HomeMy WebLinkAboutExhibitOctober 29, 2006
The City of Miami
Attn: Pedro G. Hernandez
3500 Pan American Drive
Miami, Florida 33133-5595
Re: Agreement by and between The City of Miami and Sarmiento
Advertising Group, L.L.C. for Bus Bench Design, Installation and
Maintenance, dated April 18, 2002, as amended through July 20, 2004
(the "Concession Agreement"); and
Professional Services Agreement between The City of Miami and
Sarmiento Advertising Group, L.L.C., dated July 2004 (the "Services
Agreement")
Ladies and Gentlemen:
This letter (this "Letter") is being delivered to The City of Miami, a municipal
corporation of the State of Florida, in connection with the assignment and assumption
(the "Assignment") of the Concession Agreement and the Services Agreement by the
Sarmiento Advertising Group, L.L.C., a Florida limited liability company ("Sarmiento"),
to Fuel Miami LLC, a Delaware limited liability company ("Fuel"), pursuant to a
Membership Interest Purchase Agreement by and between Fuel, as buyer, and Orlando R.
Terranova and Eduardo R. Terranova, as sellers, dated as of July 24, 2006 (the "Purchase
Agreement"). Capitalized terms used but not defined herein have the respective
meanings set forth in the Purchase Agreement. Upon approval by the City Commission of
the sale and transfer of 100% of Sarmiento's stock to Fuel, Fuel and its parent company
each agree to enter into an Assignment and Assumption Agreement with the City,
including but not limited to the following terms and conditions:
I. Employment of Key Employees
Fuel shall undertake and agree to employ each of Pablo Cremaschi, Chief
Executive Officer of Sarmiento, and Guillermo Victoria, Corporate Business Director of
Sarmiento (together, the "Key Employees"), for a period of 36 months, plus a six month
transition period (the "Employment Period") following the closing of the transactions
contemplated by the Purchase Agreement (the "Closing").
Fuel shall be expressly permitted under the Assignment and Assumption
Agreement to terminate the employment of any Key Employee at any time for Cause.
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"Cause" shall mean, with respect to each Key Employee, (i) an act or omission that
results in the imposition by any governmental authority of any restriction or limitation on
such Key Employee's ability to perform services; (ii) the commission of (A) a felony; (B)
a misdemeanor involving moral turpitude; (C) a misdemeanor involving dishonesty or
disloyalty with respect to Fuel, any of its respective affiliates or any customer or supplier
of any of the foregoing; or (D) any act or omission involving fraud; (iii) use of illegal
drugs or abuse of legal drugs or excess consumption of alcohol interfering with the
performance of such Key Employee's duties or causing Fuel disrepute or economic harm;
(iv) failure to perform duties as reasonably directed by Fuel; (v) gross negligence or
willful misconduct; or (vi) an act or omission that results in an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any government official or any
political party or official thereof or any candidate for political office, in contravention of
applicable federal, state, local or foreign law.
If prior to the expiration of the Employment Period, a Key Employee's
employment by Fuel is terminated by the Key Employee for any reason, or by reason of
the death or disability of such Key Employee, then Fuel shall have no further obligations
under this Letter with respect to such Key Employee.
II. Consent of Fuel to the Assignment
Fuel shall assume and agree to perform and fulfill all of the terms, conditions, covenants
and obligations of Sarmiento under the Concession Agreement and the Services
Agreement.
III. Guarantee of Performance
Fuel's parent company, Fuel Outdoor Holdings LLC, a Delaware limited liability
company ("Holdings"), hereby represents and warrants that it holds beneficially and of
record one hundred percent (100%) of the issued and outstanding equity interests of Fuel.
Holdings shall unconditionally guarantee to and for the benefit of The City of Miami, as
primary obligor and not as surety, the complete performance by Fuel of all Fuel's
obligations, when due, pursuant to the City's Resolution, the Concession Agreement and
the Services Agreement. The foregoing guarantee will not be a guarantee of payment or
collection.
IV. Payment Bond
Fuel shall undertake and agree to furnish to The City of Miami a letter of credit in the
amount of $250,000 (the "Payment Bond") in connection with the Assignment and
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Assumption Agreement, guaranteeing the faithful payment of its obligations, when due,
pursuant to this Letter, the City Resolution, and the Concession Agreement. The
Payment Bond shall at Closing replace the current letter of credit on file with The City of
Miami on behalf of Sarrniento. Please reference the letter from the Bank of America set
forth on Schedule A.
V. Insurance
Fuel shall provide such insurance as requested by the City's Risk Management
Department
VI. Effectiveness of Undertakings
The Assignment and Assumption Agreement shall not be enforceable as to any party
hereto until such time that the Closing shall have occurred and the Assignment shall be
effective.
VII. The Assignment and Assumption Agreement may not be assigned without the
express written consent of Fuel and The City of Miami (which consent may be granted or
withheld in the sole discretion of Fuel and The City of Miami), as the case may be.
VIII. The Assignment and Assumption Agreement shall also contain such other
provisions as required by the City.
We look forward to working with you following the proposed assignment and
assumption of the Concession Agreement.
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FUEL MIAMI LLC
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Sincerely,
FUEL OUTDOOR HOLDINGS LLC
By; By:
Michael A. Freedman Michael A. Freedman
Chief Executive Officer Chief Executive Officer
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Schedule A
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