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CITY OF DENTONRFP 6313 FOR ENERGY TRADING RISK MANAGEMENT (ETRM) SOFTWARE

FOR THE ENERGY MANAGEMENT ORGANIZATIONEXHIBIT 3

TECHNICAL AND FUNCTIONAL REQUIREMENTS SPECIFICATION

RFP 6313 EXHIBIT 3 - pg. 1


FOR THE ENERGY MANAGEMENT ORGANIZATIONTABLE OF CONTENTS

1. INTRODUCTION..................................................................................................................3

1.1 About DME’s EMO and the QSE Function.......................................................................4

1.2 Scope of Requested Software and Data Integration Services.............................................5

1.3 Respondent’s General Responsibilities..............................................................................6

1.4 DME’s General Responsibilities........................................................................................6

1.5 Project Timeline.................................................................................................................6

2. TECHNICAL REQUIREMENTS........................................................................................8

2.1 General System Functionality............................................................................................8

2.2 Front Office Functionality (Trade or Deal Capture/Entry)..............................................10

2.3 Front Office Reporting (Position Management & Reporting)..........................................10

2.4 Middle Office Functionality.............................................................................................10

2.6 Back Office Functionality (Counter-Party Checkout, Invoicing, and Accounting).........11

2.7 System Helps, Guides, and Documentation.....................................................................11

2.8 Standardized Training.......................................................................................................12

2.9 Proposed System General Questions................................................................................12

Appendix C:................................................................................................................................13

APPENDICES..............................................................................................................................15

Appendix A Proposed System Architecture...........................................................................16

Appendix B Recommended desktop and server requirements for the proposed solution..........17

Appendix C – DME Envisioned System Connectivity..............................................................18

Appendix D – Confidentiality Agreement.................................................................................19



FOR THE ENERGY MANAGEMENT ORGANIZATION

1. INTRODUCTION

This Technical and Functional Requirements Specification document describes the desired functionality for an Energy Trading Risk Management (ETRM) software to be purchased by The City of Denton for Denton Municipal Electric, (DME). The new system shall be utilized in the existing DME Administration Building located at 1659 Spencer Road, Denton, Texas 76205. The installation, implementation and commissioning of the new system must be carefully coordinated with DME support staff.

DME has developed this Technical and Functional Requirements Specification document to give prospective bidders sufficient information to construct high-quality proposals for solutions, software and data integration services, which in their experience with similar organizations, will best meet DME’s needs. These requirements are not intended to be all-inclusive, but are meant to provide a reasonable indication of the combination of DME’s front, middle, and back office system needs, how these systems must interact with DME’s real-time operations infrastructure, executive management reporting needs, middle office risk monitoring and compliance requirements, back office/accounting operations and desired Information Technology (I/T) related characteristics of the new system.

DME is seeking to replace its current ETRM for energy trading control, scheduling, and system management with a commercial-grade solution that can at a minimum, meet current and future functional requirements.

The primary business drivers for purchasing an ETRM System include, but are not limited to, DME’s need for:

(i) Accurate capture, storage and reporting commodity operations exposure, P&L attributes and risk controls/metrics,

(ii) Capture, monitoring and reporting upon compliance and audit functions,

(iii) Provision of greater efficiency and effectiveness in running its processes,

(iv) Additional functionality to meet new business requirements and increased capability in all functional areas,

(v) Flexibility to expand,

(vi) Technical “bench depth and breadth”,

(vii) Adherence to ERCOT market rules, regulations and requirements including PUC Texas and TRE oversight, and

(viii) Industry best practices.



FOR THE ENERGY MANAGEMENT ORGANIZATION1.1 About DME’s EMO and the QSE Function

Background for DME’s Energy Management Organization (EMO) is as follows:

DME is an ERCOT Non-Opt-in Entity ‘NOIE’. DME is not a competitive area but operates within the deregulated footprint of ERCOT. The DME term EMO is synonymous with an ERCOT Qualified Scheduling Entity (QSE) and performs all of the QSE functions for DME.

DME utilizes the following products: Power (including Ancillary Services) Gas Emissions & Environmental commodities (including, but not limited to RECs) Congestion Revenue Rights (CRRs) Physical and financial products, options and other underlying transactions.

DME is part owner of TMPA, a coal plant.

DME has underway, a project to build a gas-fired generation facility. DME will also purchase natural gas to supply its generation.

DME has a growing renewable portfolio, incorporating wind and solar assets. DME’s EMO may or may not serve as the QSE for ISO scheduling purposes. DME may provide QSE services for ISO-scheduling of these assets and/or that of other market participants.

Pricing, valuation, reporting, and volumetric capture of contracted to estimated (scheduled) to actual quantities of DME’s hourly and 15 minute positions, or shape, is important to DME.

DME has modest trade volume for a utility of its size per and is not a power marketer or a proprietary trader, in that regard.

DME has a limited “in-house” resources for operation with ETRM systems, including from an implementation and operation standpoint.

DME is not staffed to have a team of dedicated ETRM personnel. At most, DME will have one dedicated ETRM administrator/operator, with some access to multi-duty back-up personnel. DME Information Technology is part of City of Denton I/T and while dedicated to DME, its time is split between several different departments within DME. As such, it is not dedicated solely to support the commodity portfolio management and optimization operations efforts. It is intended that the ‘business’ will be the owner/operator of the ETRM. Many of the EMO operational and commercial personnel have prior experience from competitive companies ranging from small to large organizations, which typically have dedicated resources to support implementation efforts, which is not feasible at DME.

Functions of an ETRM system are only part of the EMO personnel responsibilities, therefore the proposed system must “support” and “lighten the workload” of personnel and not become an additional workload.



FOR THE ENERGY MANAGEMENT ORGANIZATIONTypically, DME users will extract data from the ETRM system to perform their own analysis and are proficient Excel users and not SAS based users.

There will be in the order of 12-16 unique users; comprised of: 1 risk, 1 settlements, 5 power, 1 gas, 2 congestion, 1 I/T support, 1 System Administrator 2 managers, and 2 growth users’ spots in support of risk/back office/IT.

1.2 Scope of Requested Software and Data Integration Services

DME is desirous of receiving proposals for an Energy Trading, Risk Management ‘ETRM’ system to support its energy management operations. DME envisions a software application or suite of applications that provides the Operations, Analysis, Controls and Reporting tools necessary to support DME’s Energy Management Functions listed below:

DME Energy Management FunctionsFront Office Middle Office Back Office

Trade CaptureCurve captureValuation, P&L, M-t-M Counterparty Checkout

Position Management Risk Analytics InvoicingScheduling/Volume actualization Credit & Collateral Management AccountingReporting Confirmations Reporting Risk Controls

AuditReporting

The desired ETRM solution should be intuitive, flexible, adaptable, and scalable while at the same time minimizing burdensome complexity that would degrade performance, inhibit user interaction, or require undue user training or, specialization or excessive time and resources, including support.

The desired ETRM provides solutions that integrate two way data communication with a variety of data sources that is automated, where practicable, to avoid repetitive user interactions and minimize risk of data integrity error. Automation should be updateable, and enables updates to the automation to address changes to data sources, content, format or other change requirements with minimal vendor support minimal error risks and in a timely manner, that minimizes any negative impact to DME business operations and performance.



FOR THE ENERGY MANAGEMENT ORGANIZATIONSignificant features of the proposed system that DME desires potential proposers to address are described below. DME is seeking proven vendors that have commercially available, currently deployed, ETRM software that fulfills the functionality as listed in this RFP. DME is not interested in software that is either “in-development”, commercially unproven, or currently not deployed in a tested commercial installation. Vendor staff should be adequately knowledgeable of and capable of the deployment of their system to the ERCOT market, including all underlying commodity market products and applications to be held within the ETRM system. Existing deployment within ERCOT is desirable.

1.3 Respondent’s General Responsibilities

The Respondents shall assume responsibility for the design, fabrication and startup of the new system. The Vendor's obligations shall include, but not be limited to, the responsibilities in the following list, and those required performing the system functions described in the Specification:

a) Delivery of application software and required licenses.

b) Integration of all Vendor-supplied hardware and software.

c) Training of DME personnel.

d) User’s guides, electronic “help” services/assistance, and other documentation.

e) The vendor shall be responsible to provide support and warranty services for 1 year after the Production Go-Live Date. Support services must include day-time support (Monday through Friday during normal business hours), help desk, problem resolution, subscription for vendor software patches, software upgrades and provision for support of a 24x7 electric energy business and its operations.

1.4 DME’s General Responsibilities

DME shall supply the following items and services as part of the new system:a) Windows based desktop computers and required Windows/Linux server platforms,

for on-premise installations.

b) ERCOT Digital Certificates.

c) Physical LAN and Internet connections, firewall configurations, VPN tunnels for data connectivity.

d) Meeting room facilities.

1.5 Project Timeline

The project timeline and schedule of events is stated in the RFP, but additional information is given in the table below.




2. TECHNICAL REQUIREMENTS

This section describes the technical and functional requirements of the Energy Trading and Risk Management ‘ETRM’ software. It shall be noted that the proposal shall be judged by its conformance to the functional requirements of this section.

The proposed software must provide maximum processing speed and minimum turn-around time for all functionality; have strong audit controls; be integrated and operate efficiently with other related systems; and must store data and transaction information so that it is easily accessible within the database architecture and can be imported or exported through user-defined queries or other convenient means that can be automated. The proposed software must be robust, flexible, upgradeable and expandable to accommodate changes in energy trading activities and regulations for a period of at least 10 years.

Appendix A: Should be included by the Respondent and contains the system architecture for the proposed system and interfaces/connectivity to existing DME servers and databases. DME anticipates either a locally installed client server solution or a hosted SaaS solution but is open to other configurations by Respondents. The proposer should attach the necessary documentation in Appendix A.

Appendix B: Should be included by the Respondent and contains the recommended desktop and server system requirements. A detailed description of the workstation(s), physical servers, application and database server(s), middleware, network, telecommunication and Internet connectivity requirements and specifications. A written description and applicable structural diagrams of the information technology and architecture, system design, data flow and data interfaces.

2.1 General System Functionality

2.1.1 The proposed software must facilitate increased collaboration and integration across functions and departments, while maintaining a separation of duties across the previously-described front office, middle office, and back office functions.

2.1.2 The proposed software must leverage existing platforms and eliminate redundant data entry through the use of integration.

2.1.3 The proposed software must satisfy client requirements relating to security, transparency, data-integrity, record keeping, data backup, data input/output and other system and control requirements.

2.1.4 The proposed software must incorporate a strong systematic workflow process to schedule tasks and to automate functions and routine procedures. More specifically, the ETRM must have certain specified capabilities for each of the following functional areas:



FOR THE ENERGY MANAGEMENT ORGANIZATIONa) Trade or Deal Capture/Entryb) Price/Curve Repository & Integration with Price/Curve Feedsc) Trade/Deal valuation and data repositoryd) Integrated Risk Reporting and Repositorye) Credit & Collateral Managementf) Contract Management and Confirmations Tracking g) Scheduling (Volume actualization) and Logisticsh) Centralized Position, Valuation and M-t-M/Profit & Loss (P&L) Reportingi) Trading Controls/Auditj) Settlements (check out, invoicing and operational accounting roll off)

2.1.5 The software must have the capability to integrate with existing client network security systems and firewalls, and also allow for effective user access controls.

2.1.6 Comprehensive Audit and Internal Controls: The proposed software needs to support effective risk controls including data entry, amendment and valuations tracking controls and reporting, including internal controls and documentation in accordance with leading industry practices. The system should respond to requests and valuations quickly and effectively, including standardized and ad-hoc tasks/queries. There should be minimal performance degradation for small or large tasks. Please describe the proposed software’s ability to create an electronic process/trace ticket for the entire life cycle of a transaction. This should include: who, what, when, why, where, and how a transaction is created and or modified, and the storage location of ticket when deposited into a repository. The repository should allow for search and sorting by trader, price, counterparty, date, commodity, and all other variables, efficiently and effectively displaying, reporting and providing output to show transactions in their entirety throughout the transaction life cycle.

2.1.7 Security: The solution must provide user-level security and control.

2.1.8 An account of Respondent’s track record of how previous production releases are supported; this should include a description of significant limitations, such as the number of previous releases that will be supported.

2.1.9 A description of Respondent’s approach to adapting and providing support for significant changes in the industry; the Respondent should also include a realized example of such an event and how it was addressed.

2.1.10 A description of Respondent’s experience (including examples) in supporting automation of applicable work process flow in coordination with the Respondent’s ETRM software solution, addressing to the extent applicable pre-defined, user-defined and user-modified automated workflows.

2.1.11 A description of Respondent’s experience (including examples) in planning and executing implementations and full operation of systems for clients. Attention should be noted to experience and qualifications of personnel and resources available and to be used.



FOR THE ENERGY MANAGEMENT ORGANIZATION2.1.12 Given the proposed award date in the table in the RFP, Section II, item 1 and section 1.7 above, can the system be functional for capturing and evaluating trades and be interfaced to other DME systems on or prior to May 25, 2017? If not, when could the system be installed and functional?

2.2 Front Office Functionality (Trade or Deal Capture/Entry)

The proposed software must have the ability to support energy deal record, processing and valuation capabilities for both physical and financial electric power transactions (specifically, but not limited to ERCOT); and physical and financial natural gas transactions (commodity, transport, storage, basis etc.); all power industry fuel types (e.g., coal, fuel oil, alternative fuels); Congestion Revenue Rights; Emissions and Renewable Energy Credits/Environmental Products; options on all of the above; the capture of physical asset attributes (e.g. power plants, renewable energy facilities, energy storage); fees and charges related to a transaction (such as from Brokers, Exchanges or Clearing Houses); and capacity for future consideration, if desired.

The system must be able to capture contracted, scheduled, and actualized volumes and must be tracked and auditable. Operational integration with ISO, pipeline, storage operator communication/data flow tools are desirable.

The trade/transaction functionality of the solution must be able to capture deal terms for multiple commodities, various nodal locations and delivery times, with granularity to at least 15 minute time interval where needed, and permit risk controls (e.g. track approvals and validations). Cross commodity and cross counterparty/entity (e.g. book) transactions should be possible.

A key proposed software system objective is ease of use for data capture and data extraction. The process should be intuitive, efficient and user-friendly.

The proposed software functionality also must support position management.

2.3 Front Office Reporting (Position Management & Reporting)

The proposed software must provide effective position management capabilities, including reporting in both detailed and summarized form, capable of standard and user-defined reporting parameters. Reporting and data export must be possible in detail and aggregation by multiple filtering methods, including but not limited to; gross and net position & valuation reporting, by product type, risk type, time, locations, counterparty, asset, strike, expiry etc.

2.4 Middle Office Functionality

Market data gathering is critical to the accuracy and timeliness of pricing and trade valuation within any energy trading environment. Process efficiency, accuracy, internal controls, and regulatory requirements are primary considerations. DME expects that the selected solution will provide robust features to help manage transaction-related risks. This software product will need to support internal controls such as limit structures



FOR THE ENERGY MANAGEMENT ORGANIZATIONfor traders, counterparty credit limits, confirmation processing, exception reporting, validation, and verification.

Financial and Commodity Risk Management functions and reports including Position, P&L, MtM, and risk metrics reports are a key tool for management to analyze, monitor, understand, and make decisions regarding market, credit and operational opportunities and risks. It is important to DME that this software will display day to day changes in real time and show the causes of P&L shifts and position movements.

The software will need to be able to house and support the processing of multiple forward curves, including forward curves for Ancillary Services. The capability to manage forward price curves within the system are important to DME such as tools for data cleansing (filling in missing data, correcting errors), formatting (to standardize granularity or time of use periods) and validation (detecting and removing inconsistencies).

A robust set of credit management tools is also an important feature DME is seeking from this software product, such as the ability to store collateral thresholds, independent amounts, percentage of exposure and credit matrices from contract provisions, automation of the margin call process; the ability to generate a hierarchical view of counterparty/subsidiary legal structures and commitments; model complex limit structures, counterparties, commodities and hierarchies; view credit risk concentrations by commodity, deal type and credit rating; generate real-time alerts of ratings and financial filing changes; create robust scoring models; identify and monitor key risks through dynamic modeling and reporting capabilities; generate suggest credit limits based on score; integrate with external feeds such as S&P, Moody’s, Fitch, D&B.

2.6 Back Office Functionality (Counter-Party Checkout, Invoicing, and Accounting)

Please provide a detailed description of the functionality and features of the proposed software package that support back office operations.

Credit/Collateral risk management is an integral component of any trading/hedging organization. A robust, scalable platform is required. A software solution which will eliminate manual processes that can be automated is a priority. The primary business objectives are to improve information availability and data reporting, and to streamline the business processes.

Back office functions including check-outs, reconciliations, settlement, invoicing and receivables-tracking must be fully integrated. This functionality must process complex deal types using deal and price data maintained within or through interfaces with general ledger or other systems. The settlement functionality may potentially include invoicing, bilateral and ISO settlements, or alternatively interfacing with existing systems that perform those functions, as well as cash application and accruals.

2.7 System Helps, Guides, and Documentation

The proposed software should have well-defined support, training and documentation for both users and administration of the software.



FOR THE ENERGY MANAGEMENT ORGANIZATION2.8 Standardized Training

DME desires to receive adequate and effective training for all functions of the software as it relates to the Front, Middle, and Back Office functions.

2.9 Proposed System General Questions

Each respondent must answer all of the questions below.

2.9.1 Can the solution store or generate invoice numbers?

2.9.2 Can the solution track payments to/from vendors?

2.9.3 Does the solution store or link information (PDF, .wav, word, etc) in support of transaction modification?

2.9.4 Is the solution capable of invoicing for third parties and keeping track of separate books with distinct functions (e.g. Power Marketing agreements vs. PPA's)?

2.9.5 Does the solution allow for customizable invoice templates with UTILITIES' design and other corporate designs?

2.9.6 Is the solution capable of adding additional charges that are not part of the trade and/or making retroactive adjustments?

2.9.7 Does the solution support the analysis between internal and external charges?

2.9.8 Does the solution attribute costs for items that flow through multiple services (e.g. gas to electric, shared storage facilities, inter-book transfers)?

2.9.10 Can the solution track cash collateral transactions and balances to/from Counterparties?

2.9.11 Can the solution track transactions and balances to/from Clearing Broker accounts?

2.9.12 Is the system a cloud based (Web as a Service), hosted environment, local server, or PC based system?

2.9.13 Is the proposed software capable of direct copying and pasting data to/from Excel, Access, etc.

2.9.14 Can the proposed system capture multi-period products (e.g. Nat Gas Futures Strip) without repetitive data entry. For example does a calendar strip trade have to be broken down into monthly trades?



FOR THE ENERGY MANAGEMENT ORGANIZATION2.9.15 What are the configurable time periods over which positions can be analyzed and netted?

2.9.16 Does the proposed system offer API functionality? If so, are there limitations to specific functional areas (for example there is an API to import trades but that is all)?

2.9.17 Are there pricing impacts to the perceived size requirements to the proposed system? For example if DME had twice the number of trades that the proposer expects, would this impact system cost? Alternatively, if DME had half of the perceived trades, would this impact the proposed system cost?

Appendix C:

A simplified system interface and connectivity diagram is given in Appendix C. Because of the sensitive nature of DME’s operating environment, the envisioned detailed connectivity between existing DME systems and the prospective ETRM software system shall only be released to Respondents who complete the binding Confidentiality Agreement, contained in Appendix D of this RFP. Please print out two (2) originals of the Confidentiality Agreement ("CA") complete and execute both originals, and return both original CA documents via express mail or hand deliver (between 9:00 AM to 4:30 PM, Monday through Friday ) to:

COD Purchasing 1 OR Lance Cunningham COD Address 1659 Spencer RoadDenton, TX 76205 Denton, TX 76205 Note: Please be sure to include a contact name and email address where DME can send the envisioned connectivity between existing DME systems and the prospective ETRM software system upon full execution of the NDA.

This will be provided to Respondents so that they can have better insight into DME’s integration plans.

C.1 Integration: Solution must integrate with other systems and applications within DME’s infrastructure. The selected Respondent must collaborate with DME to accomplish successful integration. The Solution may be interfaced with subsequent new solutions, databases that may be developed in parallel, existing Microsoft Access databases, Excel-based systems, and other systems that are not being replaced.



FOR THE ENERGY MANAGEMENT ORGANIZATIONAppendices




Appendix A Proposed System Architecture(to be completed by Respondents)




Appendix B Recommended desktop and server requirements for the proposed solution

(to be completed by Respondents)




Appendix C – DME Envisioned System Connectivity



FOR THE ENERGY MANAGEMENT ORGANIZATIONAppendix D – Confidentiality Agreement



FOR THE ENERGY MANAGEMENT ORGANIZATIONCONFIDENTIALITY AGREEMENT

THIS CONFIDENTIALITY AGREEMENT (this “Agreement”), dated as of ____________, is by and between _____________________, a ____ _ Corporation (“____________”), and the City of Denton, a Texas municipal corporation (“City of Denton”). ____________ 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 risk management solutions for 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 treatment as confidential, and the control and use of, information that may be furnished to the Parties; and

NOW, THEREFORE, 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, relating 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 Party, and (d) the fact that such 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 of this Agreement by the Receiving Party 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 Receiving Party obtains in the manner described by this Section 1.2(iii) 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.

1.4. “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. Restrictions on Disclosure and Use of Confidential Information.

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 not, and shall not permit its



FOR THE ENERGY MANAGEMENT ORGANIZATIONRepresentatives to, disclose Confidential Information to any Person (except as set forth in this Section 2), without the prior written consent of the Disclosing Party

2.2. Without 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 Section 2.4, 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 Person receiving Confidential Information from the Receiving Party 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 Party 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 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 (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 is legally required to disclose to avoid contempt or other penalty in the reasonable opinion of counsel to the Receiving Party, and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential Information disclosed.

3. Safekeeping and Return of Confidential Information.

3.1. The Receiving Party shall take all 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 Party shall not, and shall not permit its Representatives to, directly or indirectly, duplicate or otherwise reproduce, in whole or in part, such Confidential Information in any manner inconsistent with the terms hereof.

3.2. The Receiving Party shall return to the Disclosing Party, within ten (10) days after receipt of such a request by the Disclosing Party, all materials containing or reflecting Confidential 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 in the reasonable opinion of counsel to the Receiving Party and may also retain reports, analysis, compilations, studies, notes or other documents or records prepared by the Receiving Party 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.



FOR THE ENERGY MANAGEMENT ORGANIZATION4. 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 served 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 ____________:Company NameAddressCity, State, ZipAttn: ____________Telephone: (xxx)xxx-xxxx Facsimile: (xxx)xxx-xxxx

If to City of Denton:1659 Spencer Road Denton, TX 76205Attention: Mike GrimTelephone: (940) 349-7565Facsimile: (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. No Waiver; Amendments. 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 and amendment to this Agreement and any waiver of any provision of this Agreement must be in writing signed by the Parties.

7. Governing Law. 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. Severability. If any provision of this Agreement is held to be illegal, invalid 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 unenforceable 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. Remedies. It is agreed that each Party shall be entitled to relief both at law and in equity, including, but not limited to injunctive relief and specific performance, in the event of any breach or anticipated breach of this Agreement, without proof of any actual or special damages. The Receiving Party agrees to pay the costs and expenses (including reasonable attorneys' fees and expenses) incurred by the Disclosing Party and its Affiliates in successfully enforcing any of the terms of this Agreement or proving that the Receiving Party or any of its Representatives breached any of the terms of this Agreement.

10. Successors and Assigns. 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 Party, assign this Agreement and the rights hereunder to any of its Affiliates that own an interest in the Project. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties.

11. No Obligation or Joint Venture. 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 legal 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 this 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 and 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.



FOR THE ENERGY MANAGEMENT ORGANIZATION13. No Warranty. The Parties hereby acknowledge that neither Party, nor any of its representatives, agents, affiliates or

assigns makes any representations or warranties whatsoever concerning the accuracy, completeness or correctness of the Confidential Information supplied hereunder, nor must such representation or warranty be implied.

14. Entire Agreement. 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.

_______________________________

By: Name: ______________________________Title: _______________________________

CITY OF DENTON

By: Name: Michael S. GrimTitle: Executive Manager – Power, Legislative &

Regulatory Affairs


introduction - denton, texas web viewas such, it is not dedicated solely to support the commodity...

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