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1996-240J \~PDOCS\ORD\GTESETTL ORD ORDINANCE NO. ~ ' ~/~O AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE ON BEHALF OF THE CITY OF DENTON 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 DECLARING AN EFFECTIV~ DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS. ~ That the Mayor of the City of Denton is hereby authorized to execute on behalf of the City of Denton 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, in accordance wlth the attached Settlement Agreement, which is incorporated herein and made a part hereof for all purposes In the absence of the Mayor, the Mayor Pro Tem is hereby authorized to execute the attached settlement agreement. ~ That th~s ordinance shall become effective immediately upon Its passage and approval PASSED AND APPROVED this the day of /~~, 1996. ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM. HERBERT L. PROUTY, 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 SOAH DOCKET NO 473-95-1002 COMPLAINT OF CITY OF DENTON, § PUBLIC UTILITY COMMISSION ET AL AGAINST § OF GTE SOUTHWEST INCORPORATED § TEXAS ROWSET 1021961021 SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS Th~s Settlement Agreement and Release of All Claims ("Agreement") is entered ~nto by and between the City of Denton, a Texas incorporated munlc~pahty ("City"), and GTE Southwest Incorporated, a Delaware corporation ("GTE") The C~ty and GTE are referred to singularly as a "Party" and collectively as "the Partms" I THE RIGHT-OF-WAY LITIGATION Sect~oq 1,1 Denton L~tlgatlon On April 25, 1995, GTE hied an action styled GTE Southwest IncorDorated vs. City of Denton. et al., Cause No 95-50259-367, ~n the 367th District Court of Denton County, Texas ("Denton Lawsuit") Section 1.2 Rusk Litigation On May 19, 1995, several Cities flied an action styled C~ty of Rusk. an ~ncorporated Texas mun~c~Dahty, et al. v. GTE Southwest. Inc.. Cause No 95-5-00360, in the D~stnct Court of Cherokee County, Texas ("Rusk Lawsuit") ~ The PUC ComDlalnt 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 City of Denton. Texas. et al. Against GTE Southwest Incorporated, PUC Docket No 14152, SOAH Docket No 473-95-1002 ("PUC Complaint," collectively referred to w~th the Denton Lawsuit and the Rusk Lawsuit as the "R~ght-of-Way Litigation") ~ The Right-of-Way L~t~gat~on On ~ ~ 1996, the City Counml of Denton authorized the Mayor to settle the Right-of-Way Lit~gat~on pursuant to the terms outlined In th~s Agreement II ~ ~ C~ty covenants and warrants that it has the nght to compromme ali claims asserted ~n the R~ght-of-Way L~tigatlon as to Denton, the Mayor ~s authonzed to b~nd the City by executing th~s Agreement on ~ts behalf, and that ~t has not assigned to any third party such claims, or any part of such claims against GTE ~ D~smmsal of Right-of-Way L~tigatlon City agrees to d~smlss with prejudme any and all claims, counterclaims and causes of action ~t raised against GTE ~n the Denton Lawsuit, the Rusk Lawsmt, and the PUC Complaint, promptly upon execution of this Agreement ROWSET - 1 - 1021661034 III Section 3.1 Right to Comoromme GTE covenants and warrants that Hardy E White, ~n h~s capacity as Acting Regional President - GTE Texas/New Mexmo Region, has the authonty to execute th~s Agreement on GTE's behalf and to b~nd GTE to ~ts terms, and that GTE has not assigned to any third party such claims, or any part of GTE's claims against the C~ty Section 3.2 lD~sm~ssal of L~hgat~on GTE agrees to d~smlss w~th prejudice any and all claims, counterclaims and causes of action ~t raised against the C~ty ~n the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of th~s Agreement Sectlon 3.3 Cash Payment W~thln seven (7) bus~ness days of the C~ty's hnal reading and enactment of the R~ght-of-Way Ordinance at Attachment "A" ("New Ordinance") hereto, whmh ~s ~ncorporated In th~s Agreement for all purposes as ~f fully set forth here~n, GTE w~ll pay to the C~ty the sum of $1,255,649 76 Th~s sum comprises the following a $205,147 00, whlch is the amount of all nght-of-way fee payments w~thheld by GTE pending resolution of the Right-of-Way Lit~gat~on ("Withheld Amounts") plus four percent (4%) ~nterest on such amount, b $979,388 76, which represents a compromise of all claims related to payment of compensation by GTE to the C~ty for use of the City's rights- of-way from the beginning of time to and ~nclud~ng December 31, 1996, and c $71,114 00, which represents advance payment of reasonable compensation for use of the C~ty's nghts-of-way for the penod not covered by Section 3 3a or b above and ending on December 31, 1996 GTE agrees not to pass through to ~ts'present or future customers the ~nterest amount described ~n Sechon 3 3a and GTE agrees that all amounts that GTE ~s authorized to pass through to its customers under 3 3a above have already been passed through GTE agrees not to pass through to ~ts present or future customers the amount described in Section 3 3b hereof The amount ~n Section 3 3c above shall be passed through to GTE's customers Jack Stowe w~ll be permitted to meet w~th a GTE- designated representative, on or about October 16, 1996, to rewew GTE documents conhrmtng the Withheld Amounts ~ Termination of Ordinance or Authority Any current or prior ordinance and/or authonty Imposing a fee upon GTE for the use of the City's nghts-of- way shall expire on or before December 31, 1996, and shall be replaced with the New ROWSET ' 2 - fO2196102t Ordinance which shall take effect on January 1, 1997 The Pad~es agree that the cash payment described ~n Sectmn 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 r~ghts- of-way dunng the penod from and ~ncluding the date of the last payment made by GTE to the City for use of its r~ghts-of-way to and ~nclud~ng the effective date of the New Ordinance IV NEW RIGHT-OF-WAY ORDINANCE Secttor~ 4,1 New R~ght-of-Way Ordinance The C~ty and GTE agree to execute, adopt and enact the New Ordinance If a current ordinance or charter of the C~ty requires a ublity entering ~nto an ordinance such as the New Ordinance to pay the cost of publication of such ordinance ~n a local newspaper, GTE agrees to pay such cost of publication of the New Ordinance Section 4.2 City's Enactment of New Ordinance The City agrees to pass and enact the New Ordinance in consecutive readings, as required by law, with the hrst reading to be held on or before ~ _,..~_, 1996, and w~th any and all required readings occurring on or before ~.~ , 1996 ~ GTE's Acceotance of New Ordinance GTE agrees to execute and file with the City Secretary its acceptance of the New Ordinance w~thin fourteen (14) business days of receipt of the executed New Ordinance after the final reading and passage of the New Ordinance by the City ~ Access L~ne Fee GTE agrees that the C~ty 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 bus~ness Access Line As of September 30, 1996, there were 29,234 residential Access L~nes and 18,399 bus~ness Access L~nes In the C~ty of Denton The number of Access Lines ~s subject to change. V. MUTUAL RELEASES AND DISMISSAL OF CLAIMS IN RIGHT-OF-WAY LITIGATION ~ Release by Cit~/ In consideration of the above, the C~ty, ~n ~ts own behalf and on behalf of its successors and assigns, hereby ~rrevocably and unconditionally fully releases, acquits and discharges GTE Southwest Incorporated, ~ts successors, parent corporation, affiliated and subsidiary corporations, officers, d~rectors, 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 C~ty r~ghts-of- way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass ROWSET - 3 ' 1021961021 through of such payments by GTE to ~ts customers, which the City made or could have made ~n the lawsuits styled GTE Southwest Incorporated vs. City of Denton. et al., Cause No 95-50259-367, in the 367th Distnct Court of Denton County, Texas, C~ty of Rusk. an incoroorated Texas municipality, et al. v. GTE Southwest. Inc.. Cause No 95- 5-00360, in the D~strlct Court of Cherokee County, Texas, and the proceeding styled Com01mnt of City of Denton. Texas. et al. Aoa~nst GTE Southwest Incorporated. PUC Docket No 14152, SOAH Docket No 473-95-1002 In the Texas Public Utlhty Commission Section 5.2 Release bv GTE In considerat~on of the above, GTE Southwest Incorporated, ~n its own behalf and on behalf of ~ts successors and assigns, hereby ~rrevocably and unconditionally fully releases, acquits and d~scharges the City of Denton, Texas, ~ts officials, eroployees, representatives, attorneys and agents from any and all cta~ms from the beginning of hme up to and including December 31, 1996, (a) that relate to the payroent by GTE to the C~ty 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, whmh GTE made or could have made in the lawsuits styled GTE Southwest Incorporated vs. C~ty of Denton. et al.. Cause No 95-50259-367, in the 367th D~stnct Court of Denton County, Texas, City of Rusk. an ~ncoroorated Texas roumcioallty, et al. v. GTE Southwest. Inc., Cause No. 95-5-00360, in the District Court of Cherokee County, Texas, and the proceeding styled Comolalnt of City of Denton. Texas. et al. Against GTE Southwest J[]c,.o.[IZO. r. JLe~, PUC Docket No 14152, SOAH Docket No 473-95-1002 in the Texas Public Utility Commission ~ ~ 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, w~th prelud~ce, by each Party against the other ~n the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint If any of the agreed orders of dismissal are not accepted or s~gned by the Court or the PUC, respectively, both Parties agree to file motions for nonsu~t w~th prejudice regarding all claims, countemlalms and causes of action raised by such Partms in Court or PUC Each Party shall pay all court costs incurred by such Party VI. MISCELLANEOUS PROVISIONS ~ This Agreement is a compromise settlement of d~sputed ~ssues 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, w~ll 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 ewdence in any proceeding to enfome any or all of the terms herein ROWSET ' 4 - 1021961021 Section 6.2 Th~s Agreement w~ll neither constitute nor provide to any third party any remedy, defense, claim, evidence, or other r~ght ~n excess of these existing w~thout reference to this Agreement Sectmn 6.3 This Agreement constitutes the entire agreement between the Parties w~th respect to the matters specifically descnbed herein, and all pnor agreements, oral or wntten representations, statements, understandings, proposals and undertakings w~th respect to such matters are superseded and replaced by the prows~ons of this Agreement Section 6.4 The persons executing th~s 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 Sectmn 6.5 This Agreement shall be construed ~n accordance w~th the laws of the State of Texas ~ The nghts, powers, hm~tat~ons, duties, restrictions and releases hereto provided for shall inure to and be binding upon the Part~es hereto and upon their respective legal and bona fide representatives, successors and assigns _ Sectlon~.7 The effecbve date of this Agreement Is the~?~ day of ~,,7~ , ,1996 CITY OF DENTON, TEXAS ATTEST h./~L~J_..., By C~ecl;~t~'J~ City of Denton, Texas CEy/of Denton, Texas GTE SOUTHWEST INCORPORATED ATTEST By Hardy E White Acting Regional President - Texas/New Mexico Date ROWSET ' 5 ' 1021961021