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18-815AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A CONFIDENTIALITY AGREEMENT BETWEEN THE CITY AND TRAILSTONE POWER LLC. ("TRAILSTONE"); PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, TRAILSTONE POWER LLC., ("TrailStone"} is a power marketing campany registered to do business in Texas; and WHEREAS, the City, a Texas hame-rule municipal carporation, owns and operates an electric utility which operates under the trade name of Denton Municipal Electric (66DME99); and WHEREAS, DME is pursing multiple vendor relationships in an effort to maximize the benefits of exposure to competitive energy markets, and desires ta discuss the possibility of a future business relatianship with TrailStane for the purpose of transacting energy products; and WHEREAS, TrailStane has offered ta discuss the praducts and services it might pravide to DME, but with the condition that a confidentiality agreement be executed prior ta such discussion; and WHEREAS, DME desires ta have the benefits of multiple competitive options through which it may transact for its energy requirements; and WHEREAS, TrailStone requires a confidentiality agreement prior to entering into preliminary discussions with DME; and WHEREAS, the City Council finds it is in the public interest for the City Manager, ar his designee, ta execute the attached Canfidentiality Agreement after appraval af the same by the City Attorney, ar his designee. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS; SECTION 1. The findings and recitations contained in the preamble of this Ordinance are .. ..... _ . incarporated herein by reference. �I;_�;`I"li:�l� ;�?.; The City Manager, or his designee, is authorized ta execute the Confidentiality Agreement with TrailStone (attached as Exhibit "A" and incorporated herein far all purposes} after the same has been appraved by the City Attorney, without further autharity, guidance, or direction from the City Council, and is further authorized ta carry aut the rights, duties, abligations and respansibilities of the City under the Agreement. ��,(_:""11�)�P �, If any section, subsectian, paragraph, sentence, clause, phrase or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity af the remaining portions af this ordinance, and the City Cauncil of the City af Denton, Texas, hereby declares it would have enacted such remaining portions despite any such invalidity, SECTION 4. That this Ordinance shall become effective immediately upan its passage and appraval. ' �a ��, ��i� ��.�i��;�� :� rr��e l��" , ��"�"�.��'��:,�� " ��"��`'�� and d��a��I��B � ��7��m�� "�'. ��.�� ..�� .a�. . ._.� t�� a�m �.��i��;� was passed and ��•��.,�� by �I�cs � ��".. tr��l��;, �wa��ar � ��. � Nw. Aye NaX Abstain Absent Chris Watts, Mayor: Gerard Hudspeth, District 1: Keely G. Briggs, District 2: Don Duff, District 3: John Ryan, District 4: Deb Armintor, At Large Place 5: � �_:�°�..�� ri�,m Paul Meltzer, At Large Place 6: _._� � PASSED AND APPROVED this the ��° ��",m_ day of �� m, 2018. �� ,�.�� . � �� .. CHRISyWATTS, �^l�t��"�l��wmw .�.w�...�...... ATTEST: JENNIFER WALT�RS, CITY S�CRETARY � : r"il' � C�VED �'� TO LEGAL FORM: �,� ��:)�9 LEAL, CITY ATTORNEY �"f BY �� `� ,,� � __.�_-� _ ro� �� ,� � �.x�� ,,. , � ,��, 1��CJ"�"1��,� C°+C��'I��i"1'��,��"T"'� �d�� I'�f:��.�. THIS CONFIDENTIALITY AGREEMENT (this "Agreement"), dated as of June 18, 2017, is by and betuveen TrailStone Power, LLC, a Delaware limited liability company, and the City of Denton, a Texas municipal corporation ("City of Denton"). TrailStone Group and the City of Denton are collectively referred to herein as the "Parties" and individually as a"Party." WHEREAS, the Parties have recently had discussions or desire to enter into discussions concerning prospective commercial transactions under an EEl Master Power Purchase & Sale Agreement with Denton Municipal Electric ("DME"), a city department of City of Denton, in Denton, Texas (the "Project"), and as a result, it is deemed desirable by each Party to disclose certain information to the other Party; WHEREAS, it is a condition to the disclosure of such information that the Parties enter into this Agreement to evidence the Parties' undertakings and agreement with respect to the treatinent as confidential, and the control and use of, information that may be furnished to the Parties; and NOW, THER�FORE, in consideration of the foregoing premises, the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows: 1. Defined Terms. As used in this Agreement each of the following terms shall have the meaning assigned to such term as set forth below: 1.1. "Affiliate" means any Person that directly or indirectly (through one or more intermediaries) controls or is controlled by or is under common control with the relevant Person specified herein. 1.2. "Confidential Information" means (a) all information, whether of a business, technical, engineering, economic or other nature and regardless of the form in which it is communicated or maintained, relatin� to a Party (the "Disclosing Party"), its Affiliates and/or the Project that is provided to the other Party (the "Receiving Party") or any of its Representatives by the Disclosing Party or any of its Representatives, (b) all sketches, drawings, reports, analysis, compilations, studies and notes containing or reflecting Confidential Information, regardless of who prepares such materials, (c) the fact that the Confidential Information has been made available to or is being inspected or evaluated by the Receiving Parry, and (d) the fact that sucl� discussions and negotiations are taking place concerning the Project or other related transactions between the Parties, except that Confidential Information shall not include: (i) information that was already in the Receiving Party's or its Affiliates' possession on a non-confidential basis prior to disclosure hereunder; (ii) information which prior to disclosure was already in the public domain, or which after disclosure entered the public domain other than by a breach ofthis Agreement by the Receiving Aarty or any of its Representatives; and (iii) information which was received from a third party which the Receiving Party reasonably believes was not and is not violating an obligation of confidentiality to the Disclosing Party or its Affiliates; provided that use or disclosure by the Receiving Party of information which the Receivin� Party obtains in the manner described by this ��ii�n l�� i m�.� does not violate any of the terms under which it was disclosed by said third party. 1.3. "Person" means any natural person, corporation, company, partnership, limited liability company, joint venture, trust, organization, association, sole proprietorship or other entity. l.4. "Representatives" shall mean, with respect to either Party hereto, such Party's affiliates, officers, directors, partners, members, employees, agents, trustees, potential and existing lenders, potential and existing investors, potential and existing equity providers, security holders, others providing financing or refinancing and the consultants and advisors (including, without limitation, financial advisors, counsel and accountants, and each of their respective advisors) of such Party. 2. ��t�*i��i�r��;� +�ru i��+��s�air� �ad U�� fC��r��id��1 �n��"�rr�n�t�ic��r. 2.1. The Receiving Party agrees to, and to cause its Representatives to, treat all Confidential Information as confidential and secret and comply with the terms and conditions contained herein. The Receiving Party shall, and shall cause its Representatives to, safeguard all Confidential Information received by it using a reasonable degree of care, but not less than that degree of care used by the Receiving Party in safeguarding its own similar information or material. The Receiving Party shall not, and shall not permit its Representatives to, disclose Confidential Information to any Person (except as set forth in this ��c�i�a� �), without the prior written consent of the Disclosing Party. 2.2. W ithout the prior written consent of the Disclosing Party, the Receiving Party shall not, and shall not permit its Representatives to, make any use whatsoever of the Confidential Information other than as may be necessary for the purpose referenced above in connection with the Project. 2.3. Except as set forth in ��t;i�a�� .�, the Receiving Party shall only disclose Confidential Information to those of its Representatives, or other Persons that are concerned with the Project and whose knowledge of such Confidential Information is necessary or advisable for such purpose. Each such Aerson receiving Confidential information from the Receiving Parly shall have the same obligations with respect to such Confidential Information as the Receiving Party hereunder, and the Receiving Party shall so instruct each such Person receiving Confidential Information and shall use all reasonable efforts to prevent and prosecute unauthorized use or disclosure of Confidential Information by such Persons. The Receiving Parry shall be liable to the Disclosing Party for any breach of such obligations by any such Persons. 2.4. If the Receiving Party or any of its Representatives is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas or similar process) in connection with any review or proceeding to disclose or otherwise becomes legally compelled to disclose any Confidential Information, the Receiving Party shall provide the Disclosing Party with prompt written notice and reasonable assistance to the extent legally permissible (subject to reimbursement by the Disclosing Party of all reasonable and out of pocket expenses incurred by the Receiving Party in providing such assistance) so as to enable the Disclosing Party to seek a protective order or other appropriate remedy or waive compliance with this Agreement. If such a protective order or other remedy is not obtained, or if the Disclosing Party waives compliance with this Agreement, the Receiving Party (or such other Persons to whom such request is directed) may disclose Confidential Information, but only such Confidential Information as it deems in good faith it is legally required to disclose to avoid contempt or other penalty, and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential Information disclosed. 3. �t��"�1��,�ir�� t��a� of Confidential Information, 3.1. The Receiving Party shall take all commercially reasonable steps to prevent the unauthorized use, distribution or reproduction of all copies of written materials relating to or containing any part of Confidential Information, including all sketches, drawings, reports, analysis, compilations, studies and notes, and all copies, reproductions, reprints and translations thereof. The Receiving Parly shall not, and shall not permit its Representatives to, directly or indirectly, duplicate or otherwise reproduce, in whole or in pa�t, such Confidential Information in any manner inconsistent with the terms hereof. 3.2. The Receiving Aarty shall return to the Disclosing Party, or where unable, confirm in writing proper destruction thereof within ten (l0) days afier receipt of such a request by the Disclosing Parry, all materials derived from, containing or reflecting Confidentia( Information that are in the possession of the Receiving Party and its Representatives, without retaining copies. Notwithstanding the foregoing, Receiving Party may retain such materials to the extent required by applicable law or internal record-keeping policies and may also retain reports, analysis, compilations, studies, notes or other documents or records prepared by the Receiving Parly which contain or otherwise reflect or are generated from Confidential Information, provided, however, Receiving Party shall keep all such copies confidential in accordance with this Agreement and such obligation shall survive the termination of this Agreement. Notwithstanding the return of such materials, the Receiving Party and its Representatives shall continue to be bound by the obligations of confidentiality and other obligations hereunder. 4. Notice. All notices, requests, consents, waivers and other communications required, permitted or desired to be given hereunder or by law to be served upon or given to a Party by any other Party shall be deemed duly se�ved and given when received after being delivered by hand, courier or facsimile or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to TrailStone Power, LLC: 2901 Via Fortuna Drive, Ste. Austin, TX 78746 Attention: Credit Department Telephone: (512) 628-1218 Facsimile: (512) 628-1335 If to City of Denton: 125 1659 Spencer Road Denton, TX 76205 Attention: Philip DiPastena Telephone: (940) 349-7517 Facsimile: (940) 349-7334 Each Party may change its address for the purpose of this section by giving written notice of such change to the other Party in the manner provided in this section. 5. Term. This Agreement and the obligations of confidentiality undertaken hereby shall remain in full force and effect for a period from the date of this Agreement until the end of two (2) years after the date of this Agreement. 6. �� ''l��iv�rµ ��t�p�rr�l��re�l�. No failure or delay by the Disclosing Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. Any modification of or amendment to this Agreement and any waiver of any provision of this Agreement must be in writing signed by the Parties. 7. �ra��µ�i�� L��rr�+. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas without reference to the conflict of laws or principles thereof. 8. ��^v�r°��il'i� . If any provision of this Agreement is held to be illegal, inva(id or unenforceable under present or future laws, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceab(e provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 9. ��rn��i��. It is agreed that each Party shall be entitled to seek relief both at law and in equiry, including, but not limited to injunctive relief and specific perfonnance, in the event of any breach or bona fide anticipated breach of tliis Agreement, without proof of any actual or special damages. The Receiving Party agrees it may seek reimbursement of the direct costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Disclosing Party and its Affiliates 4 in successfully enforcing any of the terms of this Agreement and proving in a court of competent jurisdiction that the Receiving Party or any of its Representatives materially breached this A�reement and were unable to cure such breach substantially. 10. ��r��r� �nd � w` r� . Neither Party may assign this Agreement nor any of its rights hereunder except with the prior written consent of the other Party and except that either Party may, without the consent of the other Parry, assign this Agreement and the rights hereunder to any of its Affiliates that own an interes[ in the Project. This Agreement shall be binding upon and inure to the benefit of the successors and perrnitted assigns of the Parties. 1 I. "��s ��Na ��ta�� r J�� rr��r�. The Parties agree that unless and until a definitive agreement has been executed and delivered, no contract or agreement providing for a business relationship between the Parties shall be deemed to exist between the Parties, and neither Party will be under any le�al obligation of any kind whatsoever with respect to such relationship by virtue of this Agreement or any written or oral expression thereof, except, in the case of this Agreement, for the matters specifically agreed to herein. For purposes of chis Agreement, the term "definitive agreement" does not include an executed letter of intent or any other preliminary written agreement or offer, unless specifically so designated in writing and executed by both Parties. This Agreement does not obligate either Party to deal exclusively with the other Party. 12. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one end the same instrument. Any executed counterpart transmitted by facsimile or similar transmission by any Party shall be deemed an original and shall be binding upon such Party. 13. No Warrantv. T'he Parties hereby acknowledge that neither Party, nor any oF its representatives, agents, a�liates or assigns makes any representations or warranties whatsoever conceming the accuracy, completeness or correctness of the Confidential lnformation supplied hereunder, nor must such representation or warranty be implied, 14. ��r�„��r��ra�,�nt. This Agreement represents the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, whether oral or written. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. TRAILSTONE POWER, LLC CITY OF DENTON �� ` ��..�. ...... By: . � �_ By: � ..... � Name: �ITITIT� Name: 'T"��'� Hilem an Title: �� Title: City Manager � _ a � ..,,., � f � �� „, � �� : ; ; f P I �{li�l'�iFi� � —; v �" ��,�, �,' � , � C.;- �iE�ITL�N, � �' �'` „".. � �. : „�� .�� 1"�MIS AGRE�C�I��'T' �A�� 6� BOTH ��"�Il��f�� AND APPROVED as � ��wancial and operat(onal ,� �,�a��i�w��nd b�p�� sa terms. �� - �W�" � � �. . �_.��t��u�"� �� m� � ..��w�� , �� (u � � a � � ,� i�Y G � �� „ � �