PARTICIPATION AGREEMENT
This Participation Agreement ("Agreement") made as of July 11, 1994
by and between STRATEGICA CAPITAL CORPORATION, a Florida corporation
("Strategica") and _________________________________________________________
("Participant")
WHEREAS, Strategica is the owner or holder of record of the interest or
other property identified in Exhibit "A" attached hereto and incorporated herein
(the Property); and
WHEREAS, Strategica owns or holds the interest in the Property for
itself or for itself and for certain participants with Strategica in the
Property, whether now in existence or hereafter determined; and
WHEREAS, unless otherwise determined by Strategica in its discretion,
Strategica shall own or hold said interest in the Property for Strategica and
any such participants as may from time to time exist, in lieu of said interest
being owned or held in the name of Strategica and each of the participants; and
WHEREAS, Strategica may continue to own and hold such interest in its
own name or in the name of any person or entity selected by Strategica to be its
agent or designee, and, if so determined by Strategica, such interest in the
Property may be transferred to the name of any designee or agent of Strategica
or to any person or entity under contract with Strategica, at any time as
directed by Strategica; and
WHEREAS, the interest in the Property shall be owned or held by or at
the direction of Strategica for and on behalf of the Participant and all other
participants, subject, however, to the terms of this Agreement; and
WHEREAS, the parties hereto desire and intend to formulate and establish
their respective obligations, rights and remedies regarding their interest in
the Property;
NOW, THEREFORE, in consideration of the covenants and promises
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto do covenant
and agree as follows:
1. The above recitals are correct and are incorporated into this
Agreement.
2. $2,500,000 was funded or committed by Strategica to be funded to
acquire the Property (the Property Commitment). Pursuant to this Agreement,
Participant hereby acquires a participation interest (the Participation
Interest) in the Property for $100,000 (the Participation Price). The
Participation price shall be paid to Strategica or funded as directed by
Strategica upon demand. The Participation Interest in the Property currently
represents a 4% interest in the Property, which percentage was determined by a
fraction, the numerator of which shall be the Participation price and the
denominator of which shall be the Property Commitment (whether or not said total
amount has actually been fullY funded or is ever fully funded). The
Participation Interest may, in accordance with this Agreement, change and
readjust from time to time as set forth in this Agreement.
3. As of the date hereof, various parties may own participation
interests in the Property as a participant with Strategica. From time to time in
its discretion, Strategica may assign, sell or convey additional participations
in the property and Strategica may acquire certain of the participation
interests in the Property from participants who desire to dispose of heir
interest or any part thereof. Further, and from time to time in its discretion,
Strategica may acquire all or any part of the interest of any other person or
entity In any of the assets or underlying property forming a part of the
Property or may participate further in any sale of any interest owned by others
in the Property. Further, anD from time to time in Strategicas discretion, the
Participant shall fund, on a PRO RATA basis as demanded by Strategica,
additional amounts in connection with the Property, whether to protect its
interest in the Property or otherwise and, in such event, the respective
positions of the participants in the Property shall be automatically readjusted
proportionately.
4. By participating in the Property, the Participant acknowledges and
agrees that Strategica may, from time to time, receive funds in connection with
the Property in the form of interest payments and principal repayments, and that
a PRO RATA portion of the said funds received shall be paid to Participant on
the monies funded to acquire their interest in the Property until the monies
advanced by Participant are fully repaid. From those payments, Participant shall
receive its PRO RATA share thereof. Notwithstanding anything to the contrary
herein, however, Participant shall only be entitled to receive PRO RATA interest
accruing after the date of purchase of its Participation Interest. After the
participation prices paid by all participants in the property are fully repaid,
together with interest thereon, any cash, gain, benefits and ownership derived
from or in connection with the Property shall be split equally between
Strategica Group, (Group) on the one hand and Strategica together with all
participants on the other hand. The Participant further acknowledges that it
shall not be entitled to share in any portion of the cash, gain, benefits and
ownership on this investment in the Property as to any benefit and interest
which inures to Group. Further, any equity ownership in the project or business
which is a part of the property shall vest immediately one-half in Group and
one-half in Strategica together with all participants in the Property.
5. Strategica shall have the right to administer the Property, subject
to any rights of others as determined by Strategica, and to make such advances
as may be required pursuant to the provisions of any agreement from time to time
in effect pertaining to the Property. Any and all funds advanced by Strategica
shall be on a PRO RATa basis with Participant and all other participants in the
interest in the Property held in the names of Strategica.
6. The participation of each participant in the Property shall be PRO
RATA and no participant shall have priority over another participant. The
parties hereto shall share proportionately in the receipt of principal as paid
by the borrower, in conformity with the proportion which their respective
contributions from time to time bear in relation to the total amount of money
contributed by all parties.
7. In its discretion, Strategica alone shall act for all participants in
connection with the property. All decisions of Strategica in connection with the
Property shall be binding on all participants without the need for any consent
of any of the participants. Strategica shall make all decisions regarding the
administration of funds and the payment or distribution of monies to
participants and shall have the right to approve or disapprove any request of
any person or entity in connection with the Property without consultation or
permission of any of the participants. The Participant acknowledges that
Strategica may, and hereby authorizes Strategica to, refinance the project or
business which is the subject of the Property and to increase the debt on such
property and, in connection therewith, to grant equity interests and other forms
of compensation to the lender and any mortgage broker involved with such
refinancing. In such event, the Participant acknowledges and accepts a dilution
of its interest in the Property provided, however, that any such dilution shall
be uniform to all participants.
8. Strategica shall have custody and maintain possession, on behalf of
itself and the participants, of all documents relating to the Property and to
Strategicas interest in the Property.
9. In its discretion, Strategica may make, or consent to, any
modification or alteration of any documents relating to the Property or make or
consent to any release of any person or entity or collateral which supports the
Property, or waive any claim or remedy under any loan document or consent to the
creation of any junior or inferior liens against the Property or any assets
pertaining thereto. Strategica need not deliver any notice of any proposed
action or receive the approval of any participant before approving, or as a
condition to approving, any such action.
10. Participant may not sell, assign, convey, pledge or hypothecate its
interest in the Property without Strategicas prior written consent in its
discretion.
11. Strategica shall have the right to collect the principal of, and any
interest due on, and any other sums payable under, or in connection with the
Property or any loan document pertaining thereto and all other items due or
collectible in connection with the Property and any related loan documents as
the same become due, collectible or payable. Strategica, subject to the rights
of Group, shall promptly account for and pay to the Participant the Participants
proportionate share of all amounts paid to Strategica. All such payments or
collections shall be remitted to participants office at the location provided in
writing to Strategica or at the location designated on the books of Strategica.
12. Strategica shall decide upon the exercise of any and all rights and
remedies in connection with the Property, the security therefor, and any legal
action to be taken. Strategica may, but shall not be obligated to, seek the
consent of any action to be taken in connection with the Property and, upon any
such request, the Participant shall, within 10 days of such request, notify
Strategica of any response to the request. Failure to timely deliver a complete
response to the request shall be deemed an approval of the request. If
Strategica and Participant or any of the other participants fail to achieve
mutuality of consent with respect to any decision relating to the Property for
which Strategica shall have made a request, including any decision which relates
to a matter affecting the Property or the project or business pertaining to the
Property, or any security therefor, or any action to be taken in connection
therewith, Strategica shall be free to act in its discretion and the parties
agree to hold Strategica and its officers, directors and consultants harmless in
connection with any such action taken by Strategica.
13. Strategica shall at all times maintain accurate books of account and
records reflecting the respective interests in the Property. Such books and
records shall be kept in a manner accessible at Strategicas principal office for
inspection by duly
authorized representatives or examining authorities of the Participant
upon request during business hours.
14. Nothing herein shall be deemed to have created a joint venture or
partnership between the parties; and neither of the parties shall be obligated
for the acts or omissions of the other in any matter or transaction whatsoever,
except as expressly provided herein.
15. If any trustee or other designee of Strategica acquires the fee
simple title to the land and improvements, whether by foreclosure or acceptance
of a deed in lieu thereof, it is agreed that such acquisition is for convenience
only and that the respective proportionate interests of the parties shall apply
to the ownership thereof, each being deemed to have an undivided interest in the
portion of the Property therein (but not in Groups portion therein); and all
gains or losses resulting from the sale thereof and all other sums received or
costs reasonably incurred in connection with the ownership, operation and
maintenance of the property shall be shared ratably in accordance with the
respective undivided interests of the participants. During the period of any
ownership of the property by Strategica or its designee and in the event of any
sale of the property in which a purchase money loan shall be taken as part of
the consideration, this Agreement shall continue in full force and effect and
shall govern the rights and obligations of the parties.
16. Except as specifically set forth herein, no party to this Agreement
has made any express or implied warranties of any kind and neither shall be
liable to the other for any loss not due to its own intentional misconduct, but
all losses shall be borne ratably by all participants in accordance with their
respective interests in the Property and the security therefor.
17. Strategica and its officers, directors, employees, consultants,
counsel, agents and affiliates (collectively, Affiliates) shall not be liable to
participant or, if applicable, to any officer, director or shareholder of a
Participant, for any error of judgment or mistake of law or any loss or damage
with respect to the Property or the matters contemplated by this Agreement or as
to any deployment of funds in connection with the Property or the security
therefor or the matters contemplated by this Agreement or arising from any act
or omission of Strategica or any of its Affiliates in the performance of any of
its rights or obligations hereunder, unless such loss or damage is the result of
bad xxxxx xxxxx negligence or willful misconduct. The term Affiliates shall
include and officer or Strategica who acted as trustee for Strategica, and
Group, and any of their respective Affiliates.
18. The Participant, together with the other participants, shall
indemnify and hold harmless, to the extent permitted by law, Strategica and any
of the Affiliates, who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (including any action by or in the
right of any participant), by reason of any acts or omissions or alleged acts or
omissions arising out of the activities of such person, if such activities were
performed in good faith either on behalf of Strategica or any of the Affiliates
or in furtherance of the interest of Strategica or any of the Affiliates, and in
a manner reasonably believed by such person to be within the scope of the
authority conferred by this Agreement or by law against losses, damages or
expenses for which such person has not otherwise been reimbursed (including, but
not limited to, accountants and attorneys fees, judgments, fines and amounts
paid in settlement) actually and reasonably incurred by such person in
connection with such action, suit or proceeding, so long as such person was
found not guilty of bad faith willful misconduct under such contract, and, with
respect to any criminal action or proceedings, his conduct was not determined to
be unlawful by final unappealable judgment of a court of competent jurisdiction.
19. This Agreement shall be construed in accordance with the laws of the
State of Florida, without giving effect to the principals of conflicts of laws
and may not be modified except by a writing signed by the parties or their
successors in interest. This Agreement shall inure to the benefits of and shall
be binding upon the parties and their respective successors and assigns, but
nothing herein shall be deemed an authorization to any of the parties to assign
its rights and obligations hereunder, except has hereinbefore expressly
provided.
20. All notices, demands, requests or other communications which may be
or are required to be given, served or sent by any party to the other shall be
in writing and shall be deemed to have been properly given or sent by hand
delivery, federal express or other overnight courier, or by certified or
registered mail, postage prepaid, to the party at the address given previously
herein.
21. No party to this Agreement shall have any obligation to perform
under this provisions of this Agreement until and unless all parties hereto have
executed same.
22. This Agreement may be executed in counterparts, each of which shall
be considered an original.
23. The prevailing party in any litigation shall be entitled to recover
attorneys fees and costs at all judicial levels and proceedings.
IN WITNESS WHEREOF, the parties hereto have executed this Participation
Agreement the day and year first above written.
WITNESSES: STRATEGICA CAPITAL CORPORATION
/ILLEGIBLE/ BY:XXXX X. XXXXXXXX (SEAL)
-----------------------
/ILLEGIBLE/ XXXX X. XXXXXXXX
/ILLEGIBLE/ _____________________________________
/ILLEGIBLE/
EXHIBIT "A" TO PARTICIPATION AGREEMENT
DESCRIPTION OF PROPERTY
All advances by Strategica Capital Corporation to Xxxxx Environmental
Corporation and related security interests in assets, contractual agreements and
equity ownership currently existing or hereafter created.
Strategica Capital Corporation agreed to loan up to $2,500,000 to Xxxxx
Environmental Corporation under certain circumstances.
