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HomeMy WebLinkAboutExhibit 1RELEASE AND SETTLEMENT AGREEMENT This Release and Settlement Agreement (the "Agreement") is entered into as of the day of , 2008 by and between Bayside Marketplace, LLC, a Delaware limited liability company f/k/a Bayside Center Limited Partnership ("Bayside"), and the City of Miami, Florida (the "City"). RECITALS WHEREAS, in 1985 the City and Bayside entered into several agreements relating to the development of a certain portion of Bayfront Park including, inter alia,: (i) a Garage Lease Agreement, dated January 14, 1985, as amended and restated from time to time ("Garage Lease"); (ii) a Retail Lease Agreement, dated January 14, 1985, as amended and restated from time to time ("Retail Lease"); (iii) a Minority Participation Agreement, dated January 14, 1985 and (iv) a Miamarina Agreement dated October 24, 1985; and WHEREAS, Bayside Center Limited Partnership, pursuant to a merger involving General Growth Properties, Inc., became Bayside Marketplace, LLC after the merger; and WHEREAS, A dispute between the City and Bayside, arising out of Bayside's compliance with and performance under the Garage Lease and the Minority Participation Agreement, resulted in the City filing an arbitration request (the "Arbitration Request"), Case No. 32 115 Y 0068707, against Bayside with the American Arbitration Association (the "Arbitration"); and WHEREAS, pursuant to extensive negotiations, including a mediation that occurred in Miami, Florida on October 7 and 8, 2008, between the City and Bayside (the "Settling Parties" or "Settling Party" if used in the singular), the Settling Parties have agreed to compromise, settle, and release the claims in the Arbitration; and 1 WHEREAS, the parties, through their respective counsel, signed a document that outlined the substantive agreement and conditions between the parties; and WHEREAS, the parties desire to memorialize the overall settlement in this Agreement; and WHEREAS, although each of the Settling Parties denies liability to each other, the Settling Parties conclude that it is in their best interests to settle their disputes arising out of or relating to the Garage Lease, the Minority Participation Agreement and the Arbitration. BODY OF AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows: SECTION 1: RECITALS. The foregoing Recitals are true and correct and shall constitute an integral part of this Agreement. This Agreement shall be interpreted in light of those Recitals. SECTION 2: CONDITIONS PRECEDENT The terms and conditions of this Agreement are subject to the satisfaction of the following two conditions: a) execution of an estoppel certificate by the City for Bayside's pending financing in a form acceptable to both Settling Parties; b) execution of an estoppel certificate by the City for Bayside's future financing in a form acceptable to both Settling Parties, which Bayside will submit to the City no later than December 31, 2008 in identical foil to the estoppel certificate for the pending financing (referenced above), except for the name of the lender(s) and the date; or if such estoppel 2 certificate is not so identical to the estoppel certificate for the pending financing, the City will use its best efforts to execute such nonidentical estoppel certificate at its earliest convenience in accordance with the Garage Lease and the Retail Lease. Should Bayside fail to submit by December 31, 2008, 2008 an estoppel certificate for Bayside's future financing to the City for execution, the City is relieved from the term and condition outlined in this sub -paragraph and said term and condition shall be null and void. SECTION 3: DEFINITIONS. The following definitions apply to this Agreement: A. "Bayside Released Entities" means Bayside, and any of its officials, executives, administrators, officers, directors, employees, agents, successors, assigns, attorneys, insurers, shareholders, trustees, and related companies or corporations. B. "City Released Entities" means the City of Miami, Florida, and any of its officials, executives, administrators, officers, directors, employees, agents, successors, assigns, attorneys, insurers, shareholders, and trustees. C. "Bayside Claims" means any and all claims, actions, causes of action, liens, demands, or rights (including without limitation, the rights to damages, costs, interest, attorneys' fees, expenses, and compensation) whatsoever that Bayside now has against any of the City Released Entities on account of or in any way arising out of or related to the Arbitration, the Garage Lease or the Minority Participation Agreement. D. "City Claims" means any and all claims, actions, causes of action, liens, demands, or rights (including without limitation, the rights to damages, costs, interest, attorneys' fees, expenses, and compensation) whatsoever that the City now has against any of the Bayside Released Entities on account of or in any way arising out of or related to the Arbitration, the Garage Lease or the Minority Participation Agreement. 3 SECTION 4. PAYMENTS. A. Bayside's Payment to the City. As consideration for the promises and releases in this Agreement, Bayside shall pay to the City $500,000.00, payable in the following installments: (i) $100,000 due and payable on the first business day of 2009; (ii) $100,000 due and payable on the first business day of October 2010; (iii) $100,000 due and payable on the first business day of October 2011; (iv) $100,000 due and payable on the first business day of October 2012; and (v) $100,000 due and payable on the first business day of October 2013. B. Confirmation and Potential Payment Under Minority Participation Agreement. Within 10 days of execution of this Agreement by all parties, Bayside shall provide canceled checks to the City, evidencing payment of the minimum required payment due under the Minority Participation Agreement for the years 2004 through 2008. To the extent that Bayside cannot provide said documentation, Bayside shall pay any such outstanding amounts due to the Bayside Minority Foundation within 20 days after the expiration of the 10 day period. Bayside shall provide the City of Miami with copies of canceled checks evidencing payment of any such outstanding amounts to the Bayside Minority Foundation. SECTION 5. DEVELOPER EQUITY INVESTMENT ACCOUNT. A. Limitation on DEI. For purposes of this Agreement, the Settling Parties stipulate and agree that the current existing amount of Bayside's Developer Equity Investment ("the Existing DEI"), as defined in the existing Garage Lease, shall be deemed to be $1,000,000. The parties further agree that Bayside shall be able to amortize said $1,000,000 Existing DEI amount in equal $100,000 amounts over a 10-year period, and that Bayside may subtract those "amortizations" in calculating Net Income Available for Distribution ("NIAD"). After 10 years, the Existing DEI shall be deemed to be exhausted. 4 B. For purposes of this settlement, the parties agree that any future Operating Losses incurred or unfinanced Capital Improvements paid by Bayside shall be added to another Developer Equity Investment account ("the Future DEI"). Any such additions to Future DEI shall be "amortized" or depreciated in equal amounts and such amortization or depreciation shall be straight line in nature and shall be in accordance with U.S. generally accepted accounting principles, except for the period of amortization or depreciation which shall be a 10-year period, and Bayside may subtract those "10% amortizations" (or depreciations) in calculating Net Income Available for Distribution ("NIAD"). After 10 years, the Future DEI accrued in any calendar year shall be deemed to be exhausted. SECTION 6. DOCKMASTER'S AGREEMENT. Bayside and the City shall negotiate and Bayside shall execute a Dockmaster's Agreement as contemplated by the Miamarina Agreement no later than December 31, 2008. SECTION 7. MONTHLY REPORTING. Bayside shall provide to the City of Miami, on a monthly basis, in addition to the cumulative reports, financial reports required under Section 2.5(e) of the Retail Lease and the Garage Lease. SECTION 8. LEASE AMENDMENTS. The City and Bayside will use good faith efforts to negotiate the issues raised during the mediation, which are outlined in Attachment 1. SECTION 9. RELEASE OF CLAIMS. A. Bayside Release. Bayside, for itself, and for all Bayside Released Entities, hereby releases, acquits and forever discharges the City Released Entities from all Bayside Claims. Bayside warrants that it is the sole owner of the Bayside Claims hereby released, and Bayside agrees to defend, indemnify, and hold the City Released Entities harmless from and against any Bayside Claims asserted against the City. 5 B. City Release. The City, for itself, and for all City Released Entities, hereby releases, acquits and forever discharges the Bayside Released Entities from all City Claims. The City warrants that it is the sole owner of the City Claims hereby released, and the City agrees to defend, indemnify, and hold the Bayside Released Entities harmless from and against any City Claims asserted against Bayside. The parties stipulate and agree that this Agreement does not settle and shall have no effect on any claims against Bayside which the City may have or which may arise pursuant to the Retail Lease. C. Dismissal of Arbitration. Within ten days from the execution by all parties of this Agreement, the City shall dismiss its demand for arbitration with prejudice. Until such time, the demand for arbitration and proceedings thereunder shall be stayed pending approval of this Agreement by the City of Miami Commission and execution of this Agreement by the City Manager. Each party shall bear its own fees and costs with respect to all of the matters reflected herein including the Arbitration. D. The Settling Parties further agree and covenant that they will not bring or prosecute any suit, claim, demand, action, or cause of action arising out of, relating to, or pursuant to: (a) the allegations contained in the Arbitration Request; and (b) any act, omission, or occurrence relating to the Arbitration, against any of the Bayside Released Entities or City Released Entities, except to enforce the terms of this Agreement. Furthermore, in the event that a motion, petition, complaint or other proceeding is initiated to enforce the Agreement, the Settling Parties agree that the prevailing party shall be reimbursed by the opposing party the costs and expenses, including reasonable attorneys' fees, the prevailing party incurred in any such enforcement proceeding. 6 SECTION 10. GENERAL PROVISIONS. A. City Commission Approval. The terms and conditions of this Agreement shall be subject to and contingent upon approval by the City of Miami Commission. B. Governance of Agreement. This Agreement shall be governed by the substantive and procedural laws of the State of Florida and shall be binding upon the parties and their successors and assigns. This Final Settlement Agreement may not be modified except in writing signed by the parties or their authorized representatives and is binding on the parties as of the date hereof. C. No Admission. It is understood and agreed that payment of the consideration expressed herein is not an express or implied admission of any rent due, responsibility, or liability on the part of Bayside or any other person or entity and that Bayside expressly and specifically denies all such claims. Such consideration and any other covenants contained herein are undertaken in order to compromise disputed claims so that the parties may forever avoid expense, uncertainty, and hazards of litigation and arbitration. D. Return of Confidential Information. The Settling Parties further agree that all documents identified and produced by Bayside during the course of the Arbitration which were designated as confidential shall be returned to Bayside within 30 days of the execution of this Agreement by all of the Settling Parties. E. Titles. The titles, captions or headings of paragraphs herein, and the use of a particular gender, are for convenience of reference only, and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. F. Full Force. The Garage Lease and the Retail Lease, as amended and restated from time to time, shall remain in full force and effect. 7 G. Warranties. The Settling Parties represent and warrant that the persons executing this Agreement have the actual authority to execute this Agreement and thereby bind the Settling Party whom they represent to this Agreement. H. Audit of Retail Lease. Nothing contained herein shall prevent the City from auditing or examining the books and records of Bayside relating to the Retail Lease consistent with and pursuant to Section 2.5(e) of the Retail Lease or other sections of the Retail Lease, I. Entire Agreement. The Settling Parties declare and represent that no promises, inducements, or agreements not herein expressed have been made, that the Agreement contains the entire agreement between them, and that its terms are contractual and not mere recitals. 7. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. [END OF TEXT; SIGNATURES CONTINUED ON FOLLOWING PAGE] 8 Approved as to form and correctness: Julie O. Bru, City Attorney City of Miami By: Witness: (signature) (printed) (title) Bayside Marketplace, LLC eir7 (printed) cc:7 Liz c e at fc (title) # 5683928_v9 9 Witness: