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EXHIBIT 10.15(1)
THIS AGREEMENT made this 1st day of September, 1989 between CLIFFSTAN
INVESTMENTS, INC., a corporation existing under the laws of the State of Nevada
and having its principal place of business at 3320 West Sahara Avenue, Suite
380, Las Vegas, Nevada, ("Cliffstan") and PAFCO GENERAL INSURANCE COMPANY, a
corporation existing under the laws of the State of Indiana and having its
principal place of business at 4720 Kingsway Drive, Indianapolis, Indiana,
("Pafco General") and GAGE NORTH HOLDINGS INC., an Ontario corporation having
its head office at 20 Warrington Street, Hamilton, Ontario, ("Gage North");
WHEREAS Pafco General has loaned to Cliffstan the sum of One Million
Seven Hundred Thousand Dollars ($1,700,000.00) (U.S.) in consideration of
which Cliffstan has executed a certain Promissory Note dated September 1, 1989,
("Promissory Note"), a copy of which is attached hereto as Schedule "A";
AND WHEREAS Gage North has agreed for valuable consideration, including
the transfer to it from Symons International Group Ltd. of 4,000 shares of the
common stock of Pafco Financial Holdings Ltd., with Pafco General to guarantee
the repayment by Cliffstan of all amounts owed by it to Pafco General;
NOW THEREFORE for good and valuable consideration, the receipt of which
is hereby acknowledged by each of the parties hereto, the parties hereto agree
as follows:
1. (a) Gage North unconditionally guarantees to Pafco General due
payment by Cliffstan of any and all principal amounts and
interest which are presently owing or which may become owing by
Cliffstan to Pafco General pursuant to the Promissory Note;
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(b) As between Pafco General and Gage North, Gage North is and
shall continue liable as principal debtor under all of the
covenants contained in the Promissory Note notwithstanding any
transaction which may take place between Pafco General and
Cliffstan or any neglect or default of Pafco General which might
otherwise operate as a discharge for the partial or absolute of
Gage North if he were surety only of Cliffstan and without
restricting the generality of the foregoing notwithstanding the
granting of time or other indulgences to Cliffstan;
(c) Pafco General, in its absolute discretion and without
diminishing the liability of Gage North, may grant time or other
indulgences to Cliffstan or any other person or persons now or
hereafter liable to Pafco General in respect to the principal
sum and interest under the Promissory Note and may give up,
modify, vary, exchange, renew or abstain from perfecting or
taking advantage of the benefits of the Promissory Note in whole
or in part and may discharge any part or parts of or accept any
composition or arrangements or realize upon the Promissory Note
and when and in such manner as Pafco General may think expedient
and in no case shall Pafco General be responsible for any
neglect or omission with respect to the Promissory Note. Any
account settled or stated by or between Pafco General and
Cliffstan or admitted by or on behalf of Cliffstan may be
adduced by Pafco General and shall in that case be accepted by
Gage North as conclusive evidence that the balance or amount
thereof thereby appearing is due by Cliffstan to Pafco General;
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(d) Gage North will not at any time claim to be subrogated in any
manner to the position of Pafco General under the Promissory
Note and will not claim the benefit of any security at any time
held by Pafco General; provided, however, that in any event of
Gage North's paying to Pafco General all of the monies remaining
unpaid under the Promissory Note then Gage North, upon making
such payment, shall be entitled to exercise its rights
pursuant to the assignment as hereinafter described in paragraph
3;
(e) Pafco General shall not be bound to exhaust its resources
against Cliffstan or other parties or any security it may hold
before requiring payment from Gage North and Pafco General may
enforce the various remedies available to it and may realize
upon the various securities held by it or any part thereof in
such order as Pafco General may determine;
(f) If default shall occur or demand is made but not satisfied by
Cliffstan under the Promissory Note, Gage North shall forthwith
upon demand being made upon it by Pafco General in writing
served on Gage North or sent by prepaid registered mail at the
address hereinabove indicated pay to Pafco General all
principal, interest, costs and expenses due by virtue of this
Guarantee or the Promissory Note;
(g) In the event that Gage North shall become bankrupt or insolvent
or shall be subject to the provisions of the Bankruptcy Act or
any other act for the benefit of creditors either voluntarily or
under a
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court of competent jurisdiction, or make a general assignment
for the benefit of creditors or otherwise acknowledge
insolvency, then and in any and every such case Pafco General
may demand from Gage North the principal sum owed by Cliffstan
and at such time outstanding, together with all interest, costs,
expenses and administration fees and all sums of money which may
be added or become due to Pafco General by virtue of the
provisions of this Guarantee notwithstanding that the principal
sum and interest may not be otherwise due and payable under the
Promissory Note;
(b) This Guarantee shall extend to and shall enure to the benefit
of Pafco General and its successors and assigns and reference
herein to Gage North is a reference to and shall be construed
as including Gage North, its heirs, executors, administrators
and assigns.
2. As security for the obligations of Gage North pursuant to paragraph 1
hereof, Gage North agrees to provide to Pafco General a mortgage substantially
in the form annexed hereto as Schedule "B", which mortgage shall be registered
on title.
3. As security for the obligations of Cliffstan to reimburse Gage North in
the event that Gage North has paid Pafco General as set out in subparagraph
1(f) (which payment is also referred to in subparagraph 1(d)), Cliffstan hereby
assigns, transfers and otherwise conveys to Gage North all of its rights, title
and interest in a certain promissory note in favour of Cliffstan from Symons
International Group Ltd. dated September 1, 1989 in the principal amount of
$1,700,000.00 (U.S.), a copy of which is annexed hereto as Schedule C, subject
to the terms of the Subordination Agreement in favour of Fleet National Bank;
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provided that it is a condition of this assignment that so long as Cliffstan
performs its obligations to Pafco General pursuant to the Promissory Note then
this assignment shall be null and void, otherwise it shall be in full force and
effect.
4. In the event of Gage North paying to Pafco General all of the monies
remaining unpaid under the Promissory Note being entitled thereby to exercise
its rights under the assignment referred to in paragraph 3 then immediately upon
such event occurring Pafco General and Gage North each agree with Cliffstan
that Cliffstan is released and absolved of any and all liability for payment
of any monies under the Promissory Note and Pafco General and Gage North each
hereby forever release and discharge Cliffstan from any and all claims, demand,
actions, suits or proceedings of whatsoever kind or nature against
Cliffstan by reason of the Promissory Notes and the money advanced in
accordance therewith.
5. This Agreement shall be binding upon and shall enure to the benefit of
the parties hereto and their respective successors and assigns.
6. Each reference in this Agreement to payment of the Promissory Note in
full shall mean final payment of the full amount thereof through receipt thereof
by Pafco General of immediately available lawful money of the United States to
the extent that such payments are retained by Pafco General.
7. This Agreement was delivered in the State of Indiana and for all
purposes shall be governed by and construed in accordance with the local laws of
said state without regard to said state's conflict of laws rules.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first written above.
CLIFFSTAN INVESTMENTS, INC.
By: /s/ Robert Amira
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PAFCO GENERAL INSURANCE COMPANY
By: /s/ Douglas Symons
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GAGE NORTH HOLDINGS INC.
By: /s/ Cannot read signatures
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ACKNOWLEDGED and the assignment in
paragraph 3 is hereby consented to
this 7th day of September, 1989.
SYMONS INTERNATIONAL GROUP LTD.
By: /s/ G. Symons
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By: /s/ cannot read signature
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