FRIENDLY ENERGY CORP
10SB12G, EX-6.2, 2000-08-31
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                                EXHIBIT NO. 6.2

               ESP SERVICE AGREEMENT SOUTHERN CALIFORNIA EDISON.





<PAGE>

                                SOUTHERN CALIFORNIA EDISON COMPANY
                            ENERGY SERVICE PROVIDER SERVICE AGREEMENT

                                     AGREEMENT NUMBER: _______

                  This Energy Service Provider Service Agreement (this
                  "Agreement") is made and entered into as of this ____day of
                  _____________,1997, by and between "Friendly Energy
                  Corporation" ("ESP"), a ____ Corporation organized and
                  existing under the laws of the state of Nevada, and southern
                  California Edison Company ("Edison"), a corporation organized
                  and existing under the laws of the State of California. From
                  time to time, ESP and Edison shall be individually referred to
                  herein as a "Party" and collectively as the "Parties."

 SECTION 1:       GENERAL DESCRIPTION OF AGREEMENT

         1.1      This Agreement is a legally binding contract. The Parties
                  named in this Agreement are bound by the terms set forth
                  herein and otherwise incorporated herein by reference. This
                  Agreement shall govern the business relationship between the
                  Parties hereto by which ESP shall offer electrical energy
                  services, including, but not limited to, account maintenance
                  and billing services, electrical meter installation, meter
                  reading services and/or any other services that may be
                  approved by the California Public Utilities Commission
                  ("CPUC") in Direct Access transactions with customers in
                  Edison's service territory ("Direct Access Services"). Each
                  Party, by agreeing to undertake specific activities and
                  responsibilities for or on behalf of customers, acknowledges
                  that each Party shall relieve and discharge the other Party of
                  the responsibility for said activities and responsibilities
                  with respect to those customers. Except where explicitly
                  defined herein (including Attachment A hereto) the definitions
                  controlling this Agreement are contained in Edison's
                  applicable rules or in the relevant direct access tariff
                  (Edison Rule 22).

         1.2      The form of this Agreement has been developed as part of the
                  CPUC regulatory process, was intended to conform to CPUC
                  directions, was filed and approved by the CPUC for use between
                  Edison and ESPs and may not be waived, altered, amended or
                  modified, except as provided herein or in the relevant direct
                  access tariff, or as may other-wise be authorized by the CPUC.

SECTION 2:        REPRESENTATIONS

         2.1      Each Party represents that it is and shall remain in
                  compliance with all applicable laws and tariffs, including
                  applicable CPUC requirements.

         2.2      Each person executing this Agreement for the respective
                  Parties expressly represents and warrants that he or she has
                  authority to bind the entity on whose behalf this Agreement is
                  executed.

         2.3      Each Party represents that (a) it has the full power and
                  authority to execute and deliver this Agreement and to perform
                  its terms and conditions; (b) the execution, delivery and
                  performance of this Agreement have been duly authorized by all
                  necessary corporate or other action by such Party; and (c)
                  this Agreement constitutes such Party's legal, valid and
                  binding obligation, enforceable against such Party in
                  accordance with its terms.

         2.4      Each Party shall (a) exercise all reasonable care, diligence
                  and good faith in the performance of its duties pursuant to
                  this Agreement; and (b) carry out its duties in accordance
                  with applicable recognized professional standards in
                  accordance with the requirements of this Agreement.

                                     Page 7

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SECTION 3:        TERM OF SERVICE

                  The term of this Agreement shall commence on the date of
                  execution by both Parties hereto (the "Effective Date") and
                  shall terminate on the earlier of (a) the date ESP informs
                  Edison that it is no longer operating as an ESP in Edison's
                  service territory; (b) the earlier termination pursuant to
                  Section 4 hereof, or (c) the effective date of a new ESP
                  Service Agreement between the Parties hereto. Notwithstanding
                  the Effective Date of this Agreement, the ESP acknowledges
                  that it may only offer Direct Access Services to customers
                  effective January 1, 1998, or such other date as may be
                  directed by the CPUC for commencement of such services by
                  ESPs, and only after it has complied with all provisions of
                  this Agreement and Edison's applicable tariffs.

 SECTION 4:       EVENTS OF DEFAULT AND REMEDY FOR DEFAULT

         4.1      An Event of Default under this Agreement shall include either
                  Part-ys material breach of any provision of this Agreement,
                  including those incorporated by reference herein, and failure
                  to cure such breach within thirty (30) calendar days of
                  receipt of written notice thereof from the non-defaulting
                  Party; or such other period as may be provided by this
                  Agreement or the relevant direct access tariff.

         4.2      In the event of such an Event of Default, the non-defaulting
                  Party shall be entitled (a) to exercise any and all remedies
                  available under the relevant direct access tariff ; (b) to the
                  extent not inconsistent with the relevant direct access
                  tariff, to exercise any and all remedies provided for by law
                  or in equity; and (c) in the event of a material Event of
                  Default, to terminate this Agreement upon written notice to
                  the other Party, which shall be effective upon the receipt
                  thereof.

         4.3      Breach by any Party hereto of any provision of the relevant
                  direct access tariff shall be governed by applicable
                  provisions contained therein and each Party will retain all
                  rights granted thereunder.

SECTION 5:        BILLING, METERING AND PAYMENT

         5.1      Billing options and metering ser-Aces which are available to
                  ESP shall be as described in the relevant direct access
                  tariff. Billing and metering options applicable to a
                  particular customer shall be designated in the Direct Access
                  Service Request submitted by the ESP for such customer.

         5.2      Edison will bill and the ESP agrees to pay Edison for all
                  services and products provided by Edison in accordance with
                  the terms and conditions set forth in the relevant direct
                  access tariff. Any services provided by the ESP to Edison
                  shall be by separ-ate agreement between the Par-ties and are
                  not a subject of this Agreement.

SECTION 6:        LIMITATION OF LIABILITY

                  Each Party's liability to the other Party for any loss, cost,
                  claim, injury, liability, or expense, including reasonable
                  attorneys' fees, relating to or arising from any act or
                  omission in its performance of this Agreement, shall be
                  limited to the amount of direct damage actually incurred,
                  except as provided for in this Section. In no event shall
                  either Party be liable to the other Party for any indirect,
                  special, consequential, or punitive damages of any kind
                  whatsoever, whether in contract, tort or strict liability,
                  except in the event of an action covered by the
                  Indemnification provisions of Section 7 of this Agreement, in
                  which event this Section 6 shall not be applicable.

 SECTION 7:       INDEMNIFICATION

         7.1      To the fullest extent permitted by law, and subject to the
                  limitations set forth in Section 6 of this Agreement, each
                  Party (the "Indemnifying Party") shall indemnify and hold
                  harmless the other Party, and its current and future direct
                  and indirect parent companies, affiliates and their
                  shareholders, officers, directors, employees, agents, servants
                  and assigns (collectively, the "Indemnified Party") and at

                                     Page 8

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                  the Indemnified Party's option, the Indemnifying Party shall
                  defend the Indemnified Party from and against any and all
                  claims and/or liabilities for losses, expenses, damage to
                  property, injury to or death of any person, including, but not
                  limited to, the Indemnified Party's employees and its
                  affiliates' employees, subcontractors and subcontractors'
                  employees, or any other liability incurred by the Indemnified
                  Party, including reasonable expenses, legal and otherwise,
                  which shall include reasonable attorneys' fees, caused wholly
                  or in part by any negligent, grossly negligent or willful act
                  or omission by the Indemnifying Party, its officers,
                  directors, employees, agents or assigns arising out of this
                  Agreement, except to the extent caused wholly or in part by
                  any negligent, grossly negligent or willful act or omission of
                  the Indemnified Party.

         7.2      If any claim covered by Section 7.1 is brought against the
                  Indemnified Party, then the Indemnifying Party shall be
                  entitled to participate in, and unless in the opinion of
                  counsel for the Indemnified Party a conflict of interest
                  between the Parties may exist with respect to such claim,
                  assume the defense of such claim, with counsel reasonably
                  acceptable to the Indemnified Party. If the Indemnifying Party
                  does not assume the defense of the Indemnified Party, or if a
                  conflict precludes the Indemnifying Party from assuming the
                  defense, then the Indemnifying Party shall reimburse the
                  Indemnified Party on a monthly basis for the Indemnified
                  Party's defense through separate counsel of the Indemnified
                  Party's choice. Even if the Indemnifying Party assumes the
                  defense of the Indemnified Party with acceptable counsel, the
                  Indemnified Party, at its sole option, may participate in the
                  defense, at its own expense, with counsel of its own choice
                  without relieving the Indemnifying Party of any of its
                  obligations hereunder. In no event shall either Party be
                  liable to the other Party for any indirect, special,
                  consequential, or punitive damages of any kind whatsoever,
                  whether in contract, tort or strict liability.

         7.3      The Indemnifying Party's obligation to indemnify under this
                  Section 7 shall survive termination of this Agreement, and
                  shall not be limited in any way by any limitation on the
                  amount or type of damages, compensation or benefits payable by
                  or for the Indemnifying Party under any statutory scheme,
                  including, without limitation, under any Worker's Compensation
                  Acts, Disability Benefit Acts or other Employee Benefit Acts.

SECTION 8:        ASSIGNMENT AND DELEGATION

         8.1      Neither Party to this Agreement shall assign any of its rights
                  or obligations under this Agreement, except with the prior
                  written consent of the other Party, which consent shall not be
                  unreasonably withheld or delayed. No assignment of this
                  Agreement shall relieve the assigning Party of any of its
                  obligations under this Agreement until such obligations have
                  been assumed by the assignee. When duly assigned in accordance
                  with the foregoing, this Agreement shall be binding upon and
                  shall inure to the benefit of the assignee and the assignor
                  shall be relieved of its rights and obligations. Any
                  assignment in violation of this Section 8 shall be void.

         8.2      Notwithstanding the provisions of this Section 8, either Party
                  may subcontract its duties under this Agreement to a
                  subcontractor, provided that the subcontracting Party shall
                  remain fully responsible as a principal and not as a guarantor
                  for performance of any subcontracted duties, shall serve as
                  the point of contact between its subcontractor and the other
                  Party, and shall provide the other Party with thirty (30)
                  calendar days' prior written notice of any such
                  subcontracting, which notice shall include such information
                  about the subcontractor as the other Party shall reasonably
                  require, and provided further that each Party may subcontract
                  its obligation to provide Metering or Meter Reading Services
                  under this Agreement only to subcontractors who have complied
                  with all certification or registration requirements described
                  in applicable law, CPUC rules and the relevant direct access
                  tariff. If either Party subcontracts any of its duties
                  hereunder, it shall cause its subcontractors to perform in a
                  manner which is in conformity with that Party's obligations
                  under this Agreement.

                                     Page 9

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SECTION 9:        INDEPENDENT CONTRACTORS

                  Each Party shall perform its obligations under this Agreement
                  (including any obligations performed by a Partis designees as
                  permitted under Section 8 of this Agreement) as an independent
                  contractor.

SECTION 10:       ENTIRE AGREEMENT

                  This Agreement consists of, in its entirety, this Energy
                  Service Provider Service Agreement and all attachments hereto,
                  all Direct Access Service Requests submitted pursuant to this
                  Agreement and the relevant direct access tariff. This
                  Agreement supersedes all other agreements or understandings,
                  mitten or oral, between the Parties related to the subject
                  matter hereof. This Agreement may be modified from time to
                  time only by an instrument in writing, signed by both Parties.

SECTION 11:       NONDISCLOSURE

         11.1     Neither Party may disclose any Confidential Information
                  obtained pursuant to this Agreement to any third party,
                  including affiliates of such Party, without the express prior
                  written consent of the other Party. As used herein, the term
                  "Confidential Information" shall include, but not be limited
                  to, all business, financial, and commercial information
                  pertaining to the Parties, customers of either or both
                  Parties, suppliers for either Party, personnel of either
                  Party, any wade secrets, and other information of a similar
                  nature, whether written or in intangible form that is marked
                  proprietary or confidential with the appropriate owner's name.
                  Confidential Information shall not include information known
                  to either Party prior to obtaining the same from the other
                  Party, information in the public domain, or information
                  obtained by a Party from a third party who did not, directly
                  or indirectly, receive the same from the other Party to this
                  Agreement or from a party who was under an obligation of
                  confidentiality to the other Party to this Agreement or
                  information developed by either Party independent of any
                  Confidential Information. The receiving Party shall use the
                  higher of the standard of care that the receiving Party uses
                  to preserve its own confidential information or a reasonable
                  standard of care to prevent unauthorized use or disclosure of
                  such Confidential Information. Each receiving Party shall,
                  upon termination of this Agreement or at any time upon the
                  request of the disclosing Party, promptly return or destroy
                  all Confidential Information of the disclosing Party then in
                  its possession.

         11.2     Notwithstanding the preceding, Confidential Information may be
                  disclosed to any governmental, judicial or regulatory
                  authority requiring such Confidential Information pursuant to
                  any applicable law, regulation, ruling, or order, provided
                  that: (a) such Confidential Information is submitted under any
                  applicable provision, if any, for confidential treatment by
                  such governmental, judicial or regulatory authority; and (b)
                  prior to such disclosure, the other Party is given prompt
                  notice of the disclosure requirement so that it may take
                  whatever action it deems appropriate, including intervention
                  in any proceeding and the seeking of any injunction to
                  prohibit such disclosure.

 SECTION 12:      ENFORCEABILITY

                  If any provision of this Agreement or the application thereof,
                  is to any extent held invalid or unenforceable, the remainder
                  of this Agreement and the application thereof, other than
                  those provisions which have been held invalid or
                  unenforceable, shall not be affected and shall continue in
                  full force and effect and shall be enforceable to the fullest
                  extent permitted by law or in equity.

 SECTION 13:      NOTICES

         13.1     Except as otherwise provided in this Agreement, any notices
                  under this Agreement shall be in writing and shall be
                  effective upon delivery if delivered by (a) hand; (b) U.S.
                  Mail, first class postage pre-paid, or (c) facsimile, with
                  confirmation of receipt to the Par-ties as follows:

                                     Page 10

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IF THE NOTICE IS TO ESP:

Contact Name:  THOMAS BOWERS
             -------------------------------
Business Address: 4275 EXECUTIVE SQUARE, SUITE 250
                 ---------------------------
LA JOLLA, CA 92037
--------------------------------------------
FACSIMILE: 858-622-1204
          ----------------------------------

IF THE NOTICE IS TO EDISON:
--------------------------

Contact Name:               Denise K. Grant
             -------------------------------
Business Address:           7300 Fenwick Lane
                 ---------------------------
                            WESTMINSTER, CA 92683
--------------------------------------------
Facsimile:                   (714) 895-0347
          ----------------------------------

         13.2     Each Party shall be entitled to specify as its proper address
                  any other address in the United States upon written notice to
                  the other Party.

         13.3     Each Party shall designate on Attachment A the person(s) to be
                  contacted with respect to specific operational matters
                  relating to Direct Access service. Each Party shall be
                  entitled to specify any change to such person(s) upon written
                  notice to the other Party.

SECTION 14:       TIME OF ESSENCE

                  The Parties expressly agree that time is of the essence for
                  all portions of this Agreement.

 SECTION 15:      DISPUTE RESOLUTION

         15.1     The form of this Agreement has been filed with and approved by
                  the CPUC as part of Edison's applicable tariffs. Except as
                  provided in Section 15.2 and 15.3, any dispute arising between
                  the Parties relating to interpretation of the provisions of
                  this Agreement or to the performance of Edison's obligations
                  hereunder (including the performance of Billing Services,
                  Metering Services and MDMA Services by Edison) shall be
                  reduced to writing and referred to the Parties'
                  representatives identified on Attachment A for resolution.
                  Should such a dispute arise, the Parties shall be required to
                  meet and confer in an effort to resolve their dispute. Pending
                  resolution, the Parties shall proceed diligently with the
                  performance of their respective obligations under this
                  Agreement, except if this Agreement has been terminated under
                  Section 4.2. If the Parties fail to reach an agreement within
                  a reasonable period of time, the matter shall, upon demand of
                  either Party, be submitted to resolution before the CPUC in
                  accordance with the CPUC's rules, regulations and procedures
                  applicable to resolution of such disputes.

         15.2     Any dispute arising between the Par-ties relating to
                  interpretation of the provisions of this Agreement or to the
                  performance of the ESP's obligations hereunder (including the
                  performance of Billing Services, Metering Services and MDMA
                  Services by the ESP) shall be reduced to writing and referred
                  to the Parties' representatives identified on Attachment A for
                  resolution. Should such a dispute arise, the Par-ties shall be
                  required to meet and confer in an effort to resolve their
                  dispute. Pending resolution, the Parties shall proceed
                  diligently with the performance of their respective
                  obligations under this Agreement, except if this Agreement has
                  been terminated under Section 4.2. If the Parties fail to
                  reach an agreement within a reasonable period of time, the
                  Parties may mutually agree to pursue mediation or arbitration
                  to resolve such issues.

                                     Page 11
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         15.3     Notwithstanding the provisions of Paragraph 15.1 and 15.2
                  above: (a) all disputes between the Parties relating to the
                  payment by the ESP of any Edison fees or charges shall be
                  subject to the provisions of Edison's applicable tariffs
                  governing disputes over customer bills; (b) all disputes
                  between the Parties regarding Competition Transition Charges
                  payable by direct access customers or the ESP on behalf of
                  such customers shall be subject to the provisions of Edison's
                  applicable tariffs; and (c) Edison may pursue available
                  remedies for unauthorized electrical use by the ESP in a court
                  of competent jurisdiction.

         15.4     If the dispute involves a request for damages, Parties are
                  notified that the Commission has no authority to award
                  damages. To resolve such issues, the Parties may mutually
                  agree to pursue mediation or arbitration to resolve such
                  issues, or if no agreement is reached, to pursue other legal
                  remedies that are available to the Parties.

SECTION 16:          APPLICABLE LAW AND VENUE

                  This Agreement shall be interpreted, governed by and construed
                  in accordance with the laws of the State of California, and
                  shall exclude any choice of law rules that direct the
                  application of the laws of another jurisdiction, irrespective
                  of the place of execution or of the order in which the
                  signatures of the Parties are affixed or of the place or
                  places of performance. Except for matters and disputes with
                  respect to which the CPUC is the sole proper venue for dispute
                  resolution pursuant to applicable law or this Agreement, the
                  federal and state courts located in Los Angeles County,
                  California shall constitute the sole proper venue for
                  resolution of any matter or dispute hereunder, and the Parties
                  submit to the exclusive jurisdiction of such courts with
                  respect to such matters and disputes.

SECTION 17:        FORCE MAJEURE

                  Neither Party shall be liable for any delay or failure in the
                  performance of any part of this Agreement (other than
                  obligations to pay money) due to any event of force rnajeure
                  or other cause beyond its reasonable control, including but
                  not limited to, unusually severe weather, flood, fire,
                  lightning, epidemic, quarantine restriction, war, sabotage,
                  act of a public enemy, earthquake, insurrection, riot, civil
                  disturbance, strike, work stoppage caused by jurisdictional
                  and similar disputes, restraint by court order or public
                  authority, or action or non-action by or inability to obtain
                  authorization or approval from any governmental authority, or
                  any combination of these causes, which by the exercise of due
                  diligence and foresight such Party could not reasonably have
                  been expected to avoid and which by the exercise of due
                  diligence is unable to overcome. It is agreed that upon the
                  Party so affected giving written notice and reasonably full
                  particulars of such force majeure to the other Party within a
                  reasonable time after the cause relied on, then the
                  obligations of the Party, so far as they are affected by the
                  event of force majeure, shall be suspended during the
                  continuation of such inability and circumstance and shall, so
                  far as possible, be remedied with all reasonable dispatch. In
                  the event of force majeure, as described herein, both Parties
                  shall take all reasonable steps to comply with this Agreement
                  and Edison's applicable tariffs despite occurrence of a force
                  majeure event.

 SECTION 18:      UNAUTHORIZED USE OF ENERGY (ENERGY THEFT)

         18.1     The ESP represents and warrants that for each of its
                  Customers, and at all times during which it provides Direct
                  Access services as an Energy Service Provider, the ESP shall
                  completely, accurately, and in a timely manner account for
                  each of its Customer's loads with a duly authorized Scheduling
                  Coordinator. Load data not accounted for in this manner may
                  provide grounds for termination of this Agreement. For
                  verification purposes only, Edison shall have complete access
                  to the identity of the Scheduling Coordinator and the load
                  data provided to it by the ESP. Such information is to remain
                  confidential, and shall not be disclosed to any unauthorized
                  person.

                                     Page 12

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         18.2     Edison shall notify the ESP immediately and the ESP shall
                  notify Edison immediately of any suspected unauthorized energy
                  use. The Parties agree to preserve any evidence of
                  unauthorized energy use. Once unauthorized energy use is
                  suspected, Edison, in its sole discretion, may take any or all
                  of the actions permitted under Edison's applicable tariffs.

SECTION 19:       NOT A JOINT VENTURE

                  Unless specifically stated in this Agreement to be otherwise,
                  the duties, obligations, and liabilities of the Parties are
                  intended to be several and not joint or collective. Nothing
                  contained in this Agreement shall ever be construed to create
                  an association, trust, partnership or joint venture or to
                  impose a trust or partnership duty, obligation, or liability
                  on or with regard to either Party. Each Party shall be liable
                  individually and severally for its own obligations under this
                  Agreement.

SECTION 20:       CONFLICTS BETWEEN THIS AGREEMENT AND THE RELEVANT DIRECT
                  ACCESS TARIFF

                  Should a conflict exist or develop between the provisions of
                  this Agreement and the relevant direct access tariff, as
                  approved by the CPUC, the provisions of the relevant direct
                  access tariff shall prevail.

SECTION 21:       AMENDMENTS OR MODIFICATIONS

         21.1     Except as provided in Section 21.2, no amendment or
                  modification shall be made to this Agreement, in whole or in
                  part, except by an instrument in writing executed by
                  authorized representatives of the Parties, and no amendment or
                  modification shall be made by course of performance, course of
                  dealing or usage of trade.

         21.2     This Agreement may be subject to such changes or modifications
                  as the CPUC may from time to time direct or necessitate in the
                  exercise of its jurisdiction, and the Parties may amend the
                  Agreement to conform to changes directed or necessitated by
                  the CPUC. In the event the Parties are unable to agree on the
                  required changes or modifications to this Agreement, their
                  dispute shall be resolved in accordance with the provisions of
                  Section 15 hereof or, in the alternative, ESP may elect to
                  terminate this Agreement upon written notice to Edison, which
                  shall be effective upon the receipt thereof. Edison retains
                  the right to unilaterally file with the CPUC, pursuant to the
                  CPUC's rules and regulations, an application for a change in
                  Edison's rates, charges, classification, service or rules, or
                  any agreement relating thereto.

  SECTION 22:     BILLING OPTIONS OFFERED TO END-USE CUSTOMERS BY ESP

                  Check which billing options (as described in the relevant
                  direct access tariff) ESP intends to provide its Customers
                  under this Agreement. All ESPs must submit a credit
                  application on the form provided by SCE.

                    X     CONSOLIDATED EDISON BILLING. If ESP is selecting this
                   ___    billing option, indicate the primary method for
                          notifying Edison of ESP charges (check one):
                    X     EDI
                   ___
                          Other electronic exchange
                   ___
                          CONSOLIDATED ESP BILLING. If ESP is selecting this
                   ___    billing option, indicate the primary method for
                          notifying ESP of Edison Charges (check one):

                                  Paper
                          ______
                                  Diskette
                          ______
                                  EDI
                          ______
                                  Other electronic exchange
                          ______

                                     Page 13
<PAGE>
                           SEPARATE EDISON AND ESP BILLS.
                  ______

                  ESP may change these elections from time to time in compliance
                  with the relevant direct access tariff upon prior written
                  notice to Edison. The Direct Access Service Request ("DASR")
                  for each Direct Access customer will specify which billing
                  option will apply to that customer. If ESP specifies in any
                  DASR any billing option that has not been checked above, the
                  DASR will be rejected.

SECTION 23:       METER OPTIONS OFFERED TO END-USE CUSTOMERS BY ESP

                  Please indicate which meter options (as described in Edison's
                  applicable tariffs) the ESP will offer for some or all
                  Customers served under this Agreement:

                          ESP will provide Hourly Meters.
                  ______
                          ESP will offer Hourly Meter Installation Services.
                  ______
                          ESP will offer Hourly Meter Reading Services.
                  ______

                  ESP may change these elections from time to time in compliance
                  with the relevant direct access tariff upon prior written
                  notice to Edison. The Direct Access Service Request for each
                  Direct Access customer will specify which metering option will
                  apply to that Customer. If ESP specifies in any Direct Access
                  Service Request any metering option that has not been checked
                  above, the DASR will be rejected.

 SECTION 24:      AUDITS

         24.1     Edison and the ESP shall each retain such specific records as
                  may be required to support the accuracy of meter data provided
                  in their respective consolidated billings. When either Party
                  reasonably believes that errors related to metering or billing
                  activity may have occurred, a Party may request the production
                  of such documents as may be required to verify the accuracy of
                  such metering and consolidated billing. Such documents shall
                  be provided within ten (10) business days of such request. In
                  the event the requesting Party, upon review of such documents,
                  continues to believe that the other Party's duty to accurately
                  meter and provide consolidated billing for usage has been
                  breached, the requesting Party may direct that an audit be
                  conducted. Edison and the ESP shall designate their own
                  employee representative or their contracted representative to
                  audit the other party's records.

         24.2     Any such audit shall be undertaken by Edison, the ESP, or
                  their contracted representative at reasonable times without
                  interference with the audited Party's business operations, and
                  in compliance with the audited Party's security procedures.
                  Edison and the ESP agree to cooperate fully with any such
                  audit.

         24.3     Specific records to support the accuracy of meter data
                  provided in the consolidated billings may require examination
                  of billing and metering support documentation maintained by
                  subcontractors. Edison and the ESP shall include a similar
                  clause in their agreements with their subcontractors reserving
                  the right to designate their own employee representative, or
                  their contracted representative to audit records related to
                  consolidated billing to Direct Access Customers.

                                     Page 14

<PAGE>


         24.4     The auditing Party will notify the audited Party in writing of
                  any exception taken as a result of an audit. The audited Party
                  shall refund the amount of any undisputed exception to the
                  auditing Party within ten (10) days. If the audited Party
                  fails to make such payment, the audited Party agrees to pay
                  interest, accruing monthly, at a rate equal to the prime rate
                  plus two percent (2%) of Bank of America NT&SA, San Francisco,
                  or any successor institution, in effect from time to time, but
                  not to exceed the maximum contract rate permitted by the
                  applicable usury laws of the State of California. Interest
                  will be computed from the date of written notification of
                  exceptions to the date the audited Party reimburses the
                  auditing Party for any exception. The cost of such audit shall
                  be paid by the auditing Party; provided, however, that in the
                  event an audit verifies overcharges of five percent (5%) or
                  more, then the audited Party shall reimburse the auditing
                  Party for the cost of the audit.

         24.5     This right to audit shall extend for a period of three (3)
                  years following the date of final payment under this
                  Agreement. Each Party and each subcontractor shall retain all
                  necessary records and documentation for the entire length of
                  this audit period.

SECTION 25:       MISCELLANEOUS

         25.1     Unless otherwise stated in this Agreement: (a) any reference
                  in this Agreement to a section, subsection, attachment or
                  similar term refers to the provisions of this Agreement; (b) a
                  reference to a section includes that section and all its
                  subsections; and (c) the words "include," "includes," and
                  "including" when used in this Agreement shall be deemed in
                  each case to be followed by the words "without limitation."
                  The Parties agree that the normal rule of construction to the
                  effect that any ambiguities are to be resolved against the
                  drafting Party shall not be employed in the interpretation of
                  this Agreement.

         25.2     The provisions of this Agreement are for the benefit of the
                  Parties and not for any other person or third party
                  beneficiary. The provisions of this Agreement shall not impart
                  rights enforceable by any person, firm or organization other
                  than a Party or a successor or assignee of a Party to this
                  Agreement.

         25.3     The descriptive headings of the various sections of this
                  Agreement have been inserted for convenience of reference only
                  and shall in no way define, modify or restrict any of the
                  terms and provisions thereof.

         25.4     Any waiver at any time by either Party of its rights with
                  respect to a default under this Agreement, or with respect to
                  any other matter arising in connection with this Agreement,
                  shall not be deemed a waiver with respect to any other or
                  subsequent default or matter and no waiver shall be considered
                  effective unless in writing.

         25.5     Each Party shall be responsible for paying its own attorneys'
                  fees and other costs associated with this Agreement, except as
                  provided in Sections 6 and 7 hereof. If a dispute exists
                  hereunder, the prevailing Party, as determined by the CPUC, or
                  as may otherwise be determined by the dispute resolution
                  procedure contained in Section 15 hereof, if used, or by a
                  court of law, shall be entitled to reasonable attorneys' fees
                  and costs.

         25.6     To the extent that the CPUC has a right under then-current law
                  to audit either Party's compliance with this Agreement or
                  other legal or regulatory requirements pertaining to Direct
                  Access transactions, that Party shall cooperate with such
                  audits. Nothing in this Section shall be construed as an
                  admission by either Party with respect to the right of the
                  CPUC to conduct such audits or the scope thereof.

         25.7     Except as otherwise provided in this Agreement, all rights of
                  termination, cancellation or other remedies in this Agreement
                  are cumulative. Use of any remedy shall not preclude any other
                  remedy in this Agreement.

                                     Page 15

<PAGE>


         The Parties have executed this Agreement on the dates indicated below,
to be effective upon the later date.

ON BEHALF OF ESP,                        ON BEHALF OF EDISON


By:        /s/ Thomas Bowers             By:       /s/ Pamela A. Bass
           ----------------------                  ------------------------
Name:        Thomas Bowers               Name:     Pamela A. Bass
           ----------------------                  ------------------------
Title:     Chief Operating Officer       Title:    Senior Vice President,
           ----------------------                  ------------------------
                                                   Customer Service Bus. Unit

Date:      March 28, 2000                Date :    5/17/00
           ----------------------                  ------------------------














                                     Page 16

<PAGE>


-------------------------------------------------------------------------------


                                  ATTACHMENT A

A.        DEFINITIONS:

BILLING SERVICES - The consolidated billing services described in the relevant
direct access tariff which are provided by Edison and/or ESP.

CONSOLIDATED ESP BILL - The consolidated bill prepared and presented by ESP to
an end-use customer which includes the customer's ESP Charges and Edison
Charges.

CONSOLIDATED EDISON BILL - The consolidated bill prepared and presented by
Edison to an end-use customer which includes the Customer's ESP Charges and
Edison Charges.

DIRECT ACCESS CUSTOMERS - An end-use customer located within Edison's service
territory who purchases Direct Access Services through the ESP.

ESP CHARGES - Charges for Direct Access Services provided by the ESP.

METERING SERVICES - The meter installation, maintenance and related services
described in the relevant direct access tariff which are provided by Edison
and/or ESP.

METER READING SERVICES - The meter reading and related services described in the
relevant direct access tariff which are provided by Edison and/or ESP.

EDISON CHARGES - Charges (a) for services provided by Edison; or (b) which are
energy-related and which are approved by the CPUC or the Federal Energy
Regulatory Commission (including any Competition Transition Charges or Fixed
Transition Amount Charges owing to Edison or its affiliates, as those terms are
defined under the California Public Utilities Code). Fixed Transition Amount
Charges are also referred to as Trust Transfer Amount (TTA) Charges.

-------------------------------------------------------------------------------

B.        CONTACT PERSONS (SECTION 13.3):

            1     Billing Services           Jim Navarette (626) 633-3155
                  Edison Contact:
                                 ----------------------------------------------
                  ESPContact: Denise A. Heinke
                             --------------------------------------------------
            2.    Metering and Meter Reading Services  Dave Bernaudo, metering
                                                       (562) 903-3122
                                                       Ron Schaefer, meter
                  Edison Contact:                      reading (805) 945-932
                                 ----------------------------------------------

                  ESP Contact:
                              -------------------------------------------------

C.       PARTIES' REPRESENTATIVES (SECTION 15.1):

                  Edison Representative:      Denise K. Grant (714) 895-0167
                                        ---------------------------------------

                  ESP Representative: Denise A. Heinke
                                     ------------------------------------------

                                     Page 17



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