Document:

Exhibit 10.3

Amendment
to Registration Rights Agreement

This Amendment to
Registration Rights Agreement (this “Amendment”), dated as of June 30,
2006, is entered into by and among Arena Pharmaceuticals, Inc. (the “Company”)
and Mainfield Enterprises, Inc. (“Purchaser”).

 WHEREAS, the Company, Purchaser and Smithfield
Fiduciary LLC (“Smithfield”) are parties to that certain Registration Rights
Agreement, dated as of December 24, 2003, as it may be amended from time
to time (the “Registration Rights Agreement”); and

WHEREAS, in
accordance with Section 6(b) of the Registration Rights Agreement,
the Company and Purchaser, and by a separate agreement dated as of the date
hereof, the Company and Smithfield, desire to amend the Registration Rights
Agreement as provided herein and therein.

NOW THEREFORE, in
consideration of the mutual promises herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

1.               The first sentence
of Section 2(c) of the Registration Rights Agreement is hereby
deleted in its entirety and replaced with the following:

Upon the occurrence of any Event (as defined below) and on every
monthly anniversary thereof until the applicable Event is cured, as partial relief
for the damages suffered therefrom by the Holders (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 1.0% of the aggregate purchase price paid under the Purchase
Agreement for the Securities held by such Holder for each of the first and
second months and 2.0% for each month thereafter; provided, however,
that the maximum amount payable by the Company as liquidated damages in respect
of all such Events (including, but not limited to, any Events relating to
Registrable Securities issued or issuable pursuant to the 2006 Warrant, as
defined in that certain Settlement Agreement and Release, dated as of the date
hereof, between the Company and Smithfield) shall be capped at 10% of the
aggregate purchase price paid by each Holder under the Purchase Agreement for
the Securities.

 

2.               The Registration Rights Agreement shall
continue in full force and effect except to the extent modified herein.

3.               This Amendment may
be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that all parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as
if such facsimile signature page were an original thereof.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOW]

 2
 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.

	
  

  	
  Arena
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack Lief

  
	
   

  	
  Name:

  	
  Jack Lief

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAINFIELD
  ENTERPRISES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Avi Vigder

  
	
   

  	
  Name:

  	
  Avi Vigder

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

 3Southern California Edison
  Company

  	
   

  	
  DATE:

  	
   

  	
  PURCHASE ORDER NO.

  	 

	
  PURCHASE
  ORDER

  	
   

  	
  06/14/06

  	
   

  	
  V3066907

  	 

	
   

  	
   

  	
  SUPPLIER CODE

  	
   

  	
  COMM/SERV CODE

  	 

	
   

  	
   

  	
  51375

  	
   

  	
  012111

  	 

	
   

  	
   

  	
  REQUISITION NO.

  	
   

  	
  ACCOUNTING LOC. NO.

  	 

	
   

  	
   

  	
  B5377

  	
   

  	
  9214

  	 

	
   

  	
   

  	
  Please indicate the PURCHASE ORDER NUMBER on all
  invoices, packages, correspondence, shipping papers and inquiries.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MAIL ORIGINAL INVOICE & A COPY TO:

  	
   

  	
   

  
	
   

  	
   

  	
  ACCOUNTS PAYABLE DIVISION

  	
   

  	
   

  
	
   

  	
   

  	
  P.O. Box 700

  	
   

  	
   

  
	
   

  	
   

  	
  Rosemead, CA 91770

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If in any way unable to comply with the requirements
  of this order, notify the Procurement Agent in writing immediately

  	 

	
  ARCA CALIFORNIA, INC.

  	
   

  	
   

  	
   

  	
   

  	 

	
  7400 EXCELSIOR BLV

  	
   

  	
   

  	
   

  	
   

  	 

	
  MINNEAPOLIS, MN 55426

  	
   

  	
   

  	
   

  	
   

  	 

										

 

(800) 452-8680                       Corp.      Y             TN/SSN  41-1454591

	
  PROCUREMENT AGENT  TELEPHONE NUMBER

  JIM ALPAGO                                       (626)
  302-5076

  	
  F.O.B.

  
	
  APPLICABLE TERMS/CONDITIONS
  — DATE

  SEE BELOW

  	
  TERMS OF PAYMENT

  NET 30 DAYS AFTER RECEIPT OF INVOICE

  
	
  REQUIRED AT EDISON LOCATION
  BY

  SEE BELOW

  	
  CONFIRMED WITH AND DATE

  
	
  VIA

  	
  DOCUMENT I.D.

   

  

 

STRICT ADHERENCE TO THE PROVISIONS OF THIS
PURCHASE ORDER IS REQUIRED. IF ANY CONFLICT ARISES REGARDING INVOICE
INSTRUCTIONS OR OTHER SECTIONS OF THE PURCHASE ORDER, PLEASE CONTACT THE
PROCUREMENT AGENT IDENTIFIED ABOVE.

GENERAL DESCRIPTION

ARCA California, Inc. (“Consultant”) shall
provide the necessary supervision, labor, material, tools and equipment to schedule, collect and recycle operable, inefficient, primary and/or
secondary refrigerators, freezers, and room air conditioners in Edison’s
service territory, where designated, for Edison’s 2006-2008 Appliance
Recycling Program, as requested by Edison’s Customer Service
Business Unit.

Work shall be performed on a fixed unit price basis in
accordance with Attachment 1 pages 1 through 29
which includes the following exhibits, all of which are incorporated herein:

	
  Exhibit A

  	
   

  	
  ARCA Zip Codes

  
	
  Exhibit B

  	
   

  	
  ARCA Remote Area Zip Codes

  
	
  Exhibit C

  	
   

  	
  Customer Participant Survey Example

  
	
  Exhibit D

  	
   

  	
  ATO Form

  
	
  Exhibit E

  	
   

  	
  Disposition Code

  
	
  Exhibit F

  	
   

  	
  Reporting Requirements

  

 

TOTAL AUTHORIZED AMOUNT

Total cumulative charges against this Purchase Order
shall not exceed $23,000,000.00, including
applicable taxes and freight, without prior authorization by issuance of a
Change Order.

	
  The applicable terms and condition as
  referenced, are hereby incorporated and made part of this Purchase Order.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  No change shall be made to the price, terms and
  conditions, 

  	
   

  	
  Southern California Edison Company

  
	
  specified requirements or schedules of this Purchase
  Order without written authorization of the Procurement Agent. Additional
  costs resulting from work done or material supplied without such
  authorization may be denied.

  	
   

  	
  By /s/ Jim Alpago

  
	
   

  	
   

  	
  FOR THE DIRECTOR OF PROCUREMENT AND MATERIAL
  MANAGEMENT

  

 

 

 

SOUTHERN
CALIFORNIA EDISON COMPANY

GENERAL TERMS AND CONDITIONS

Consultant Services

Table of Contents

	
  1.    AGREEMENT

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.    DEFINITIONS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.    INDEPENDENT
  CONTRACTOR

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.    COMMERCIAL
  TERMS

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.    DISPUTES

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.    CONTROL
  OF THE WORK

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.    JOBSITE
  ACCESS REQUIREMENTS AND FITNESS FOR DUTY

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.    CONFLICT
  OF INTEREST

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.    DOCUMENTATION

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.   NON-CONFORMING
  WORK AND WARRANTY

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.   PERMITS,
  STATUTES AND CODES

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.   SUBCONTRACTING
  WITH SMALL BUSINESS

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.   INSURANCE

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.   INDEMNITY

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.   CONSEQUENTIAL
  DAMAGES

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.   NON-DISCLOSURE

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.   TITLE
  AND RISK OF LOSS

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.   PROPRIETARY
  RIGHTS

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.   INFRINGEMENT

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.   COMPUTING
  SYSTEM ACCESS AND SECURITY REVIEW OBLIGATIONS

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21.   ENVIRONMENTAL,
  HEALTH & SAFETY REQUIREMENTS

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.   TERMINATION
  AND CANCELLATION

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.   SURVIVAL

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.   MISCELLANEOUS

  	
   

  	
  20

  	
   

  

 

SOUTHERN
CALIFORNIA EDISON COMPANY

GENERAL TERMS AND CONDITIONS

Consultant Services

1.                 AGREEMENT

In consideration of the
payments to be made and obligations to be performed by Edison, Consultant shall
perform the specified services and its other obligations as an independent
contractor (not as an employee or agent of Edison), all as set forth in the
Purchase Order which incorporates these General Terms and Conditions.

2.                 DEFINITIONS

When used herein with initial capitalizations, whether
in singular or plural, the following terms shall have the following meanings:

2.1            Affiliate:  Any person or entity that directly or indirectly
controls, is controlled by, or is under common control with, the indicated
person or entity.

2.2            Affiliated
Entity:  Any organization or
individual which performs specialized services for Consultant or Edison or its
Affiliates, or any organization or individual in which Consultant has a
business or ownership interest, which has a business or ownership interest in
Consultant, or which along with Consultant is the subject of a common business
or ownership interest by another entity or individual.

2.3            Chance
Order:  Document issued by Edison
which, when accepted by Consultant, amends
the Purchase Order.

2.4            Confidential
Information:  All information,
documents, materials, business plans, concepts, designs, models, trade secrets
or intellectual property of any kind furnished or made available by Edison “to
Consultant in oral, electronic or written form or by inspection, and all
analyses, compilations, studies, reports or other materials prepared by
Consultant containing or reflecting the foregoing. Confidential Information shall include the terms and conditions
of the Purchase Order and the fact that Edison has contracted with Consultant
for the Work.

2.5            Consultant:  The entity to which the Purchase Order is
addressed and which is responsible for performing the Work.

2.6            CWA
(Consultant Work Assignment):  An
Edison document, initiated by Edison under the Purchase Order and accepted by
Consultant, which authorizes Consultant to perform the stated Work at the rate(s) set
forth in the Purchase Order, states the authorized amount and schedule for such
Work, the deliverables, the acceptance criteria, and other requirements for the
Work, provided that the CWA may not change the total authorized amount or
effective period in the Purchase Order or
suspend or terminate the Work.

2.7            Documentation:  Documents and Information, including required
reports, in tangible form, including but not limited to computer disk or
electronic mail, which shall be delivered by Consultant to Edison as required
by the Purchase Order.

2.8            Documents:  All books, records, photographs, slides,
materials, data, calculations, estimates, documents, communications, notes,
proposals, reports, scopes of work or related responses, whether in written,
electronic or any other tangible form.

2.9            Edison:  Southern California Edison Company.

 

2.10      Edison Representative:  An Edison employee designated in the Purchase
Order to direct, coordinate, and approve the Work.

2.11      Fitness for Duty Requirements:  As defined in Section 7.

2.12      Information:  All inventions, discoveries, drawings,
designs, models, prototypes, software programs and documentation, Documents,
improvements, specifications or other data, trade secrets, secret processes,
techniques, technology, know-how, concepts, ideas and other intellectual property,
whether patentable or not, which are conceived, created, developed or reduced
to practice by Consultant or result from or are suggested by Consultant’s work
in connection with the performance of the Work, or are obtained from or for
Edison by Consultant in connection with the performance of the Work.

2.13      Jobsite:  The Edison facility or Edison-designated
third party property at or for which the Work is performed as stated in the
Purchase Order.

2.14      Jobsite
Subcontractor:  As defined in Section 13.1.

2.15      Material:  Equipment, materials, and supplies to be
purchased by Consultant as stated in the Purchase Order for direct application
to the Work.

2.16      Prohibited
Items:  As defined in Section 7.3.

2.17      Proprietary
Rights:  As defined in Section 18.1.

2.18      Purchase
Order:  Document issued by Edison to
Consultant, as may be amended by Change Orders and CWAs, which authorizes the
Work, states the commercial terms, and incorporates by reference these General
Terms and Conditions, and, if applicable, the Statement of Work, and other
referenced documents, all of which form the contract between the parties, with
the following priority in the event of conflicting provisions: Change Orders
from the most recent to the earliest; the Purchase Order; Terms and Conditions;
CWAs, from the latest revision to the earliest; the Statement of Work; any
other referenced documents.

2.19      Statement
of Work:  A statement of the tasks to
be performed by Consultant as set forth in a separate document or in the
Purchase Order, as may be modified from time to time.

2.20      Subcontractor:  An entity of any tier furnishing services to
Consultant for the Work.

2.21      Work:  The services performed by Consultant, and all
other obligations of Consultant, pursuant to or as required by the Purchase
Order.

2.22      Work
Schedule:  The agreed to schedule for
performance of the Work and delivery of the Documentation as set forth in the
Statement of Work or the Purchase Order.

3.                 INDEPENDENT CONTRACTOR

Consultant is and will
perform the work as an independent contractor for Edison. Nothing in the
Purchase Order shall be construed so as to render Consultant an employee,
agent, representative, joint venturer or partner of Edison, and Consultant
shall not hold himself out to others in such capacity. Consultant shall not
enter into any contracts, agreements or other obligations with any other
parties which bind, or are intended to bind, Edison without first receiving
express written authorization from Edison. Edison and Consultant shall each
maintain sole and exclusive control over its respective personnel and
operations.

 

4.             COMMERCIAL TERMS

4.1            Time
and Material, Multiplier or Cost Reimbursable Basis:  If the Work will be performed on a time and
material basis, multiplier basis, or cost reimbursable basis as stated in the
Purchase Order, the provisions of this Section 4.1 shall apply:

4.1.1                             General
Provisions:

4.1.1.1                     All charges
shall be directly identifiable to, and
required for the Work. Any charges for overtime shall require the prior written
approval of the Edison Representative. Overtime rates shall be authorized and
charged only for non-exempt personnel. All Work by exempt personnel shall be
charged at straight time rates or
multipliers only.

4.1.1.2                     Consultant shall complete the Work within the
authorized amount and in accordance with the Work Schedule. Consultant-shall
notify Edison’s procurement agent responsible for the Purchase Order and the
Edison Representative at such
time that it becomes reasonably apparent that the forecasted cumulative charges
will exceed the stated expenditure limitation. Consultant shall not proceed
with or be reimbursed for any Work performed either beyond the effective period
of the Purchase Order, or exceeding the authorized amount of the Purchase
Order, without the written authorization
of the procurement agent responsible for the Purchase Order and the Edison Representative.

4.1.2                             Labor
Related Costs Under Time and Material Basis:  Consultant shall bill Edison at the fixed
hourly rates for the applicable labor categories stated in the Purchase Order
for time spent directly engaged in performance of the Work by Consultant’s
employees. Such fixed hourly rates shall include all related costs including,
but not limited to, salaries/wages, statutory payroll taxes and insurance costs
such as the costs required by the Federal Insurance Compensation Act, Federal
Unemployment Insurance, State Unemployment Insurance, and Workers’ Compensation
Insurance, paid absence and benefit allowance (including, but not limited to,
vacations, medical, dental and life insurance, child care and other similar
employee benefits), miscellaneous supplies, reproduction, communications, data
processing, library research, office management, administrative supervisors,
payroll clerk, clerical and administrative support, overhead, and fee.

4.1.3                             Labor
Related Costs Under Multiplier Basis: 
Consultant shall bill Edison for straight time and approved overtime
work at the actual salary/wage paid to Consultant’s employees directly engaged
in performance of the Work multiplied by the straight time and overtime
multipliers set forth in the Purchase Order. The multiplier shall include all
related costs including, but not limited to, statutory payroll taxes and
insurance costs such as the costs required by the Federal Insurance
Compensation Act, Federal Unemployment Insurance, State Unemployment Insurance,
and Workers’ Compensation Insurance, paid absences and benefit allowance
(including, but not limited to, vacations, medical, dental and life insurance,
child care and other similar employee benefits), miscellaneous supplies,
reproduction, communications, data processing, library research, office
management, administrative supervisors, payroll clerk, clerical and
administrative support, overhead, and fee.

 

4.1.4                             Labor Related Costs Under Cost Reimbursable Basis:

4.1.4.1                     Salary/Wage Costs:  Consultant
shall bill Edison for the actual salary/wages paid to Consultant’s
employees directly engaged in performance of the Work, plus:

(i)                    Payroll
Additive Costs:  Costs for statutory
payroll taxes and insurance, such
as the costs required by the Federal Insurance Compensation Act, Federal Unemployment Insurance,
State Unemployment Insurance, and Workers’ Compensation Insurance. These costs
shall be paid as a percentage (as specified in the Purchase Order) of the
actual salary/wage costs.

(ii)                 Payroll
Related Costs:  Costs for employee
benefits as actually provided by Consultant for employees directly engaged in performance of the Work,
including, but not limited to, vacation, medical, dental and life insurance,
child care and other similar employee benefits, determined by actual wages paid
to Consultant’s employees. These costs shall be paid as a percentage (as
specified in the Purchase Order) of the actual salary/wage costs.

(iii)              Overhead
Allowance:  An allowance to
compensate Consultant for its overhead and general and administrative expenses
allocable as determined by a percentage; (as set forth in the Purchase Order}
of the actual salary/wage costs. This overhead allowance shall include all
other costs and expenses of Consultant not otherwise specified in this Section 4.1.4.

4.1.4.2                     Fee:  Edison shall pay Consultant either a fixed fee, or a fixed percentage of the
salary/wage costs, as specified in the Purchase Order.

4.1.5                             Material Costs: 
Material costs shall be charged at actual cost from Consultant’s
suppliers and Subcontractors without mark-up.

4.1.6                             Subcontract
Costs:  Subcontracted Work shall be
charged at the rates actually paid by Consultant, not to exceed the rates set
forth in the Purchase Order for Work by the Consultant.

4.1.7                             Travel Costs:  Expenses for out of town travel
shall be reimbursed only if authorized in advance by the Edison Representative, and shall be reimbursed at necessary,
actual, and reasonable cost without markup. Air travel shall be charged at
actual, reasonable rates, but in no case shall they exceed economy or coach
fare, whichever is reasonably available. Automobile travel from Consultant’s
office to the Jobsite and to Edison’s general offices shall be paid at the
fixed mileage rate stated in the Purchase Order, or if not stated, at Edison’s
rate for Edison employees.

4.1.8                             Invoices:  Consultant shall submit monthly
invoices for the costs incurred in the prior month and shall include a cost
breakdown for each task identified in the Statement of Work. Each invoice shall
include the cost incurred to date, the current monthly amount invoiced, the
cumulative amount invoiced to date, the current monthly and cumulative amounts
authorized, and justification for all variances between amounts authorized and
incurred or invoiced. Each invoice shall provide sufficient detail to identify
the following elements:

 

a.                  Dates
worked.

b.                 Personnel
work hours with name and
classification.

c.                  Personnel
work rates:

-                      Fixed
rates (time and material basis); or

-                          Salary/wage
costs, payroll additive costs, payroll related costs, and overhead allowance (cost reimbursable basis); or

-                      Multiplier

d.                 Description
of work performed by task.

e.                  Edison’s
CWA number.

f.                    Material
and subcontract costs.

g.                 “Out-of-Pocket”
expenses authorized by the Purchase Order with receipt therefor.

h.                     Receipts for
authorized travel costs or detail of trips, including amount of miles traveled, for which authorized mileage is
charged.

i.                     Statement
of deliverables for the period.

j.                     Fee
- if applicable (cost reimbursable basis only).

4.1.9                             Records:  Consultant shall maintain, for
a period of three (3) years after final payment, complete accounting
records (and supporting documentation) of all invoiced costs. Edison reserves
the right to audit and copy any applicable documents related to the work hours
and other direct costs invoiced.

4.2            Fixed Price Basis:  If
the Work is to be performed on a fixed price basis as set forth in the Purchase
Order, the provisions of this Section 4.2 shall apply:

4.2.1                             Costs:  Consultant shall perform all
the Work in accordance with the Work Schedule for the fixed price
set forth in the Purchase Order. There shall be no additional cost to Edison
except for changes to the scope of Work authorized in writing by the Edison
Representative.

4.2.2                             Invoices:  

4.2.2.1                     As specified in the Purchase Order, Consultant shall
submit invoices either: (a) monthly, based on percentage completion; (b) upon
completion of payment milestones; (c) as a final invoice; or (d) otherwise,
each as described below:

4.2.2.1.1           Monthly; Percentage
Completion:  Invoices shall be
submitted monthly based on the percent of Work completed in the prior month as
agreed to by the Edison Representative. Such invoice shall list by task the
percent of Work completed in the prior month and the percent of total Work
completed, and a detailed description of any separately billed items authorized
by the Purchase Order. Each invoice shall include the amount previously invoiced,
the current monthly amount being

 

invoiced, the
cumulative amount invoiced to date and the total fixed price. Within thirty
(30) days after receipt of the invoice at Edison’s Accounts Payable Division,
Edison shall pay ninety percent (90%) of each current monthly amount invoiced.

Upon completion of the Work, as agreed to by the Edison Representative, the invoice for the
retained ten percent (10%) shall be submitted together with a release for
claims for any additional charges. Edison shall pay such invoice within thirty
(30) days after its receipt in Edison’s Accounts Payable Division.

4.2.2.1.2           Payment Milestones:  When
Edison agrees in writing that a payment milestone has been completed, Consultant shall submit an invoice
therefor in the amount set forth in the Purchase Order, less the retention set
forth in the Purchase Order, if any. Edison shall pay such invoices within
thirty (30) days of their receipt in Edison’s Accounts Payable Division.

4.2.2.1.3           Final Invoice:  A
single invoice shall be submitted at the completion of the Work for a lump sum
payment of the fixed price. Edison shall pay such invoice within thirty (30)
days after its receipt in Edison’s Accounts Payable Division.

4.2.2.1.4           Other:  Edison shall pay each invoice
submitted under the payment terms in the Purchase Order within thirty (30) days
of Edison’s receipt of the invoice in Edison’s Accounts Payable Division.

4.2.2.2                     Each invoice
shall list the number of any CWA(s) covered by such invoice.

4.2.2.3                     Edison shall have the right to
audit Consultant’s out-of-pocket expenses and task completion records.

4.2.2.4                     If requested
in the Purchase Order, each invoice shall included a list of all open Edison
purchase orders to Consultant, and all Edison purchase orders completed within
the previous twelve (12) months. The list shall document the purchase order
number, the total authorized amount of each purchase order, and either the name
of the department and Edison Representative for whom the work is performed, or
the accounting location as shown on the purchase order.

5.                 DISPUTES

Any unresolved disputes shall
be referred to Edison’s Director of Procurement and Material Management, or a
designee, and an officer of Consultant for resolution. Pending resolution,
Consultant shall continue to perform the Work as directed by the Edison
Representative, and Edison shall continue to make payments for the undisputed
items.

 

6.                 CONTROL OF THE WORK

6.1            Compliance with Work Schedule: 
Consultant shall perform the Work in compliance with the Work Schedule.
If performance of the Work falls behind schedule, Consultant shall accelerate
the performance of the Work to comply with the Work Schedule: (i) at
Consultant’s expense for Work performed on a fixed price basis; or (ii) as
directed by the Edison Representative for Work performed on a time and
material, multiplier method, or
cost reimbursable basis. If the
nature of the Work is such that Consultant is unable to accelerate the Work, it shall promptly notify the Edison Representative of the delay, the causes
of the delay, and submit a proposed revised Work Schedule.

6.2            Changes to Work: 
Edison may at any time make changes to the Work including additions,
reductions, and changes to any or all of the Work, as directed in writing by
the Edison Representative. Such changes may be made with a Change Order or a
CWA. The authorized amount (or fixed price as applicable) and Work Schedule
shall be equitably adjusted, if required, to account for such changes and shall
be set forth in a Change Order.

6.3            CWAs:

6.3.1                             All CWAs shall be approved by Consultant’s
project manager and the Edison Representative prior to the start of the Work
authorized therein.

6.3.2                             Prior to performing the Work set forth in a
CWA, Consultant shall prepare a detailed plan specifying the tasks to be completed in performing the Work, a time
schedule for completion of such tasks and a budget for the Work, and present it
for approval to the Edison Representative.

6.3.3                             Consultant shall perform the Work within the
authorized budgeted amount and time schedule set forth in the CWA. Consultant shall notify Edison of the status of its
cumulative costs for each CWA and for the Purchase Order. Consultant shall not
commit its own resources, or engage sub-suppliers to provide resources, if such
resources are forecasted to exceed the amount authorized by the applicable CWA
or the Purchase Order. Whenever it becomes apparent that the estimated cost to
complete the Work will exceed the authorized amount, Consultant shall promptly
ask the Edison Representative for authorization to proceed. Consultant shall
not proceed with or be reimbursed for any Work performed under a CWA which
exceeds the authorized amount of the CWA, or extends beyond the time schedule
of the CWA.

6.3.4                             Changes to a CWA shall be in accordance with
the section of the Purchase Order titled “Extra Work/Control of Work.”

6.4            Work Cessation:  When
directed by a Change Order, Consultant shall suspend or terminate the Work.

6.5            Key Personnel: 
Consultant shall promptly notify the Edison Representative of the intended
reassignment and proposed replacement of key personnel performing the Work. Any
such reassignment and replacement shall be subject to Edison’s approval. Consultant
shall promptly replace any key personnel if requested by the Edison
Representative.

6.6            Subcontractor:  Any
Work subcontracted by Consultant shall be identified as such in the Purchase
Order and any Work subcontracted to an Affiliated Entity shall be specifically
identified. For any subcontracted Work, the prior written approval of the Edison
Representative shall be required for the Subcontractor, the activities to be
performed,

 

and the related
charges. Consultant shall at all times be responsible for the Work, and for the
acts and omissions of Subcontractors and persons directly or indirectly
employed by them.

6.7            Additional Instructions:  If
Consultant receives any verbal or written instructions for performance of Work
from Edison personnel other than the Edison Representative, Consultant shall
promptly reconfirm such instructions with the Edison Representative and request
that a corresponding CWA be issued.

6.8            Emergencies:  In an emergency endangering
life or property, Consultant shall: a) perform Work or such other services or
work as is necessary to meet the emergency; b) immediately notify the Edison
Representative and (c) shall, within three (3) days, submit a request
for a CWA which shall then be issued by Edison.

6.9            Status Reports: 
Consultant shall provide status reports to the Edison Representative as
required by the Purchase Order. If requested in the Purchase Order, a copy of
the status report shall be sent also to the Edison procurement agent
responsible for the Purchase Order designated therein. Such status reports
shall identify by tasks the labor hours expended (and dates worked) and total
dollars charged as follows: (i) budgeted and expended for current month; (ii) accumulated
to date; (iii) budgeted to date; (iv) forecast at completion; (v) percent
complete; and (vi) reasons for variances. If requested in the Purchase
Order, each status report shall include a list of all open Edison purchase
orders to Consultant, and all Edison purchase orders to Consultant completed
within the previous twelve (12) months. The list shall document each purchase
order number, the total authorized amount of each purchase order, and either
the name of the department and Edison Representative under each purchase order
for whom the work is performed, or the accounting location as shown
on each purchase order.

6.10      Drafts:  Draft copies of required reports shall be
submitted for review for contractual compliance, satisfaction of Edison needs
and good professional practices, comments, and
approval, prior to the due date of such reports.

6.11      Inspection:  Edison authorized representatives shall have
the right of access to and inspection of Consultant’s facilities and/or
locations at reasonable times during regular business hours regarding
performance of the Work.

6.12      Uncontrollable Forces:  Consultant shall not be liable for delay in
the Work Schedule or inability to perform the Work due to any cause beyond its
reasonable control, such as strike, flood, fire, lightning, epidemic,
quarantine restriction, war, sabotage, act of a public enemy, earthquake, or
critical material unavailability; provided that Consultant promptly notifies
Edison in writing of the nature, cause, date of commencement, and expected
impact of the event and has exercised due diligence in proceeding to meet the
Work Schedule. Edison shall extend the Work Schedule for an equitable period
due to such causes without any change in the Purchase Order price.

7.                 JOBSITE
ACCESS REQUIREMENTS AND FITNESS FOR DUTY

7.1            Jobsite Access Requirements:

7.1.1                             Compliance
with Jobsite Access Requirements: 
Consultant and Subcontractor employees shall comply with the Jobsite
access requirements set forth below. Failure to comply with these requirements
may result in the withholding of payment of invoices until such requirements
are satisfied and/or Edison’s cancellation of the Purchase Order without penalty or notice. In addition, Consultant
shall be liable for any additional expenses incurred by Edison, including
expenses related to special processing, investigations and badging, which
result from non-compliance with these requirements.

 

7.1.2                             Notification of Convictions: 
During application for Jobsite access, and/or during the Work,
Consultant shall immediately notify Edison whenever Consultant becomes aware of
evidence that any Consultant’s or its Subcontractors’ employee, who has, or
will have, Jobsite access, has been convicted of a serious criminal offense.

7.1.3                             Visitor Badge Requirement:  All
visitors to a particular Jobsite must comply with that Jobsite’s visitor access
requirements.

7.1.4                             Extended Stay Badge Requirement:  All
persons requesting Jobsite access at least three (3) times a week for a
period of thirty (30) days or more shall be processed for a Jobsite badge,
prior to starting the Work. To obtain a Jobsite badge, each person must submit:
1) a completed Edison form, “Temporary Access Authorization for Contingent
Workforce,” and related documents, which have been approved by an authorized
Edison supervisor or manager; 2) Verification of Social Security registration;
and 3) Photo identification (such as a driver’s license, etc.). All persons issued
an Edison Jobsite badge will undergo a security background check for criminal
convictions. Edison’s corporate security department will be the sole determiner
if access to the Jobsite should be granted, not granted or revoked.

7.1.5                             Change of Status:  When
a Consultant’s or its Subcontractors’ employee with Jobsite access is
reassigned to a non-Edison work site, or is no longer employed by Consultant or
Subcontractor, Consultant shall immediately notify Edison if it is determined
that such employee will not return within ten (10) days. Verbal
notification shall be confirmed in writing to the Edison Representative, or
designee, within twenty-four (24) hours of the verbal notification. Upon such
notification, Edison shall cancel Jobsite access for such employee. Thereafter,
if the separation from the Jobsite is greater than thirty (30) days and
Consultant and Edison agree that such access should be restored, the employee
shall be re-processed as set forth above.

7.1.6                             Return of Badge:  When
a Consultant’s or its Subcontractors’ employee is reassigned to a non-Edison
work site, Consultant shall be responsible for such employee to “process out”
through Edison prior to leaving the Jobsite, which shall include the return of
the employee’s badge and all property loaned by Edison to Consultant or its
Subcontractor for such employee’s use. Should such employee fail to process out
through Edison, then Consultant shall notify Edison within twenty-four (24)
hours of the employee’s leaving, obtain the employee’s badge and return it to
Edison.

7.2            Sexual Harassment: 
Edison supports a diverse work force and prohibits unlawful employment
discrimination and harassment of every kind, including sexual harassment, in
accordance with state and federal laws. Whenever present on Edison property or
facilities, Consultant shall require its employees, Subcontractors, agents to
comply with all applicable federal and state statutes, acts, regulations, codes
and standards prohibiting conduct that might reasonably be construed as violating
state or federal equal opportunity laws, including conduct such as making
sexually suggestive jokes or remarks, touching, assaulting, making gestures of
a sexual or suggestive nature, and impeding or blocking any Edison employee’s,
subcontractor’s or agent’s movement.

 

7.3            Fitness for Duty:

7.3.1                             Consultant and its Subcontractor personnel on
the Jobsite:

(i)                    Shall report
for work in a manner fit to do their job;

(ii)                 Shall not be
under the influence of or in possession of any alcoholic beverages or of any
controlled substance (except a controlled substance as prescribed by a
physician for such person so long as the performance or safety of the Work is
not affected thereby); and

(iii)              Shall not have been
convicted of any serious criminal offense which, by its nature, may have a discernible adverse impact
on the business or reputation of Edison.

7.3.2                             Inspection: Searches by Edison authorized representatives may be made of lockers, storage areas, vehicles, persons or personal effects on Edison owned, or
leased property at various times without prior announcement. Such facility
inspections maybe conducted using detection dog teams to search work areas and
other common areas in order to detect evidence of unlawful drug use or the
presence of pyrotechnics, explosives, firearms, weapons, or facsimiles thereof,
alcoholic beverages and illegal drugs (“Prohibited Items”). Prohibited Items
must not be brought onto, or kept on, Edison property.

7.3.3                             Compliance:
Consultant shall advise its employees of the requirement of this Section 7.3
(“Fitness for Duty Requirements”) before they enter on the Jobsite and shall
immediately remove from the Jobsite any employee determined to be in violation
of these requirements. Consultant shall impose these requirements on its Subcontractors. Edison may cancel the
Purchase Order if Consultant violates these Fitness for Duty Requirements.

8.             CONFLICT OF
INTEREST

Consultant affirms that, to the best of its knowledge, there is no
actual or potential conflict of interest between Consultant, its employees or
their families, Subcontractors, or business interests, and Edison. Consultant
shall not hire any Edison employee or employee’s spouse to perform any part of
the Work. Consultant further affirms that it has set forth in its proposal for
the Work: (i) all situations in which Consultant or an Affiliated Entity
of Consultant has been or currently is an Edison consultant,
contractor, or employee; (ii) all situations in which Consultant or an
Affiliated Entity of Consultant has been or currently is in a joint venture
arrangement or licensing relationship with Edison; and (iii) any
Affiliated Entity to which Consultant intends to subcontract any part of the
Work. Consultant shall update such affirmations to Edison during performance of
the Work within thirty (30) days
following any change thereto.

9.                 DOCUMENTATION

9.1            Consultant shall deliver the Documentation to
Edison as scheduled and, if the Purchase Order is terminated, shall deliver all
completed and incomplete Documentation to Edison in accordance with Section 22
hereof.

9.2            Edison has the right to review and approve the
Documentation and the data and methods used to develop the Documentation.
However, the failure of Edison to conduct such review or grant such approval
shall not relieve Consultant from its responsibilities and obligations under
the Purchase Order.

 

10.                              NON-CONFORMING WORK AND WARRANTY

 

The Work shall comply with the requirements of the Purchase
Order and the Statement of Work for such Work and with appropriate professional
standards, and Consultant shall use due professional care in performance of the Work. For a period of not less
than one (1) year after completion of an the Work under the Statement of Work
Consultant shall, at no additional cost to
Edison, re-perform Work that does
not materially comply with the Purchase Order and the Statement
of Work relevant to such Work. Consultant shall within three (3) calendar days,
correct any error of shortcoming that renders the Work or Documentation
dysfunctional or unusable and shall correct other errors within thirty (30)
calendar days after Consultant's receipt of notice of the error. Upon the
request of Edison, Consultant shall correct any such error deemed important by
Edison in its sole discretion to Edison's continued use of the Work or Documentation
within seven (7) calendar days after Consultant's receipt of notice of the
error.

 

11.        PERMITS, STATUTES AND CODES

 

11.1                       The Work
and Documentation shall comply with the applicable requirements of all
statutes, acts, ordinances, regulations, codes, and standards of federal,
state, local and foreign governments, and all agencies thereof.

 

11.2                       Consultant
shall conform to the applicable employment practices requirements of
(Presidential) Executive Order 11246 of September 24, 1965, as amended, and
applicable regulations promulgated thereunder. Consultant shall be solely
responsible for the safety and health of personnel and the prevention of
industrial accidents and illness arising out of the performance of the Work.

 

12.        SUBCONTRACTING WITH SMALL BUSINESS

 

Utilization of Small Business Concerns and Small Business
Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals:  By this reference, the requirements of Public
Law 95-507, 15USC637, dated October 24, 1978, are incorporated herein and made
a part hereof. A copy of this document is available upon request from the
following address:

 

                                                Southern
California Edison Company

                                                Attn:
Supplier Qualification Coordinator

                                                Procurement
Division P.O. Box 800 

                                                Rosemead,
CA 91770

 

13.        INSURANCE

 

13.1                       Requirement:  Consultant shall maintain for the Work, and
shall require that each Subcontractor performing any service at the Jobsite
(hereinafter referred to as "Jobsite Subcontractor") maintain, at all
times until completion of the Work and at its own expense, valid and
collectible insurance as required below. This insurance shall not affect
Consultant's liability under the indemnity provisions of Section 14, and shall
in no event be terminated, expire, nor be materially altered except on thirty
(30) days' prior written notice to Edison's procurement agent responsible for
the Purchase Order. Such insurance shall be maintained with insurers with an A.
M. Best Company rating of A- VII or better. Any other insurance carried by
Edison, its officers, agents, and employees which may be applicable shall be deemed
to be excess insurance and Consultant's and Jobsite Subcontractor's insurance
shall be deemed primary for all purposes despite any conflicting provision in
Consultant's or Jobsite Subcontractor's policies to the contrary.

 

13.2                       Certificates:  As evidence that policies do in fact provide
the required coverages and limits of insurance listed below and are in full
force and effect, Consultant shall furnish to Edison's procurement agent
responsible for the Purchase Order certificates of insurance on forms
acceptable to Edison. Consultant shall require each Jobsite Subcontractor to
provide such certificates to Consultant and shall make these certificates
available to Edison upon request. Certificates of insurance shall be furnished
and made available upon receipt of the Purchase Order or Subcontract, but in
any event prior to start of the applicable Work.

 

13.3                       Requirements:

 

                                                a.   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 $1,000,000. Carriers
furnishing such insurance shall be required to waive all rights of subrogation
against Edison, its officers, agents, employees, and other contractors and
subcontractors.

 

                        b.   General Liability Insurance, written on an
"occurrence" basis, including:

 

-                    Broad form property damage liability.

-                    Contractual liability.

(i)                                     Such
insurance shall bear limits of not less than $1,000,000
per occurrence and $1,000,000
annual aggregate, exclusive of defense costs as respects
products and completed operations, and not less than $1,000,000 per occurrence
and $1,000,000 annual aggregate, exclusive of defense costs, as respects all
other coverages.

 

(ii)         Such
insurance shall:

 

-     Acknowledge
Edison, its officers, agents, and employees as additional insureds.

-     Be primary
for all purposes.

-     Contain
standard cross-liability or severability of interest provisions.

-                    Waive all
rights of subrogation against Edison, its officers, agents, employees, and
other contractors and subcontractors

 

(iii)                               If Consultant elects, with
the concurrence of Edison, a "claims made" form of Commercial General
Liability Insurance may be maintained. In such event, the following additional
requirements shall apply:

 

-     The retroactive
date of the policy shall be prior to the commencement of the Work.

-                    Coverage shall be maintained
in effect for a period of not less than two (2) years after completion of the
Work, or a supplemental extended reporting period of not less than two (2)
years after completion of the Work shall be included.

 

These requirements shall ensure that such insurance shall
enable Edison to recover for claims reported at any time commencing with the
start of Work and continuing to a date not less than two (2) years following
completion of the Work.

 

c.             Automobile Bodily Injury and Property Damage Liability
Insurance on an "occurrence" form with a combined single limit per
occurrence of not less than $1,000,000.
Such insurance shall cover liability arising out of the use by
Consultant and Jobsite Subcontractors of owned, non-owned, and hired
automobiles in the performance of the Work. Such insurance shall acknowledge
Edison as an additional insured and be primary for all purposes.

 

 

 

13.4                       Notification:  Consultant shall report immediately to the
Edison Representative and confirm in writing any injury, loss, or damage
incurred by Consultant or Jobsite Subcontractors in connection with the Work,
or its receipt of notice of any claim by a third party, or of any occurrence
that might give rise to a claim.

 

13.5                       Maintenance:  If any of the required insurance coverages
contain aggregate limits applying to other operations of Consultant not
relating to the Work, and such limits are diminished by any incident,
occurrence, claim, settlement, or judgment against such insurance, Consultant shall take immediate steps to
restore such aggregate limits or shall provide other insurance protection for
such aggregate limits.

 

13.6                      Insurance Indemnification:  If Consultant fails to comply with any of the
provisions of this Section 13, "INSURANCE" or any insurance
requirements in the Purchase Order, Consultant shall, at its own cost, defend,
indemnify, and hold harmless Edison, its Affiliates and their officers,
directors, 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
them, arising out of or in connection with the performance or non-performance
of the Work by Consultant or any Subcontractor, or their officers, directors,
employees or agents to the extent that Edison would have been protected had
Consultant complied with all of the provisions of this Section.

 

14.           INDEMNITY

 

14.1                     Consultant shall, at its own
cost, defend, indemnify and hold harmless Edison and its Affiliates and all
officers, agents, employees, assigns, and successors in interest of Edison and
its Affiliates, from and against any and all liability, damages, losses, claims,
demands, actions, causes of action, costs, including attorney's fees (which
shall include allocable costs of in-house counsel) and expenses or any of them,
resulting from the death of or bodily injury to any person or damage to any
property, arising out of any act or omission of Consultant, Subcontractors, and
employees, officers and agents of either Consultant, or Subcontractors, or any
of them.

 

14.2                     Consultant shall at its own
cost, reimburse Edison for any and all costs and expenses (including property
replacement costs) arising from damage to or loss of Edison's property caused
by Consultant, Subcontractors and employees, officers and agents of either
Consultant or Subcontractors, or any of them.

 

14.3                     Tools:  Any tools, supplies, equipment, or other items
loaned by Edison to Consultant (except where Edison specifically directs such
use) shall be loaned solely as a convenience to Consultant. Consultant agrees
that such items are being loaned "as is," and Edison makes no
representations as to the condition, suitability for use, freedom from defect
or otherwise, of such items. Consultant shall, at its own cost, defend, indemnify
and hold harmless Edison, its officers, directors, 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 them, arising out of or in connection with any
actual or alleged use, delivery, or transportation of any and all loaned tools,
supplies, equipment or other items having defects or claimed to be defective.

 

14.4                    Employer
Liability:  Consultant
shall, at its own cost, defend, indemnify and hold harmless Edison, its
officers, directors, 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 them, resulting from
payment or non-payment of any statutory withholding charges, Edison employee
benefits or other financial obligations, including but not limited to,
overtime, contribution taxes, benefits and penalties payable under Workers'
Compensation (including Workers' Compensation Reform Act of 1989), unemployment
compensation, disability benefit, old age benefit, or tax withholding laws for
which Edison shall be adjudged liable as an employer with respect to Consultant
or Consultant personnel, arising out of or in any way related to the
relationship between Edison, Consultant, and Consultant personnel, including
the failure of Consultant personnel to be recognized as exclusively employed by
Consultant and not by Edison.

14.5                    No
Limitation:  The
indemnities set forth in this Section "INDEMNITY" shall not be
limited by the insurance requirements set forth in the "INSURANCE"
Section

 

15.                        CONSEQUENTIAL
DAMAGES

 

Neither party (including Subcontractors and Edison's
subcontractors of any tier) shall be liable to the other party for any special,
indirect, incidental or consequential damages whatsoever whether in contract,
tort (including negligence) or strict liability including, but not limited to,
loss of use of or under-utilization of labor or facilities, loss of revenue or
anticipated profits, cost of replacement power or claims from customers,
resulting from a party's performance or nonperformance of its obligations under
the Purchase Order, or in the event of suspension of the Work or termination of
the Purchase Order.

 

16.      NON-DISCLOSURE

 

16.1                 Non-Disclosure
by Consultant:

 

a.                                     Consultant agrees that
during the term of this Purchase Order and for a period of six (6) years from
termination or expiration of the Purchase Order, it will hold the Confidential
Information in confidence and it will not disclose any Confidential Information
to any person (including any Affiliate of Edison) without the prior written
consent of Edison. Confidential Information may be disclosed only to those
employees and agents of Consultant who need to know such Confidential
Information for the purpose of performing the Work, are informed of the
confidential nature of such Confidential Information and are directed not to
disclose or use the Confidential Information in violation of this Section 16.1.

 

b.                                     Consultant
agrees that it will not use any of the Confidential Information for any purpose
other than performing the Work.

 

                                                c.         In connection with this Purchase Order,
Consultant and its directors, officers, employees, agents and other associated
persons may from time to time learn material nonpublic information concerning
Edison or other companies. State and federal securities laws prohibit trading
in the securities of such companies while in the possession of such material
non public information and also prohibit the communication of such information
to others. Consultant agrees not to trade in the securities of Edison or other
companies about which it has learned material nonpublic information in
connection with this Purchase Order and not to communicate such information to
others in violation of these laws. Consultant shall take reasonable precautions
to ensure that its directors, officers, employees, agents and other associated
persons do not violate such laws.

 

 

 

                                                d.         Consultant will be responsible for any
breach of this Section 16.1 by its employees or agents.  Consultant shall, at its own expense, take
all steps, including the initiation and prosecution of actions at law or in
equity, necessary to prevent or halt the unauthorized use or disclosure of any
of the Confidential Information by any of its employees or agents or by any
other person who obtained the Confidential Information from Consultant in
violation of this Section 16.1.

 

e.                                     The
obligations herein not to disclose or use Confidential Information shall not
apply to any Confidential Information which (a) is or becomes generally
available to the public, other than as a result of disclosure by Consultant,
(b) was known to Consultant prior to disclosure by Edison, as evidenced by
written records, provided that the source of such information was not bound by
an obligation of non­disclosure to Edison, or (c) was independently developed
by Consultant, as evidenced by written records.

 

f.                                         At any time
upon request of Edison, all Confidential Information in tangible form,
including all copies or parts thereof, shall be returned to Edison or
destroyed, except that Consultant may retain one copy of any materials prepared
by Consultant containing or reflecting Confidential Information if necessary
for compliance with its internal record-keeping or quality assurance
requirements only. If destroyed, such destruction shall be certified in writing
by Consultant.

 

                              g.         In the event that Consultant is required by law or
regulatory authority or otherwise becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, criminal or
civil investigative demand or similar process) to disclose any Confidential
Information, Consultant will provide Edison with prompt written notice so that
Edison may seek (with Consultant's cooperation, if requested by Edison) a
protective order or other appropriate remedy. In the event that such protective
order or other remedy is not obtained, or that Edison waives compliance with
the provisions of this Section 16.1, Consultant will furnish only that portion
of the Confidential Information which is legally required and will exercise its
best efforts to obtain reliable assurance that confidential treatment will be
accorded the Confidential Information.

 

                                                h.         Consultant recognizes and acknowledges
the irreparable damage which would result to Edison if this Section 16.1 were
breached. Without prejudice to the rights and remedies otherwise available,
Edison shall be entitled to equitable relief, including an injunction and
specific performance if Consultant breaches or threatens to breach any of the
provisions of this Section 16.1, without proof of actual damages. Consultant
waives any requirement of a bond in connection with such remedy.

 

16.2                       Non-Disclosure
by Edison:  Consultant
shall not include in any Documentation any information that Consultant claims
to be proprietary or confidential to Consultant without the prior written
consent of the Edison Representative unless specifically required by the
Purchase Order. Thereafter, if Edison accepts the inclusion of such proprietary
or confidential information, Edison shall make reasonable efforts, to the
extent allowed by law, to keep in confidence and not to disclose to any third
party, without the prior written consent of Consultant, the confidential or
proprietary information of Consultant which is or has been disclosed to Edison
in a drawing or other document which has been clearly marked by Consultant to be confidential or proprietary.

 

Notwithstanding the other provisions of this Section 16.2,
or any confidential or proprietary markings placed on documents by Consultant,
Edison shall not be prohibited from disclosing to third parties information
which is required to repair, replace, add to, or maintain the items acquired by
Edison pursuant to this Purchase Order,
so long as Edison secures the agreement of the third party in
writing to use the information for
only such purposes and to otherwise restrict disclosure as provided above.

16.3           Non-Disclosure of
Transmission System Information:  Consultant shall not disclose any transmission
system information (including, but not limited to information about available
transmission capability, price, curtailments, storage, ancillary services, balancing, maintenance activity,
capacity expansion plans or similar information) to any Edison Energy Supply
& Marketing Department personnel, to the extent such disclosure may be
prohibited by the FERC Standards of Conduct.

 

17.                  TITLE AND RISK OF LOSS

 

17.1           Documentation:  Title to the Documentation, including
copyright ownership in the Documentation, shall pass to Edison when prepared;
however, a copy may be retained by Consultant for its records and internal use.
Consultant shall retain such Documentation in a controlled access file, and
shall not reveal, display or disclose the contents of the Documentation to
others without the prior written authorization of Edison. 

 

Consultant shall have risk of loss of or damage to the
undelivered Documentation, and the Documents and Information required to
produce the Documentation, until completion of the Work.

 

17.2           Material:  Title to all Material, field or research
equipment, and laboratory models procured or fabricated under the Purchase
Order shall pass to Edison when procured or fabricated, and such title shall be
free and clear of any and all encumbrances. Consultant shall have risk of loss
of any Material or Edison-owned equipment of which it has custody.

 

17.3           Disposition:  Consultant shall dispose of items to which
Edison has title as directed in writing by the Edison Representative.

 

18.     PROPRIETARY RIGHTS

 

18.1           Rights and Ownership:  Edison's rights to inventions, discoveries,
trade secrets, patents, copyrights, and other intellectual property, including
the Information and Documentation, and revisions thereto (hereinafter collectively
referred to as "Proprietary Rights"), used or developed by Consultant
in the performance of the Work, shall be governed by the following provisions:

 

                                                (i)   Proprietary Rights conceived, developed, or
reduced to practice by Consultant in the performance of the Work shall be the
property of Edison, and Consultant shall cooperate with all appropriate
requests to assign and transfer same to Edison in any countries throughout the
world.

 

(ii)          If Proprietary Rights conceived, developed, or reduced
to practice by Consultant prior to the performance of the Work are used in and
become integral with the Work or Documentation, or are necessary for Edison to
have complete enjoyment of the Work or Documentation, Consultant shall grant to
Edison a non-exclusive, irrevocable royalty-free license, as may be required by
Edison for complete enjoyment of the Work and Documentation, including the
right to reproduce, correct, repair, replace, maintain, translate, publish,
use, modify, copy or dispose of any or all of the Work and Documentation and
grant sublicenses to others with respect to the Work and Documentation.

 

                                                (iii)  If the Work or Documentation includes the
Proprietary Rights of others, Consultant shall procure, at no additional cost
to Edison, all necessary licenses regarding such Proprietary Rights of others
so as to allow Edison the complete enjoyment of the Work and Documentation,
including the right to reproduce, correct, repair, replace, maintain,
translate, publish, use, modify, copy
or dispose of any or all of the Work and Documentation, and
grant sublicenses to others with respect to the Work and Documentation. All
such licenses shall be in writing and shall be irrevocable and royalty-free to
Edison.

 

18.2      No
Additional Compensation:  Nothing set
forth in this Section 18 shall be deemed to require payment by Edison to
Consultant of any compensation specifically for the assignments and assurances
required hereby, other than the payment of expenses as may be actually incurred
by Consultant in complying with this Section 18.

 

19.                              INFRINGEMENT

 

19.1                       As used in the following
subparagraphs, the term "Claim" shall mean the assertion of a right,
or of a violation of a right, in writing such as by demand letter, complaint,
charge, or the like, whether or not a legal action or proceeding has been
filed, initiated or instituted.

 

19.2                       Consultant represents and
warrants that the Work and Documentation shall be free of any Claim of trade
secret, trademark, trade name, copyright, or patent infringement or other
violations of any intellectual property rights of any person.

 

19.3                        Consultant shall defend,
indemnify and hold harmless, Edison, its officers, agents, employees,
successors and assigns from and against any and all liability, damages, losses,
claims, demands, actions, causes of action, and costs including reasonable
attorney's fees and expenses arising out of any Claim that use of the Work or
Documentation infringes upon any trade secret, trademark, trade name,
copyright, patent, or other intellectual property rights.

 

19.4                       In the event any such Claim
is made against Edison, Consultant shall, at its expense and at Edison's
option, (i) refund any amounts paid by Edison under the Purchase Order, (ii)
procure for Edison the right to use the Work and Documentation, or (iii)
replace or modify the Work and Documentation as approved by Edison so as to
obviate any such claim of infringement. If, in connection with any such Claim,
a temporary restraining order or preliminary injunction be granted, Consultant
shall put up a satisfactory bond to permit Edison's continued use of the Work
and Documentation. The remedies provided in this Section 19.4 shall not limit
the indemnification obligations in Section 19.3.

 

19.5                       Edison shall cooperate
reasonably with Consultant, at Consultant's sole cost and expense, in any
defense of such Claims, actions and proceedings.

 

20.                              COMPUTING
SYSTEM ACCESS AND SECURITY REVIEW OBLIGATIONS

 

20.1                       Computing System Access

 

                                                20.1.1   If Edison
determines in its sole discretion that, in order for Consultant to perform the
Work, Consultant may require access to Edison's communications and computing
systems, which include, but are not limited to, computers, servers,
applications, files, electronic mail, electronic equipment, wireless devices,
data resources, and Edison-sponsored connections to the Internet communications
network (collectively, "Computing Systems"), then Edison shall grant
Consultant access to such Computing Systems, provided that such access shall be
subject to the conditions herein provided. Edison authorizes Consultant to
access the Computing Systems only for the purpose of Consultant performing the
Work in accordance with the terms of the Purchase Order. In the event
Consultant was previously granted access, or is granted access, to Edison's Computing
Systems, Consultant represents, warrants and covenants that (i) if applicable,
it has accessed such Computing Systems only as required to perform the Work and
in compliance with the requirements set forth in these Computing System Access
and Security Review Obligations, and (ii) it shall only access such Computing
Systems as required to perform the Work in accordance with the terms of the
Purchase Order.

 

 

20.1.2
        Consultant
shall promptly identify in writing to Edison those Consultant employees, Subcontractors
and agents who will, in order to perform the Work, require access to such
Computing Systems, and Edison shall, upon receipt by Edison Information
Security of the appropriate request forms from Consultant, issue appropriate
computer and for e-mail accounts, passwords and access authorizations to
Consultant and such personnel. When a Consultant's or its Subcontractors'
employee or agent with Computing Systems access is reassigned to non-Edison
work, is no longer employed by Consultant or Subcontractor, Consultant shall
immediately notify the Edison Representative and Edison Information Security
verbally that such personnel will no longer be performing any of the Work and
Edison may immediately delete Computing System access for such employee or agent.
Consultant shall confirm such verbal notification in writing to the Edison
Representative, or designee, and to Edison Information Security within
twenty-four (24) hours of
the verbal notification. Upon delivery of such notice to the Edison Representative
and Edison Information Security, Consultant shall immediately deliver to Edison
Information Security all Edison-owned Computing Systems equipment that may have
been issued or loaned to such re-assigned or terminated Consultant or
Subcontractor employee.

 

20.1.3            Consultant shall comply, and
shall cause its employees, Subcontractors, agents, and any other person whom
Consultant allows to access the Computing Systems to comply, with all Edison
policies and procedures in regards to such access. Consultant shall ensure that
the Computing Systems, any user accounts, passwords or any other access
authorizations, and all Edison information and data contained in the Computing
Systems, remain secure during Consultant access and that the Computing Systems
and all information and data retrieved during such access remain confidential,
secure and protected from disclosure to unauthorized parties.

 

20.1.4            Consultant shall be
responsible for any breach of these Computing System Access and Security Review
Obligations by its employees, Subcontractors or agents, or by any other person
who obtained access to the Computing Systems from Consultant in violation of
these Computing System Access and Security Review Obligations, and Consultant
shall notify Edison immediately in the event Consultant has reason to know or
suspect that a breach of these Computing System Access and Security Review
Obligations has occurred. Consultant shall, at its own cost, defend, indemnify
and hold harmless Edison
and its Affiliates and all officers, agents, employees, assigns, and successors
in interest of Edison and its Affiliates, from and against any and all
liability, damages, losses, claims, demands, actions, causes of action, costs,
including attorney's fees (which shall include allocable costs of in-house
counsel) and expenses or any of them, resulting from the breach of these
Computing System Access and Security Review Obligations by Consultant,
Subcontractors, and employees, officers and agents of either Consultant, or
Subcontractors, or any of them. In the event Edison
determines that Consultant or any of its employees,
Subcontractors or agents has breached these Computing System Access and
Security Review Obligations, Edison may immediately revoke or terminate
Consultant's or its Subcontractors' access to Edison Computing Systems;
provided, however, that such revocation or termination shall not relieve
Consultant of its obligations to perform the Work in accordance with the terms
of the Purchase Order. Notwithstanding the foregoing right to revoke or
terminate Consultant's access to Edison's Computing Systems, Edison may
exercise any other legal or equitable right or remedy that may be available to
it under applicable law or under the Purchase Order, including termination of
the Purchase Order.

 

 

20.1.5                              Consultant
shall execute, and shall cause its employees, Subcontractors and agents to
execute, any documents Edison may deem reasonably necessary to ensure
Consultant's compliance with these Computing System Access and Security Review
Obligations.

 

20.2                       Security Review.  Consultant represents and warrants to Edison
that it and its Subcontractors and agents each has taken all commercially
reasonable steps necessary, including without limitation the implementation of
security industry best practices, to maintain the confidentiality, integrity
and availability of its own computing systems. Edison or its authorized
representative shall have the right at any time to examine Consultant's and its
Subcontractors' and agents' records and reports relating to their respective
security policies, practices and procedures, including without limitation any
internal, external or regulatory audit reports or reviews relating to the
security of Consultant's or its Subcontractors' or agents' computing systems,
and their compliance therewith, and Consultant represents and warrants that it
has the authority to grant Edison or its authorized representatives such access
to its Subcontractors' and agents' records and reports.

 

21.        ENVIRONMENTAL,
HEALTH & SAFETY REQUIREMENTS

 

The attached "Southern California Edison ENVIRONMENTAL,
HEALTH & SAFETY HANDBOOK FOR CONTRACTORS", dated February 1, 2002, is hereby incorporated by reference
into this Purchase Order. Consultant shall immediately notify the Edison Representative
and the procurement agent (identified in the Purchase Order heading) if Consultant
is unable to meet ANY of the requirements set forth therein. Edison may cancel
this Purchase Order if Consultant fails to meet the requirements set forth in
this attachment. Such cancellation shall not be deemed a termination under the
termination provisions of the General Terms and Conditions of this Purchase
Order.

 

22.                              TERMINATION AND
CANCELLATION

 

22.1                       Termination for Convenience:  Notwithstanding any other provisions of the Purchase
Order, Edison shall have the unilateral right to terminate the Work, or any
portion thereof, or the Purchase Order by the issuance of a Change Order, which
shall not require Consultant's acceptance.

 

Subject to the provisions of Section 22.3 hereof, Edison shall
pay Consultant the termination charges set forth in the Purchase Order pro-rated
to the effective date of termination. If termination charges are not set forth
in the Purchase Order, Edison shall:  (i)
for time and material, multiplier method, or cost reimbursable Work set forth
in the Purchase Order, complete the payments for all Work accepted by Edison;
or (ii) for fixed price Work set forth in the Purchase Order, negotiate an
equitable payment for the portion of the Work accepted by Edison. Edison, at
its option, may take possession of any Material paid for by Edison. The
provisions of this Section 22.1 shall be Consultant's sole remedy resulting
from such termination.

 

22.2                       Cancellation
for Default:  In the event
of: (i) the breach of or failure of
Consultant to perform any of its material obligations under the Purchase
Order including, but not limited to, failure to complete the Work on time or
failure to make satisfactory progress or persistent failure to pay labor and
material claims; (ii) the failure of Consultant to give Edison adequate
assurance of performance within ten working days after written demand by Edison
therefor when reasonable grounds for insecurity arise; or (iii) the insolvency, bankruptcy or receivership of
Consultant, then Edison may (a) withhold payment of any further monies which
may be due Consultant until such condition is cured, and/or (b) declare
Consultant to be in default of the Purchase Order and notify Consultant in
writing of such declaration and shall be entitled to cancel the Purchase Order
in whole or in part effective immediately upon written notice thereof. Any
cancellation pursuant to this Section 22.2 shall not be deemed a
"termination" for the purposes of Section 22.1 hereof.

 

In the event of such cancellation, Consultant shall
immediately stop Work and surrender to Edison's possession, complete and
incomplete Documentation and other Information, Material, control and use of
the Jobsite and all Consultant and Edison-owned equipment, facilities, and all other
items which Edison may deem necessary or appropriate until the Work is
completed. Consultant shall assign to Edison the outstanding subcontracts and
purchase orders as requested by the Edison Representative for such completion.
Edison shall have the right to provide, or contract for, all additional labor,
Material, and any other items which it may deem necessary to complete the Work.

 

If the total of all expenses incurred by Edison to complete
the Work is greater than the sum which would have been payable under the
Purchase Order if Consultant had completed the Work, the difference shall
constitute a claim against Consultant. Such claim shall be due and payable
within ten working days after presentation of the claim. Additionally, Edison
shall have the right to pursue other remedies afforded by law.

 

22.3                       Delivery of Materials:  Without limiting the effect of the provisions
of Sections 16.1 and 22.2 hereof, upon receipt of notice of termination or
cancellation under this Section 22, Consultant shall immediately deliver to
Edison all complete and incomplete Documentation and all Material. If, at the
time of termination or cancellation further sums are due Consultant, Consultant
shall not be entitled to the sums until all Documentation and all Material required
to be delivered to Edison are delivered.

 

22.4                       Cessation of Work:  Upon receipt of notice of termination or
cancellation for any reason, Consultant shall promptly cease all Work except
for additional Work that Edison may, in its discretion, request Consultant to
perform. Additional Work shall be performed in compliance with the terms of the
Purchase Order.

 

23.                              SURVIVAL

 

Notwithstanding completion or termination of the Work or of the Purchase
Order or any portion thereof, the parties shall continue to be bound by those
provisions of the Purchase Order which by their nature survive such completion
or termination.

 

24.        MISCELLANEOUS

 

24.1                       Severability:  If any section, provision or portion of these
General Terms and Conditions is held to be invalid, illegal or void by a court
of proper jurisdiction, the remainder of these General Terms and Conditions
shall nevertheless subsist and continue in full force and effect.

 

 

24.2                       Assignment:  Neither the Purchase Order nor any interest
under it shall be assigned without the prior written consent of Edison.

 

24.3                       Governing Law:  The Purchase Order 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.

 

24.4                    Waivers:  Any waiver by either party of any violation
of, breach of or default under any provision of the Purchase Order by the other
party shall not be effective unless stated specifically in writing and shall
not be construed as, or constitute, a continuing waiver of such provisions, or
waiver of any other violation of, breach of or default under any other
provision of the Purchase Order.

 

24.5                   Section Headings:  Section headings appearing in these General
Terms and Conditions and in the Purchase Order are for convenience only and
shall not be construed as interpretations of text.

 

24.6                      Notices: Any legal
notice pertaining to the Purchase Order shall be in writing identified by
Purchase Order number and sent registered or certified mail, postage prepaid, to
Edison or to Consultant, as appropriate, at their respective addresses
appearing in the Purchase Order.

 

24.7                       Third Parties:  Nothing expressed or implied in the Purchase
Order is intended, or shall be construed, to confer upon or give any person or
entity any rights or remedies under, or by reason of, the Purchase Order,
except as specifically provided for herein.

 

24.7                       Entire Agreement:  The Purchase Order contains the entire
agreement and understanding between the parties and merges and supersedes all prior
representations and discussions pertaining to the Purchase Order, including
Consultant's proposal (except as specifically referenced). Any changes,
exceptions, or different terms and conditions proposed by Consultant, or
contained in Consultant's acknowledgment of the Purchase Order, are hereby
rejected unless expressly stated in the Purchase Order or incorporated by a
Change Order.

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