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Resolution No. 89651 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 8965 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A MUTUAL NON -DISCLOSURE AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND LS POWER ASSOCIATES, L.P. WHEREAS, to facilitate discussions regarding the possibility of a mutually beneficial business relationship regarding the construction of a power plant, the City of Vernon and LS Power Associates ("LS Power") desire to enter into a confidentiality agreement setting forth the terms and conditions under which certain confidential information and documents will be exchanged by the parties; and WHEREAS, the City of Vernon desires to preserve and protect its rights by entering into such a confidentiality agreement with LS Power in a manner that preserves the confidentiality and protected status of the documents, materials, and information to be exchanged. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Mutual Non -Disclosure Agreement with LS Power, a copy of which is attached hereto as Exhibit A and incorporated herein by reference. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor to execute said Agreement for, and on behalf of, the City of Vernon and the Acting City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of -the City of Vernon hereby directs the Acting City Clerk, or his designee, to forward one fully executed original to the Chief Assistant City Attorney for processing. SECTION 5: The Acting City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this lst day of February, 2006. LEONIS C. LBURG, ayor ATTEST: BRUCE V. MALKENHORST, JR. Acting City Clerk - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) . ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8965, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Wednesday, February 1, 2006, and thereafter was duly signed by the Mayor of the City of Vernon. t BRUCE V. MALKENHORST, JR. Acting City Clerk (SEAL) - 3 - EXHIBIT 0 MUTUAL NON -DISCLOSURE AGREEMENT This Mutual Non -Disclosure Agreement ("Agreement") is entered into as of January 17, 2006 ("Effective Date") by and between the City of Vernon, a municipal corporation, having a principal place of business at 4305 Santa Fe Avenue, Vernon, CA 90058 ("City") and LS Power Associates, L.P., a Delaware limited liability company, having a principal place of business at Two Tower Center, 11 th Floor, East Brunswick, NJ 08816 ("Investor"). City and Investor desire to engage in non-exclusive discussions in connection with the possible establishment of a business relationship between them related to the construction of a power plant in the City of Vernon, and to exchange, for the sole purpose of evaluating the possibility of such a relationship, certain confidential information and documents. The parties acknowledge and agree that the sole reason for their exchanging confidential information is to facilitate their discussions of a possible mutually beneficial relationship, and the use or disclosure of any of such shared confidential information for any other purpose is wrongful and in violation of the terms of this Agreement. To further specifically protect their confidential information, the parties hereby agree as follows: 1. Definition of Confidential Information. The term "Confidential Information" shall mean (a) all non-public information disclosed in writing, diagrams, computers, emails, or any other form or medium by either party or a party's employees, agents, consultants, attorneys and other representatives (collectively, the "Related Parties"), marked as "Confidential" or "Proprietary" when furnished; (b) all non-public information disclosed by a party or one of the Related Parties in the course of an oral exchange, negotiation, meeting, or conversation, identified as "Confidential" or "Proprietary" when disclosed; (c) all information provided in any term sheets, memorandum, letters of intent, or other correspondence or conversations related to the potential business arrangement between the parties; and (d) the existence and terms of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the limitations and prohibitions on use, duplication and disclosure of Confidential Information as set forth in this Agreement shall apply to any and all non-public information disclosed in writing or orally to either party prior to the date of this Agreement notwithstanding the fact that such disclosure occurred prior to the date of this Agreement. 2. Nondisclosure and Nonuse Obli atg ions. Each of the parties, as Recipient, agrees that such Recipient will not, directly or indirectly, on its own or by, for, or through any other person or entity, use, disseminate, or in any way disclose any Confidential Information of the other party, as Discloser, to any person, firm or business, except to the extent necessary for internal evaluations in connection with negotiations, discussions, and consultations with personnel or authorized representatives of such Discloser in furtherance of the purpose stated above or except as otherwise provided for in this Agreement. Furthermore, the existence of any business negotiations, discussions, consultations or agreements in progress between the parties shall not be released to any public media without written approval of both parties. Each of the parties, as Recipient, agrees that such Recipient shall treat all Confidential Information of the other party, as Discloser, with the same degree of care as such Recipient accords to such Recipient's own Confidential Information, but in no case less than reasonable care. Each of the parties, as Recipient, agrees that such Recipient shall disclose Confidential Information of the other party, as Discloser, only to those of such Recipient's affiliates and its and their members, 01910/0035 132795.1 i partners, directors, officers, employees, consultants, agents, and counsel (collectively, the "Representatives") who need to know such information, and such Representatives agree, to be bound by terms and conditions substantially similar to those terms and conditions applicable to such Recipient under this Agreement. Each of the parties, as Recipient, shall immediately give notice to the other party, as Discloser, of any unauthorized use or disclosure of Discloser's Confidential Information. Each of the parties, as Recipient, agrees to reasonably assist the other party, as Discloser, in remedying any such unauthorized use or disclosure of Discloser's Confidential Information. 3. Exclusions from Nondisclosure and Nonuse Obli& tions• Term of Obligations. The obligations of each of the parties, as Recipient, with respect to any portion of the Confidential Information of the other party, as Discloser, shall not apply to such portion that: (a) was in the public domain at or subsequent to the time such portion was communicated to such Recipient by such Discloser through no fault of such Recipient, (b) was rightfully in such Recipient's possession free of any obligation of confidence, to the Recipient's knowledge, at or subsequent to the time such portion was communicated to such Recipient by such Discloser, (c) was developed by employees or agents of such Recipient independently of and without reference to any information communicated to such Recipient by such Discloser, or (d) was communicated by such Discloser to an unaffiliated third party free of any obligation of confidence. A disclosure by each of the parties, as Recipient, of Confidential Information of the other party, as Discloser, either (a) in response to a valid order by a court or other governmental body, (b) otherwise required by law, rule or regulation, or (c) necessary to establish the rights of either party under this Agreement, shall not be a breach of this Agreement by such Recipient or a waiver of confidentiality for other purposes; provided, however, such Recipient shall provide reasonably prompt prior notice thereof to such Discloser to enable such Discloser to seek a protective order or otherwise prevent such disclosure. The obligations of the parties shall continue for a period of two (2) years from the Effective Date unless earlier terminated as described in this Paragraph 3. 4. Ownership and Return of Confidential Information and Other Materials. All Confidential Information of each of the parties, as Discloser, shall remain the property of such Discloser. At such Discloser's request and no later than five (5) days after such request, such Recipient shall promptly deliver to such Discloser or destroy, at Recipient's option, all tangible media of expression in such Recipient's possession or control to the extent that such tangible media incorporate any of such Discloser's Confidential Information, except to the extent that Recipient's counsel reasonably believes that the Recipient is required to retain all or a portion of such Confidential Information. At Discloser's request, Recipient shall deliver written certification of such Recipient's compliance with such Recipient's obligations under this sentence. 5. Governing Law. This Agreement shall be governed in all respects by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. 2 01910/0035 132795.1 6. Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable, (i) that provision shall be deemed amended to achieve as nearly as possible the same effect as the original provision, and (ii) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. 7. Waiver, Amendment: Modification. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed by the party against whom such waiver or consent is asserted. The waiver by either party of, or consent of either party to, a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of, consent to, or excuse of any other or subsequent breach by the other party. This Agreement may be amended or modified only by mutual written agreement. 8. Injunctive Relief. A breach or threatened breach by either party of any of the promises or agreements contained herein may result in irreparable and continuing damage to the other party for which there will be no fully adequate remedy at law, and such other party shall be entitled to seek injunctive relief, a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate) without the need to post a bond or other security, and without the need to prove damages. Notwithstanding anything contained herein to the contrary, neither party shall be liable for any consequential, punitive, exemplary or indirect damages as a result of a breach of this Agreement. 9. Entire Agreement. This Agreement constitutes the entire agreement with respect to the matters described herein and supersedes all prior or contemporaneous oral or written agreements concerning such matters. 10. Negotiations. The parties are entering into this Agreement to discuss a possible business relationship, and there is no obligation on the part of the parties to proceed with negotiations, to enter into a definitive agreement, or to establish a business relationship. Unless and until a definitive agreement is signed by the parties, neither party has any obligation or liability to the other, except in connection with Confidential Information, as set forth in this Agreement. Any discussions undertaken by the parties are non-exclusive. Executed as of the date first written above. City of Vernon ATTEST: By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk Approved as to Form Name: Eric T. Fresch Title: City Attorney LS Power Associates, L.P. By: LS Power Development, LLC, its general partner By: Name: ANY— Title: &e JZ,O. d- / 94,1, City of Vernon By: Leonis C. Malburg, Mayor 3 01910/0035 132795.1 SUPPORTING DOCUMENTS MUTUAL NON -DISCLOSURE AGREEMENT This Mutual Non -Disclosure Agreement ("Agreement") is entered into as of January 17, 2006 ("Effective Date") by and between the City of Vernon, a municipal corporation, having a principal place of business at 4305 Santa Fe Avenue, Vernon, CA 90058 ("City") and LS Power Associates, L.P., a Delaware limited liability company, having a principal place of business at Two Tower Center, I Ith Floor, East Brunswick, NJ 08816 ("Investor"). City and Investor desire to engage in non-exclusive discussions in connection with the possible establishment of a business relationship between them related to the construction of a power plant in the City of Vernon, and to exchange, for the sole purpose of evaluating the possibility of such a relationship, certain confidential information and documents. The parties acknowledge and agree that the sole reason for their exchanging confidential information is to facilitate their discussions of a possible mutually beneficial relationship, and the use or disclosure of any of such shared confidential information for any other purpose is wrongful and in violation of the terms of this Agreement. To further specifically protect their confidential information, the parties hereby agree as follows: 1. Definition of Confidential Information. The term "Confidential Information" shall mean (a) all non-public information disclosed in writing, diagrams, computers, emails, or any other form or medium by either party or a party's employees, agents, consultants, attorneys and other representatives (collectively, the "Related Parties"), marked as "Confidential" or "Proprietary" when furnished; (b)all non-public information disclosed by a party or one of the Related Parties in the course of an oral exchange, negotiation, meeting, or conversation, identified as "Confidential" or "Proprietary" when disclosed; (c) all information provided in any term sheets, memorandum, letters of intent, or other correspondence or conversations related to the potential business arrangement between the parties; and (d) the existence and terms of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the limitations and prohibitions on use, duplication and disclosure of Confidential Information as set forth in this Agreement shall apply to any and all non-public information disclosed in writing or orally to either party prior to the date of this Agreement notwithstanding the fact that such disclosure occurred prior to the date of this Agreement. 2. Nondisclosure and Nonuse Obligations. Each of the parties, as Recipient, agrees that such Recipient will not, directly or indirectly, on its own or by, for, or through any other person or entity, use, disseminate, or in anyway disclose any Confidential Information of the other party, as Discloser, to any person, firm or business, except to the extent necessary for internal evaluations in connection with negotiations, discussions, and consultations with personnel or authorized representatives of such Discloser in furtherance of the purpose stated above or except as otherwise provided for in this Agreement. Furthermore, the existence of any business negotiations, discussions, consultations or agreements in progress between the parties shall not be released to any public media without written approval of both parties. Each of the parties, as Recipient, agrees that such Recipient shall treat all Confidential Information of the other party, as Discloser, with the same degree of care as such Recipient accords to such Recipient's own Confidential Information, but in no case less than reasonable care. Each of the parties, as Recipient, agrees that such Recipient shall disclose Confidential Information of the other party, as Discloser, only to those of such Recipient's affiliates and its and their members, 01910/0035 132795.1 partners, directors, officers, employees, consultants, agents, and counsel (collectively, the "Representatives") who need to know such information, and such Representatives agree, to be bound by terms and conditions substantially similar to those terms and conditions applicable to such Recipient under this Agreement. Each of the parties, as Recipient, shall immediately give notice to the other party, as Discloser, of any unauthorized use or disclosure of Discloser's Confidential Information. Each of the parties, as Recipient, agrees to reasonably assist the other party, as Discloser, in remedying any such unauthorized use or disclosure of Discloser's Confidential Information. 3. Exclusions from Nondisclosure and Nonuse Obligations, Term of Obligations. The obligations of each of the parties, as Recipient, with respect to any portion of the Confidential Information of the other party, as Discloser, shall not apply to such portion that: (a) was in the public domain at or subsequent to the time such portion was communicated to such Recipient by such Discloser through no fault of such Recipient, (b) was rightfully in such Recipient's possession free of any obligation of confidence, to the Recipient's knowledge, at or subsequent to the time such portion was communicated to such Recipient by such Discloser, (c) was developed by employees or agents of such Recipient independently of and without reference to any information communicated to such Recipient by such Discloser, or (d) was communicated by such Discloser to an unaffiliated third party free of any obligation of confidence. A disclosure by each of the parties, as Recipient, of Confidential Information of the other party, as Discloser, either (a) in response to a valid order by a court or other governmental body, (b) otherwise required by law, rule or regulation, or (c) necessary to establish the rights of either party under this Agreement, shall not be a breach of this Agreement by such Recipient or a waiver of confidentiality for other purposes; provided, however, such Recipient shall provide reasonably prompt prior notice thereof to such Discloser to enable such Discloser to seek a protective order or otherwise prevent such disclosure. The obligations of the parties shall continue for a period of two (2) years from the Effective Date unless earlier terminated as described in this Paragraph 3. 4. Ownership and Return of Confidential Information and Other Materials. All Confidential Information of each of the parties, as Discloser, shall remain the property of such Discloser. At such Discloser's request and no later than five (5) days after such request, such Recipient shall promptly deliver to such Discloser or destroy, at Recipient's option, all tangible media of expression in such Recipient's possession or control to the extent that such tangible media incorporate any of such Discloser's Confidential Information, except to the extent that Recipient's counsel reasonably believes that the Recipient is required to retain all or a portion of such Confidential Information. At Discloser's request, Recipient shall deliver written certification of such Recipient's compliance with such Recipient's obligations under this sentence. 5. Governing Law. This Agreement shall be governed in all respects by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. 2 01910/0035 132795.1 6. Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable, (i) that provision shall be deemed amended to achieve as nearly as possible the same effect as the original provision, and (ii) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby. 7. Waiver; Amendment; Modification. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed by the party against whom such waiver or consent is asserted. The waiver by either party of, or consent of either party to, a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of, consent to, or excuse of any other or subsequent breach by the other party. This Agreement may be amended or modified only by mutual written agreement. 8. Injunctive Relief. A breach or threatened breach by either party of any of the promises or agreements contained herein may result in irreparable and continuing damage to the other party for which there will be no fully adequate remedy at law, and such other party shall be entitled to seek injunctive relief, a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate) without the need to post a bond or other security, and without the need to prove damages. Notwithstanding anything contained herein to the contrary, neither party shall be liable for any consequential, punitive, exemplary or indirect damages as a result of a breach of this Agreement. 9. Entire Agreement. This Agreement constitutes the entire agreement with respect to the matters described herein and supersedes all prior or contemporaneous oral or written agreements concerning such matters. 10. Negotiations. The parties are entering into this Agreement to discuss a possible business relationship, and there is no obligation on the part of the parties to proceed with negotiations, to enter into a definitive agreement, or to establish a business relationship. Unless and until a definitive agreement is signed by the parties, neither party has any obligation or liability to the other, except in connection with Confidential Information, as set forth in this Agreement. Any discussions undertaken by the parties are non-exclusive. Executed as of the date first written above. City of Ve ATTEST: By: Name: Bruce V. Malkenhorst, Jr. Title: Acting City Clerk Approved as to Form By: C �* Name: Eric T. Fresch Title: City Attorney LS Power Associates, L.P. By: LS Power Development, LLC, its general partner By: Name: lz� &fy-VOYU Title: Se.l� .P t 11-L t City of Vernon --'- �eonis C. Malbu , Mayor 01910/0035 132795.1