstan or SIG Ltd. for the repayment of their respective interests in the
Note as they may be from time to time;
AND WHEREAS SIG Ltd. has agreed to provide additional security to Pafco and
Granite Re in the form of a pledge of common shares owned by SIG Ltd. in the
capital of Goran Capital Inc., a corporation incorporated pursuant to the laws
of Ontario.
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NOW THEREFORE, the parties hereto agree as follows:
SIG Ltd. (the "Pledgor"), grants to Pafco and Granite Re (the "Pledgee") a
pledge of and a security interest in those securities described in the
"Schedule" attached hereto or which may be described in any supplemental
Schedule which hereafter may be delivered by the Pledgor to the Pledgee, which
supplemental Schedule contains a reference to this Pledge Agreement (the
"Pledged Securities" or "Securities").
1 . Obligations Secured. This Pledge Agreement has been executed by the
Pledgor and delivered to the Pledgee to secure the prompt payment and
performance of:
(i) all of the obligations of Granite Re pursuant to the Purchase
Agreement, whereby Granite Re purchased the Note; and
(ii) all of the obligations of Cliffstan and Cliffstan's successors and
assigns under the Note.
2. Perfection of Pledge. The Pledgor shall deliver to Pledgee a
certificate or certificate representing all of the Pledged Securities. In
addition, the Pledgor shall execute and deliver to the Pledgee any "stock
power", "bond power", or other instrument of assignment and any financing
statement, or other instrument deemed necessary by the Pledgee to further
evidence or perfect the Pledgee's security interest. The Pledgee may file any
financing statement to perfect its security interest signed by the Pledgee or by
the Pledgor alone. The Pledgor appoints and constitutes the Pledgee as its
agent and any officer of the Pledgee as the Pledgor's attorney-in- fact for the
purposes of: (i) executing instruments of assignment of any Pledged Security
including "stock powers" and "bond powers", and (ii) taking any action necessary
to cause the Pledgee's security interest to be registered on the books of the
issuer of such Securities. Such appointment and such power are irrevocable so
long as the Purchase Agreement and the Note are secured by the pledge and
security interest evidenced by this Pledge Agreement.
3. Proceeds - Dividends. The Pledgee's security interest will extend to
the proceeds of any Pledged Securities and any Securities which may be acquired
by the Pledgor by reason of any reinvestment of such proceeds. The Pledgee's
security interest will also extend to any cash, securities or any other property
which may be or become payable or distributable to the Pledgor an account of any
Pledged Securities. The Pledgor will deliver to the Pledgee any certificate
which the Pledgor may receive, as a dividend with respect to the Pledged
Securities, representing any Securities which are subject to the Pledgee's
security interest, together with appropriate "stock powers" or "bond powers" or
other appropriate instruments of assignment.
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4. Warranty of Ownership. The Pledgor represents, warrants and
covenants that the Pledgor is the owner of all the Pledged Securities and will
be the owner of any Pledged Securities hereafter delivered to the Pledgee or
which may otherwise be subjected to the Pledgee's security interest under this
Pledge Agreement, free of any other security interests or any interest
whatsoever of any other party. and that the Pledgor has and will continue to
have full power, right and authority to grant to the Pledgee a pledge of and a
security interest in all Pledged Securities.
5. Voting Rights. Unless a default shall have occurred and be
continuing under the Purchase Agreement and/or the Note, the Pledgor shall be
entitled to exercise all voting rights with respect to the Pledged Securities
and to execute consents, in respect thereof, and to consent to, ratify or waive
notice of any or all meetings of the holders of Securities of a class of which
any of the Pledged Securities are a part, with the same force and effect as if
this Pledge Agreement had not been executed and delivered. If necessary and
upon the receipt of the written request from the Pledgor, the Pledgee shall from
time to time execute and deliver appropriate proxies to enable the Pledgor to
exercise the voting and similar rights reserved to the Pledgor.
6. Remedies. Upon the occurrence of a default under the Purchase
Agreement and/or the Note, the Pledgee shall have all the rights, remedies and
options in respect to the Pledged Securities of a secured party under the
Uniform Commercial Code, and all other rights and remedies provided by law. In
exercising any such remedies, the Pledgee may sell all the Pledged Securities as
a unit, even though the price obtained may be in excess of the amount remaining
unpaid under the Purchase Agreement and the Note. The Pledgee is authorized at
any sale or other disposition of the Pledged Securities, if it deems it
advisable so to do, to restrict the prospective bidders or purchasers to persons
who will represent and agree that they are purchasing for their own accounts,
for investment and not with a view to the distribution or resale of any of the
Pledged Securities. The Pledgee may purchase the Pledged Securities or any part
thereof at any sale or sales. Any requirements of the Uniform Commercial Code
as to reasonable notice shall be met by giving notice to the Pledgor sixty (60)
days prior to such sale or other event giving rise to the requirement for
notice.
7. Application of Proceeds. The proceeds of any sale of all or any part
of the Pledged Securities, and any other cash at the time held by the Pledgee
under this Pledge Agreement, shall be applied by the Pledgee in the following
order:
a. to the payment of costs and expenses of any such sale,
including reasonable compensation to the Pledgee and its agents and
counsel, and all other expenses, liabilities and advances made or incurred
by the Pledgee in
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connection herewith;
b. to the payment of any such sums owing to Pledgee pursuant to the
Purchase Agreement in such order as the Pledgee may determine, and
c. to the payment of any such sums owing to Pledgee pursuant to the
Note in such order as Pledgee may determine; and
d. after all obligations under the Note and Purchase Agreement
have been satisfied, to the payment to the Pledgor or the Pledgor's
successors or assigns, or as a court of competent jurisdiction may direct,
of any surplus then remaining from such proceeds.
8. Pledge Absolute. This Pledge Agreement and the pledge and
security interest provided for hereunder shall be absolute and unconditional,
irrespective of the irregularity, invalidity or unenforceability of the Purchase
Agreement and/or the Note.
9. Miscellaneous. This Pledge Agreement shall be binding upon the
Pledgor and upon Pledgor's legal representatives, successors and assigns. If
any provision of this Pledge Agreement is determined to be illegal or
unenforceable, such provision shall be deemed to be severable from the balance
of the provisions of this Pledge Agreement and the remaining provisions shall be
enforceable in accordance with their terms. This Pledge Agreement is made under
and will be governed by the laws of the State of Indiana, except to the extent
that Indiana's conflicts of law rules would require the substantive rules of law
of any other jurisdiction to be applied.
Dated: April 22, 1994.
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SYMONS INTERNATIONAL GROUP LTD.
Per: /s/ Alan G. Symons
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Printed: President Alan G. Symons
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