EXHIBIT 10.2
SUMMER 2000-01 ENERGY EFFICIENCY INITIATIVE
REFRIGERATOR/FREEZER RECYCLING PROGRAM
AGREEMENT
Between
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
And
SOUTHERN CALIFORNIA EDISON COMPANY
TABLE OF CONTENTS
1 DEFINITIONS 1
2 GENERAL TERMS 3
3 CONTRACT DOCUMENTS 3
4 SCOPE OF WORK 4
5 CUSTOMER AND APPLIANCE ELGIBILITY 9
6 OWNERSHIP AND CONFIDENTIALITY 10
7 COMMERCIAL TERMS 12
8 BILLING 13
9 RESPONSIBILITIES OF ADMINISTRATOR AND ARCA 14
10 RIGHT TO AUDIT 14
11 CHANGES 14
12 PERMITS, CODES AND STATUTES 15
13 WARRANTY 15
14 TITLE 17
15 INSURANCE 17
16 INDEMNITY 19
17 TERM AND TERMINATION 20
18 WRITTEN NOTICES 21
19 SUBCONTRACTS 21
20 CALIFORNIA PUBLIC UTILITIES COMMISSION 22
21 NON-WAIVER 22
22 ASSIGNMENT 22
TABLE OF CONTENTS
23 FORCE MAJEURE 22
24 GOVERNING LAW 23
25 SECTION HEADINGS 23
26 SURVIVAL 23
27 NONRELIANCE 23
28 ATTORNEYS' FEES 23
29 COOPERATION 23
30 ENTIRE AGREEMENT 23
THIS AGREEMENT ("Agreement") is made and entered into as of the 11th day of
September, 2000, by and between, APPLIANCE RECYCLING CENTERS OF AMERICA, INC., a
Minnesota corporation ("ARCA"), and SOUTHERN CALIFORNIA EDISON COMPANY, a
California corporation ("Administrator"). Administrator and ARCA are also each
individually referred to herein as "Party" and collectively as "Parties."
RECITALS
WHEREAS, the California Public Utilities Commission ("CPUC"), by ruling
of the Assigned Commissioners and Administrative Law Judge on the Summer 2000
Energy Efficiency Initiative, D. 00-07-017, dated August 21, 2000, and in
subsequent rulings (collectively referred to as the "Ruling"), approved with
modifications ARCA's proposal, dated July 21, 2000 ("Proposal"), and directed
that Administrator enter into a contract with ARCA for Refrigerator/Freezer
Early Retirement and Recycling Program services ("Program") to Jurisdictional
electric service customers in the specified counties in the service territories
of Pacific Gas & Electric ("PG&E") and San Diego Gas & Electric ("SDG&E").
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recital, the mutual
covenants contained herein, the payments and agreement to be made and performed
by Administrator as set forth herein, the Parties agree as follows:
1. DEFINITIONS
1.1 Basic Recycling Charge: Per-unit charge described in Section
7.2.l.
1.2 Refrigerants: Chlorofluorocarbon and hydrochlorofluorocarbon
and hydrofluorocarbon refrigerants contained in the cooling
systems of refrigerators and freezers.
1.2.1 CFCs: Chlorofluorocarbons.
1.2.2 CFC-11: Chlorofluorocarbons contained in refrigerator
and freezer insulting foam.
1.3 Change Order: Document issued by Administrator to Contractor,
executed by ARCA and Administrator, to change a Purchase
Order.
1.4 Contact Period: September 11, 2000 to December 31, 2001, or as
extended by mutual agreement of the Parties.
1.5 CPUC: the California Public Utilities Commission.
1.6 Documentation: Specifications, procedures, instructions,
reports, test results, analyses, calculations, manuals, and
other data specified in the Purchase Order, Change Order, this
Agreement, and any amendment to this Agreement, as required by
any legal entity having jurisdiction over the Work.
1.7 Eligible Appliances: Freezers or Refrigerators (as such terms
are defined below) that meet the Program appliance eligibility
criteria set forth in Section 5.3.
1.7.1 Refrigerator: A Primary or a Secondary Refrigerator.
1.7.2 Primary Refrigerator: Refrigerator currently in use
by Customer as the main refrigeration appliance.
1.7.3 Secondary Refrigerator: Surplus or spare refrigerator
utilized by Customer concurrently with Primary
Refrigerator.
1.7.4 Freezer: A free-standing freezer utilized by a
Customer concurrently with a Primary Refrigerator.
1.8 Eligible Customers: Customers who take distribution service
from PG&E or SDG&E in accordance with the respective utility's
applicable CPUC-approved rules of service, and who reside
within the Territories.
1.9 Hazardous Materials: Any substance or material which has been
designated as hazardous or toxic by the U.S. Environmental
Protection Agency, the California Department of Toxic
Substances Control and/or any other governmental agency now or
hereinafter authorized to regulate materials in the
environment, including, but not limited to "Materials which
require special handling" as defined in California Public
Resources Code Section 42167, which is contained in or is
derived from the Eligible Appliance.
1.10 Mercury: Mercury found in switches and temperature control
devices in refrigerators and freezers.
1.11 PCBS: Polychlorinated Biphenyls.
1.12 Pilot Program: A sub-program within the overall Program
designed to demonstrate the feasibility of certain program
elements prior to full implementation of a program including
such program elements.
1.13 Program Participants: Eligible Customers who turn in Eligible
Appliances.
1.14 Purchase Order: Document issued by the Administrator to ARCA
and executed by the Parties, which contains the terms and
conditions for the Work described herein.
1.15 Recycling Center: The site at which ARCA will process
refrigerators and freezers, remove CFCs, Refrigerants, PCBS,
Mercury and Used Oils, and recycle or legally dispose of
Hazardous Materials.
1.16 Refrigerator/Freezer Early Retirement and Recycling Program:
That program ordered by the CPUC in its Ruling which requires
Administrator to contract with ARCA for implementation of a
refrigerator/freezer early retirement and recycling program in
the Territories of PG&E and SDG&E (also referred to herein as
the "Program").
1.17 Ruling: as defined in the Recital to this Agreement and any
subsequent rulings.
1.18 Subcontractor: Either an entity contracting directly with ARCA
to furnish services or materials as part of or directly
related to, the Work; or an entity contracting with
Subcontractor of any tier to furnish services or materials as
a part of, or directly related to, the Work.
1.19 Territories: The regions defined by the zip codes set forth in
Attachment C located in the following counties in the service
territories of SDG&E and PG&E: San Diego and portions of
Orange County, San Francisco, San Mateo, and Santa Clara.
Beginning January 1, 2001, the regions defined by the zip
codes set forth in Attachment C located in the following
counties will be added: Alameda, Contra Costa, Santa Cruz and
Marin, and any additional regions as directed by the CPUC.
1.20 Used Oils: Used refrigeration compressor oil.
1.21 Work: Any and all obligations of ARCA to be performed pursuant
to this Agreement.
2. GENERAL TERMS
2.1 ARCA shall perform the work and its associated obligations
described below as an independent contractor.
2.2 This Agreement is appended to, and part of a Purchase Order
executed by the Parties.
2.3 The Program is subject to spending limits, and ARCA shall not
invoice SCE for an aggregate amount in excess of $5.5 million
to be spent in only PG&E's Territory, or an aggregate amount
in excess of $3.0 million to be spent in only SDG&E's
Territory.
3. CONTRACT DOCUMENTS
3.1 This Agreement shall consist of the following documents: this
Agreement, any amendments to this Agreement, the Purchase
Order, and Change Orders. Except as provided below in Section
13 (Year 2000 warranty provision), in the event of any
conflict or apparent conflict between any of the provisions of
the documents comprising this Agreement, the following order
of construction of the documents shall apply:
3.1.1 Amendments to the Agreement in chronological order
from the most recent to the earliest;
3.1.2 Change Orders incorporating and reflecting any
Amendments to the Agreement in chronological order
from the most recent to the earliest.
3.1.3 This Agreement.
3.1.4 Purchase Order incorporating this Agreement.
3.2 Each Party shall notify the other immediately upon the
identification of any such conflict or inconsistency.
4. SCOPE OF WORK
4.l. Advertising and Marketing. ARCA shall:
o Submit to the Administrator all advertising and other
marketing materials for approval prior to publishing
or distributing.
o Implement a multi-media advertising/marketing
campaign (i.e., brochures, print, cable television
advertisements, truck signs, 800 number, web site
address) for each Target Area which focuses on system
load impacts of operating inefficient refrigerators
and freezers, operating costs and potential private
energy savings, and environmental benefits.
o Provide local print and television media with program
information, press kits, facility tours, collection
ride-along events, press releases, and other
opportunities to feature the Program.
o As appropriate, solicit marketing affiliate
participation from major retailers (i.e., Sears,
Circuit City, Home Depot) including point-of-sale
displays, and provide program information to consumer
groups (particularly those assisting under-served
segments of the residential electric customer base),
community-based organizations, local governments,
property owner/manager's associations, homeowner and
tenant organizations, environmental organizations,
and civic groups.
o Provide a per-unit "bounty" to the authorized
marketing affiliate for each participant referred to
the program who turns in an Eligible Appliance for
recycling.
o Ensure that all advertising and promotional materials
include program guidelines and restrictions, duration
of the program, incentive amount, public and private
program benefits, the 800 number and web site
address; and will clearly state that the program is
funded by California electric utility customers under
the auspices of the Commission.
o Explore adding program information to the
Commission's web site and creating links from other
sites to direct potentially Eligible Customers to the
Program web site.
4.2 Customer Services. ARCA shall:
o Establish an 800 telephone number and provide trained
customer service staff to assist residential
consumers Monday through Friday from 6:00 a.m. to
6:00 p.m. Pacific time with questions about the
program and to schedule their participation.
o Verify customer eligibility (i.e., live in the
Territory, own a working refrigerator/freezer).’
o Schedule in-home appliance removal appointments
(choices of service dates and morning/afternoon
collection, handle reschedule and cancellation
requests).
o Provide customers with information about preparing
their refrigerator for removal (appliance must be
plugged in and working at the time of pickup, empty
and defrosted).
o Conduct a brief customer survey, using questions
provided by Administrator, with a randomly selected
20% of customers who schedule a collection
appointment.
o Produce written confirmation of appliance collection.
o Provide customers with a day-ahead confirmation call.
o Fulfill incentive payments (checks are sent
approximately 3 weeks after collection of the
refrigerator/freezer).
4.3 Collection. ARCA shall:
o Hire and train drivers in the program service
territory, provide collection vehicles and trailers,
and establish a local transfer site.
o Collect all Eligible Appliances from customers'
residences or facilities within 20 days from the date
of initial customer contact unless otherwise
requested by the customer, and secure customer
signature.
o Contact customers a day ahead of their collection
appointment as a reminder and assist customers
needing to reschedule appointments.
o Ask program participants to have their old
refrigerator/freezer plugged in at the time of
collection, or located within 50 feet of an outlet,
so that the operational condition of the appliance
can be confirmed.
o Remove refrigerators and freezers and transfer to
trailers to be shipped to ARCA's center in Compton,
CA for processing and recycling.
4.4 Refrigerator Processing. ARCA shall:
o Operate a center in compliance with all federal,
state and local hazardous waste management and
recycling regulations.
o Ensure that all Refrigerants are recovered and
recycled.
o Recover and recycle CFC-11 blowing agents in the
polyurethane foam insulation of refrigerators and
freezers.
o Ensure that all hazardous components, such as
capacitors containing polychlorinated biphenyls
(PCBS) or mercury-containing switches, are removed
and properly stored prior to shipment for disposal or
recycling.
o Ensure that used compressor oil is recovered and
processed to reduce the level of hazardous halogens
before the oil is collected by a licensed oil
recycler.
o Ensure that PCB components are incinerated at a
federally licensed hazardous waste incineration
facility.
o Ensure that mercury is recovered by a licensed
mercury reclamation facility for recycling.
o Ensure that Refrigerants and non-CFC refrigerants are
sold to a certified refrigerant reclamation facility
for recycling.
o Ensure that processed refrigerators and freezers are
sold to a metals recovery facility for recycling.
4.5 Records. ARCA shall document and maintain records for services
under this Agreement as follows:
4.5.1 A Customer Comment Tracking System for recording
customer inquiries, complaints, and positive
feedback.
4.5.2 Appliance Turn-in Order Form ("ATO") to collect data
such as customer name, address, home and work phone
numbers; Appliance manufacturer's name; Appliance
model and style; defrost type; color, size, and
estimated age of unit; location of Appliance within
the residence; final disposition code (which
indicates operating condition of Appliance and/or
Incentive received); special pick-up instructions (if
applicable); and other information as needed to
provide required reports under this Agreement.
4.5.3 Compilation of data in subsection 4.5.2 in electronic
mode, employing a software program suitable for
exchange of information with Administrator, subject
to the approval of Administrator's Program Manager.
4.6 Customer Survey. ARCA shall conduct a customer survey, shown
in Exhibit A, which is attached and incorporated by reference
herein, using a stratified purposeful sample of 5% to 20% of
the Program Participants. The purpose of the survey shall be
to elicit information such as appliance use, customer
demographics and customer satisfaction. Administrator may
modify the information collected or reported in the survey, or
the stratification and frequency of the survey, provided the
modified survey is comparable to Exhibit A.
4.7 Incentives. ARCA shall establish and implement a financial
incentive service as follows:
4.7.1 Each Program Participant will be entitled to receive
a check in an amount to be determined by ARCA, not to
exceed seventy-five Dollars ($75.00). The check is
referred to as the "Incentive".
4.7.1.1 In the event ARCA determines the
incentive amount will be less than
$75.00, ARCA will notify SCE at least 30
days prior to implementing the lower
incentive amount.
4.7.2 ARCA shall provide Administrator with a weekly
listing of Customers who receive an Incentive.
4.7.3 Upon Administrator's payment to ARCA as described in
Section 7 of this Agreement, Administrator shall be
under no further obligation with respect to
reimbursement of such amounts and such reimbursement
shall constitute full payment to ARCA on behalf of
the Program Participants entitled to Incentives. Upon
Administrator's payment to ARCA of such
reimbursement, ARCA shall be deemed the holder of
such property as far as the interests of the Program
Participants entitled thereto are concerned for any
and all purposes, including, but not limited to,
complying with the unclaimed property laws of
California and any and all other applicable states.
Administrator shall not assume any responsibility for
other disposition of the Incentive after such payment
is paid to ARCA and shall not be entitled to the
reversion of any amounts so paid.
4.8 Reporting. ARCA shall provide Administrator with reports for
the services performed under this Agreement as follows:
4.8.1 A monthly report, provided no later than the 15th day
of the month, and a quarterly report, each which
shall contain the following:
(a) the number of Eligible Appliances processed
under this Agreement during the previous
month and the size in cubic feet, year of
manufacture, style, and defrost type.
(b) environmental data such as an estimated
breakdown of amount of refrigerants
recovered; number of pounds of Refrigerants,
PCBs and Mercury removed; amount of Used
Oils recycled; number of units containing
CFC-11 foam; and weight of metals and
non-recyclable materials sold for recycling.
(c) monthly Customer Comment Tracking System
information required pursuant to Section
4.5.1.
(d) aging reports indicating the number of
Eligible Appliances that were collected
during the preceding month and that were
scheduled for collection from Customers
during that month, the date of the initial
contact with the Customer, the date or dates
the appliance was scheduled for collection,
and the actual collection date.
4.8.2 A final report no later than thirty (30) days after
the termination of this Agreement of all amounts paid
by ARCA in compliance with any unclaimed property
laws pursuant to Section 4.7.3 hereof.
4.8.3 Weekly invoices as provided in Section 8.
4.8.4 Upon reasonable written request from an authorized
representative of Administrator, special and
nonrecurring reports during the course of the
Program. Such report content will be developed by the
Parties and shall not necessitate unreasonable labor
which would otherwise require the negotiation of a
charge separate from the Basic Recycling Charge.
4.8.5 ARCA shall maintain records of its Program
Participants. In all cases, when ARCA picks up an
Eligible Appliance from a Program Participant, ARCA
shall obtain the Program Participant's signature on
the ATO.
4.8.6 ARCA shall submit to Administrator estimates of
Program impact in the form of a final report at the
end of the Contract Period. Such report shall include
(but need not be limited to) the following:
o a description of all activities undertaken
as part of the Program
o the number of units retired and recycled
o a demonstration of the energy and demand
savings achieved.
4.8.7 ARCA shall make all data used in the preparation of
the final report of Program impact estimates,
referred to in Section 4.8.6 above, available to
Administrator for auditing or other verification
purposes.
4.9 Website. ARCA shall design and, subject to the prior approval
of Administrator, implement a website which enables Eligible
Customers in the Territories to electronically submit
information for prequalification and schedule appointments on
a 24 hour, seven day a week basis.
4.10 Cooperation, ARCA will work cooperatively with the
Administrator, the CPUC and other interested parties to
provide feed-back, determine Program effectiveness and
recommend modifications to the Program's design or procedures.
5. CUSTOMER AND APPLIANCE ELIGIBILITY
5.1 Customer eligibility for the Program shall depend on the
following:
5.1.1 Customer is an Eligible Customer in the Territories
listed in Section 1.9 and occupies a single-family
residential (Domestic Rate) or multi-unit dwelling or
mobile home, or other customers as determined
eligible under the Pilot Programs described in
Section 5.1.4.
5.1.2 Customer is the owner of the Eligible Appliance or
possesses written consent from the actual owner to
turn in the Eligible Appliance.
5.1.3 Customer turns in no more than two Eligible
Appliances per year unless otherwise allowed pursuant
to Pilot Programs described in Section 5.1.4.
5.1.4 The Pilot Programs to be implemented during the
Contract Period of this Program shall include: i)
acceptance of Eligible Appliances from
landlords/multi-family unit owners; (ii) acceptance
of Eligible Appliances from non-profit organizations
located within the Territories; and (iii) acceptance
and prequalifications of PG&E and SDG&E's customers
who participate in Refrigerator Rebate Programs if
linkages to the utility programs can be created.
5.2 Commercial customers do not qualify for the Program. Landlords
are considered commercial customers unless otherwise
determined eligible under the Pilot Programs described in
Section 5.1.4.
5.3 An Eligible Appliance must be capable of cooling and/or
freezing, as applicable, at time of collection and its size
must be 10 cubic feet or more unless it is otherwise
determined eligible under the Pilot Programs described in
Section 5.1.4.
5.4 Commercial refrigerators, ammonia-containing gas
refrigerators, commercial freezers, and room air conditioners
do not qualify as Eligible Appliances.
6. OWNERSHIP AND CONFIDENTIALITY
6.1 All information disclosed by Administrator during meetings or
negotiations with regard to the Program, and any information
contained in drawings, specifications, technical reports, and
data, provided by Administrator to ARCA during performance of
this Agreement shall be held in confidence by ARCA and used
only for the performance of the Work pursuant to this
Agreement.
6.2 ARCA, its employees, and any subcontractors shall not disclose
any information concerning SDG&E's or PG&E's customers to any
person other than Administrator's personnel either during the
term of this Agreement or after its completion, without ARCA
having obtained the prior written consent of Administrator,
except as provided by lawful court order or subpoena and
provided ARCA gives Administrator advance written notice of
such order or subpoena. Prior to any approved disclosure,
persons receiving said information, including ARCA, its
employees, or third parties, must enter into a nondisclosure
agreement with Administrator. ARCA agrees to require its
employees and subcontractors to execute a nondisclosure
agreement prior to performing any services under this
Agreement. This provision, however, does not prohibit ARCA
from disclosing non-confidential information concerning this
Agreement to the CPUC in any CPUC proceeding, or any
CPUC-sanctioned meeting or proceeding or other public forum.
6.3 All materials provided by Administrator to ARCA during the
performance of this Agreement shall be returned to
Administrator after this Agreement is terminated or at the
request of Administrator. ARCA shall not duplicate any
material furnished by Administrator without prior written
approval from Administrator.
6.4 Except as required by the CPUC, Administrator, its employees
and any subcontractors of Administrator shall not disclose any
confidential or proprietary information provided by ARCA
("ARCA's Confidential Information") to any person other than
ARCA's personnel, either during the term of the Agreement, or
after its completion, without having obtained the prior
written consent of ARCA. By way of example, ARCA's
Confidential Information shall include, without limitation,
ARCA's systems for oil degassing, Refrigerant recovery and
ARCA's computer software. Administrator agrees to require its
employees to comply with the non-disclosure requirements of
this Section prior to any contact with, or evaluation of
ARCA's Confidential Information.
6.5 Administrator agrees that, without the prior written consent
of ARCA, it will not, during the term or after termination of
this Agreement, directly or indirectly, disclose to any
individual, corporation, or other entity, or use for its own
or such other's benefit, any of ARCA's Confidential
Information, whether reduced to written or other tangible
form, which:
6.5.1 Is not generally known to the public or in the
industry;
6.5.2 Has been treated by ARCA or any of its subsidiaries
as confidential or proprietary; and
6.5.3 Is of a competitive advantage to ARCA or any of its
subsidiaries and in the confidentiality of which ARCA
or any of its subsidiaries has a legally protectable
interest.
6.6 ARCA's Confidential Information which becomes generally known
to the public or in the industry, or, in the confidentiality
of which, ARCA and its subsidiaries cease to have a legally
protectable interest, shall cease to be subject to the
restrictions of this Section 6.
7. COMMERCIAL TERMS
7.1 Payment
Administrator shall pay to ARCA, as full compensation for
completing the Work, the prices set forth in Exhibit B as
described in this Section 7.
7.2 Summary of Charges
7.2.1 Basic Recycling Charge. Administrator shall pay to
ARCA a per-unit Basic Recycling Charge for the number
of units collected and recycled pursuant to this
Agreement at the price or prices set forth on Line C
of Exhibit B. The Basic Recycling Charge covers the
scope of work described in Section 4, excluding: the
Incentive charge, CFC-11 Charge, Advertising Charge,
and any Financing Charge.
7.2.1.1 True-Up. The pricing in line C of Exhibit B
assumes a total volume for the Project of
20,001 to 40,000 units. In the event the
total number of units collected and recycled
under the Program at any time exceeds
40,000, then the pricing under Exhibit B
shall be based on line D for the 40,000
units previously processed, and for all
subsequent
units processed (up to 60,000 units). In
addition, ARCA shall provide Administrator
with a credit, allocated based on the number
of such 40,000 units attributable to PG&E's
and SDG&E's Territory, in the total amount
of $228,000. ARCA shall apply such credited
amounts against future invoices for each of
PG&E's and SDG&E's Territory, respectively,
subject to the spending limitations in
Section 2.3. ARCA shall refund to
Administrator any unused credit within 30
days after termination of this Agreement.
7.2.2 Incentive Charge. Administrator shall pay to ARCA the
per-unit Incentive charge in the amount set forth in
line C of Exhibit B.
7.2.3 CFC-11 Charge. Administrator shall pay to ARCA the
per-unit CFC-11 charge in the amount set forth in
Line C of Exhibit B for all units collected.
7.2.4 Advertising Charge. Administrator shall pay to ARCA
the perunit advertising charge in the amount set
forth in line C of Exhibit B.
7.2.5 Financing Charges. Administrator shall pay to ARCA
monthly interest at the rate of three-quarter of one
percent (0. 75%) on the average monthly balance of
any unpaid and overdue invoice over and above the
charges set forth on Exhibit B.
7.3 ARCA agrees that any agreement it has, or in which it may
enter with other utilities or agencies for a recycling
program, shall not detrimentally affect ARCA's services under
this Agreement.
8. BILLING
8.1 ARCA shall submit separate weekly invoices respectively
relating to the Territories of SDG&E and PG&E, respectively,
indicating the per-unit charges for the refrigerators and
freezers collected, processed, and recycled. ARCA shall
include with each invoice copies of all ATOs relating to
invoiced amounts, and a summary, setting forth for each ATO
included with the invoice, the ATO number, zip code, first
unit price, additional units, and total price. Administrator
shall have no obligation to pay any invoice unless all of the
data and documents listed above have been received. ARCA shall
apply a per-unit charge on units that have been disabled and
only for the following transactions:
8.1.1 Collection of an Eligible Appliance.
8.1.2 Collection contact made for Eligible Appliance that
cannot be removed due to obstruction because of size
of structural barrier provided that ARCA obtains
written permission from Customer to permanently
disable said unit, and ARCA then permanently disables
the unit.
8.2 ARCA shall apply a 25% per unit discount to the Basic
Recycling Charge to any additional units when two Eligible
Appliances are removed during a single collection appointment
from a Customer's residence. Said discount shall be clearly
documented and identified in ARCA's invoice.
8.3 Administrator shall make payment (less any unsubstantiated or
incorrect charge) within thirty days of receipt of an invoice
from ARCA.
8.4 ARCA acknowledges that Administrator will forward to SDG&E and
PG&E, for their review, copies of the supporting documentation
and reports ARCA submits to Administrator. In the event SDG&E
or PG&E provides Administrator with evidence demonstrating
that any invoiced amount paid by Administrator to ARCA was
incorrect or improper, Administrator shall have the right to
offset from current payments due ARCA the full amount of such
incorrect or improper payment, pending resolution of the
discrepancy. No Financing Charges shall accrue on any amount
offset by Administrator unless the offset was improper or
incorrect.
9. RESPONSIBILITIES OF ADMINISTRATOR AND ARCA
9.1 Administrator shall be responsible for making contractual
arrangements to transfer funding from PG&E and SDG&E to
Administrator for payment, for arranging for its cost sharing
with PG&E and SDG&E, and shall administer the Program for
purposes of streamlining administration and oversight.
9.2 ARCA shall work with the Administrator to ensure that the
Program meets the test for cost-effectiveness, using the 1.0
minimum ratio total resource cost test, as set forth in the
Rulings. ARCA shall provide Administrator with all
documentation necessary to demonstrate such test is met.
9.3 ARCA shall provide Administrator with estimates of Program
impact at the conclusion of this Contract.
9.4 Administrator and ARCA shall meet their respective directives
pursuant to the Rulings.
10. RIGHT TO AUDIT
During the Program and for 3 years after termination of the Agreement,
Administrator, or its Authorized Representative, shall have the right
and free access, at any reasonable time during normal business hours,
to examine, audit, and copy all ARCA's records and books as related to
ARCA's obligations under this Agreement, including, but not limited to,
verification of costs to Administrator, as claimed by ARCA.
11. CHANGES
Changes to this Agreement shall be made by mutual agreement of the
Parties through a written amendment to the Agreement. Such written
amendment may be incorporated into this Agreement through a subsequent
Purchase Order or Change Order.
12. PERMITS, CODES, AND STATUTES
12.1 ARCA shall perform the Work set forth in this Agreement in
accordance with all applicable federal, state, and local laws,
rules, and/or ordinances. Prior to performance of any
services, ARCA shall, at its own cost, have obtained, and
shall have required all Subcontractors to obtain, all licenses
and permits required by law, rule, regulation, and ordinance,
or any of them, to engage in the activities required in
connection with this transaction. Said licenses and permits
shall be kept current at all times during the term of the
Agreement. ARCA also represents and warrants that, to the best
of its knowledge, based upon reasonable and prudent inquiry,
any storage site and any disposal facility to which the
Hazardous Materials may be moved are in compliance with any
and all federal, state and local laws and regulations
pertaining thereto and that such storage sites and disposal
facilities are suitable and may lawfully receive and/or
dispose of the Hazardous materials.
12.2 ARCA shall comply with all applicable local, state, and
federal safety and health laws in effect an the date of this
Agreement, including, but not limited to, EPA, California EPA,
RCRA, the Occupational Safety and Health Act of 1970 (OSHA),
and all standards, rules, regulations, and orders issued
pursuant to such local, state, and federal safety and health
laws. Should any such law, rule, or regulation be enacted or
promulgated subsequent to the date of this Agreement, which
renders ARCA's performance impractical, ARCA and Administrator
shall, in good faith, negotiate an amendment to this Agreement
reasonably compensating ARCA for its additional costs.
13. WARRANTY
13.1 ARCA warrants to Administrator that the Work shall be
performed in a competent manner, in accordance with this
Agreement, and that the acceptance, handling, storage,
recycling, and disposal of the refrigerators and freezers and
the Hazardous Materials shall be in accordance with (i) the
requirements of this Agreement and (ii) the applicable local,
state, and federal laws and regulations in effect at the time
of the work performed.
13.2 ARCA represents and warrants (i) that it has knowledge of the
California Public Resources Code and the California Health and
Safety Code which require that refrigerators and freezers be
processed to remove Refrigerants, PCBS, Mercury, and Used Oils
prior to crushing for transport or transferring to a baler or
shredder for recycling; (ii) that it has knowledge of the
hazards associated with the removal, handling, storage,
recycling, and legal disposal of Hazardous Materials; (iii)
that it has experience and expertise in such removal,
handling, storage, recycling, and legal disposal; (iv) that it
uses only qualified personnel, (including subcontractor's and
agent's personnel) who have been instructed and certified in
the proper safety procedures to be used in such removal,
handling, storage, recycling, or legal disposal; and (v) that
it will continue to operate and maintain its Recycling Center.
13.3 Year 2000 Warranty. ARCA hereby represents and warrants to
Administrator and agrees that its software, hardware and
equipment, and any piece, part, component or system thereof,
and/or work provided hereunder will (a) at the time of
delivery or performance be and will remain Year 2000 Compliant
and (b) not fail to meet, or to be delivered in accordance
with, all the requirements and specifications of this
Agreement, as a result of any failure of ARCA or of its
operations, suppliers, software, hardware or equipment to be
Year 2000 compliant. In order for the software to be Year 2000
Compliant, it must accurately process date/time data
(including, but not limited to, calculating, comparing,
sorting, sequencing and calendar generation), including single
century formulas and multi-century formulas, from, into,
within and between the twentieth and twenty-first centuries,
including all dates and leap year calculations, and will not
malfunction or generate abnormal endings, incorrect values or
invalid results involving such date/time data; (ii) accurately
interface with other software, hardware or equipment, as
necessary and appropriate, in order to supply, receive,
process or transmit date/time and other data; (iii) provide
that date/time-related functionalities, date/time fields and
any user input interfaces include a four digit year format
and/or other appropriate indication of century; (iv) not cause
any of Administrator's other software, hardware or equipment
that Administrator deems to be otherwise Year 2000 compliant
to fail to be Year 2000 compliant; and (v) not cause any of
Administrator's other software, hardware or equipment that
Administrator deems to be otherwise Year 2000 ready to fail to
be Year 2000 ready. For purposes of this Agreement,
Administrator shall deem software, hardware or equipment to be
"Year 2000 compliant" if it has been or is determined by
Administrator to accurately process date/time data from, into,
within and between the twentieth and twenty-first centuries
including all dates and leap year calculations. For purposes
of this Agreement, Administrator shall deem software, hardware
or equipment to be "Year 2000 ready" if it has been or is
determined by Administrator to be suitable for continued use
into the Year 2000 and beyond.
13.4 Year 2000 Warranty Controlling. In the event of any conflict
or apparent conflict between any other provisions of this
Agreement the terms and conditions of this Year 2000 Warranty
shall control. Nothing in this Year 2000 Warranty shall be
construed to limit any rights or remedies Administrator may
otherwise have under any other provision of this Agreement, or
under any other contract or agreement between the Parties.
14. TITLE
14.1 Title to the Hazardous Materials shall pass to ARCA when ARCA
collects refrigerators and freezers from Customers.
14.2 Title of collected refrigerators and freezers shall pass to
ARCA.
15. INSURANCE
15.1 Without limiting ARCA's liability to Administrator, including
the requirements of Section 16 (Indemnity), ARCA shall
maintain for the Work, and shall require that each
Subcontractor of the first tier maintain, at all times during
the Work and at its own expense, valid and collectible
insurance as described below. This insurance shall not be
terminated, expire, not be materially altered, except on
thirty days written notice to Administrator. ARCA shall
furnish Administrator with certificates of insurance and forms
acceptable to Administrator and shall require each
Subcontractor of the first tier to furnish ARCA with
certificates of insurance, as evidence that policies do
provide the required coverage and limits of insurance listed
below. Such certificates shall be furnished to Administrator's
Program Manager by ARCA upon receipt of the Purchase Order,
and by Subcontractor for the first tier upon receipt of its
subcontract, but in any event prior to start of its portion of
the Work. Any other insurance carried by Administrator, its
officers, agents, and employees, which may be applicable,
shall be deemed to be excess insurance, and ARCA's insurance
shall be deemed primary for all purposes notwithstanding any
conflicting provision in ARCA's policies to the contrary.
(i) Workers' Compensation Insurance with statutory
limits, as required by the state in which the Work is
performed, and Employer's Liability Insurance with
limits of not less than $5,000,000. Carriers
furnishing such insurance shall be required to waive
all rights of subrogation against Administrator, its
officers, agents, employees, and other contractors
and subcontractors.
(ii) Comprehensive Bodily Injury and Property Damage
Liability Insurance, including owners, and
contractors' protective liability, product/completed
operations liability, contractual liability, and
coverage for liability incurred as a result of sudden
and accidental discharge, dispersal, release or
escape of polluting materials, (excluding automobile)
with a combined single limit of not less than
$3,000,000 for each occurrence. Such insurance shall:
(a) acknowledge Administrator and SDG&E or PG&E, as
appropriate, their respective officers, agents, and
employees, as additional insureds; (b) be primary for
all purposes; and (c) contain standard
cross-liability provisions.
(iii) Automobile Bodily Injury and Property Damage
Liability Insurance with a combined single limit of
not less than $3,000,000 for each occurrence. Such
insurance shall cover liability arising out of the
use by ARCA and Subcontractors of owned, non owned
and hired automobiles in the performance of the Work.
As used herein, the term "automobile" means vehicles
licensed or required to be licensed under the Vehicle
Code of the state in which the Work is performed.
Such insurance shall acknowledge Administrator and
SDG&E or PG&E, as appropriate as additional insureds
and be primary for all purposes.
(iv) Environmental Impairment Expense Insurance with a
combined single limit of not less than $5,000,000 for
each occurrence and overall limits of $10,000,000.
Such insurance shall provide coverage for necessary
costs or expense of removing, cleaning up,
transporting, nullifying, and rendering ineffective,
or any of them, any substance which has caused
environmental impairment and such insurance shall
contain no exclusions for non-sudden and/or
non-accidental discharge, release or escape of
polluting materials. Such insurance shall acknowledge
Administrator and SDG&E or PG&E, as appropriate, as
additional insureds and be primary for all purposes.
ARCA shall report immediately to Administrator and
confirm in writing any injury, loss, or damage
incurred by ARCA or Subcontractors in excess of
$500.00, or its receipt of notice of any claim by a
third party in excess of $500.00, or any occurrence
that might give rise to such claim.
If ARCA fails to comply with any of the provisions of
this Section 15, ARCA shall, at its own cost, defend,
indemnify, and hold harmless Administrator, its
officers, agents, employees, assigns, and successors
in interest, from and against any and all liability,
damages, losses, claims, demands, actions, causes of
action, costs, including in-house and outside
attorney's fees and expenses, or any of them,
resulting from the death or injury to any person or
damage to any property to the extent that
Administrator would have been protected had ARCA
complied with all of the provisions of this Section.
16. INDEMNITY
16.1 ARCA shall, at its own cost, indemnify, defend, reimburse, and
hold harmless Administrator, its officers, directors,
employees, agents, assigns, and successors in interest, from
and against any and all liability, damages, losses, claims,
suits, demands, actions, causes of action, costs, expenses,
including in-house and outside attorney's fees and expenses,
or any of them resulting from the death or injury to any
person or damage to or destruction of any property caused by
ARCA, Subcontractors, and employees, officers and agents of
either ARCA or Subcontractors, or any of them, and arising out
of or attributable to the performance or nonperformance of
ARCA's obligations under this Agreement and including, without
limitation, failure to comply fully with any federal, state,
or local law, statute, regulation, rule, ordinance, or
government directive which directly or indirectly regulates or
affects the handling, storage, recycling, or disposal of the
Hazardous Materials to be managed by ARCA hereunder. In all
cases of death or injury to employees, officers or agents of
either ARCA or Subcontractors, whether or not caused by ARCA,
Administrator shall be indemnified by ARCA for any and all
liability except to the extent such death or injury results
from the negligence of Administrator.
16.2 ARCA shall, at its own cost, indemnify, defend, reimburse, and
hold harmless Administrator, its officers, directors,
employees, and agents, assigns, and successors in interest,
from and against any and all liability imposed upon, or to he
imposed upon Administrator, under any law imposing liability
for the environmental clean-up of the Hazardous Materials at
any location (other than Administrator's property) where the
Hazardous Materials have been placed, stored or disposed of in
the performance or nonperformance of ARCA's obligations under
this Agreement, or any other site to which the Hazardous
Materials have migrated.
16.3 The indemnities set forth in this Section 16 shall not be
limited by the insurance requirements set forth in Section 15.
17. TERM AND TERMINATION
17.1 This Agreement shall commence on the date first written above
and shall continue in effect until the first to occur of (1)
conclusion of the Contract Period, and (ii) ninety (90) days
after ARCA has invoiced Administrator for a total aggregate
amount of $8.5 million under this Agreement. In either event,
ARCA shall complete all work associated with all amounts
invoiced under this Agreement. This Agreement may be extended
as agreed to in writing by the Parties, subject to approval by
the CPUC.
17.2 Either Party may terminate the Agreement for cause by
providing 60 days advance written notice to the other Party.
If the default has not been cured within the 60 day notice
period, the non-defaulting party may declare this Agreement
terminated, effective on the last day of said notice period
("Termination Date"). ARCA shall be paid for all work
performed prior to the Termination Date.
17.3 Administrator shall have the right to terminate this Agreement
by providing 30 days advance written notice to ARCA upon CPUC
mandate, or upon depletion of the amount of funding authorized
by the CPUC for the Contract Period. In the event the
Agreement is terminated upon CPUC mandate, Administrator shall
pay ARCA all amounts owed under the Agreement as of 30 days
after Administrator's written notice to ARCA of the CPUC's
mandate (the "Termination Date"). In such event, Administrator
shall only be obligated to pay contractor for such
refrigerators and freezers actually collected by ARCA for
recycling as of the Termination Date.
17.4 In the event of termination pursuant to this Section 17, ARCA
and Administrator shall work cooperatively to facilitate the
termination of the Summer Initiative.
17.5 Each Party shall immediately provide at no cost to the other,
any report, testimony, or any communications with the CPUC, or
any board, division, committee or member thereof, which could
reasonably be anticipated to effect the Program or which
addresses it in any manner.
18. WRITTEN NOTICES
18.1 Any written notice, demand or request required or authorized
in connection with this Agreement, shall be deemed properly
given if delivered in person or sent by facsimile, nationally
recognized overnight courier, or first class mail, postage
prepaid, to the address specified below, or to another address
specified in writing by Administrator as follows:
ADMINISTRATOR: Southern California Edison Company
Attn: Jeannette Duvall-Ward
2244 Walnut Grove Avenue - Quad 2A
Rosemead, CA 91770
(626) 302-8791 telephone
(626) 302-8313 facsimile
ARCA: Appliance Recycling Centers of America, Inc.
Attention: Mr. Jack Cameron President
7400 Excelsior Boulevard Minneapolis, MN 55426
(952) 612-1717 telephone
(952) 612-1801 facsimile
18.2 Notices shall be deemed received (a) if personally or
hand-delivered, upon the date of delivery to the address of
the person to receive such notice if delivered before 5:00
p.m., or otherwise on the Business Day following personal
delivery; (b) if mailed, three Business Days after the date
the notice is postmarked; (c) if by facsimile, upon electronic
confirmation of transmission, followed by telephone
notification of transmission by the noticing Party; or (d) if
by overnight courier within the time limits set by that
courier for next-day
19. SUBCONTRACTS.
19.1 ARCA shall contractually require each Subcontractor of the
first tier providing service in connection with the Work to be
bound by general terms and conditions protecting Administrator
which are equivalent to the terms and conditions of this
Agreement.
19.2 ARCA shall, at all times, be responsible for the work, and
acts and omissions, of Subcontractors and persons directly or
indirectly employed by them for services in connection with
the Work. The Purchase Order and this Agreement shall not
constitute a contractual relationship between any
Subcontractor and Administrator nor any obligation for payment
to any Subcontractor.
20. CALIFORNIA PUBLIC UTILITIES COMMISSION
This Agreement and the Purchase Order incorporating this Agreement are
entered into in furtherance of the Ruling, and shall at all times be
subject to such changes or modifications by the CPUC as it may from
time to time direct in the exercise of its jurisdiction.
21. NON-WAIVER
None of the provisions of the Agreement shall be considered waived by
either Party unless such waiver is specifically stated in writing.
22. ASSIGNMENT
Administrator may be required to assign its rights, duties and
obligations under this Agreement to the CPUC and/or its designee. ARCA
and Administrator hereby consent to such assignment. Other than an
assignment to the CPUC or the CPUC's administrator, neither Party shall
delegate or assign this Agreement or any part or interest thereof,
without the prior written consent of the other Party, and any
assignment without such consent shall be void and of no effect.
23. FORCE MAJEURE
Failure of ARCA to perform any of the provisions of this Agreement by
reason of any of the following shall not constitute an event of default
or breach of this Agreement: strikes, picket lines, boycott efforts,
earthquakes, fires, floods, war (whether or not declared), revolution,
riots, insurrections, acts of God, acts of government (including,
without limitation, any agency or department of the United States of
America), acts of the public enemy, scarcity or rationing of gasoline
or other fuel or vital products, inability to obtain materials or
labor, or other causes which are reasonable beyond the control of the
ARCA.
24. GOVERNING LAW
The contract shall be interpreted, governed, and construed under the
laws of the State of California as if executed and to be performed
wholly within the State of California.
25. SECTION HEADINGS
Section headings appearing in this Agreement are for convenience only
and shall not be construed as interpretations of text.
26. SURVIVAL
Notwithstanding completion or termination of the Work, of this
Agreement, any amendment to the Agreement, or of any Purchase Order or
Change Order, the Parties shall continue to be bound by the provisions
of this Agreement and any Purchase order incorporating this Agreement,
Amendment to this Agreement and Change Orders, which by their nature
shall survive such completion or termination. Such provisions shall
include, but not be limited to, ARCA's indemnity protecting
Administrator from any liability for environmental clean up as provided
in Section 16 of this Agreement.
27. NO RELIANCE
Neither Party has relied upon any representation, warranty, projection,
estimate or other communication from the other not specifically so
identified in this Agreement.
28. ATTORNEYS' FEES
In the event of any legal action or other proceeding between the
Parties arising out of this Agreement or the transactions contemplated
herein, the prevailing Party in such legal action or proceeding shall
be entitled to have and recover from the other Party all costs and
expenses incurred therein, including reasonable in-house and outside
attorneys' fees.
29. COOPERATION
Each Party agrees to cooperate with the other Party in whatever manner
reasonably required to facilitate the successful completion of the
Agreement.
30. ENTIRE AGREEMENT
This Agreement contains the entire agreement and understanding between
the Parties and merges and supersedes all prior representations and
discussions pertaining to the Agreement, including ARCA's proposal. Any
changes, exceptions, or different terms and conditions proposed by ARCA
are hereby rejected unless expressly stated in this Agreement.
SIGNATURES
Each of the persons signing this Agreement individually represents that
he or she is duly authorized to execute this Agreement on behalf of the
Party for whom he or she signs.
SOUTHERN CALIFORNIA APPLIANCE RECYCLING
EDISON COMPANY OF AMERICA, INC.
By: /s/ Pamela A. Bass By: /s/ Edward R. Cameron
Name: Pamela A. Bass Name: Edward R. Cameron
Title: Sr. Vice President Title: President
Date: October 5, 2000 Date: September 26, 2000