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HomeMy WebLinkAboutAT&T CALIFORNIA-2013A-2013-001 SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS (the "Agreement") is entered into this ? day of January, 2013, by and between AT&T CALIFORNIA ("AT&T") on the one hand, and the CITY OF SANTA ANA ("City"), on the other hand. RECITALS: 1. The City and Adelphia Cablevision entered into a Franchise Agreement dated May 2, 2005 (the "Franchise Agreement"). 2. Subject to the terms of an Order of the United States Bankruptcy Court for the Southern District of New York In re: Adelphia Communications Corp., et al. dated June 28, 2006, and AT&T's state issued franchise pursuant to The California Digital Infrastructure and Video Competition Act of 2006 ("DIVCA"), AT&T assumed the Public, Educational and Government ("PEG") rights and obligations of said Franchise Agreement effective when it began selling video service in Santa Ana. 3. Pursuant to the terms of the Franchise Agreement, in December 2005, Adelphia provided an upfront Public, Educational and Government ("PEG") Capital Support payment of $450,000, and commenced amortization of the payment. 4. After full amortization of the upfront PEG Capital Support payment, the franchisee was required, pursuant to the Franchise Agreement, to pass through to the City, PEG fees at the rate of $.55 per subscriber per month through and including June 30, 2012, and thereafter to pass through to the City, PEG fees at the rate of $.65 per subscriber per month. AT&T010313 5. DIVCA requires that the holder of a state issued franchise pay the City an annual Franchise Fee. 6. Certain controversies have arisen between the parties concerning their respective rights and obligations under the Franchise Agreement and AT&T's state issued franchise. The parties now wish to resolve, finally and forever, all controversies between them arising from or relating to the calculation, assessment, collection or payment of PEG Capital Support payments through October 31, 2012, and Franchise Fees through and including October 31, 2010. NOW, THEREFORE, in consideration of the foregoing premises and the mutual terms and conditions contained herein, the receipt and sufficiency of which are by all parties hereby acknowledged, and with the intent to be legally bound, the parties covenant and agree as follows: 1. The parties agree that the initial PEG Capital Support Payment was fully amortized on August 15, 2008. Upon execution of this Agreement, the City hereby releases and forever discharges AT&T from any and all liabilities, claims, demands, rights, damages, debts, responsibilities and actions which the City had, has or hereafter may have against AT&T arising from or relating in any way to the calculation, assessment or payment of PEG Capital Support Fees, or interest and penalties related thereto, for the period from August 15, 2008 through October 31, 2012. 2. Upon execution of this Agreement, the parties hereby release and forever discharges each other from any and all liabilities, claims, demands, rights, 2 AT&T 010312 damages, debts, responsibilities and actions which either party had, has or hereafter may have against the other arising from or relating in any way to the calculation, assessment or payment of Franchise Fees, or interest and penalties related thereto, for any period prior to October 31, 2010. 3. Within fifteen (15) business days of the receipt by AT&T of the City's signed copy of this Agreement, AT&T shall deliver to the City payment in the amount of One Hundred Twenty-one Thousand Six Hundred Twenty-two and 65/100 Dollars ($121,622.65). The parties agree that, in view of the resolution of their dispute, no further audit for the period of January 1, 2008 through October 31, 2012 shall be performed with respect to the calculation and payment of PEG Capital Support payments. 4. The parties agree that, in view of the resolution of their dispute, no further audit for the period of January 1, 2008 through October 31, 2010 shall be performed with respect to the calculation and payment of Franchise Fee payments. 5. To the extent applicable under DIVCA and subject to the terms of an Order of the United States Bankruptcy Court Southern District of New York In re: Adelphia Communications Corp., et al. dated June 28, 2006, this Agreement shall not be read to release any duty of AT&T arising under the Franchise Agreement or its state issued franchise to indemnify or insure the City against acts and omissions occurring during the franchise term that are separate, unrelated and distinct from the calculation, assessment, collection or payment of PEG Capital Support Payments. 3 AT&T 01031.2 6. This Agreement shall not be read to release any duty of AT&T arising under its state issued franchise to indemnify or insure the City against acts and omissions occurring during the state franchise term that are separate, unrelated and distinct from the calculation, assessment, collection or payment of Franchise Fees. 7. The releases contained in this Agreement are special releases and section 1542 of the Civil Code of the State of California is not applicable. If and to the extent it should be determined that the releases contained in this Agreement are not special releases, contrary to the parties' acknowledged intention and agreement, each party specifically waives the benefit of the provisions of section 1542 of the Civil Code of the State of California, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 8. Each party hereto represents and states that such party has carefully read this Agreement, knows the contents hereof, and signs the same of such party's own free will, act and deed. Each party further represents that such party has obtained legal advice from such party's attorneys in connection with this Agreement, which has been drafted with the assistance of counsel for each such parry, and that such party executes this Agreement without reliance upon any statement or representation of, by or on behalf of any of the parties that is not contained in this Agreement. 4 AT&T 010312 9. This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes all prior discussions, representations, understandings, or agreements, whether written or oral. 10. This Agreement shall be binding upon the parties hereto and upon their respective parents, heirs, subsidiaries, affiliates, divisions, predecessors-in-interest and/or successors-in-interest. 11. The parties hereto mutually covenant and agree to cooperate with each other and to take any and all actions necessary to carry out the terms and effectuate the intent of this Agreement, including the execution of any documents necessary for such purposes. 5 AT&T 010312 IN WITNESS WHEREOF, all parties have executed this Agreement as of the date first set forth above. AT&T CALIFORNIA By: Its: ?A14-'Y THE CITY OF SANTA ANA 1 By: C Paul M. Walters City Manager ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: La r Sheedy Assistant City Attorney 6 AT&T 010312