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1996-068City of Southiake, Texas CITY OF SOUTHLAKE RESOLUTION NO. 96-68 RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS AUTHORIZING THE MAYOR TO EXECUTE A SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS WITH GTE SOUTHWEST INCORPORATED, RELATING TO THE SETTLEMENT OF THE CASES STYLED GTE SOUTHWEST INCORPORATED VS. CITY OF DENTON. ET AL.. AND CITY OF RUSK. ET AL. VS. GTE SOUTHWEST INC. AND THE CITY OF DENTON. TEXAS. ET AL.. COMPLAINT AGAINST GTE SOUTHWEST INCORPORATED BEFORE THE PUC; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE: Section 1. That the Mayor of the City of Southlake is authorized to execute on behalf of the City, a Settlement Agreement and Release of all Claims with GTE Southwest, Incorporated, relating to the settlement of the cases styled, GTE SOUTHWEST INCORPORATED VS. CITY OF DENTON. ET AL. AND CITY OF RUSK. AT AL VS. GTE SOUTHWEST INC. AND THE CITY OF DENTON. TEXAS ET AL. COMPLAINT AGAINST GTE SOUTHWEST INCORPORATED before the PUC, in accordance with the attached Settlement Agreement, which is incorporated herein and made a part hereof for all purposes. Section 2. That this resolution shall take effect immediately upon its passage and approval. PASSED AND APPROVED THIS THE 5TH DAY OF NOVEMBER, 1996. Spar 7-1 Mayor Rick Stacy Sandra L. LeGrand City Secretary AP AS TO FORM: City Attorney NO. 95-50259-367 GTE SOUTHWEST INCORPORATED, § IN THE DISTRICT COURT OF a Delaware Corporation, Plaintiff, vs. DENTON COUNTY, TEXAS THE CITY OF DENTON, A TEXAS INCORPORATED MUNICIPALITY, et al., Defendant. 367TH JUDICIAL DISTRICT NO. 95-5-00360 CITY OF RUSK, et al., IN THE 2D JUDICIAL Plaintiffs, V. DISTRICT COURT OF GTE SOUTHWEST, INC., Defendant. CHEROKEE COUNTY, TEXAS PUC DOCKET NO. 14152 SOAR DOCKET NO. 473-95-1002 COMPLAINT OF CITY OF DENTON, § PUBLIC UTILITY COMMISSION ET AL. AGAINST § OF GTE SOUTHWEST INCORPORATED § TEXAS ROWSET 1021961022 SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS This Settlement Agreement and Release of All Claims ("Agreement") is entered into by and between the City of Southlake. a Texas incorporated municipality ("City"), and GTE Southwest Incorporated, a Delaware corporation ("GTE"). The City and GTE are referred to singularly as a "Party" and collectively as "the Parties." 1. THE RIGHT-OF-WAY LITIGATION, Section 1.1. Denton Litigation. On April 25, 1995, GTE filed an action styled GTE Southwest Incorporated vs. Citv of Denton. et al., Cause No. 95-50259-367, in the 367th District Court of Denton County, Texas ("Denton Lawsuit"). Section 1.2. Rusk Litiaation. On May 19, 1995, several Cities filed an action styled Citv of Rusk. an incoroorated Texas muniCiDalitv, et al. v. GTE Southwest. Inc., Cause No. 95-5-00360, in the District Court of Cherokee County, Texas ("Rusk Lawsuit"). Section 1.3,. The PUC Complaint. On April 29, 1995, the Cities which were parties to the Rusk Lawsuit filed a Complaint against GTE at the Texas Public Utility Commission styled Complaint of Citv of Denton. Texas. et al. Aaainst GTE Southwest, Incomorated, PUC Docket No. 14152, SOAH Docket No. 473-95-1002 ("PUC Complaint," collectively referred to with the Denton Lawsuit and the Rusk Lawsuit as the "Right -of -Way Litigation"). Section 1.4. The Riaht-of-Wav Litiaation. On —, 1996, the City Council of Southlake authorized the Mayor to settle the Right -of -Way Litigation pursuant to the terms outlined in this Agreement. II. CITY'S COVENANTS Section 2.1. Riaht to Compromise. City covenants and warrants that it has the right to compromise all claims asserted in the Right -of -Way Litigation as to Southlake, the Mayor is authorized to bind the City by executing this Agreement on its behalf, and that it has not assigned to any third party such claims, or any part of such claims against GTE. Section 2.2. Dismissal of Riaht-of-Wav Litigation. City agrees to dismiss with prejudice any and all claims, counterclaims and causes of action it raised against GTE in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of this Agreement. ROWSET - 1 - 1021961035 III. GTE'S COVENANTS. Section 3.1. Riaht to Comoromise. GTE covenants and warrants that Hardy E. White. in his capacity as Acting Regional President - GTE TexasiNew Mexico Region, has the authority to execute this Agreement on GTE's behalf and to bind GTE to its terms, and that GTE has not assigned to any third party such claims, or any part of GTE's claims against the City. Section 3.2. Dismissal of Litication. GTE agrees to dismiss with prejudice any and all claims, counterclaims and causes of action it raised against the City in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of this Agreement. Section 3.3. Cash Pavment. Within seven (7) business days of the City's final reading and enactment of the Right -of -Way Ordinance at Attachment "A" ("New Ordinance") hereto, which is incorporated in this Agreement for ail purposes as if fully set forth herein, GTE will pay to the City the sum of $202,918.75. This sum comprises the following: a. $49,537.00, which is the amount of all right-of-way fee payments withheld by GTE pending resolution of the Right -of -Way Litigation ("Withheld Amounts") plus four percent (4%) interest on such amount; b. $125,721.75, which represents a compromise of all claims related to payment of compensation by GTE to the City for use of the City's rights- of-way from the beginning of time to and including December 31, 1996; and C. $27,660.00, which represents advance payment of reasonable compensation for use of the City's rights-of-way for the period not covered by Section 3.3a. or b. above and ending on December 31, 1996. GTE agrees not to pass through to its present or future customers the interest amount described in Section 3.3a. and GTE agrees that all amounts that GTE is authorized to pass through to its customers under 3.3a. above have already been passed through. GTE agrees not to pass through to its present or future customers the amount described in Section 3.3b. hereof. The amount in Section 3.3c. above shall be passed through to GTE's customers. Jack Stowe will be permitted to meet with a GTE - designated representative, on or about October 16, 1996, to review GTE documents confirming the Withheld Amounts. ge.C,tJon 3.4. Termination of Ordinance or Authoritv. Any current or prior ordinance and/or authority imposing a fee upon GTE for the use of the City's rights-of- way shall expire on or before December 31, 1996, and shall be replaced with the New ROWSET - 2 - 1021961022 Ordinance which shall take effect on January 1, 1997. -he Parties agree that the cash payment described ih Section 3.3 above includes an amount which the City has determined to be fair and reasonable compensation for GTE's use of the City's rights- of-way during the period from and including the date of the last payment made by GTE to the City for use of its rights-of-way to and including the effective date of the New Ordinance. IV. NEW RIGHT-OF-WAY ORDINANCE, Section 4.1. New Riaht-of-Wav Ordinance. The City and GTE agree to execute. adopt and enact the New Ordinance. If a current ordinance or charter of the City requires a utility entering into an ordinance such as the New Ordinance to pay the cost of publication of such ordinance in a local newspaper, GTE agrees to pay such cost of publication of the New Ordinance. Section 4.2. Citv's Enactment of New Ordinance. The City agrees to pass and enact the New Ordinance in consecutive readings, as required by law. with the first reading to be held on or before 1996, and with any and all required readings occurring on or before 1996. Section 4.3. GTE's Acceptance of New Ordinance. GTE agrees to execute and file with the City Secretary its acceptance of the New Ordinance within fourteen (14) business days of receipt of the executed New Ordinance after the final reading and passage of the New Ordinance by the City. Section 4.4. Access Line Fee. GTE agrees that the City may set an Access Line Fee as that term is defined in the New Ordinance up to $17.00 per year for each residential Access Line and up to $24.00 per year for each business Access Line. As of September 30, 1996, there were 5,933 residential Access Lines and 2,005 business Access Lines in the City of Southlake. The number of Access Lines is subject to change. V. MUTUAL RELEASES AND DISMISSAL OF CLAIMS IN RIGHT-OF-WAY LITIGATION. Section 5.1. Release by City. In consideration of the above, the City, in its own behalf and on behalf of its successors and assigns, hereby irrevocably and unconditionally fully releases, acquits and discharges GTE Southwest Incorporated, its successors, parent corporation, affiliated and subsidiary corporations, officers, directors, employees, attorneys, representatives and agents from any and all claims from the beginning of time up to and including December 31, 1996, (a) that relate to the payment by GTE to the City of reasonable compensation for GTE's use of City rights-of- way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass ROWSET - 3 - 1021961022 through of such payments by GTE to its customers, which the City made or could have made in the lawsuits styled GTE Southwest Incoroorated vs. Citv of Denton. et al., Cause No. 95-50259-367, in the 367th District Court of Denton Countv, Texas, City of Rusk. an incorporated Texas municipality. et al. v. GTE Southwest. Inc.,, Cause No. 95- 5-00360, in the District Court of CheroKee County, Texas, and the proceeding styled Complaint of Citv of Denton. Texas. et al. Against GTE Southwest Incorporated, PUC Docket No. 14152, SOAH Docket No. 473-95-1002 in the Texas Public Utility Commission. Section 5.2. Release bv_ GTE. In consideration of the above, GTE Southwest Incorporated, in its own behalf and on behalf of its successors and assigns, hereby irrevocably and unconditionally fully releases, acquits and discharges the City of Southlake, Texas, its officials, employees, representatives, attorneys and agents from any and all claims from the beginning of time up to and including December 31, 1996, a) that relate to the payment by GTE to the City of reasonable compensation for GTE's use of City rights-of-way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass through of such payments by GTE to its customers, which GTE made or could have made in the lawsuits styled GTE Southwest Incorporated vs. Citv of Denton. et al., Cause No. 95-50259-367, in the 367th District Court of Denton County, Texas, Citv of Rusk. an incoroorated Texas municipality. et al. v. GTE Southwest. Inc., Cause No. 95-5-00360, in the District Court of Cherokee County, Texas, and the proceeding styled Complaint of Citv of Denton. Texas. et al. Against GTE Southwest Incorporated, PUC Docket No. 14152, SOAH Docket No. 473-95-1002 in the Texas Public Utility Commission. Section 5.3. Dismissal of Claims. The Parties agree to submit, within ten (10) days after execution by the City and GTE of this Agreement, an agreed order of dismissal of all claims, counterclaims and causes of action, with prejudice, by each Party against the other in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint. If any of the agreed orders of dismissal are not accepted or signed by the Court or the PUC, respectively, both Parties agree to file motions for nonsuit with prejudice regarding all claims, counterclaims and causes of action raised by such Parties in Court or PUC. Each Party shall pay all court costs incurred by such Party. VI. MISCELLANEOUS PROVISIONS Section 6.1. This Agreement is a compromise settlement of disputed issues and claims and, therefore, will not be construed as an admission of liability of any Party or of the validity of any claims or potential claims made by any Party against any other Party or otherwise construed as an admission of any Party and, as such, will not be offered or received as evidence in any proceeding, provided that nothing will prevent this Agreement or its terms from being used, offered or received in evidence in any proceeding to enforce any or all of the terms herein. ROWSET - 4 - 1021961022 Section 6.2. This Agreement will neither constitute nor provide to any third party any remedy, defense, claim, evidence, or other right in excess of those existing without reference to this Agreement. Section 6.3. This Agreement constitutes the entire agreement between the Parties with respect to the matters specifically described herein, and ail prior agreements, oral or written representations, statements, understandings, proposals and undertakings with respect to such matters are superseded and replaced by the provisions of this Agreement. Section 6.4. The persons executing this Agreement on behalf of the respective Parties hereto have been duly and properly authorized to execute the same by the passage of any necessary motion, resolution or other act. Section 6.5,. This Agreement shall be construed in accordance with the laws of the State of Texas. Section 6.6. The rights, powers, limitations, duties, restrictions and releases herein provided for shall inure to and be binding upon the Parties hereto and upon their respective legal and bona fide representatives, successors and assigns. We fion 6.7. The effective date of this Agreement is the • day of P 1996. a ATTEST: U City Secretary City of Southlake, Texas ATTEST: Date: CITY OF SOUTHILAKE, TEXAS vs M By: 7a ory City of Southlake, Texas GTE SOUTHWEST INCORPORATED 2 Hardy E. White Acting Regional President - Texas/New Mexico ROWSET - 5 - 1021961022