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R-2014-1591 - 7/10/2014RESOLUTION NO. R-2014-1591 WHEREAS, in 2009, the City of Round Rock ("City") issued a request for proposal for the implementation and maintenance of a VoIP system; and WHEREAS, Mercury Communication Services, Inc. ("MCSI"), Mercury Communication Services of Austin, LLC ("MCSA") and NEC Corporation of America, a Delaware corporation ("NEC"), ("Defendants") entered into various contracts and subcontracts to implement and maintain and/or supply equipment related to the City's VoIP system (the "VoIP Project"); and WHEREAS, a dispute arose between the City and the Defendants related to the VoIP Project; WHEREAS, the City filed suit against the Defendants in the lawsuit styled City of Round Rock v. Mercury Communication Services, Inc., et al; Cause No. 12-0791-C277; in the 277`h Judicial District Court of Williamson County, Texas (the "Litigation"); and WHEREAS, the Parties have reached a Settlement Agreement and Release of Claims ("Agreement") to fully compromise and settle all claims and causes of action that have been or could have been asserted by the Parties related to or arising out of the VOIP Project; Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City the Agreement, a copy of which is attached hereto as Exhibit "A". The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. 0112.1404; 00306859 RESOLVED this 10th day of July, 2014. ALAN MCGRAW, Mayor City of Round Rock, Texas �sm& . 111 3 SARA L. WHITE, City Clerk EXHIBIT «A„ SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS This Settlement Agreement and Release of Claims ("Agreement") is made by and between the City of Round Rock (the "City") and Mercury Communication Services, Inc. ("MCSI"), Mercury Communication Services of Austin, LLC ("MCSA") and NEC Corporation of America, a Delaware corporation ("NEC") (MCSI, MCSA and NEC are herein collectively defined as the "Defendants"), and their respective members, managers, employees, attorneys, agents, affiliates, carriers, successors and assigns (collectively the "Parties"), and is conditioned upon and will become effective upon acceptance by the Round Rock City Council and the signature by all the Parties of the Agreement (such date being herein defined as the "Effective Date" of this Agreement). WHEREAS, in 2009, the City issued a request for proposal for the implementation and maintenance of a VoIP system; WHEREAS, Defendants entered into various contracts and subcontracts to implement and maintain and/or supply equipment related to the City's VoIP system (the "VoIP Project"); WHEREAS, a dispute arose between the City and the Defendants related to the VoIP Project; WHEREAS, the City filed suit against the Defendants in the lawsuit styled City of Round Rock v. Mercury Communication Services, Inc., et al; Cause No. 12-0791-C277; in the 277`h Judicial District Court of Williamson County, Texas (the "Litigation"); WHEREAS, MCSI, MCSA and NEC made monetary demands upon each other for matters relating to the Litigation; WHEREAS, Defendants deny any and all liability to the City and to each other in connection with the Litigation; WHEREAS, the Parties have reached an agreement to fully compromise and settle all claims and causes of action that have been or could have been asserted by the Parties related to or arising out of the VoIP Project as set forth below, including any claims that the City did or could have asserted against the Defendants in the Litigation and any claims, if any, that MCSI and/or MCSA on one hand and NEC on the other hand has or may have against the other related to the VoIP Project; and WHEREAS, the Parties desire to avoid the uncertainty, inconvenience and expense of further litigation, and to buy peace and enter into this Agreement upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the agreements and in reliance upon the representations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1.0 Payment. Defendants agree to pay or caused to be paid to the City the amount of $400,000.00 (the "Settlement Payment") within 30 days of the Effective Date of this Agreement, to be funded as follows: • MCSI and MCSA shall collectively pay or cause to be paid the sum of $200,000.00; and • NEC shall pay or cause to be paid the sum of $200,000.00. Page 1 of 4 The payment obligations of the Defendants are several and not joint. In the event that any Defendant shall fail to timely make its share of the Settlement Payment as outlined above, the releases by other Defendants of the non-paying Defendant and the City, and those by the City against all Defendants shall be ineffective, and this Agreement shall be of no further force or effect, and the City shall immediately return all settlement payments made by the paying Party; provided expressly, however, that the terms of this Agreement shall at all times remain subject to TRE 408 irrespective of whether this Agreement is consummated or terminated prior to consummation. 2.0 Dismissal of Litigation. Within ten (10) days following receipt of the Settlement Payment, the City will dismiss all claims in the above -styled and numbered Litigation with prejudice with each party to bear its own attorneys' fees and court costs. 3.0 Equipment. The City will have the equipment that is the subject of the Litigation assembled in one location for return to Defendants within 30 days of the Effective Date. The City will remove any City data stored within the equipment prior to returning the equipment. To the extent Defendants discover any City data still remaining on the equipment, Defendants will notify the City and allow City representatives to remove such data at a mutually agreeable date, time and location. The Parties further agree that MCSA will receive 75 of the NEC VoIP phones and the reminder of the equipment will be returned to NEC. Defendants shall have up to thirty (30) days to pick up the equipment following the date of notification by the City that the Equipment is ready to be picked up. 4.0 Mutual Releases. In consideration for the promises and agreements set forth herein, the Parties and their directors, officers, shareholders, members, managers, employees, attorneys, agents, affiliates, successors and assigns hereby release and forever discharge each other and their agents, adjusters, consultants, sub -consultants, subcontractors, sub -subcontractors, attorneys, employees, officers, partners, members, shareholders, parents, affiliates, subsidiaries, principals, trustees, owners, directors, sureties, insurers (including The Hartford Insurance Company) guarantors, additional insurers, excess/umbrella insurers, successors, and all other persons and entities in privity with any of them, of and from any and all disputes, claims, demands, claims of subrogation or indemnity, claims for attorney's fees or defense, claims for defense and indemnity as additional insureds, and causes of action of any kind whatsoever, whether known or unknown, whether heretofore or hereafter accruing or arising, whether held by assignment or otherwise, whether for latent or patent defects, and whether sounding in tort, contract, or trespass, or arising by operation of law or statute, that any Party has, had, or may ever have against any other Party or Parties, in any way related to or arising out of (1) the design, development, sale, installation, implementation, testing, repairs and/or warranty work of the VoIP Project for the City or the labor, material, and equipment furnished in connection therewith (including without limitation all equipment manufactured and/or sold by NEC), (2) any representations made by the Defendants to the City related to the VoIP Project, including, but not limited to, any representations regarding the Defendants' qualifications, NEC's products or equipment, and/or the Defendants' participation in the VoIP Project, (3) all of the contracts, subcontracts and sub -subcontracts, warranties, purchase orders, RFP Response, consulting agreements related to the VoIP Project for the City (but this release does not include any contracts, subcontracts and sub -subcontracts, warranties, purchase orders, consulting agreements between MCSI or MCSA on one hand and NEC on the other hand not specifically related to the VoIP Project), (4) any claims that MCSI and/or MCSA on one hand and/or NEC on the other hand has or may have against the other related to the VoIP Project or the Litigation and (5) the Litigation, save and except that MCSI and MCSA do not release any claims they may have against each other. It is further agreed that the Mercury entities may reach an agreement between themselves as to their attorneys' fees and court Page 2 of 4 costs. Notwithstanding anything to the contrary contained in this paragraph, the releases hercin do not include the release of claims for breach of any obligation in this Agreement. 5.0 Representations. Defendants represent and warrant that their payment obligations herein will not render them insolvent. Each of the Parties expressly represent and warrant that it owns all of the claims that each such Party is releasing under this Agreement, that each has full legal authority and capacity to release said claims and has not and will not, in any way, transfer those claims to any other person or entity. 6.0 Miscellaneous. The City of Round Rock's City Manager, Assistant City Managers, Chief Information Officer, IT Operations Officer and internal or external attorneys and MCSI's, MCSA's and NEC's officers, directors, and internal or external attorneys agree not to make any false statements about any of the Parties. The Parties further agree not to issue any written press release or other written statement to the media related to this Agreement, the Litigation or the facts, circumstances, claims or causes of action expressed therein or which may have been expressed therein without the prior written consent of the other party, except as required by law or a court order. 7.0 Venue. This Agreement shall be construed and interpreted in accordance with Texas law and venue of any dispute arising from or related to the Agreement, or the obligations contained herein, shall be in Williamson County, Texas. 8.0 Severability. If for any reason a court of competent jurisdiction finds any provision of this Agreement to be unenforceable, that provision of the Agreement will be enforced to the maximum extent permissible so as to effectuate the intent of the parties, and the remainder of this Agreement will continue in full force and effect. 9.0 Entire Agreement. The Parties hereby represent, warrant and agree that they are not relying upon any statement or representation of any other party as inducement to enter into this Settlement Agreement, except for the promises and obligations contained herein. This Agreement contains the entire agreement between the Parties with regard to the matters set forth herein, save and except any separate agreements MCSI and MCSA have reached or may reach between themselves as to any claims asserted between MCSI and MCSA relating to this Litigation. This Agreement supersedes and replaces all prior agreements between the Parties and encompasses the Parties' entire agreement, save and except (1) any separate agreements MCSI and MSA have reached or may reach between themselves as to any claims asserted between MCSI and MCSA relating to this Litigation and (2) any agreements or contracts between MCSI or MCSA on one hand and NEC on the other hand not specifically related to the VoIP Project. Further, it is acknowledged that each party has had the benefit of counsel to explain the terms of the Agreement. Each party to this Agreement represents, warrants and agrees that this Agreement is the product of a negotiation by the Parties to this Agreement, represented by their respective counsel. The Parties acknowledge and agree that additional facts may later be learned that are relevant to this Agreement and still they hereby specifically desire, intend and agree to release all claims, as set forth herein. 10.0. Execution in Counterparts. This Agreement may be signed in multiple counterparts, and the separate signature pages executed by the Parties may be combined to create a document binding on all of the Parties and together shall constitute one and the same instrument. 11.0. Headings and Numbering_ Any paragraph, article, and/or section headings or paragraph numbers used in this Agreement are for convenience only and shall not affect the construction of the Page 3 of 4 Agreement. 12.0 Modification. This Agreement may only be modified by written instrument executed by all Parties. There shall be no oral modifications of this Agreement. 13.0 Effective Date. If the Effective Date has not occurred prior to August 15, 2014, this Agreement shall lapse and be of no further force or effect, the Parties shall thereafter revert to their respective positions in the Litigation as if this Agreement shall never have been entered into, and the terms of this Agreement shall remain subject to TRE 408. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the dates witnessed below, to become effective as of the Effective Date. CITY OF ROUND ROCK Dated: By: Alan McGraw, Mayor MERCURY COMMUNICATION SERVICES, INC., a Texas corporation Dated: By: Gregory F. Osler, President MERCURY COMMUNICATION SERVICES OF AUSTIN, LLC, a Texas limited liability company Dated: By: Stephen R. Talbert, Manager Dated: By: Christopher M. Anselmi, Manager NEC CORPORATION OF AMERICA Dated: By: Its: Page 4 of 4