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HomeMy WebLinkAboutC-4471 - First Amendment to MOU, Letter of Intent and Confidentiality AgreementNovember 3, 2009 Mr. Andrew Kingman Chief Financial Officer Poseidon Resources 501 W. Broadway Suite 2020 San Diego, CA 92101 Re: Letter of Intent Regarding Potential Water Purchase Agreement Dear Mr. Kingman: The purpose of this letter (the "Letter of Intent") is to indicate the interest of the City of Newport Beach in the potential purchase of up to 8,000 acre -ft per year of desalinated water from a seawater desalination plant to be built by Poseidon Resources ("Poseidon') at its site in the City of Huntington Beach, and to set forth certain conditions for such purchase between the City of Newport Beach and Poseidon. . 1. Water Purchase Agreement. The City of Newport Beach along with, several other Orange County retail water agencies (the "Participating Retail Agencies"), and Poseidon have entered in a Memorandum of Understanding to review the Participating Retail Agencies interest in purchasing desalinated water from the Huntington Beach Project ("Project"). The City of Newport Beach has, and continues to be, interested in pursuing good faith negotiations to reach agreement on the terms to be set forth in a definitive water purchase agreement, based on and subject to the following key minimum conditions and other terms to be agreed upon by and between the City of Newport Beach and Poseidon. 2. No Liability. Except for the obligation to negotiate in good faith and for Section 3 below, the provisions of this Letter of Intent are non-binding and do not constitute and will not give rise to any legally binding obligation on the part of the Parties hereto. Nothing contained in this Letter of Intent (including the Term Sheet) shall be deemed or construed to be an agreement or obligation of either party to conclude negotiations by the execution of the Water Purchase Agreement. The provisions of this Letter of Intent (including the Term Sheet) do not create any rights on the part of either Party. 3. Costs. Except as otherwise agreed to, each of the Parties shall be responsible for its own costs and expenses relating to the review, negotiation and documentation and of a Water Purchase Agreement except as otherwise agreed in the Memorandum of Understanding. 4. Permitting. Poseidon and City of Newport Beach recognizes the potential for regional supply reliability benefits that ocean desalination projects offer to the City of Newport Beach and other Orange County and Southern California agencies. To this extent, and with the understanding that this letter doe not in any way commit the City of Newport Beach to purchase water from the project, the City of Newport Beach will cooperate as it deems appropriate with Poseidon in its efforts to obtain all necessary regulatory approvals and permits to enable the timely construction of the project. 5. Governing Law. This Letter of Intent shall be governed by and construed in accordance with the laws of the State of California without reference to its conflicts of laws principles. 6. Counterparts. This Letter of Intent may be executed in one or more counterparts, each of which, when executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument. If this Letter of Intent properly reflects our understanding, please indicate by signing in the space provided below and returning a copy to the undersigned. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY B Z•l� Leonie H. Mulvihill, Assistant City Attorney ATTEST: By:_ O� 0- U W 1" Leilani I. Brown, City Clerk 446�fRORNN CITY OF NEWPORT BEACH, A Municipal Corporation By: G.1 Da ' Kiff, City Manager Agreed and Accepted: Poseidon Resources, LLC By: Nl--- AJdr-e'w Kingman, Chief Financial Officer Attachment A November 3, 2009 Mr. Andrew Kingman Chief Financial Officer Poseidon Resources 501 W. Broadway Suite 2020 San Diego, CA 92101 Re: Letter of Intent Regarding Potential Water Purchase Agreement Dear Mr. Kingman: The purpose of this letter (the "Letter of Intent") is to indicate the interest of the City of Newport Beach in the potential purchase of up to 8,000 acre -ft per year of desalinated water from a seawater desalination plant to be built by Poseidon Resources ("Poseidon') at its site in the City of Huntington Beach, and to set forth certain conditions for such purchase between the City of Newport Beach and Poseidon. . 1. Water Purchase Agreement. The City of Newport Beach along with, several other Orange County retail water agencies (the "Participating Retail Agencies"), and Poseidon have entered in a Memorandum of Understanding to review the Participating Retail Agencies interest in purchasing desalinated water from the Huntington Beach Project ("Project"). The City of Newport Beach has, and continues to be, interested in pursuing good faith negotiations to reach agreement on the terms to be set forth in a definitive water purchase agreement, based on and subject to the following key minimum conditions and other terms to be agreed upon by and between the City of Newport Beach and Poseidon. 2. No Liability. Except for the obligation to negotiate in good faith and for Section 3 below, the provisions of this Letter of Intent are non-binding and do not constitute and will not give rise to any legally binding obligation on the part of the Parties hereto. Nothing contained in this Letter of Intent (including the Term Sheet) shall be deemed or construed to be an agreement or obligation of either party to conclude negotiations by the execution of the Water Purchase Agreement. The provisions of this Letter of Intent (including the Term Sheet) do not create any rights on the part of either Party. 3. Costs. Except as otherwise agreed to, each of the Parties shall be responsible for its own costs and expenses relating to the review, negotiation and documentation and of a Water Purchase Agreement except as otherwise agreed in the Memorandum of Understanding. 4. Permitting. Poseidon and City of Newport Beach recognizes the potential for regional supply reliability benefits that ocean desalination projects offer to the City of Newport Beach and other Orange County and Southern California agencies. To this extent, and with the understanding that this letter does not in any way commit the City of Newport Beach to purchase water from the project, the City of Newport Beach will cooperate as it deems appropriate with Poseidon in its efforts to obtain all necessary regulatory approvals and permits to enable the timely construction of the project. 5. Governing Law. This Letter of Intent shall be governed by and construed in accordance with the laws of the State of California without reference to its conflicts of laws principles. 6. Counterparts. This Letter of Intent may be executed in one or more counterparts, each of which, when executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument. If this Letter of Intent properly reflects our understanding, please indicate by signing in the space provided below and returning a copy to the undersigned. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY B. ti G Leonie H. Mulvihill, Assistant City Attorney ATTEST: By: - w �*A-- Leilani I. Brown, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation By: Da 'd Kiff, City Manager Agreed and Accepted: Poseidon Resources, LLC By: Andrew Kingman, Chief Financial Officer Attachment B First Amendment to Memorandum of Understanding THIS FIRST AMENDMENT ("First Amendment") TO THE MEMORANDUM OF UNDERSTANDING dated May 22, 2008 ("MOU") is made by and between all the original signatories to the MOU, to wit, Poseidon Resources (Surfside) LLC and its affiliates (collectively, "Poseidon"), the City of Anaheim Public Utilities Department, El Toro Water District, Irvine Ranch Water District, Laguna Beach County Water District, Mesa Consolidated Water District, Moulton Niguel Water District, City of Santa Ana Public Works Agency, Santa Margarita Water District, South Coast Water District, Trabuco Canyon Water District (collectively "MOU Retail Agencies"), and the Municipal Water District of Orange County ("MWDOC"). WHEREAS, Poseidon, the MOU Retail Agencies and MWDOC previously executed the MOU to define how they will interact with each other and with outside parties in connection with discussion and negotiation of a long-term water purchase agreement or multiple long-term water purchase agreements through which some or all of them may purchase water from Poseidon's Huntington Beach Desalination Project ("Project"); and WHEREAS, numerous other public and private water retailers have developed an interest in joining these discussions and negotiations with Poseidon on an equal basis with the MOU Retail Agencies; and WHEREAS, the MOU (1) does not obligate any party to the MOU to enter into a water purchase agreement with any other party to the MOU, and (2) does not provide Poseidon, the MOU Retail Agencies or MWDOC with exclusive negotiating rights or obligations; and WHEREAS, currently the interests of all parties to the MOU appear to be served by expanding the number of MOU Retail Agencies under the MOU, which will expand the potential market for Project water, increase efficiency in the dissemination and analysis of Project information by and among Orange County water retailers, and spread certain fixed costs of the negotiation process among a greater number of potential participants; and WHEREAS, in the interest of avoiding the cost, delay and inefficiency of repeated written amendments signed by all parties, as currently required by Section XI(b) of the MOU, the undersigned wish to amend the MOU to allow additional potential water purchasers to join the MOU by a simple amendment approved and executed only by Poseidon and the potential water purchaser, with notice to all other parties and subject to objection by any party within 30 days; NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and conditions contained herein, Poseidon, the MOU Retail Agencies, and MWDOC agree as follows: FIRST AMENDMENT TO POSEIDON MOU Page 1 The introductory paragraph of the MOU is hereby amended as follows, with all new text underscored: Poseidon Resources (Surfside), LLC and its affiliates (collectively "Poseidon"), the Participating Retail Agencies, and MWDOC (each hereinafter referred to as a "Party" and collectively the "Parties") desire to enter into this Memorandum of Understanding (the "MOU") to define how the Parties will interact with each other and with outside parties in connection with discussion and negotiation of a long-term water purchase agreement or multiple long-term water purchase agreements ("WPA" and "WPAs" respectively) through which some or all of the Participating Retail Agencies may purchase water from Poseidon's Huntington Beach Desalination Project ("Project"). Other potential purchasers of Project water may join the list of Participating Retail Agencies at any time with full rights and obligations under the MOU, without written approval of other Participating Retail Agencies or MWDOC, by executing an "Amendment to List of Participating Retail Agencies" in the form attached hereto as Exhibit A and giving written notice to all Parties. This right is subject to objection by any existing Participating Retail Agency as provided herein, 2. Section I of the MOU is hereby amended as follows, with all new text underscored: I. Term a) The term of this MOU (the "Term") begins on the date the MOU is executed by the Parties and terminates on June 30, 2011, unless otherwise terminated pursuant to the terms herein or extended by mutual written agreement of the Parties. b) The Term for any new Participating Retail Agency joining this MOU by execution of an Amendment (see Exhibit A) shall commence 30 days after the last date written notice of the Amendment is received by any existing Participating Retail Agency. Within the 30 -day period following receipt of such written notice of the Amendment, any existing Participating Retail Agency may deliver a written Notice of Objection to the Amendment to MWDOC, which shall forward it to all Participating Retail Agencies and the agency submitting the Amendment. The Notice of Objection shall state a reason for the objection, and upon receipt by MWDOC it shall immediately render the Amendment null and void. For purposes of this section, written notice of the Amendment and of any Objection must be made through an overnight delivery service. FIRST AMENDMENT TO POSEIDON MOU Page 2 3. Section X of the MOU is hereby amended as follows, with all new text underscored: Nothing in this MOU establishes or implies an exclusive arrangement between Poseidon and the Parties, or any of them. This MOU does not prohibit any Party from reviewing, participating in or developing other potential water supply projects, nor does it prohibit Poseidon from discussing and negotiating with other potential purchasers of water from the Project in addition to Participating Retail Agencies and MWDOC. Poseidon shall provide a copy of the MOU to other such potential purchasers of water from the Project and notify them in writing that they may become a signatory to the MOU, subject to the right of each then existing Participating Retail Agency to object as provided herein. Prior to entering into any binding arrangements or WPA with such parties ("Additional Water Arrangements"), Poseidon will notify the Participating Retail Agencies and MWDOC of the terms and conditions of such Additional Water Arrangement and the identities of such potential purchasers of water from the Project. Poseidon agrees to offer the Participating Retail Agencies no less favorable terms and conditions than any Additional Water Arrangement entered into at any time. It is mutually understood by the Parties that this provision excludes up to 3,360 acre feet per year of water sold to the City of Huntington Beach as agreed to in the City of Huntington Beach entitlement process in 2006. 4. Section XI(b) of the MOU is hereby amended as follows, with all new text underscored: b) This MOU shall be governed by the laws of the State of California, United States of America, and may only be amended in a writing signed by all Parties, except as expressly provided in this MOU, as amended. Any legal action filed to enforce this MOU shall be brought in state or federal court, as appropriate, in the State of California. 5. Upon full execution of an "Amendment to List of Participating Retail Agencies," notice to all Parties, and expiration of all rights to object to the Amendment, Poseidon shall provide all new Participating Retail Agencies with copies of any and all materials previously distributed to the Participating Retail Agencies under Section IV of the MOU, "Uniform Disclosure of Project Information." 6. Each party to this First Amendment represents and warrants that (a) it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and is qualified to do business in all jurisdictions where it is required to be qualified; (b) it has the necessary power and authority to enter into and perform its obligations under this First Amendment and the MOU, as amended; (c) the person(s) FIRST AMENDMENT TO POSEIDON MOU Page 3 signing this First Amendment is duly authorized to execute this First Amendment on behalf of the party represented; (d) upon execution, this First Amendment and the MOU, as amended, will be enforceable against each party in accordance with its terms, except as such enforceability may be inconsistent with applicable laws concerning bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights generally; and (e) the execution and delivery of this First Amendment and performance by the executing party under this First Amendment and the MOU, as amended, is not known to conflict with any agreement, law, rule, regulation, order, judicial decree or administrative code to which such party is subject. ACKNOWLEDGED AND AGREED: Posei n R sources (Surfside) LLC By: Name: Title: City of Anaheim Public Utilities By: Name: Title: Laguna Beach County Water Authority By: Name: Title: Mesa Consolidated Water District By: Name: El Toro Water District By: Name: Title: Irvine Ranch Water District By: Name: Title: Moulton Niguel Water District By: Name: FIRST AMENDMENT TO POSEIDON MOU Page 4 Title: Santa Margarita Water District By: Name: Title: Trabuco Canyon Water District By: Name: Title: Municipal Water District of Orange County By: Name• Title: Title: South Coast Water District By: Name• Title: City of Santa Ana Public Works Agency By: Name• Title: FIRST AMENDMENT TO POSEIDON MOU Page 5 EXHIBIT A AMENDMENT TO LIST OF PARTICIPATING RETAIL AGENCIES THIS AMENDMENT TO THE LIST OF "PARTICIPATING RETAIL AGENCIES" DEFINED IN THE MEMORANDUM OF UNDERSTANDING DATED May 22, 2008 ("MOU"), AS AMENDED, is made by and between Poseidon Resources (Surfside) LLC and its affiliates (collectively, "Poseidon") and City of Newport Beach. 1. Pursuant to the First Amendment to the MOU, executed by all original Parties to the MOU, City of Newport Beach is hereby added as a full "Participating Retail Agency" under the MOU, as amended. No express approval or authorization by the governing boards of the previously existing Participating Retail Agencies is required. 2. City of Newport Beach shall be responsible for sending written notice and a photocopy of this Amendment to all previously existing Participating Retail Agencies within 10 days of the date of final execution of this Amendment. City of Newport Beach shall request an updated list of Participating Retail Agencies from the Municipal Water District of Orange County. 3. City of Newport Beach understands and agrees that within 30 days of receipt of such written notice, any of the existing Participating Retail Agencies may assert an objection to this Amendment pursuant to the terms of the MOU, and that upon timely objection this Amendment shall be null and void. 4. Each party to this Amendment represents and warrants that (a) it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and is qualified to do business in all jurisdictions where it is required to be qualified; (b) it has the necessary power and authority to enter into and perform its obligations under this Amendment and the MOU, as amended; (c) the person(s) signing this Amendment is duly authorized to execute this Amendment on behalf of the party represented; (d) upon execution, this Amendment and the MOU, as amended, will be enforceable against each party in accordance with its terms, except as such enforceability may be inconsistent with applicable laws concerning bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights generally; and (e) the execution and delivery of this Amendment and performance by the executing party under the MOU, as amended, is not known to conflict with any agreement, law, rule, regulation, order, judicial decree or administrative code to which such party is subject. FIRST AMENDMENT TO POSEIDON MOU Page 6 ACKNOWLEDGED AND AGREED: Poseidon Resources (Surfside) LLC By: Name: Title: APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Ba -SW" $42 eonie 0. Mulvihill, Assistant City Attorney ATTEST: B "� �Aw— Leilaniy I. Brown, City Clerk --fila„® VORN%P' CITY OF NEWPORT BEACH, A Municipal Corporation David Kiff, City Manager Agreed and Accepted: Poseidon Resources, LLC By: Andrew Kingman, Chief Financial Officer FIRST AMENDMENT TO POSEIDON MOU Page 7 ACKNOWLEDGED AND AGREED: Poseidon Resources (Surfside) LLC i By: Name: Title:U/cc APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY y: IY& 2-. 1 - jo eonie H. Mulvihill, Assistant City Attorney ATTEST: 4�w- T. Leilani I. Brown, City Clerk ;-9 CITY OF NEWPORT BEACH, A Municipal Corporation By: c--v--,N Da' Kiff, 14 City Manager Agreed and Accepted: Poseidon Resources, LLC By: Andrew Kingman, Chief Financial Officer FIRST AMENDMENT TO POSEIDON MOU Page 7 Attachment C CONFIDENTIALITY AGREEMENT THIS CONFIDENTIALITY AGREEMENT ("Agreement"), entered into and made effective as of the day of , 2010, is by and between City of Newport Beach, a Municipal Corporation [agency] ("City") and Poseidon Resources (Surfside) LLC ("Poseidon") (collectively the "Parties"). WITNESSETH: WHEREAS, the Parties, along with other agencies providing water service (collectively, City and such other agencies are referred to as the "Water Agencies"), have entered into discussions and negotiations concerning the possibility of a public-private partnership regarding Poseidon's Huntington Beach desalination project (the "Project"); and WHEREAS, in order to proceed with the next stage of the discussions and negotiations, CITY has requested, and Poseidon is willing to provide, certain information that Poseidon considers proprietary and confidential; and WHEREAS, Poseidon wishes to protect its proprietary and confidential information against unauthorized use and disclosure by CITY; NOW, THEREFORE, in consideration of the mutual promises and covenants made herein, and with the intent to be legally bound hereby, the Parties agree as follows: Confidential Information. The term "Confidential Information," as used in this Agreement, shall mean information, other than information described in one or more of clauses (a) through (d) below in this Section, that is provided by Poseidon to CITY. When Poseidon provides Confidential Information in documentary form, whether hardcopy or electronic, it shall clearly mark it "Confidential." When Poseidon provides Confidential Information to CITY verbally, it shall notify CITY of the confidential nature of the information in writing prior to or immediately after verbally conveying the information. In addition to the foregoing requirements, each item of Confidential Information provided either in documentary form or verbally shall be accompanied by a writing stating the grounds for Poseidon's assertion that the information is of the nature described in Section 6 below and is not within any of the exclusions listed in clauses (a) through (d) in this Section. Poseidon shall have the right to determine, in its sole judgment, what information it will provide to CITY. Confidential Information shall not include the following: (a) Information that, at the time of disclosure by Poseidon, is publicly available or generally known or available to third parties, or information that later becomes publicly available or generally known or available to third parties through no act or omission by CITY; (b) Information that CITY can demonstrate was in its possession prior to disclosure by Poseidon; (c) Information received by CITY from a third party who, to CITY's knowledge and reasonable belief, did not acquire such information on a confidential basis either directly or indirectly from Poseidon; and CONFIDENTIALITY AGREEMENT THIS CONFIDENTIALITY AGREEMENT ("Agreement"), entered into and made effective as of the it day of -iso 2010, is by and between City of Newport Beach, a Municipal Corporation [agency] ("City") and Poseidon Resources (Surfside) LLC ("Poseidon") (collectively the "Parties"). WITNESSETH: WHEREAS, the Parties, along with other agencies providing water service (collectively, City and such other agencies are referred to as the "Water Agencies"), have entered into discussions and negotiations concerning the possibility of a public-private partnership regarding Poseidon's Huntington Beach desalination project (the "Project"); and WHEREAS, in order to proceed with the next stage of the discussions and negotiations, CITY has requested, and Poseidon is willing to provide, certain information that Poseidon considers proprietary and confidential; and WHEREAS, Poseidon wishes to protect its proprietary and confidential information against unauthorized use and disclosure by CITY; NOW, THEREFORE, in consideration of the mutual promises and covenants made herein, and with the intent to be legally bound hereby, the Parties agree as follows: Confidential Information. The term "Confidential Information," as used in this Agreement, shall mean information, other than information described in one or more of clauses (a) through (d) below in this Section, that is provided by Poseidon to CITY. When Poseidon provides Confidential Information in documentary form, whether hardcopy or electronic, it shall clearly mark it "Confidential." When Poseidon provides Confidential Information to CITY verbally, it shall notify CITY of the confidential nature of the information in writing prior to or immediately after verbally conveying the information. In addition to the foregoing requirements, each item of Confidential Information provided either in documentary form or verbally shall be accompanied by a writing stating the grounds for Poseidon's assertion that the information is of the nature described in Section 6 below and is not within any of the exclusions listed in clauses (a) through (d) in this Section. Poseidon shall have the right to determine, in its sole judgment, what information it will provide to CITY. Confidential Information shall not include the following: (a) Information that, at the time of disclosure by Poseidon, is publicly available or generally known or available to third parties, or information that later becomes publicly available or generally known or available to third parties through no act or omission by CITY; (b) Information that CITY can demonstrate was in its possession prior to disclosure by Poseidon; (c) Information received by CITY from a third party who, to CITY's knowledge and reasonable belief, did not acquire such information on a confidential basis either directly or indirectly from Poseidon; and (d) Information CITY can demonstrate was independently developed by it or a third party or for it or a third party and that was not obtained, in whole or in part, from Poseidon. 2. Disclosure and Use of Confidential Information. Unless required by State or Federal law, CITY shall not, without Poseidon's prior written consent, disclose to any third party, firm, corporation or entity such Confidential Information, provided, however, CITY may discuss Confidential Information with other Water Agenc(ies) that have entered into a confidentiality agreement with Poseidon. Internally, CITY shall limit the disclosure of the Confidential Information to only those officers, employees and agents (including its governing board or committees, attorneys, accountants, bankers and consultants) of CITY reasonably necessary to evaluate the Confidential Information and/or the Project. If CITY internally evaluates Confidential Information and/or the Project with its governing board or committees, CITY shall do so without disclosing the Confidential Information in a public meeting, to the extent permitted by Section 54950 et seq. of the California Government Code. Should CITY staff determine that a need exists to disclose Confidential Information in a public meeting, CITY will notify Poseidon of this need and identify the information to be disclosed prior to posting the agenda for the meeting. CITY shall use the Confidential Information received from Poseidon under this Agreement only for the purpose of its internal evaluation of the Project. In complying with its obligations under this Agreement, CITY shall use reasonable means to prevent unauthorized disclosure and to protect the confidentiality of the Confidential Information. Notwithstanding CITY's exercise of its right to discuss Confidential Information with another Water Agenc(ies) that have entered into a confidentiality agreement with Poseidon, CITY shall not have any obligation with regard to limiting or preventing disclosure of Confidential Information by such other Water Agenc(ies) or with regard to such other Water Agenc(ies)' performance of their confidentiality agreements, and CITY's and such other Water Agenc(ies)' obligations under their respective confidentiality agreements shall not be construed as joint and several. Required Disclosure. In the event CITY is requested or required by any provision of State or Federal law, oral questions, interrogatories, requests for information or documents, subpoena, civil investigation, demand or similar process to disclose any Confidential Information received pursuant to this Agreement, CITY will notify Poseidon immediately of such request(s). 4. Return of Documents. Either Party may elect at any time to terminate this Agreement. CITY will return any and all Confidential Information upon written request from Poseidon, including all originals, copies, translations, transcriptions or any other form of said material, without retaining any copy or duplicate thereof. To the extent permitted by law and if Poseidon has not requested the return thereof pursuant to the preceding sentence, CITY shall promptly destroy any and all electronic and hardcopy versions of Confidential Information, as well as any documents consisting of excerpts or portions of materials previously identified by Poseidon as Confidential Information. CITY will not retain any Confidential Materials in its agency files. Survival of Obligations. Regardless of any termination of any business relationship between the Parties, the obligations and commitments established by this Agreement shall remain in full force and effect for four (4) years from the day and year first hereinabove written or until such time as the Parties have entered into an agreement providing otherwise. 6. Nature of Information. CITY hereby accepts the representations of Poseidon that the Confidential Information is of a special, unique, unusual, extraordinary, and intellectual character, that money damages would not be a sufficient remedy for any breach of this Agreement by CITY, and that specific performance and injunctive or other equitable remedies for any such breach shall be available to it. The Parties also acknowledge that the interests of Poseidon in such Confidential Information may be irreparably injured by disclosure of such Confidential Information. The remedy stated above may be pursued in addition to any other remedies applicable at law or equity for breach of this Agreement. Should litigation be instituted to enforce any provision hereof, the Party that prevails will be entitled to recover all costs, including reasonable legal fees, expert costs and costs of investigation. 7. Governing Law. The laws of the State of California shall govern this Agreement. 8. No Other Agreement. It is expressly understood that this Confidentiality Agreement is not and shall not be construed as any form of a letter of intent or agreement to enter into any type of transaction. 9. No License or Rights. Neither this Agreement, nor the transfer of Confidential Information hereunder, shall be construed as granting to CITY any license or rights to any information or data now or hereafter owned or controlled by Poseidon. 10. Except as may be required by law, without the prior consent of Poseidon, CITY will not (a) confirm or deny any statement made by a third party regarding the Confidential Information, (b) disclose to any person the fact that Confidential Information has been made available to it by Poseidon, or (c) disclose any of the terms or conditions of this Agreement. IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement on the day and year first herein above written. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY By: t- 2 1-D Leonie H. Mulvihill, Assistant City Attorney ATTEST: By: — "- "V Leilani I. rown, City Clerk h- 111 FO R"i CITY OF NEWPORT BEACH, A Municipal Corporation By: D Kiff, City Manager Poseidon Resources (Surfside), LLC ,--- ) By: Title: U ,-.e- i' Print Name:�� 'r i « l,,.[ ' Title: Print Name: CONFIDENTIALITY AGREEMENT THIS CONFIDENTMI YWEMENT ("Agreement"), entered into and made effective as of the 3U"day of is by and between City of Newport Beach, a Municipal Corporation [agency] ("City") and Poseidon Resources (Surfside) LLC ("Poseidon") (collectively the "Parties"). WITNESSETH: WHEREAS, the Parties, along with other agencies providing water service (collectively, City and such other agencies are referred to as the "Water Agencies"), have entered into discussions and negotiations concerning the possibility of a public-private partnership regarding Poseidon's Huntington Beach desalination project (the "Project"); and WHEREAS, in order to proceed with the next stage of the discussions and negotiations, CITY has requested, and Poseidon is willing to provide, certain information that Poseidon considers proprietary and confidential; and WHEREAS, Poseidon wishes to protect its proprietary and confidential information against unauthorized use and disclosure by CITY; NOW, THEREFORE, in consideration of the mutual promises and covenants made herein, and with the intent to be legally bound hereby, the Parties agree as follows: 1. Confidential Information. The term "Confidential Information," as used in this Agreement, shall mean information, other than information described in one or more of clauses (a) through (d) below in this Section, that is provided by Poseidon to CITY. When Poseidon provides Confidential Information in documentary form, whether hardcopy or electronic, it shall clearly mark it "Confidential." When Poseidon provides Confidential Information to CITY verbally, it shall notify CITY of the confidential nature of the information in writing prior to or immediately after verbally conveying the information. In addition to the foregoing requirements, each item of Confidential Information provided either in documentary form or verbally shall be accompanied by a writing stating the grounds for Poseidon's assertion that the information is of the nature described in Section 6 below and is not within any of the exclusions listed in clauses (a) through (d) in this Section. Poseidon shall have the right to determine, in its sole judgment, what information it will provide to CITY. Confidential Information shall not include the following: (a) Information that, at the time of disclosure by Poseidon, is publicly available or generally known or available to third parties, or information that later becomes publicly available or generally known or available to third parties through no act or omission by CITY; (b) Information that CITY can demonstrate was in its possession prior to disclosure by Poseidon; (c) Information received by CITY from a third party who, to CITY's knowledge and reasonable belief, did not acquire such information on a confidential basis either directly or indirectly from Poseidon; and (d) Information CITY can demonstrate was independently developed by it or a third party or for it or a third party and that was not obtained, in whole or in part, from Poseidon. 2. Disclosure and Use of Confidential Information. Unless required by State or Federal law, CITY shall not, without Poseidon's prior written consent, disclose to any third party, firm, corporation or entity such Confidential Information, provided, however, CITY may discuss Confidential Information with other Water Agenc(ies) that have entered into a confidentiality agreement with Poseidon. Internally, CITY shall limit the disclosure of the Confidential Information to only those officers, employees and agents (including its governing board or committees, attorneys, accountants, bankers and consultants) of CITY reasonably necessary to evaluate the Confidential Information and/or the Project. If CITY internally evaluates Confidential Information and/or the Project with its governing board or committees, CITY shall do so without disclosing the Confidential Information in a public meeting, to the extent permitted by Section 54950 et seq. of the California Government Code. Should CITY staff determine that a need exists to disclose Confidential Information in a public meeting, CITY will notify Poseidon of this need and identify the information to be disclosed prior to posting the agenda for the meeting. CITY shall use the Confidential Information received from Poseidon under this Agreement only for the purpose of its internal evaluation of the Project. In complying with its obligations under this Agreement, CITY shall use reasonable means to prevent unauthorized disclosure and to protect the confidentiality of the Confidential Information. Notwithstanding CITY's exercise of its right to discuss Confidential Information with another Water Agenc(ies) that have entered into a confidentiality agreement with Poseidon, CITY shall not have any obligation with regard to limiting or preventing disclosure of Confidential Information by such other Water Agenc(ies) or with regard to such other Water Agenc(ies)' performance of their confidentiality agreements, and CITY's and such other Water Agenc(ies)' obligations under their respective confidentiality agreements shall not be construed as joint and several. Required Disclosure. In the event CITY is requested or required by any provision of State or Federal law, oral questions, interrogatories, requests for information or documents, subpoena, civil investigation, demand or similar process to disclose any Confidential Information received pursuant to this Agreement, CITY will notify Poseidon immediately of such request(s) and will use reasonable efforts to lawfully delay disclosure until an appropriate protective order may be sought by Poseidon and/or a waiver of compliance with the provisions of this Agreement granted by Poseidon; provided, however, such measures shall not include initiating or defending litigation or otherwise contesting the validity of a demand for disclosure pursuant to law or order of a court or regulatory body, unless City and Poseidon first reach agreement regarding the engagement of legal counsel for City and the payment of City's legal and related expenses in such litigation or contest. If by the earlier of seven (7) days after being notified by City of such request(s) or two (2) days prior to the disclosure date, Poseidon does not either grant a waiver or seek a protective order, then City may comply with the request(s) and such disclosure of Confidential Information will not constitute a breach of this Agreement. To the fullest extent permitted by law, Poseidon shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from CITY's compliance with this Section 3. 4. Return of Documents. Either Party may elect at any time to terminate this Agreement. CITY will return any and all Confidential Information upon written request from Poseidon, including all originals, copies, translations, transcriptions or any other form of said material, without retaining any copy or duplicate thereof. To the extent permitted by law and if Poseidon has not requested the return thereof pursuant to the preceding sentence, CITY shall promptly destroy any and all electronic and hardcopy versions of Confidential Information, as well as any documents consisting of excerpts or portions of materials previously identified by Poseidon as Confidential Information. CITY will not retain any Confidential Materials in its agency files. Survival of Obligations. Regardless of any termination of any business relationship between the Parties, the obligations and commitments established by this Agreement shall remain in full force and effect for four (4) years from the day and year first hereinabove written or until such time as the Parties have entered into an agreement providing otherwise. 6. Nature of Information. CITY hereby accepts the representations of Poseidon that the Confidential Information is of a special, unique, unusual, extraordinary, and intellectual character, that money damages would not be a sufficient remedy for any breach of this Agreement by CITY, and that specific performance and injunctive or other equitable remedies for any such breach shall be available to it. The Parties also acknowledge that the interests of Poseidon in such Confidential Information may be irreparably injured by disclosure of such Confidential Information. The remedy stated above may be pursued in addition to any other remedies applicable at law or equity for breach of this Agreement. Should litigation be instituted to enforce any provision hereof, the Party that prevails will be entitled to recover all costs, including reasonable legal fees, expert costs and costs of investigation. 7. Governing Law. The laws of the State of California shall govern this Agreement. No Other Agreement. It is expressly understood that this Confidentiality Agreement is not and shall not be construed as any form of a letter of intent or agreement to enter into any type of transaction. 9. No License or Ri hgts. Neither this Agreement, nor the transfer of Confidential Information hereunder, shall be construed as granting to CITY any license or rights to any information or data now or hereafter owned or controlled by Poseidon. 10. Except as may be required by law, without the prior consent of Poseidon, CITY will not (a) confirm or deny any statement made by a third party regarding the Confidential Information, (b) disclose to any person the fact that Confidential Information has been made available to it by Poseidon, or (c) disclose any of the terms or conditions of this Agreement. IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement on the day and year first herein above written. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY B �] 1 (� Leonie Mulvihill, Assistant City Attorney ATTEST: Ey:um —4--O - V, �Uv-� Leilani I. Brown, City Clerk 1400—a"ft, U "OR 14 CITY OF NEWPORT BEACH, A Municipal Corporation By:��( \ ) David Kiff, City Manager Poseidon Resources (Surfside), LLC A Title: Print Name: By: Title: Print Name: