EXHIBIT 10
2000/2001 REFRIGERATOR RECYCLING
AND HAZARDOUS MATERIALS DISPOSAL AGREEMENT
BETWEEN
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
AND
SOUTHERN CALIFORNIA EDISON COMPANY
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THIS PROGRAM IS FUNDED BY CALIFORNIA UTILITY CUSTOMERS AND ADMINISTERED BY
SOUTHERN CALIFORNIA EDISON COMPANY UNDER THE AUSPICES OF THE CALIFORNIA
PUBLIC UTILITIES COMMISSION.
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SOUTHERN CALIFORNIA EDISON COMPANY'S 2000/2001 REFRIGERATOR RECYCLING
AND HAZARDOUS MATERIALS DISPOSAL AGREEMENT
TABLE OF CONTENTS
1 DEFINITIONS
2 GENERAL TERMS
3 CONTRACT DOCUMENTS
4 SCOPE OF WORK
5 CUSTOMER AND APPLIANCE ELGIBILITY
6 OWNERSHIP AND CONFIDENTIALITY
7 COMMERCIAL TERMS
8 BILLING
9 RIGHT TO AUDIT
10 CHANGES
11 PERMITS, CODES AND STATUTES
12 WARRANTY
13 TITLE
14 INSURANCE
15 INDEMNITY
16 TERM AND TERMINATION
17 WRITTEN NOTICES
18 SUBCONTRACTS
19 CALIFORNIA PUBLIC UTILITIES COMMISSION
20 NON-WAIVER
21 ASSIGNMENT
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SOUTHERN CALIFORNIA EDISON COMPANY'S 2000/2001 REFRIGERATOR RECYCLING
AND HAZARDOUS MATERIALS DISPOSAL AGREEMENT
TABLE OF CONTENTS
22 FORCE MAJEURE
23 GOVERNING LAW
24 SECTION HEADINGS
25 SURVIVAL
26 NONRELIANCE
27 ATTORNEYS' FEES
28 COOPERATION
29 ENTIRE AGREEMENT
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THIS AGREEMENT ("Agreement") is made and entered into as of the 1st day
of January, 2000, by and between SOUTHERN CALIFORNIA EDISON COMPANY, a
California corporation ("SCE") and APPLIANCE RECYCLING CENTERS OF
AMERICA, INC., a Minnesota corporation ("Contractor"). SCE and
Contractor are also each individually referred to herein as "Party" and
collectively as "Parties."
RECITALS
WHEREAS, the Parties have previously entered into agreements
with respect to the recycling of older inefficient refrigerators and
freezers and the disposal of hazardous materials.
WHEREAS the Parties desire to continue to implement a
Refrigerator Recycling Program ("the 2000/2001 Refrigerator Recycling
Program") for the removal of older, inefficient refrigerators and
freezers ("Refrigerators and Freezers") from SCE Customer residences
thereby reducing the load demand on the electrical system under the
terms set forth below.
WHEREAS, SCE desires to continue and increase its efforts to
reduce the load demand on the electrical system through the further
removal of older inefficient primary and secondary Refrigerators and
Freezers.
WHEREAS, SCE desires to ensure the safe, lawful recovery and
recycling or lawful disposal, as necessary, of CFCs, PCBs, and
Hazardous Materials.
WHEREAS, in furtherance thereof, SCE desires to contract with
Contractor for the continued comprehensive management of the 2000/2001
Refrigerator Recycling Program.
WHEREAS, Contractor desires to contract with SCE for the
continued comprehensive management of the 2000/2001 Refrigerator
Recycling Program, said management to include collection and
dismantling of primary and secondary Refrigerators and Freezers;
removal of CFCs, PCBs and other Hazardous Materials from collected
Refrigerators and Freezers; handling storage and legal disposal of
compressor oil, PCBs and other Hazardous Materials; recycling of metal,
sulfur dioxide, and CFCs; providing incentives to participating SCE
Customers who relinquish Refrigerators and Freezers; and performance of
a customer survey.
WHEREAS, Contractor represents (i) that it has knowledge of the
Metallic Discard Act, effective January 1, 1994, which prohibits the
disposal of Refrigerators and Freezers in landfills and requires that
Refrigerators and
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Freezers be shredded for metal recovery following removal of CFCs,
PCBs, and other Hazardous Materials contained in discarded
Refrigerators and Freezers, (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 has
purchased property and has established and will continue to operate and
maintain its recycling center on said purchased property in the City of
Compton or other area acceptable to Contractor and SCE.
WHEREAS, the Parties hereto desire to set forth terms and
conditions under which the aforesaid management services shall be
performed and which shall constitute the Parties' agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, the
mutual covenants contained herein, the payments and agreement to be
made and performed by SCE as set forth in the pricing schedule attached
hereto as EXHIBIT A and incorporated by reference herein, the Parties
agree as follows:
1. DEFINITIONS
1.1 Agreement: This document, the terms and conditions contained
in this Agreement as amended from time to time.
1.2 CFCs: Chlorofluorocarbons
1.3 CFC-11: Chlorofluorocarbons contained in refrigerator
and freezer insulating foam.
1.4 Change Order: Document issued by SCE to Contractor to change a
Purchase Order.
1.5 Contract Period: January 1, 2000 to December 30, 2001, or as
extended by mutual agreement of the Parties.
1.6 CPUC: the California Public Utilities Commission.
1.7 Documentation: Specifications, procedures, instructions,
reports, test results, analyses, calculations, manuals, and
other data specified in the Purchase Order, Change Order, this
Agreement, and any
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amendment to this Agreement, as required by any legal entity
having jurisdiction over the Work.
1.8 Eligible Appliances: see Eligible Refrigerators and Freezers
(section 1.10).
1.9 Eligible Customers: Residential customers in SCE service
territory who meet the customer eligibility criteria in
Section 6.
1.10 Eligible Refrigerators and Freezers: Appliances that meet the
2000/2001 Refrigerator Recycling Program appliance eligibility
criteria as set forth in Section 5.
1.11 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 Refrigerators or Freezers.
1.12 2000/2001 Refrigerator Recycling Program: Refrigerator
Recycling Program defined by this Agreement.
1.13 2000/2001 Program Participants: Eligible customers who turn in
qualifying Refrigerators or Freezers.
1.14 PCB: Polychlorinated Biphenyl.
1.15 Pilot Program: A sub-program within the overall 2000/2001
Refrigerator Recycling Program designed to demonstrate the
feasibility of certain program elements prior to full
implementation of a program including such program elements.
1.16 Purchase Order: Document issued by SCE to Contractor and
executed by the Parties, which contains additional terms and
conditions for the Work described herein.
1.17 Recycling Center: The site at which Contractor will process
Refrigerators and Freezers, remove CFCs, PCBs and other
Hazardous Materials, and recycle or legally dispose of
Hazardous materials.
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1.18 Recycling Charge: Per-unit price for services performed by
Contractor under scope of work, including CFC-11 recovery
services, and excluding incentive and financing services.
1.19 Primary refrigerator: refrigerator currently in use by
customer as the main refrigeration appliance.
1.20 Secondary refrigerator: Surplus refrigerator utilized by
customer concurrently with primary refrigerator.
1.21 Subcontractor: Either an entity contracting directly with
Contractor 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.
1.22 Work: Any and all obligations of Contractor to be performed
pursuant to this Agreement or a subsequent Purchase Order or
Change Order incorporating this Agreement, such as
Refrigerator and Freezer collection, Refrigerator and Freezer
processing, handling, storing, recycling, and legal disposal,
of Hazardous Materials and Documentation preparation.
2. GENERAL TERMS
2.1 Contractor shall perform the work and its associated
obligations described below as an independent contractor.
2.2 This Agreement shall be supplemented by a Purchase Order
containing additional terms and conditions for performing the
work described below.
3. CONTRACT DOCUMENTS
3.1 This Agreement shall consist of the following documents: this
Agreement, any amendments to this Agreement, Purchase Orders,
and Change Orders. Except as provided below in Section 12
(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;
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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
4.1 Contractor shall be responsible for customer service
activities, including providing inbound 800 telephone numbers
for Customers, a webpage which allows Customer access for
inquiries and/or qualification and signup 24 hours a day,
seven days a week, (see Section 4.9), all communication
services, scheduling Eligible Refrigerator and Freezer
collection appointments, verification of customer and
appliance eligibility, documentation of customer data, and
other activities.
4.2 Contractor shall (i) collect all Eligible Appliances from
Customers' residences within 10 to 15 business days from the
date of initial customer contact (unless otherwise requested
by the Customer), in remote areas of the service territory, or
as approved by SCE's Program Manager. Collection shall be no
later than 20 business days from the date of the initial
customer contact, unless otherwise requested by Customer. A
twenty-five percent (25%) reduction in the Recycling Fee shall
be made by SCE if Eligible Appliances are collected later than
20 business days after the initial customer contact, except in
creation remote areas of SCE's service territory or unless the
customer requested the later collection date. For purposes of
this section, the remote areas of SCE's service territory
shall include: those districts listed below. See EXHIBIT B for
more information on the zip codes and cities for the remote
areas of SCE's service territory.
DISTRICT NAME/NUMBER
* Antelope Valley (36)
* Arrowhead (40)
* Barstow (72)
* Bishop (85)
* Blythe (87)
* Catalina Island (61)
* Kernville (53)
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* Tehachapi (52)
* High Desert (73)
* 29 Palms (84)
* Big Creek (50)
* San Joaquin Valley (51)
* Ridgecrest (86);
(ii) ensure that the Eligible Appliance is an operating unit
before removing it from a residence; (iii) disable the unit
prior to leaving pick-up location; and (iv) process the unit
at its Recycling Center.
4.3 Contractor shall be solely responsible for all methods,
techniques, sequences, and procedures for the dismantling of
Eligible Appliances, processing of metal panels and
components, recycling of recovered scrap metal, removal,
recycling, or lawful disposal of Hazardous Materials.
4.4 Contractor shall be solely responsible for all methods,
techniques, sequences, and procedures for the removal and
management of all capacitors found in Eligible Appliances, and
the removal and disposal of compressor oil, PCBs, and other
Hazardous Materials from the time Contractor collects Eligible
Appliances pursuant to this Agreement.
4.5 Contractor shall document and maintain records for services
under this Agreement, or any Purchase order incorporating 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 to collect data such as
customer name, address, home and work phone numbers;
utility account number, Appliance manufacturer's
name; Appliance model and style; defrost type; color,
size, and estimated age of unit; location of
Appliance within the residence; amperage, final
disposition code (which indicates operating condition
of Appliance and/or Incentive received)
identification of units containing CFC-11; special
pick-up instructions (if applicable) and signature of
customer in the event refrigerator or freezer is
discovered not to be an Eligible Appliance as
certified, customer acknowledges liability to SCE for
recycling costs.
4.5.3 Compilation of data in subsection 4.5.2 in electronic
mode, employing a software program suitable for
exchange of
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information with SCE, subject to the approval of
SCE's Program Manager.
4.6 Contractor shall conduct a customer survey, comparable to
EXHIBIT C, which is attached and incorporated by reference
herein, using a stratified purposeful sample of 5% to 20% of
the 2000/2001 Program Participants. The stratification and
frequency of the survey may be modified periodically by SCE,
provided that an Amendment to this Agreement or a separate
agreement shall be entered into if any such modification
necessitates unreasonable labor, as substantiated by
Contractor, requiring the negotiation of a charge separate
from the Recycling Charge. The purpose of the survey shall be
to elicit information such as appliance use, customer
demographics and customer satisfaction. Stratification and
frequency of survey shall be modified periodically as
determined by SCE provided modified survey is comparable to
EXHIBIT C.
4.7 Contractor and SCE shall establish and implement a financial
incentive service as follows:
4.7.1 Each 2000/2001 Program Participant, other than low
income customers serviced pursuant to SCE's 1999/2000
Refrigerator Replacement Pilot Program For Low Income
Customers, will be entitled to receive a check in the
amount of thirty-five Dollars ($35.00) and/or a
promotional item to be provided by SCE (the
"Promotional Item"). The check and the Promotional
Item are each referred to individually as the
"Incentive".
The Promotional Item shall be delivered to Contractor
at a location to be mutually agreed upon by the
Parties. SCE shall require the manufacturer to
deliver the Promotional Items in packages designed to
diminish the possibility of damage to the units
during transit.
4.7.2 Contractor shall deliver Promotional Items to
2000/2001 Program Participants at the time the
Eligible Appliance is picked up. Each Program
Participant who receives a Promotional Item must sign
a receipt acknowledging that he/she received the
Promotional Item. Requests for checks shall be
processed and mailed via the U.S. Postal System
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within 15 business days of the date the Eligible
refrigerator or freezer was picked up.
4.7.3. Contractor shall provide SCE with a weekly listing of
Customers qualifying for an Incentive for SCE's
approval. Customers qualifying for an Incentive are
2000/2001 non low income Program Participants who
turn in an Eligible Appliance for which SCE will pay
a per-unit price as set forth in Section 7.2 of this
Agreement.
4.7.4 Upon SCE's reimbursement of Contractor for the
Incentives described in Section 7.4 of this
Agreement, SCE shall be under no further obligation
with respect to reimbursement of such amounts and
such reimbursement shall constitute full payment to
Contractor on behalf of the 2000/2001 Program
Participants entitled to Incentives. Moreover, upon
SCE's payment to Contractor of such reimbursement,
Contractor shall be deemed the holder of such
property as far as the interests of the 2000/2001
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.
SCE shall not assume any responsibility for other
disposition of the reimbursement payments after such
reimbursement is paid to Contractor and shall not be
entitled to the reversion of any amounts so paid.
4.8 Contractor shall provide SCE 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 which shall contain the following:
(a) the number of Eligible Appliances processed
through the Recycling Center 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 capacitors removed; number and size of CFC-11
units and amount of CFC-11 recovered; amount of
sulfur dioxide recovered, amount of compressor oil
recycled; and weight of metals and nonrecyclable
materials sold for shredding.
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(c) the 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 Contractor in compliance with any unclaimed
property laws pursuant to Section 4.7.4 hereof.
4.8.3 Upon reasonable written request from an authorized
representative of SCE, special and nonrecurring
reports during the course of the 2000/2001
Refrigerator Recycling Program. Such report content
will be developed by the Parties in anticipation of
requests from the CPUC, SCE internal audits, or
compilation of data relevant to Rebuild LA
activities. An amendment to this Agreement or a
separate agreement shall be entered into only if any
such report necessitates unreasonable labor, as
substantiated by Contractor, requiring the
negotiation of a charge separate from the Recycling
Charge.
4.8.4 Contractor shall modify its current computer software
program so that the Contractor's Appliance Turn-In
Order Form ("ATO") has a disposition code which can
be coded for each 2000/2001 Program Participant
indicating which Incentive was selected by the
2000/2001 Program Participant. In all cases, when
Contractor picks up an Eligible Appliance from a
2000/2001 Program Participant, Contractor shall
obtain the 2000/2001 Program Participant's signature
on the Contractor's ATO.
On a weekly basis, Contractor shall prepare an
invoice for SCE to substantiate the fees due for
Contractor's delivery of Promotional Items and the
costs, if any, incurred by Contractor pursuant to
Section 9.6 of this Agreement (the "Invoice"). The
Invoice shall include an ATO report showing the
delivery of Promotional Items during the billing
period. The Invoice shall also separately identify
all low income customers serviced. All Invoices will
be paid pursuant to Section 8.5.
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4.9 Contractor shall design and implement a website which enables
SCE's customers to electronically submit information for
prequalification and schedule appointments on a 24 hour, seven
day a week basis. The website content shall be approved by the
SCE Program Manager. Any changes to the content must be
reviewed and approved prior to implementation. The site shall
match the "look and feel" of the SCE server page which shall
host the link.
5. CUSTOMER AND APPLIANCE ELIGIBILITY
5.1 Customer eligibility for the 2000/2001 Refrigerator Recycling
Program shall depend on the following:
5.1.1 Customer is a resident in the SCE service territory
and occupies a single-family residential (Domestic
Rate) or multi-unit dwelling or mobile home. Eligible
customers include customers who reside in SCE's
service territory but who take distribution services
from an entity other than SCE.
5.1.2 Customer is not one of the low income customers
identified by SCE as a participant in the 1999/2000
Refrigerator Replacement Pilot Program For Low Income
Customers.
5.1.3 Customer is the owner of the Eligible Appliance or
possesses written consent from the actual owner to
turn in the Eligible Appliance.
5.1.4 Customer turns in no more than two Eligible
Refrigerators or Freezers per year unless written SCE
approval is obtained for any additional Eligible
Appliance.
5.1.5 The Pilot Programs to be implemented in 2000/2001 as
part 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 SCE's service
territory; and (iii) acceptance and
pre-qualifications of SCE customers who participate
in SCE's Refrigerator Rebate Program.
5.2 Commercial customers do not qualify for the 2000/2001
Refrigerator Recycling Program. Landlords are considered
commercial customers.
5.3 Refrigerator and Freezer eligibility for the 2000/2001
Refrigerator Recycling Program shall depend on the following:
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5.3.1 Refrigerator or Freezer must be capable of cooling or
freezing, or both, as applicable, at time of
collection.
5.3.2 Refrigerator or Freezer minimum size is 10 cubic feet
and maximum size is 27 cubic feet.
5.4 Commercial refrigerators, ammonia-containing gas
refrigerators, commercial freezers, and room air conditioners
do not qualify for the 2000/2001 Refrigerator Recycling
Program.
6. OWNERSHIP AND CONFIDENTIALITY
6.1 All information disclosed by SCE during meetings or
negotiations with regard to the 2000/2001 Refrigerator
Recycling Program, and any information contained in drawings,
specifications, technical reports, and data provided by SCE to
Contractor during performance of this Agreement shall be held
in confidence by Contractor and used only for the performance
of the Work pursuant to this Agreement.
6.2 Contractor, its employees, and any subcontractors shall not
disclose any 2000/2001 Refrigerator Recycling Program or
customer information to any person other than SCE's personnel
either during the term of this Agreement or after its
completion, without Contractor having obtained the prior
written consent of SCE, except as provided by lawful court
order or subpoena and provided Contractor gives SCE advance
written notice of such order or subpoena. Prior to any
approved disclosure, persons receiving said information,
including Contractor, its employees, or third parties, must
enter into a nondisclosure agreement with SCE. Contractor
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 CONTRACTOR FROM DISCLOSING NON-CONFIDENTIAL
INFORMATION CONCERNING THE 2000/2001 REFRIGERATOR RECYCLING
PROGRAM TO THE CPUC IN ANY CPUC PROCEEDING, OR ANY
CPUC-SANCTIONED MEETING OR PROCEEDING OR OTHER PUBLIC FORUM.
6.3 All materials provided by SCE to Contractor during the
performance of this Agreement shall be returned to SCE after
this Agreement is terminated or at the request of SCE.
Contractor shall not duplicate any material furnished by SCE
without prior written approval from SCE.
6.4 All information, material, and documents prepared or caused to
be prepared under this Agreement by Contractor shall become
the
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property of SCE. Such information, or derivative information,
materials, and documents, shall be used by Contractor only for
work performed directly for SCE, and shall not be used in
Contractor's general course of business, disclosed nor
revealed in any way to a third party without the prior express
written consent of SCE.
6.5 All information disclosed by Contractor to SCE during meetings
or negotiations with regard to the 2000/2001 Refrigerator
Recycling Program, and any information contained in drawings,
specifications, technical reports, and data provided by
contractor to SCE during performance of this Agreement, shall
be held in confidence by SCE, and used only in relation to the
Work pursuant to this Agreement.
6.6 Except as required by the CPUC, SCE, its employees and any
subcontractors of SCE shall not disclose any confidential or
proprietary information provided by Contractor ("Contractor's
Confidential Information") to any person other than
Contractor's personnel, either during the term of the
Agreement, or after its completion, without having obtained
the prior written consent of Contractor. By way of example,
Contractor's Confidential Information shall include, without
limitation, Contractor's systems for oil degassing, CFC
recovery, CFC-11 recovery and Contractor's computer software.
Prior to any approved disclosure, persons to receive
Contractor's Confidential Information, including SCE, its
employees or any third-party, must enter into a nondisclosure
agreement with Contractor. SCE agrees to require its employees
to execute appropriate nondisclosure agreements prior to any
contact with, or evaluation of Contractor's Confidential
Information.
6.7 SCE agrees that, without the prior written consent of
Contractor, 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 Contractor's Confidential
Information, whether reduced to written or other tangible
form, which:
6.7.1 Is not generally known to the public or in the
industry;
6.7.2 Has been treated by Contractor or any of its
subsidiaries as confidential or proprietary; and
6.7.3 Is of a competitive advantage to Contractor or any of
its subsidiaries and in the confidentiality of which
Contractor or any of its subsidiaries has a legally
protectable interest.
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6.8 Contractor's Confidential Information which becomes generally
known to the public or in the industry, or, in the
confidentiality of which, Contractor 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
No payment shall be made under this Agreement until SCE has
received a signed "Acceptance Copy" of the Purchase Order from
Contractor. SCE shall pay to Contractor, as full compensation
for completing the Work, the prices set forth in EXHIBIT A in
accordance with the payment provisions set forth below in
subsections 7.2 through 7.4.
7.2 Summary of Charges
7.2.1 Recycling Charge. SCE shall pay to Contractor a
per-unit Recycling Charge for the number of units
collected pursuant to this Agreement at the price or
prices set forth in Section 8.3 below. The Recycling
Charge covers the scope of work described in Section
4, including CFC-11 Recovery and excluding incentive
purchasing and financing services.
7.2.2 Other Charges. All other costs for services shall be
negotiated between the parties and implemented by an
amendment to the Agreement.
7.2.3 SCE shall pay Contractor a fee of Two Dollars ($2.00)
("Handling Fee") per Promotional Item for each
Promotional Item distributed to 2000/2001 Program
Participants in accordance with subsection 8.5.3. The
Handling Fee shall compensate Contractor for the
storage, handling and delivery of the Promotional
Items, additional labor, and any and all other costs
and expenses in connection with the Promotional Item
Incentive, including any additional documentation and
reports that may be necessary or required as a result
of the Promotional Item incentive. SCE shall not be
responsible for any other compensation or
reimbursement to Contractor as a result of the
Promotional Item incentive except for the Handling
Fee.
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7.2.4 Incentive Cost and Finance Charges. SCE shall pay to
Contractor Incentive costs and finance charges as
specified in Section 7.4 below.
7.3 Pricing Recycling Charge
7.3.1 The per-unit Recycling Charge to be paid by SCE for
the Contract Period shall be as set forth in EXHIBIT
A.
7.4 Pricing Incentive Costs and Finance Charges
7.4.1 SCE shall reimburse Contractor for the cost of each
incentive payment distributed to 2000/2001 Program
Participants.
7.4.2 SCE shall pay to Contractor monthly interest at the
rate of three-quarter of one percent (0. 75%) on the
average monthly balance of the outstanding incentive
costs.
7.5 Miscellaneous
Contractor 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 Contractor's services
under this Agreement.
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8. BILLING
8.1 Contractor shall submit a weekly invoice reflecting the
per-unit charge for the refrigerators and freezers collected,
processed, and recycled, and for the purchase and approval of
incentives. Contractor 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
or structural barrier provided that Contractor
obtains written permission from Customer to
permanently disable said unit, and Contractor then
permanently disables the unit.
8.1.3 Collection of an oversized Eligible Appliance that
requires additional trips, personnel, or equipment to
execute removal. Additional services for removal of
an oversized Eligible Appliance shall be charged as a
single appointment with no extra charge for said
additional services.
8.1.4 Collection of an Eligible Appliance that could not be
inspected for eligibility confirmation only with
prior approval in accordance with subsection 5.3.
8.2 Contractor shall submit a final invoice for the Contract
Period in hard copy and in electronic format acceptable to
SCE.
8.3 Contractor shall apply a 25% per unit discount to the
Recycling Charge to any additional units when two or more
Eligible Refrigerators or Freezers are removed during a single
collection appointment from Customer's residence. Said
discount shall be clearly documented and identified in
Contractor's invoice.
8.4 Contractor shall submit a weekly invoice for the purchase
price of the incentive payments and a monthly invoice for the
interest charge identified in subsection 7.4.2.
8.5 SCE shall make payment (less any unsubstantiated or incorrect
charge):
8.5.1 For check incentive services, within thirty days of
receipt of an Invoice by SCE's Accounts Payable
Department.
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8.5.2 Of Recycling Fee, within thirty days of receipt of an
Invoice from Contractor approved by SCE.
8.5.3 For Handling Fees within thirty days of receipt of an
Invoice from Contractor approved by SCE.
8.6 Upon receipt of each shipment of the Promotional Items,
Contractor shall inspect the shipment for any damaged or
defective Promotional Items. Contractor shall contact the SCE
Program Manager for instructions regarding the disposition of
any damaged and/or defective Promotional Item. SCE shall
reimburse Contractor for all costs associated with the return
of any such damaged and/or defective Promotional Items.
8.7 On a weekly basis, Contractor shall provide SCE with an
unaudited accounting of Promotional Items remaining in
Contractor's inventory of Promotional Items. At the end of the
program year, Contractor shall complete and provide SCE with a
reconciliation to account for the Promotional Items that were
defective, damaged, or stolen. Contractor shall reimburse SCE
for any and all Promotional Items stolen from Contractor after
delivery to Contractor.
8.8 If after a Promotional Item is delivered by Contractor any
2000/2001 Program Participant alleges that a Promotional Item
is damaged or defective, SCE shall replace such defective
and/or damaged Promotional Item. SCE shall be responsible for
the replacement of the damaged and/or defective Promotional
Item, including, but not limited to, the delivery of a new
Promotional Item to the 2000/2001 Program Participant. If the
damage to a Promotional Item is the result of any action by
Contractor, SCE shall be relieved of any obligation to pay
Contractor a Handling Fee for the damaged Promotional Item.
<PAGE>
9. RIGHT TO AUDIT
SCE, 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 Contractor's records and books as related
to Contractor's obligations under this Agreement, including, but not
limited to, verification of costs to SCE, as claimed by Contractor.
10. 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.
11. PERMITS, CODES, AND STATUTES
11.1 Contractor 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, Contractor 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. Contractor 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.
11.2 Contractor 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 Contractor's performance impractical, Contractor and
SCE shall, in good faith, negotiate an amendment to this
Agreement reasonably compensating Contractor for its
additional costs.
<PAGE>
12. WARRANTY
12.1 Contractor warrants to SCE 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.
12.2 Year 2000 Warranty. Contractor hereby represents and warrants
to SCE 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 Contractor 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 (i)
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 SCE's
other software, hardware or equipment that SCE deems to be
otherwise Year 2000 compliant to fail to be Year 2000
compliant; and (v) not cause any of SCE's other software,
hardware or equipment that SCE deems to be otherwise Year 2000
ready to fail to be Year 2000 ready. For purposes of this
Agreement, SCE shall deem software, hardware or equipment to
be "Year 2000 compliant" if it has been or is determined by
SCE 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, SCE shall deem software, hardware or equipment to
be "Year 2000 ready" if it has been or is determined by SCE to
be suitable for continued use into the Year 2000 and beyond.
<PAGE>
12.3 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 SCE may otherwise
have under any other provision of this Agreement, or under any
other contract or agreement between the Parties.
13. TITLE
13.1 Title to the Hazardous Materials shall pass to Contractor when
Contractor collects refrigerators and freezers from customers.
13.2 Title of collected Refrigerators and Freezers shall pass to
Contractor.
14. INSURANCE
14.1 Without limiting Contractor's liability to SCE, including the
requirements of Section 15, Indemnity, Contractor 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 he materially altered, except on
thirty days prior written notice to SCE. Contractor shall
furnish SCE with certificates of insurance and forms
acceptable to SCE and shall require each Subcontractor of the
first tier to furnish Contractor 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 SCE's 2000/2001 Program
Manager by Contractor 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 SCE, its officers,
agents, and employees, which may be applicable, shall be
deemed to be excess insurance, and Contractor's insurance
shall be deemed primary for all purposes notwithstanding any
conflicting provision in Contractor'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 SCE, its officers,
agents, employees, and other contractors and
subcontractors.
<PAGE>
(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 SCE, its officers, agents, and
employees, and 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 Contractor 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 SCE as an
additional insured 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
SCE as an additional insured and be primary for all
purposes.
Contractor shall report immediately to SCE and
confirm in writing any injury, loss, or damage
incurred by Contractor 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 Contractor fails to comply with any of the
provisions of this Section 14, Contractor shall, at
its own cost, defend, indemnify, and hold harmless
SCE, 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 attorney's fees
and expenses, or any of
<PAGE>
them, resulting from the death or injury to any
person or damage to any property to the extent that
SCE would have been protected had Contractor complied
with all of the provisions of this Section.
15. INDEMNITY
15.1 Contractor shall, at its own cost, indemnify, defend,
reimburse, and hold harmless SCE, 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 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 Contractor,
Subcontractors, and employees, officers and agents of either
Contractor or Subcontractors, or any of them, and arising out
of or attributable to the performance or nonperformance of
Contractor's obligations under this Agreement and including,
without limitation, failure to comply fully with every
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 Contractor hereunder. In all cases of death or
injury to employees, officers or agents of either Contractor
or Subcontractors, whether or not caused by Contractor, SCE
shall be indemnified by Contractor for any and all liability
except to the extent such death or injury results -from the
negligence of SCE.
15.2 Contractor shall, at its own cost, indemnify, defend,
reimburse, and hold harmless SCE, 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 SCE, under any law imposing liability for the
environmental clean-up of the Hazardous Materials at any
location (other than SCE's property) where the Hazardous
Materials have been placed, stored or disposed of in the
performance or nonperformance of Contractor's obligations
under this Agreement, or any other site to which the Hazardous
Materials have migrated.
15.3 The indemnities set forth in this Section 15 shall not be
limited by the insurance requirements set forth in Section 14.
<PAGE>
16. TERM AND TERMINATION
16.1 This Agreement shall commence on January 1, 2000 and shall
continue in effect until December 30, 2001, or until
Contractor has picked up all units called in prior to December
30, 2001, whichever is later. This Agreement may be extended
as agreed to in writing by the Parties.
16.2 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"). Contractor shall be paid for all work
performed prior to the Termination Date.
16.3 SCE shall have the right to terminate this Agreement by
providing 30 days advance written notice to Contractor upon
CPUC mandate as set forth in Section 19 below, 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, SCE shall pay Contractor all amounts owed
under the Agreement as of 30 days after SCE's written notice
to Contractor of the CPUC's mandate (the "Termination Date").
In such event, SCE shall only be obligated to pay contractor
for such Refrigerators and Freezers actually collected by
Contractor for recycling as of the Termination Date, and shall
not be obligated to pay contractor for units not collected but
which would otherwise be required to be paid for as units
comprising SCE's Specified Volume.
16.4 In the event of termination pursuant to this Section 16 or
Section 19, Contractor and SCE shall work cooperatively to
facilitate the termination of the 2000/2001 Refrigerator
Recycling Program.
16.5 Each Party shall immediately provide at no cost to the other
any testimony, or any communications with the CPUC, or any
board, division, committee or member thereof, which could
reasonably be anticipated to effect the 2000/2001 Refrigerator
Recycling Program or which addresses it in any manner.
17. WRITTEN NOTICES
17.1 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
<PAGE>
specified below, or to another address specified in writing by
SCE as follows:
--------------------------------------------------------------
SCE: Southern California Edison Company
Refrigerator Recycling Program
2244 Walnut Grove Avenue - Quad 2A
Rosemead, CA 91770
(626) 302-8791 telephone
(626) 302-8313 facsimile
CONTRACTOR: 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
--------------------------------------------------------------
17.2 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: on the Business Day following delivery
to the overnight courier within the time limits set by that
courier for next-day delivery.
18. SUBCONTRACTS
18.1 Contractor 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 SCE
which are equivalent to the terms and conditions of this
Agreement.
18.2 Contractor 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 SCE nor any obligation for payment to any
Subcontractor.
<PAGE>
19. CALIFORNIA PUBLIC UTILITIES COMMISSION
This Agreement and the Purchase Order incorporating this Agreement
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.
20. NON-WAIVER
None of the provisions of the Agreement shall be considered waived by
either Party unless such waiver is specifically stated in writing.
21. ASSIGNMENT
SCE may be required to assign its rights, duties and obligations under
this Agreement to the CPUC and/or its designee. Contractor hereby
consents to such assignment. Other than SCE's assignment to the Board
or the Board'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.
22. FORCE MAJEURE
Failure of Contractor 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 reasonably beyond
the control of the Contractor.
<PAGE>
23. 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. Any action brought to enforce or
interpret this Agreement shall be filed in Los Angeles County,
California.
24. SECTION HEADINGS
Section headings appearing in this Agreement are for convenience only
and shall not be construed as interpretations of text.
25. 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, Contractor's indemnity protecting SCE
from any liability for environmental clean up as provided in Section 16
of this Agreement.
26. NONRELIANCE
Neither Party has relied upon any representation, warranty, projection,
estimate or other communication from the other not specifically so
identified in this Agreement.
27. 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 attorneys' fees.
28. COOPERATION
Each Party agrees to cooperate with the other Party in whatever manner
reasonably required to facilitate the successful completion of the
Agreement.
<PAGE>
29. 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 Contractor's
proposal. Any changes, exceptions, or different terms and conditions
proposed by Contractor are hereby rejected unless expressly stated in
this Agreement.
APPLIANCE RECYCLING SOUTHERN CALIFORNIA
CENTERS OF AMERICA, INC. EDISON COMPANY
By: /s/Jack Cameron By: /s/Pamela A. Bass
------------------------------- ------------------------------
Its: President Its: Senior Vice President
------------------------------ -----------------------------
Date: June 12, 2000 Date: June 12, 2000
