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HomeMy WebLinkAboutLetters 3October 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 Iimited 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. 1 lek: 11111111111rI F.`TT7 T,a n9iTTiiIia "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. I1. 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 IOSANCEIIS • SANFRANCISCO • CHICAGO • PIIILADIIPNIA • NEWYOBN • WASHINGTOND.C. • NOSTON 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 Sarmiento. 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. T.. .1 • ,4•,,. ..,... A A -1 it iti�( ; 3 i �' �, ,� , � g 1119 m, I ir!. It 0 ., Lr,s4 i�raritarw[vl'e3�r,1TavailiwWirA.t:T Z�� I1tr1�T71'J;1��,�;fa'r FUEL MIAMI LLC By; Sincerely, FUEL OUTDOOR HOLDINGS LLC By: Michael A. Freedman Michael A. Freedman Chief Executive Officer Chief Executive Officer Schedule A • HICNGD • PHILKOEIPHIA • NEW YOHII • WASHIKGTON D.C. • ROSTON 6..0 Sarmiento O U T o o❑ R A a V E P.. T I S I N G 2610 North Miami Avenue Miami, Florida 33127 tel: 305.400.7355 fax: 305.400.9991 www.sarmiento.net Mr. P.Hernandex Att. Stephanie Grindell October 1 0t, 2006 Ms. Stephanie N. Grindell Director of Public Works City of Miami Dear Mrs. Grindell: As per tine Agreement between the City of Miami and Sarmiento Advertising Group LLC, for bus benches design, installation and maintenance, please note that Sarmiento wishes to exercise the right to renew the contract under the conditions of Article 3.iI, Section 3.2. Guillermo Victoria Director %E6=N T 00 :3S id S)iNoM o I 1 1d A1I D : aI O T t7S0S2S0E : }Sa3 WU60:60 9002-0£-10o Kt GOO &Vert% Slitsch Honorable Pedro Hernandez City Manager City of Miami 444 S.W. 2"'I Avenue 10s4 Floor Miami, FL 33130 Dear City Manager Hernandez, 1 wanted to take this opportunity to thank you and Mary Conway for taking so much time out of your busy schedules on Wednesday, October 46 to meet with Lucia Dougherty, Guillermo Victoria, Pablo Cremaschi, and myself to discuss the trawler of Sarmicnto Advertising Group LLC, to Fuel. As discussed, we look forward to this matter being expeditiously placed on the agenda for the Commissioner's meeting scheduled to take place on October 26, 2006. We look forward to hearing from you office repotting what additional information you office will require from us in preparation for the Commissioner's meeting on October 26, 2006. Thank you for you attention to this matter, and we at Fuel look forward to working with you, your staff' and the City of .Miami for a very long time to come, Sincerely yours, Michael A. Freedman Chief Executive Officer Cc: Me Mary Conway, PE Ms, Lucia Dougherty Mr. Guillermo Victoria Mr, Pablo Cremaschi ii f--•'� y `' 1 rl U �. f iliS ANGE IS • SAN FRANCISCO • t:ltICRG0 Pl11tf11EIP111A • lyttfl t'URK • IMS111MG1UN U.C. • ttOS1011 rwx.loIIau10oor,com • 140 ► IN Avt0of• Luvr TN moo • wy, or 1.910 •mombsr of 1.1.11. • P. 112 0 .'3Si r. t11.I 7.TI$ INSURANCE REQUIREMENTS FOR A CERTIFICATE OF INSURANCE -BUS BENCHES/BUS SHELTERS I. Commercial General Liability A. Limits of Liability Bodily Injury and Property Damage Liability Each Occurrence $1,000,000 Genera! Aggregate Limit $ 2,000,000 Products/Completed Operations $ 1,000,000 Personal and Advertising Injury $1,000,000 B. Endorsements Required City of Miami included as an Additional Insured Employees included as insured II. Business Automobile Liability A. Limits of Liability Bodily Injury and Property Damage Liability Combined Single Limit Any Auto Including 1-Iired, Borrowed or Non -Owned Autos Any One Accident $ 1,000,000 B. Endorsements Required City of Miami included as an Additional Insured Ill. Worker's Compensation Limits of Liability Statutory -State of Florida IV. Employer's Liability A. Limits of Liability $100,000 for bodily injury caused by an accident, each accident. $ 1 00,000 for bodily injury caused by disease, each employee $500,000 for bodily injury caused by disease, policy limit The above policies shall provide the City of Miami with written notice of cancellation or material change from the insurer not less than (30) days prior to any such cancellation or material change. Companies authorized to do business in the State of Florida, with the following qualifications, shall issue all insurance policies required above: The company must be rated no less than "A" as to management, and no less than "Class V" as to Financial Strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent. All policies and /or certificates of insurance are subject to review and verification by Risk Management prior to insurance approval. Greenberg Traurig Simon fo' o TO, (spa)679.0044 fex (306)679.0717 Ow1050968w.coni August 31, 2006 Mr. Pedro A. Hernandez Manager City of Miami, City Hall 3500 Pan Arnerican Drive Miami , FL 33133-5595 Re: Request for Approval of Assignment of Contract between The City of Miami and Sarmiento Advertising Group LLC Dear Mr. Manager: Our office represents Sarmiento Advertising Group, LLC (Sarmiento). On April 18, 2002, Sarmiento executed an agreement with the City of Miami (City) for the provision of bus benches for use by the general public within the City (Agreement). Subsequent amendments to the Agreement were executed by the City and Sarmiento on September 18, 2002, February 27, 2003, August 18, 2003 and July 20th, 2004 (Amendments). In addition to the Agreement and the Amendments, the City and Sarmiento executed a Professional Services Agreement (PSA) an July 28th, 2004 for the maintenance of City bus shelters, in accordance with Article IX, Section a,3 and Article X, Section 10.8 of the Agreement, Sarmiento respectfully requests approval of a proposed assignment of the Agreement, as revised by the Amendments, to Fuel Miami, LLC, a Delaware limited liability corporation (FUEL). When read together, the above two sections of the Agreement require the prior approval and consent of the City Commission before the assignment, sale or transfer of the Agreement. A sale or transfer of a majority of Sarmiento's stock or partnership shares is considered an assignment of the Agreement. It is Sarmiento's intent, If approved by the City Commission, to sell and transfer 100% of its stock to FUEL. Likewise, Sarmiento requests acknowledgment by the City that the proposed assignment of the Agreement to FUEL will not affect Sarmiento's rights under the PSA tnpnlirrglriWtB,P.A. I Attnrntyi s LAw 17,71 hnrl'il verso i Mi,u"i.►t 13111 I Teo VCIErifin l I'm )05,4;79PP/1/ I wwwgTlowcwn £O ' d 7t1101. Mr. Pedro A. Hernandez August 31, 2006 Page 2 FUEL Is a traditional Out -Of -Home Media Company, based in New York City, with a nationwide presence and an. extensive asset base of display panels, similar to Sarmiento's, in Boston, New York, Philadelphia, Washington D.C., Chicago, San Francisco, and Los Angeles. FUEL Is active in 7 of the 15 largest DMA's In the U.S. and has a deep and experienced management team. Fuel has the requisite management expertise, and, as a portiollo• company of Och-Ziff Capital Management, a global institutional asset management firm with over $18 billion of capital under management, the financial backing to undertake the ownership of Sarmlento and otherwise perform under all aspects of Sarmiento's Agreement with the City. Most importantly, since FUEL is acquiring Sarmiento itself, the same management team that has so ably performed on behalf of the City will remain In charge of the concession. Enclosed for your review is additional background information on FUEL. We understand that your office may require additional information on FUEL as a potential assignee under the rights of the Agreement. Please feel free to contact my office at your earliest convenience so we can facilitate ail such information. Please be informed that Sarmlento is currently In good standing under the terms of the Agreement and the request for approval of assignment of the Agreement Is not the result of insolvency, bankruptcy proceedings or any other condition affecting Sarrniento's ability to perform thereunder. We respectfully request an expeditious review and disposition of Sarmiento's request for approval assignment of its rights under the Agreement to Fuel. Sarmlento firmly believes that FUEL will provide the same level of excellent service to the City that Sarmiento has traditionally delivered under the Agreement. Should you have any questions or comments, please contact my office at your earliest convenience. Sincerely mon Ferro SF Enclosures 1,.1 i+gr1 Af. E 7141 Me. PA.