Resolution No. 92891 RESOLUTION NO. 9289
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
3 VERNON APPROVING, RATIFYING AND AUTHORIZING THE
EXECUTION OF CONFIDENTIALITY AGREEMENTS WITH
4 VARIOUS PARTIES RELATING TO THE VERNON POWER PLANT
5 AND THE COLDWATER PROJECT
6 WHEREAS, the City of Vernon (the "City") owns and operates
7 its own electric system which services the City's constituents; and
8 WHEREAS, the City constructed the Malburg Generating Station
9 ("MGS") within the City limits for the purpose of producing
10 additional generating capacity; and
11 WHEREAS, the City is in the process of developing a natural
12 gas -fired combined cycle power plant located within City limits
13 officially named the Vernon Power Plant (the "VPP Project") for the
14 purpose of installing additional generating capacity that will yield
15 an efficient, cost-effective, and reliable source of electric
16 generation to the City; and
17 WHEREAS, the City is in the process of evaluating its
18 portfolio of power and transmission rights and generation assets,
19 associated power purchase agreements and potential transactions
20 regarding the MGS, the VPP Project and associated real and personal
21 assets owned by the City (collectively, the "Coldwater Project"); and
22 WHEREAS, the City desires to preserve and protect its rights
231 by entering into confidentiality agreements with various parties in a
24 manner that preserves the confidentiality and protected status of the
25 documents, materials, and information to be exchanged, retained and
26 used; and
27 WHEREAS, to facilitate discussions relating to the Coldwater
28 Project and the VPP Project, the Director of Light & Power executed a
1 Confidentiality Agreement on April 2, 2007 with TransCanada Pipeline
2 USA Ltd. (the "Agreement"), subject to ratification by the City
3 Council; and
4 WHEREAS, to facilitate discussions, studies, contractual
5 sales or purchase arrangements regarding the Coldwater Project and the
6 development, erection, and operation of the VPP Project, the Director
7 of Light & Power executed numerous Confidentiality Agreements with
81 various parties on April 12, 2007, setting forth the terms and
9 conditions under which certain confidential information and documents
10 will be exchanged, retained and used by the parties, subject to
11 ratification by the City Council; and
12 WHEREAS, the City Council desires to approve and ratify the
13 actions of the Director of Light & Power in executing the numerous
14 Confidentiality Agreements on April 2, 2007 and April 12, 2007; and
15 WHEREAS, in order to facilitate the Coldwater and VPP
16 Projects and avoid any unnecessary delays to the completion of the
17 Projects which could potentially impact the City, staff is -
18 recommending that the Acting City Administrator, or his designee, be
19 authorized to execute future Confidentiality Agreements with various
20 parties after approval as to form by the City Attorney relating to the
21 Projects and to do all other actions deemed necessary or advisable to
22 facilitate the Confidentiality Agreements; and
23 WHEREAS, the City Council of the City of Vernon has
24 determined that, pursuant to the provisions of subsection (a) of
25 Section 2.27 of the Vernon City Code, it is in the public interest and
26 necessity to enter into the various Confidentiality Agreements with
27 the various parties.
28 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
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II 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
II and correct.
SECTION 2: The City Council of the City of Vernon hereby
11 ratifies the Director of Light & Power's execution of the
Confidentiality Agreement on April 2, 2007 with TransCanada Pipeline
USA Ltd., a copy of which is attached hereto as Exhibit A and
incorporated by reference, and ratifies the Director of Light &
Power's execution of various Confidentiality Agreements on April 12,
2007 with various parties in substantially the same form as Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
approves and authorizes the Acting City Administrator, or his
designee, to execute any future Confidentiality Agreements with
various parties after approval as to form by the City Attorney to
complete the Coldwater and VPP Projects on behalf of the City and to
do all other actions or to execute any document as shall be required
to implement the confidentiality agreements or that are deemed
necessary or advisable during the evaluation process.
SECTION 4: 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 16th day of April, 2007.
A TEST:
ANUELA GIRON, A ting City Clerk
�-LEONIS C. MALBURG, M yor
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I STATE OF CALIFORNIA )
ss
2 COUNTY OF LOS ANGELES )
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4 I, MANUELA GIRON, Acting City Clerk of the City of Vernon, do
5 hereby certify that the foregoing Resolution, being Resolution No.
6 9289, was duly adopted by the City Council of the City of Vernon at a
7 regular meeting of the City Council duly held on Monday, April 16,
8 2007, and thereafter was duly signed by the Mayor of the City of
9 Vernon.
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11 �ANUELAON, Acting City Clerk
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(SEAL)
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EXHIBIT
",A
CONFIDENT1ALIIY AGREEMENT
This Confidentiality Agreement (this "Agreement") entered into between TransCanada PipeLine USA Ltd.
("IransCanada") and the City of Vernon, California ("Vernon") (with TransCanada and Vernon each sometimes
referred to as a "Party" and collectively sometimes as the "Parties").
WHEREAS Vernon has been developing a combined cycle power plant to be located in Vernon, California; --
AND WHEREAS Vernon and TransCanada wish to enter into discussions about TransCanada's possible investment in
the proposed power plant (the "Proposed Transaction");
AND WHEREAS each Party will be required to review certain confidential and proprietary information of the other
Party and its Affiliates in order to determine whether to participate in the Proposed Transaction;
AND WHEREAS IransCanada and Vernon have agreed to disclose such confidential and proprietary information to
each other on the condition that such information be retained in confidence and dealt with in accordance with the
following provisions;
NOW IHEREFORE in consideration of the disclosure of such confidential and proprietary information by
IransCanada to Vernon and by Vernon to TransCanada, and of the mutual covenants and agreements of the Parties
contained herein, the Parties agree as follows;
1. Definitions
In this Agreement the following words and phrases shall have the following meanings:
(a) "Affiliate" means in relation to a Party any company or corporation which (i) directly or indirectly
controls such Party-, (ii) is directly or indirectly controlled by such Party; or (iii) is directly or
indirectly controlled by a company of- corporation which directly or indirectly controls such Party;
where "control" means the right to exercise votes attaching to more than fifty percent (501/9) of the
voting shares of the company or corporation in question, provided that a partnership which is a Party
and which is comprised solely of the other companies or corporations which are Affiliates, as
described above, shall be deemed to be an Affiliate of each such company or corporation and its other
Affiliates;
(b) "Confidential Information" means all information, in whatever- form, whether factual, interpretive or
strategic, furnished by or on behalf of the Provider hereunder, directly or indirectly to the Recipient,
including but not limited to, all contracts, financial information, financial strategies, engineering
reports, environmental reports, land and lease information, technical and economic data, marketing
information and field notes, marketing strategies, marketing methods, sketches, photographs,
computer records or software, specifications, models, or other information which is or may be either
applicable to or related in any way to the assets, business or affairs of the Provider or its Affiliates, or
the Proposed Transaction, together with all analyses, compilations, data studies or other documents
prepared by the Recipient or its Representatives containing or based upon, in whole or in part,
information acquired by the Recipient during the course of its Review.. Confidential Information shall
not include Non-proprietary Information;
(e) "Non-proprietary Information" means the information with respect to which the Recipient is able to
establish:
(i) at the time of disclosure was or thereafter became generally available to the public, other
than as a result of any act or omission by the Recipient or its Representatives or anyone to
whom the Recipient or its Representatives disclosed such information;
(ii) was or became lawfully known to the Recipient or its Representatives on a non -confidential
basis and not in contravention of any applicable law from a source (other than the Provider)
that is entitled to disclose the information; or
(iii) was already lawfully in the possession of the Recipient or its Representatives or was lawfully
acquired by them, provided that, such information is not subject to another confidentiality
agreement or other obligation of secrecy; and
provided that, any combination of the information which comprises part of the Confidential
Information shall not be deemed to be Non-proprietary Information merely because individual parts of
t7rat information were within the scope of the above clauses unless the combination itself was within
the scope of any of the above clauses;
(d) "Provider" shall mean the Party or its Representative who is providing information to the other Party,
being IiansCanada, Vernon or their respective Affiliates, as the context requires;
(e) "Recipient" shall mean the Party or its Representative that is receiving information horn the other
Party, being IransCanada, Vernon or their respective Affiliates, as the context requiies;
(f) "Representatives" means the directors, officers, employees, agents, lawyers, engineers, accountants,
consultants and financial advisers of a Party or Affiliates of a Party; and
(g) "Review" means the Recipient's review of any information provided by the Provider for the purposes
of the Proposed Iransaction.
2, Use and Non -disclosure
The Recipient shall:
(a) keep the Confidential Information in strict confidence and not use the Confidential Information for
any purpose whatsoever, directly or indirectly, whether in competition with the Provider or otherwise,
other than for the purpose of conducting the Review;
(b) disclose only such portions of the Confidential Information to its Representatives as is required for the
purpose of conducting the Review and only to those Representatives who have a need to know the
same;
(c) be liable for any breach of this Agreement by it or any of its Representatives and the Recipient
covenants that, in the case of disclosure of Confidential Information to any of its Representatives,
such persons shall be informed at the time of disclosure of the confidential and proprietary nature of
the Confidential Information;
(d) keep a list of all its Representatives to whom any Confidential Information has been delivered and
shall provide the Provider with that list immediately upon written request; and
(e) not disclose, without the prior written consent of the Provider, any Confidential Information to any
person other- than in accordance with the terms of this Agreement, except in the event that the
Recipient or its Representatives are required by law to otherwise disclose any Confidential
Information. Prior to any such disclosure, the Recipient shall immediately provide to the Provider
written notice thereof so that Provider may seek a protective order or other appropriate remedy or
waive compliance by the Recipient with this clause. In the event that any court or administrative
body requires disclosure of the Confidential Information, then the Recipient or any of its
Representatives required to provide such disclosure will furnish only that portion of the Confidential
Information which is legally required and, further, shall each exercise their best efforts to obtain
reasonable assurances that confidential treatment will be accorded such Confidential Information
3.. Acknowledements by Recipient
the Recipient acknowledges that:
(a) the Confidential Information is proprietary to the Provider, and provided to the Recipient solely for
the purpose of the Review;
(b) the provision by the Provider of any Confidential Information to any other third party does not render
such Confidential Information as Mon -proprietary Information;
(c) without prejudice to the terms and conditions of any eventual agreement or agreements relating to the
Proposed Transaction, the Provider does not make any representation or warranty, express or implied,
as to the accuracy or completeness of the Confidential Information;
(d) it will rely upon its own investigations, due diligence and analysis in evaluating and in satisfying itself'
as to all matters relating to the Proposed Transaction;
(e) the Provider shall have no liability to the Recipient or any of its Representatives resulting from any
use of the Confidential Information by the Recipient or any of its Representatives; and
(f) no commitment or contract relating to the Proposed Iransaction shall exist unless and until definitive
agreements have been executed and delivered by or on behalf of the Parties
4.. Acknowledgement by TransCanada
TransCanada is considering a possible investment in a combined cycle power plant being developed by Vernon
to be located in Vernon, California As such, Vernon will usually be the Provider and TransCanada will usually be the
Recipient of Confidential Information However, from time to time, TransCanada may be the Provider and Vernon may
be the Recipient of Confidential Information. TransCanada acknowledges that as a public entity Vernon is subject to
the requirements of the California Public Records Act and that this may hinder Vernon's ability to maintain the
confidentiality of'Confidential Information.
5 Return of Confidential Information
At any time, upon the written request of the Provider for any reason whatsoever, and within five (5) days of
such request, the Recipient shall return all original copies of the Confidential Information to the Provider and shall
destroy any and all copies or other reproductions or extracts thereof, together with such documents, memoranda, notes
and other writings whatsoever prepared by Recipient and its Representatives based on the Confidential Information.
Upon any such request, a senior- officer of Recipient shall promptly certify in writing to the Provider that all of the
documents constituting Confidential Information, including documents constituting Confidential Information held by its
Representatives, have been returned or destroyed
6.. Failure or Delay Not Waiver
It is understood and agreed by the Recipient that any failure or delay by the Provider in exercising any right,
power or privilege under this Agreement shall not operate as a waiver thereof, nor shall any single or partial exercise
thereof'preclude any other or future exercise of any right (equitable or otherwise), power or privilege hereunder:
7.. Duration of Agreement
This Agreement shall remain in force and effect for a period of two (2) years from the date hereof'
notwithstanding that the Confidential Information may have been returned or copies thereof destroyed prior to the
expiration of'such time period
8.1 Iniunctive Relief
the Recipient acknowledges that monetary damages would not be a sufficient remedy for a breach of this
Agreement by the Recipient or any of its Representatives and agrees that in addition to any other remedy to which
Provider or its Affiliates may be entitled under this Agreement, at law or in equity, Provider or its Affiliates shall be
entitled to injunctive relief to prevent breaches of this Agreement and to specifically enforce the terms and provisions
hereof,
9.. Notices
Notices, where required herein, shall be sufficiently given if delivered personally, by courier or by fax or other
electronic means directed as follows:
City of Vernon
4305 Sanfe Fe Avenue
Vernon, California 90058
Attention: Donal O'Callaghan, Director of Light and Power
Fax: (323) 587-7596
TransCanada PipeLine USA Ltd.
c/o Suite 900
1400 SW Fifth Avenue
Portland, OR 9 7201
Attention: Peter G. Lund
Fax: (503) 833-4913
Such notice shall be deemed to have been delivered on the date of actual delivery in the case of personally
delivered or courier- and in the case of notices sent by fax or other electronic means on the next business day following
the date of receipt. Either Party may change its address or fax number hereunder from time to time by giving written
notice of'such to the other Party
10. Severance
If'any provision of* this Agreement is determined by a court of competent jurisdiction to be wholly or partially
unenforceable for any reason, such unenforceability will not affect the enforceability of the balance of this Agreement
and all provisions of this Agreement shall, if alternative interpretations are applicable, be construed so as to preserve the
enforceability hereof'
11. Entire Agreement
This Agreement expresses the entire agreement between the Parties with respect to the communication and
delivery of Confidential Information and supersedes and cancels all prior communications, understandings and
agreements between the Parties, whether written or oral, express or implied. Ihis Agreement shall be binding upon and
enure to the benefit of the Parties and their respective successors and permitted assigns
12. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the State of New York and
the Federal laws applicable therein and the courts of New York shall have jurisdiction to entertain applications for
injunctive relief'and all other actions arising in connection with this Agreement.
13. Enurement
Ihis Agreement shall be binding upon and enure to the benefit of the Parties and their respective Affiliates,
successors and assigns.
14•. Counteraart Execution
Ihis Agreement may be executed and delivered in counterparts with the same effect as if both Parties had
signed and delivered the same copy, and when each Party has executed and delivered a counterpart, all counterparts
together constitute one Agreement Delivery of a copy of this Agreement by facsimile or electronic mail is good and
sufficient deliver y..
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IN WITNESS WHEREOF each of the Parties has executed this Agreement as of'the 2"a day of April, 2007
TRANSCANADA PIPELINE USA LTD.. THE CITY O O
1
P
berg Donal O'Callaghan
Deputy General Counsel Director of Light and Power
Per:
GARFV y,.t4_Na
Vice Fles;ii�tit, kick Maflaup.ment
SUPPORTING
DOCUMENTS
CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: April 30, 2007
TO: Donal O'Callaghan, Director of Light & Power
FROM: Nelly Giron, Acting City Clerk
RE: Resolution No. 9289 - A Resolution of the City Council of
the City of Vernon Approving, Ratifying and Authorizing the
Execution of Confidentiality Agreements with Various Parties
Relating to the Vernon Power Plant and the Coldwater Project
Transmitted herewith is a copy of the fully executed confidentiality
agreement and Resolution No. 9289, referenced above, which was
approved and ratified by City Council on April 16, 2007.
Thank you.
NG:dr
c: Resolution No. 9289
Agreement No. 07-037