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Port of Edmonds, ESC Associates & Splash Inc Confidentiality and Cost Allocation AgreementCONFIDENTIALITY AND COST ALLOCATION AGREEMENT This Confidentia ity And Cos Allocation Agreement (this "Agreement") is entered into as of the day ofJ"�MU7, by and between the Port of Edmonds, a municipal corporation, ESC Associates, a Washington limited partnership, the City of Edmonds, a municipal corporation, and Splash, Inc., a Washington corporation (collectively the "Property Owners") each a "Party" and together the "Parties". Property Owners are examining certain potential transactions relating to the redevelopment of the areas owned by the Property Owners ("Transactions") Accordingly, in connection with the Transactions, the Parties will receive certain oral and written information, which the Property Owners deem confidential. In consideration of and as a condition for furnishing the Confidential Information (as defined below),the Parties agree to the following, it being understood that they are also agreeing to cause their directors, officers, employees, partners, representatives, affiliates, advisors, agents and associates ("Representatives") to comply with the provisions hereof: 1. Confidential Information. For purposes of this Agreement, the term "Confidential Information" means any oral or written information which is made available to a Party or one of its Representatives (a "Receiving Party") by the other Party or one of its Representatives (a "Disclosing Party") before or after the date of this Agreement, regardless of the manner in which such information is furnished. Confidential Information also includes the following: (i) all compilations, evaluations, analyses and other information developed or prepared by a Receiving Party or its Representatives; (ii) names of various current and potential customers and marketing relationships of the Disclosing Party, (iii) the nature of any discussions between a Party and its, affiliates or trade allies; and (iv) any information which contains or is based on any Confidential Information. Notwithstanding anything in this Section 1 to the contrary, the term "Confidential Information" does not include any information which (i) at the time of disclosure by a Disclosing Party, or thereafter, is generally available to and known by the public (other than as a result of a disclosure made directly or indirectly by a Receiving Party or its Representatives), (ii) was available to a Receiving Party or its Representatives on a non - confidential basis from a source other than a Disclosing Party (provided that such source is not or was not bound by a confidentiality agreement with a Disclosing Party or its Representatives or had any other duty of confidentiality to a Disclosing Party or its Representatives), or (iii) has been independently acquired or developed by a Receiving Party without violating any of such Receiving Party's obligations under Section 2 hereof. 2. Confidentiality; Disclosure. The Confidential Information will be kept confidential by each Receiving Party. Notwithstanding the preceding sentence, a Receiving Party may disclose the Confidential Information or portions thereof to those of such Receiving Party's Representatives, except "Observers" who shall hold such information strictly confidential, (which shall cause them to become a Receiving Party hereunder) who need to know such information for the purpose of analysis or performing an obligation related to the Transactions. Notwithstanding the foregoing, the Representatives are not authorized to disclose such Confidential Information to any Representative without (i) informing such Representative of the confidential nature of the Confidential Information and (ii) securing the agreement of such Representative to a similar confidentiality obligation. Any such agreement of a Receiving Party's Representatives may be in general form covering such party's confidential information generally, so long as it acts to prevent such Representatives from disclosing Confidential Information to others in violation of this Agreement. The Parties agree to be responsible for any breach of this Section 2 by Receiving Party or Receiving Party's representatives. In the event that a Receiving Party or one of its Representatives becomes legally compelled (by law, rule, regulation, order, deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information, such Receiving Party shall provide the Disclosing Party with prompt prior written notice of such requirement so that the Disclosing Party may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Section 2. In the event that such protective order or other remedy is not obtained, or that the Disclosing Party waives compliance with the provisions hereof, the Receiving Party compelled to disclose shall (i) furnish only that portion of the Confidential Information which, in accordance with the advice of its own counsel (which may include internal counsel), is legally required to be furnished, and (ii) exercise reasonable efforts to obtain assurances that confidential treatment will be accorded the Confidential Information so furnished. Nothing in this Confidentiality Agreement shall be interpreted to require any public entity to violate any provision of law or subject any public entity to liability to any other party to this agreement for compliance with law. 3. Return. Upon request from a Disclosing Party, each Receiving Party promptly will return to the Disclosing Party, all copies of the Confidential Information in each Receiving Party's possession in any form. Each Receiving Party will keep confidential any Confidential Information contained in all copies of any analyses, compilations, studies or other documents prepared by or for a Receiving Party which contain or reflect any Confidential Information. If a Disclosing Parry requests the return of its Confidential information the Receiving Party shall destroy all copies of its analyses, compilations, studies or other documents prepared by or for it that contain the confidential information in a manner that would not allow its extraction or that would allow the identification of the Disclosing Party as the source of the Confidential Information or inputs to the analysis etc. Upon notice that the Disclosing Party requests the return of its Confidential Information, the Receiving Party shall not be permitted to use it for any purpose. 4. Intellectual Property Rights. Nothing contained in this Agreement shall be construed as or imply any right granted to either Party with respect to any intellectual property of either Party (whether or not copyrighted or patented), including any uses related thereto, and all Confidential Information shall be the sole property of the IME Disclosing Party. The analysis and work product hereunder is to be prepared for the exclusive use of the Parties and their designated agents. The Parties agree that all work prepared by them or their employees, agents and subcontractors of any tier (including their respective employees, agents and subcontractor(s) in connection with the Transactions which is subject to protection under copyright laws constitute "work for hire", all copyrights to which belong to the Property Owners. Furthermore, such work products may not be reproduced or used for any other purpose without the express written consent of the Property Owners. 5. Cost Allocation. The Parties acknowledge that the initial cost to undertake the analysis of redevelopment of the Parties' and related properties is in the amount of Eighty Thousand Dollars ($80,000.00) (the "Total Cost"). The parties, respectively, have agreed to the following allocation of the Total Cost: Port of Edmonds: $32,918.87 City of Edmonds: $14,383.10 ESC Associates: $25,616.90 Splash, Inc.: $ 7,091.13 Total $80, 000.00 The Port of Edmonds shall be the primary focal point for payment of consultant fees. Upon receipt of invoicing from a consultant and processing the invoice for payment, the Port of Edmonds shall prepare and send each other party an invoice for its proportionate share. Upon receipt of the invoice from the Port, each other party shall promptly process the invoice and make payment to the Port within the party's next payment cycle. In the event that the Total Cost increases, each party shall be responsible for any increase in the same proportion as they, respectively, are responsible for the Total Cost. 6. Entire Agreement; Amendment; Waiver. This Agreement constitutes the entire agreement of the Parties hereto relating to the subject matter hereof, and this Agreement supersedes all prior communications, representations, or agreements, verbal or written, among the Parties relating to the subject matter hereof. No provision in this Agreement may be waived or amended except by written consent of the Property Owners. It is further understood and agreed that no failure or delay by either Party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise or waiver of a right, power or privilege preclude any other or further exercise thereof. 7. Remedies. The Parties shall be entitled to equitable relief, including injunction and specific performance as well as personal liability for reimbursement of the costs of advisors, consultants and legal expenses, in the event of breach of the provisions of this Agreement, in addition to all other remedies available to them at law or in equity. 8. Notices. Notices under this Agreement shall be in writing and shall be effective when actually delivered. If mailed, a notice shall be deemed effective on the -3- second day after deposited as registered or certified mail, postage prepaid, directed to the other party at the address shown below: If to Observer: If to Property Owners : Either party may change its address for notices by written notice to the other in accordance with this Agreement. 9. Beneficiary; Assignment; Governing Law. This Agreement is for the benefit of each Party, and will be governed by and construed in accordance with the laws of the State of Washington, USA. Neither Party may assign or otherwise transfer its rights or delegate its duties under this Agreement without prior written consent, and any attempt to do so without consent is void. 10. Term. This Agreement shall continue until the Property Owners terminates this Agreement by written notice to the other; provided, however, such termination shall not affect any obligation with respect to Confidential Information received by the Parties prior to such termination, which obligation shall continue for a period of one year from the date of disclosure by a Party or its Representative, and the remedies of the Party with respect thereto shall survive indefinitely. 11. No Obligation. Unless and until a written definitive agreement with respect to the Transactions is executed by the Parties, neither the execution of this Agreement, nor the negotiations between the Parties or the exchange of drafts or documents relating to the Transactions shall be construed as any form of a letter of intent, an agreement or an obligation to enter into the Transactions. 12. No Warranty. With respect to any information, including but not limited to the Confidential Information, which a Party furnishes or otherwise discloses to the other Party for the purpose of evaluating any Transactions, it is understood and agreed that the Disclosing Party does not make any representations or warranties as to the accuracy, completeness or fitness for a particular purpose thereof. It is further understood and agreed that no party or their Representatives shall have any liability or responsibility to the other Party or to any other person or entity resulting from the use of any information so furnished or otherwise provided pursuant to this Agreement. -4- IN WITNESS WHEREOF, the undersigned parties have executed this Confidentiality Agreement as of the date first written above. PORT OF EDMONDS ESC ASSOCIATES CITY OF EDMONDS By:_ Name: Its: SPLASH, INC. By:` Name: Its: -5- IN WITNESS WHEREOF, the undersigned parties have executed this Confidentiality Agreement as of the date first written above. PORT OF EDMONDS a0"74i e i ESC ASSOCIATES By:_ Name: Its: CITY OF EDMONDS By: Namne: �&Z"AJL-w Its: lwx- LaeL SPLASH, INC. By: Name: Its: - 5 - PORT OF EDMONDS ESC ASSOCIATES By: Name: Its: CITY OF EDMONDS By:_ Name: Its: SPLASH, PROPERTIES, LLC. BZJ�ZV) N )j 4 tq eu Its: `ril6m 6j p--K' -5-