Document:

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                                                                   EXHIBIT 10(a)

                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

         This is the Second Amendment to the Employment Agreement ("Agreement")
between Lindsay Manufacturing Co., a Delaware corporation ("LINDSAY"), and
Richard W. Parod ("PAROD"), which was entered into on March 8, 2000, and under
which PAROD commenced employment on April 5, 2000, and was previously amended on
May 2, 2003.

                                       I.

         Paragraph 2 of the Agreement is hereby amended to extend the Term of
the Agreement for two additional years, so that, unless terminated at an earlier
date in accordance with Paragraph 4 of the Agreement, the Term shall continue in
effect until April 5, 2007.

                                       II.

         All other terms and conditions of the Agreement are hereby ratified and
confirmed. All defined terms which are used herein shall have the same meaning
as in the Agreement, except as modified herein.

         IN WITNESS WHEREOF, the parties have executed this Second Amendment to
the Agreement to be effective on the later date set forth below when the
Agreement has been executed by both parties.

RICHARD W. PAROD                            LINDSAY MANUFACTURING CO.

/s/ Richard W. Parod                        /s/ Michael N. Christodolou
------------------------                    -----------------------------------
Richard W. Parod                            Michael N. Christodolou
                                            Chairman of the Board
Date:  December 22, 2004                    Date:  November 30, 2004<PAGE>

                                                                    EXHIBIT 10.1

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

         THIS SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE ("Agreement") is
entered into this 23rd day of December, 2004 ("Effective Date") by and between
Commerce Energy Group, Inc. ("Commerce") and Commonwealth Energy Corporation
("Commonwealth"), and Ian Carter, Brad Gates and Robert Perkins (the
"Commonwealth Directors") (collectively, the "Commerce Parties"), on the one
hand, and Joseph P. Saline ("Saline"), Patricia E. Saline ("Mrs. Saline"), and
Joseph Ogundiji, individually and as Trustee of the Ogundiji Family Holdings
Trust ("Ogundiji") (collectively, the "Saline Parties"), on the other hand.
Commerce, Commonwealth, the Commonwealth Directors, Saline, Mrs. Saline and
Ogundiji shall collectively be referred to herein as "the Parties."

                                 R E C I T A L S

         THIS AGREEMENT is made with respect to the following facts:

         A.       For a period prior to the Effective Date, Saline was a
director of Commonwealth.

         B.       Saline claims to have owned shares of preferred stock of
Commonwealth, which he has since purported to convert to 704,000 common shares
of Commerce ("Saline Shares").

         C.       Ogundiji claims to have owned preferred shares of stock of
Commonwealth, which he has since purported to convert to 160,000 common shares
of

                                  Page 1 of 24
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Commerce ("Ogundiji Shares"). The Commerce Parties dispute the number of the
Ogundiji shares.

         D.       On August 16, 2001, Saline filed a Petition to Enforce
Corporate Director's Inspection Rights Under Corporations Code Section 1602 in
the Superior Court of the State of California, County of Orange, as Case No.
01CC10657, in which Saline sought inter alia an alleged unconditional right to
inspect and copy all documents and records of Commonwealth (the "Inspection
Action"). Thereafter, Commonwealth filed its Cross-Petition for Breach of
Contract, Breach of Fiduciary Duty, Violation of Penal Code Section 632, Libel,
Intentional Inducement to Breach of Contract, and Violation of Business &
Professions Code Section 17200, as amended, in the Inspection Action. By the
Cross-Petition, Commonwealth, and intervening cross-petitioners Ian Carter, Brad
Gates and Robert Perkins, sought damages against Saline for, inter alia, his
alleged illegal tape recording of board meetings and alleged libel of
Commonwealth in statements made in proxy solicitation materials (the "Inspection
Cross-Action").

         E.       On October 29, 2001, Saline commenced an action against
Commonwealth in the Superior Court of the State of California, County of Orange,
as Case No. 01CC13887. On November 5, 2001, Saline filed his First Amended
Complaint for Breach of Contract, Conversion, Declaratory Relief, Promissory
Estoppel, Unlawful Denial of Voting Rights Pursuant to Corporations Code Section
709, Illegal Stock Dividend in Violation of Corporations Code Section 25120 and
Violation of Business and Professions Code section 17200, et seq. (the "Shares
Action"). By the Shares Action, Saline sought inter alia recognition of the
alleged validity of the Saline Shares. On December 6, 2001, Commonwealth filed
its Cross-

                                  Page 2 of 24
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Complaint for Declaratory Relief in the Shares Action (the "Shares
Cross-Action"). The Shares Action, the Shares Cross-Action, the Inspection
Action and the Inspection Cross-Action were eventually consolidated by the
Court.

         F.       On February 14, 2003, Commonwealth filed its Complaint for
Declaratory Relief against Ogundiji in the Superior Court of the State of
California, County of Orange, as Case No. 03CC03409 (the "Declaratory Relief
Action"). The Declaratory Relief Action challenges the validity of the Ogundiji
Shares. Thereafter, Ogundiji filed a Cross-Complaint seeking inter alia damages
for claims similar to those alleged by Saline in the Shares Action (the
"Declaratory Relief Cross-Action").

         G.       On April 19, 2004, Saline and Ogundiji filed a complaint to
inter alia set an annual shareholder meeting and for the appointment of an
independent election inspector in the Superior Court of the State of California,
County of Orange, as Case No. 04CC05038 (the "Shareholder Meeting Action"). As
part of the Shareholder Meeting Action, Saline and Ogundiji objected to a
proposed reorganization of Commonwealth, claiming that inter alia a merger
between Commonwealth and CEGI Acquisition Corp. (the "Merger") constituted a
breach of Commonwealth's directors' fiduciary duties owed to Saline, Ogundiji
and other shareholders. The Shareholder Meeting Action names the Commerce
parties and various of their officers and/or directors as defendants ("Other
Director Defendants").

         H.       Saline has also filed a Complaint against Ian Carter
individually in the Superior Court of the State of California, County of Orange,
as Case No. 04CC09285 (the "Carter Action"). The Carter Action alleges that Ian
Carter wrongfully and tortiously acted to cause Commonwealth to declare the
Saline Shares invalid.

                                  Page 3 of 24
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         I.       The above-referenced lawsuits have spawned several appeals and
writ petitions, three of which appeals are currently pending, Appeal Case Nos.
G031829, G033177 and G033699 (the "Appeals").

         J.       Saline and Ogundiji have threatened to file various additional
actions against the Commerce Parties and their officers and directors, including
but not limited to: (1) a derivative action against Ian Carter, and/or the
Commerce Parties, and/or the Other Director Defendants, and/or other officers
and directors of the Commerce Parties, based upon actions taken by Ian Carter
prior to the Effective Date and/or for actions taken or to be taken by Robert
Perkins and/or other officers and directors, including the Other Director
Defendants, with respect to Ian Carter and his separation from Commonwealth
and/or Commerce, some of the basis of which are set forth in various letters
from counsel for Saline and Ogundiji to counsel for the Commerce Parties and/or
emails from Saline to the Commerce Parties and/or their officers and directors
(all collectively the "Threatened Derivative Actions"); and (2) a federal
securities lawsuit against the Commerce Parties and/or their officers and
directors, including the Other Director Defendants, with respect to, among other
things, statements made in proxy solicitation materials relating to the Merger,
a draft copy of which complaint was sent to counsel for the Commerce Parties by
counsel for Saline and Ogundiji on November 23, 2004 (the "Threatened Federal
Securities Action").

         K.       The Inspection Action, Inspection Cross-Action, Shares Action,
Shares Cross-Action, Shareholder Meeting Action, Declaratory Relief Action,
Declaratory Relief Cross-Action, Carter Action, the Appeals, the Threatened
Derivative Actions and the Threatened Federal Securities Action shall
collectively be referred to herein as the "Actions."

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         L.       The Parties desire to resolve the Actions and all appeals
therefrom, mutually release all past and present claims the Parties on each side
of the various disputes have or may have against any and all of the Parties on
the other side, and to enter into a complete, final and binding settlement.

                                A G R E E M E N T

         NOW, THEREFORE, in consideration of the foregoing Recitals and pursuant
to the covenants, terms and conditions hereinafter, the Parties agree as
follows:

         1.       Incorporation of Recitals.

                  The foregoing Recitals are incorporated herein by reference.

         2.       Effective Date.

                  This Agreement shall be deemed effective and binding on the
Parties when this Agreement has been fully executed by all Parties and delivered
by the Parties to counsel for each respective side (the "Effective Date"). As of
the Effective Date, the Parties shall be bound and obligated to perform all
duties imposed under this Agreement and shall be entitled to all benefits and
entitlements conferred under this Agreement.

         3.       Payment by Commonwealth / Confirmation of Share Ownership.

                  In full settlement of all claims made by, on behalf of, or
held but as yet unasserted by Saline, Mrs. Saline and Ogundiji, against any and
all of the Commerce Parties, the Parties agree to the following:

                  3.1      Commonwealth will pay to Saline One Million Two
Hundred Thousand Dollars ($1,200,000) (the "Settlement Sum") via wire transfer
to the Enterprise Counsel Group's client trust account payable within five (5)
days after the Effective Date.

                                  Page 5 of 24
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                  3.2      The Commerce Parties acknowledge and agree that
Saline is the owner of the Saline Shares (defined above), and that such shares
are valid. Saline shall surrender to Commerce within five days after the
Effective Date of this Agreement the share certificates he presently has in his
possession for 100,000 shares of Commonwealth preferred stock in his name and
252,000 shares of Commonwealth preferred stock in the name of The Robert M.
Bates Family Trust, Sylvia E. Bates, Trustee, duly endorsed, or pursuant to a
valid stock power or a properly executed lost securities bond for some or all of
such shares in the standard form used by Commerce, and Commerce shall thereafter
within five additional days provide to Saline a share certificate for 704,000
shares of Commerce common stock. In light of the fact that Saline was a director
of Commonwealth on the day of the special meeting relating to that certain
Agreement and Plan of Reorganization by and among Commerce, CEGI Acquisition
Corp. and Commonwealth and the related merger provided thereby (the
"Reorganization Merger"), the share certificate for the 704,000 shares of
Commerce common stock shall bear a legend indicating that sales of such common
stock are subject to Rule 145 under the Securities Act of 1933, as amended (the
"Securities Act"). A copy of the legend is attached to this Agreement as Exhibit
"1." Commerce warrants that this same legend is also placed and/or will be
placed on the Commerce common stock certificates of all other Commonwealth and
Commerce directors at the time of the Reorganization Merger. Saline and Mrs.
Saline acknowledge and agree that, except for the Saline Shares, Saline and Mrs.
Saline have no right, title or claim to any other shares of stock in Commerce or
Commonwealth as of the Effective Date.

                  3.3      Ogundiji shall surrender to Commerce within five days
after the Effective Date of this Agreement all of the share certificates he
presently has in his possession

                                  Page 6 of 24
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for Commonwealth preferred and/or common stock and/or Commerce common stock,
duly endorsed, or pursuant to a valid stock power, and/or Ogundiji shall provide
Commonwealth with a properly executed lost securities bond for such shares in
the standard form used by Commerce, and then in an additional five days Commerce
shall pay to Ogundiji the sum of Two Hundred Twenty-Two Thousand Four Hundred
Dollars ($222,400) via wire transfer to the Enterprise Counsel Group's client
trust account. Ogundiji acknowledges and agrees that, except for the Ogundiji
Shares, Ogundiji has no right, title or claim to any other shares of stock in
Commerce or Commonwealth as of the Effective Date.

                  3.4      Consistent with the bylaws, beginning with the annual
meeting following the end of the fiscal year ended July 31, 2005 ("2006
Meeting"), Saline shall have the right to choose to put his name before
Commerce's nomination committee to request candidacy to the Commerce Board. If
Saline does so, the Nominating Committee shall consider this request, but there
is no guarantee that Saline's name will be placed in nomination on the slate
determined by such Committee. Notwithstanding whatever action is taken by the
Nominating Committee, so long as Saline remains a shareholder of Commerce, the
Commerce Parties agree and acknowledge that Saline will have all rights in
compliance and consistent with the bylaws of Commerce to seek election to the
board of directors of Commerce commencing with the 2006 Meeting of the
shareholders of Commerce. Saline acknowledges and agrees that he is not and will
not be a candidate for the Commerce board of directors, nor has he sponsored nor
will he sponsor any proposals at the forthcoming January 2005 Commerce
shareholders meeting and election.

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         4.       Dismissals.

                  4.1      The parties shall cooperate to provide proper notice
to all courts of the execution of this Agreement as required by law.

                  4.2      Within three business days after the Effective Date
and as a condition precedent to payments of the Settlement Sum and the
confirmation of share ownership set forth in Paragraphs 3.1, 3.2 and 3.3 above,
Saline and Ogundiji and/or their counsel shall execute and deliver to
Commonwealth for filing with the Court dismissals, with prejudice, of the
Inspection Action, the Shares Action, the Shareholder Meeting Action, the Carter
Action, the Appeals in which they are Appellant, and the Declaratory Relief
Action in the form of the copies attached hereto collectively as Exhibit "2" to
this Agreement. Commonwealth is not authorized to file, and shall not file,
these dismissals with the respective courts until after confirmation of payment
by Commonwealth of the Settlement Sum to Saline per paragraph 3.1 above, and
payment by Commerce of the sum of $222,400 to Ogundiji per paragraph 3.3 above.

                  4.3      After the Effective Date and upon receipt of the
dismissals described in Paragraph 4.2, Commonwealth shall cause to be filed with
the Court dismissals, with prejudice, of the cross-petition in the Inspection
Action, the cross-complaint in the Shares Action, the Appeals in which they are
the Appellant, and the Declaratory Relief Action in the form of the copies
attached hereto collectively as Exhibit "3."

                  4.4      After the Effective Date and upon receipt of the
dismissals described in Paragraph 4.2, the Commonwealth Directors shall cause to
be filed with the Court dismissals, with prejudice, of the Inspection
Cross-Action and Ian Carter's appeal in the Shares Action in the form of the
copy attached hereto as Exhibit "4."

                                  Page 8 of 24
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         5.       Expiration of Options.

                  Saline, Mrs. Saline, and Ogundiji acknowledge and agree that
any and all claims to grants of options or grants of options to purchase stock
in Commerce or Commonwealth or any affiliate or successor of Commonwealth held
by Saline, Mrs. Saline or Ogundiji or claimed by Saline, Mrs. Saline or Ogundiji
to be owed to Saline, Mrs. Saline or Ogundiji have expired, and further
acknowledge and agree that Saline, Mrs. Saline and Ogundiji have no claim to
exercise any other options to purchase stock in Commerce or Commonwealth and
waive and forever relinquish any claim of right to exercise any such options
which may have existed prior to the Effective Date, whether such options were
issued or not.

         6.       Release of Claims by Saline

                  6.1      Saline, on behalf of himself and his agents, assigns
and attorneys, hereby fully and completely releases and forever discharges the
Commerce Parties and, where applicable, each of their respective present, former
and future divisions, parent entities, subsidiaries, affiliates, officers,
directors, partners, agents, employees, members, insurers, representatives,
lawyers and law firms, and all persons acting by, through, under or in concert
with them, or any of them (hereafter, "Commerce Releasees"), of and from any and
all manner of action or actions, causes or causes of action, in law or in
equity, and any suits, debts, liens, contracts, agreements, promises,
liabilities, claims, demands, damages, losses, costs and expenses, of any nature
whatsoever, known or unknown, fixed or contingent, individual or derivative,
from the beginning of time to the Effective Date that anyone has had or now has
against the Commerce Releasees, including, without limitation, any and all
claims asserted in, arising out of, based upon, or relating to any and all of
the Actions (hereinafter the "Claims"). Notwithstanding the above general
release, in the event that Saline is named a party

                                  Page 9 of 24
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defendant in any future action arising from or related to his service as a
director of Commonwealth, such general release shall not act to release any
claim Saline may have as an insured under any Commonwealth insurance policy to
seek indemnity and defense.

                  6.2      SALINE ACKNOWLEDGES THAT HE IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

                  "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
                  TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

SALINE, HAVING HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY, AND BEING AWARE
OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER,
AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT
WITH RESPECT TO THE CLAIMS RELEASED HEREIN.

                  6.3      Saline represents and warrants that other than Mrs.
Saline, he is the only person who has any interest in any of the Claims herein
released. Saline further represents and warrants that he has not assigned or
otherwise transferred any interest in any of the Claims which he may have
against the Commerce Releasees.

                                 Page 10 of 24
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                  6.4      Saline agrees that if he voluntarily joins in, or in
any manner affirmatively seeks relief through, any suit arising out of, based
upon, or relating to the Claims he released herein, or in any manner asserts
against the Commerce Parties any of the Claims he released hereunder, then
Saline will pay to the Commerce Parties, in addition to any other damages caused
to the Commerce Parties, all attorneys' fees and costs actually incurred by the
Commerce Parties in defending or otherwise responding to said suit or Claims.

                  6.5      Nothing in this Paragraph 6 may be construed as a
release by Saline of any of the rights, duties, obligations or entitlements
created by this Agreement.

         7.       Release of Claims by Mrs. Saline

                  7.1      Mrs. Saline, on behalf of herself and her agents,
assigns and attorneys, hereby fully and completely releases and forever
discharges the Commerce Releasees, as defined in paragraph 6.1 above, of and
from any and all Claims, also defined in paragraph 6.1 above, that Mrs. Saline
has had or now has against the Commerce Releasees, including, without
limitation, any and all Claims asserted in, arising out of, based upon, or
relating to the Actions.

                  7.2      MRS. SALINE ACKNOWLEDGES THAT SHE IS FAMILIAR WITH
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

                  "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
                  TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

                                 Page 11 of 24
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MRS. SALINE, HAVING HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY, AND BEING
AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS SHE MAY HAVE
THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF
SIMILAR EFFECT WITH RESPECT TO THE CLAIMS RELEASED HEREIN.

                  7.3      Mrs. Saline represents and warrants that other than
Saline, she is the only person who may have any interest in any of the matters
herein released. Mrs. Saline further represents and warrants that she has not
assigned or otherwise transferred any interest in any Claim which she may have
against the Commerce Releasees.

                  7.4      Mrs. Saline agrees that if she voluntarily joins in,
or in any manner affirmatively seeks relief through, any suit arising out of,
based upon, or relating to the Claims she released herein, or in any manner
asserts against the Commerce Parties any of the Claims she released hereunder,
then Mrs. Saline will pay to the Commerce Parties, in addition to any other
damages caused to the Commerce Parties, all attorneys' fees and costs actually
incurred by the Commerce Parties in defending or otherwise responding to said
suit or Claim.

                  7.5      Nothing in this Paragraph 7 may be construed as a
release by Mrs. Saline of any of the rights, duties, obligations or entitlements
created by this Agreement.

         8.       Release of Claims by Ogundiji

                  8.1      Ogundiji, on behalf of himself and his agents,
assigns and attorneys, hereby fully and completely releases and forever
discharges the Commerce

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Releasees, defined in paragraph 6.1 above, of and from any and all Claims,
defined in paragraph 6.1 above, that Ogundiji has had or now has against the
Commerce Releasees, including, without limitation, any and all Claims asserted
in, arising out of, based upon, or relating to the Actions.

                  8.2      OGUNDIJI ACKNOWLEDGES THAT HE IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

                  "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
                  TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

OGUNDIJI, HAVING HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY, AND BEING
AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE
THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF
SIMILAR EFFECT WITH RESPECT TO THE CLAIMS RELEASED HEREIN.

                  8.3      Ogundiji represents and warrants that he is the only
person who has any interest in any of the matters herein released. Ogundiji
further represents and warrants that he has not assigned or otherwise
transferred any interest in any Claim which he may have against the Commerce
Releasees.

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                  8.4      Ogundiji agrees that if he voluntarily joins in, or
in any manner affirmatively seeks relief through, any suit arising out of, based
upon, or relating to the Claims he released herein, or in any manner asserts
against the Commerce Parties any of the Claims he released hereunder, then
Ogundiji will pay to the Commerce Parties, in addition to any other damages
caused to the Commerce Parties, all attorneys' fees and costs actually incurred
by the Commerce Parties in defending or otherwise responding to said suit or
Claim.

                  8.5      Nothing in this Paragraph 8 may be construed as a
release by Ogundiji of any of the rights, duties, obligations or entitlements
created by this Agreement.

         9.       Release of Commerce Party Claims by the Commerce Parties

                  9.1      The Commerce Parties on behalf of themselves and all
of their respective present or former divisions, parent entities, subsidiaries,
affiliates, officers, directors, partners, employees, insurers, representatives,
lawyers, law firms, and all persons acting by, through or in concert with them,
hereby fully and completely release and forever discharge Saline, Mrs. Saline
and Ogundiji, their respective predecessors, partners, managers, employees,
agents, servants, attorneys, law firms, heirs, executors, representatives,
administrators, and insurers, individually and collectively (hereafter, "Saline
Releasees"), of and from any and all manner of action or actions, causes or
causes of action, in law or in equity, and any suits, debts, liens, contracts,
agreements, promises, liabilities, claims, demands, damages, losses, costs and
expenses, of any nature whatsoever, known or unknown, fixed or contingent, from
the beginning of time to the Effective Date that the Commerce Parties have had
or now have against the Saline Releasees, including, without limitation, any and
all claims arising out of, based upon, or relating to the Actions (hereinafter
the "Commerce Party Claims").

                                 Page 14 of 24
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                  9.2      THE COMMERCE PARTIES ACKNOWLEDGE THAT THEY ARE
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:

                  "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                  CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
                  TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

THE COMMERCE PARTIES, HAVING CONSULTED WITH THEIR ATTORNEYS, BEING AWARE OF SAID
CODE SECTION, HEREBY EXPRESSLY WAIVE ANY RIGHTS THEY MAY HAVE THEREUNDER, AS
WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT WITH
RESPECT TO THE CLAIMS RELEASED HEREIN.

                  9.3      The Commerce Parties represent and warrant that they
are the only entities which have any interest in any of the matters herein
released. The Commerce Parties further represent and warrant that they have not
assigned or otherwise transferred any interest in any Commerce Party Claim which
it may have against the Saline Releasees.

                  9.4      The Commerce Parties agree that if any or all of them
voluntarily join in, or in any manner affirmatively seek relief through, any
suit arising out of, based upon, or relating to the Claims they released herein,
or in any manner assert against the Saline Releasees any of the Claims the
Commerce Parties released hereunder, then the Commerce

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Party or Parties involved will pay to the Saline Releasee(s) involved, in
addition to any other damages caused to the Saline Releasee(s), all attorneys'
fees and costs actually incurred by the Saline Releasee(s) in defending or
otherwise responding to the portion of said suit concerning the released
Claim(s).

                  9.5      Nothing in this Paragraph 9 shall be construed as a
release by the Commerce Parties of any of the rights, duties, obligations or
entitlements created by this Agreement.

         10.      No Action Before Dispute Resolution

                  10.1     The Parties agree that for a period of two (2) years
from the Effective Date no civil action with respect to any dispute, claim or
controversy between any of the Saline Parties and any of the Commerce Parties
may be commenced until the matter has been discussed between Saline and Peter
Weigand (or a reasonably equivalent executive officer of Commerce or
Commonwealth if Peter Weigand is unavailable) and then if necessary submitted to
JAMS for mediation. Any party may commence mediation by providing to JAMS and
the other party(ies) involved a written request for mediation, setting forth the
subject of the dispute and the relief requested. The mediation will occur before
Hon. James L. Smith, if he is available. If Judge Smith is not available, then
the parties will cooperate with JAMS and with one another in selecting a
mediator from JAMS panel of neutrals, and in scheduling the mediation
proceedings. The parties covenant that they will participate in the mediation in
good faith, and that they will share equally in its costs. All offers, promises,
conduct and statements, whether oral or written, made in the course of the
mediation by any of the parties, their agents, employees, experts and attorneys,
and by the mediator and any JAMS employees, are confidential, privileged and
inadmissible for any purpose, including impeachment, in any litigation or other
proceeding involving the parties, provided that evidence that is otherwise

                                 Page 16 of 24
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admissible or discoverable shall not be rendered inadmissible or
non-discoverable as a result of its use in the mediation. Either party may seek
equitable or injunctive relief prior to the mediation to preserve the status quo
pending the completion of that process. Except for such an action to obtain
equitable or injunctive relief, neither party may commence a civil action with
respect to the matters submitted to mediation until after the completion of the
initial mediation session, or 45 days after the date of filing the written
request for mediation, whichever occurs first. Mediation may continue after the
commencement of a civil action, if the parties so desire. The provisions of this
Clause may be enforced by any Court of competent jurisdiction, and the party
seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys' fees, to be paid by the party against whom
enforcement is ordered.

                  10.2     The Saline Parties agree that for a period of two (2)
years from the Effective Date they shall not take any steps to contact by
telephone, in writing, or otherwise, other shareholders or holders of stock in
Commerce or Commonwealth, or any of their affiliates or successors, for any
reason related to bringing a proxy contest without first complying with the
mediation procedure provided in paragraph 10.1 above.

         11.      Confidentiality.

                  11.1     The parties agree that Commerce shall issue a press
release in the form and substance of the one attached hereto as Exhibit "5"
("Press Release"), and that Commerce shall further file a Form 8-K and/or 10-Q
or other applicable regulatory forms disclosing the terms of and/or attaching
this Agreement. Otherwise, as a material term and condition of this Agreement,
the Parties agree that the settlement negotiations following the commencing of
the Actions, including without limitation, those prior to, during and outside
mediation and formal settlement proceedings; and all confidential financial,
proprietary and/or trade secret information of Commerce or Commonwealth other
than as may have been

                                 Page 17 of 24
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contained in publicly disseminated documents (the "Confidential Information")
will remain confidential and may only be disclosed to the Parties and their
counsel, except as provided herein. In addition, the Parties further agree not
to comment on the subject matter of the Actions to anyone except the Parties and
their respective counsel, and the Saline Parties agree that (1) originals or
copies of documents received by any of the Saline Parties in the course of
discovery in the Actions; and (2) originals or copies of any confidential
documents obtained by Saline by virtue of his prior position as a director of
Commonwealth (collectively, "Discovery Documents") shall be maintained in
confidence by the Saline Parties, and the Saline Parties shall not share any
Discovery Documents with any third parties or allow any third parties to have
access to, review or copy any of the Discovery Documents, for a period of two
(2) years after the Effective Date. Neither the Parties nor their counsel will
disclose the Confidential Information to, or discuss the subject matter of the
Actions during the two (2) year period with, third parties (excluding counsel),
and the Saline Parties agree not to disclose the Discovery Documents during the
two (2) year period, except with regard to the Press Release and Form 8-K and/or
10-Q or other applicable regulatory forms referenced above, and also except:

                           11.1.1           As may be required to enforce or
                                    interpret the terms of this Agreement;

                           11.1.2           As may be required for reporting to
                                    governmental taxing authorities or in public
                                    filings or applications with any other
                                    governmental body (including Saline and Mrs.
                                    Saline's present family law action) or
                                    agency or by lawful order of any federal or
                                    state court or agency; or

                                 Page 18 of 24
<PAGE>

                           11.1.3           As may be required to accomplish
                                    certain limited and specific business
                                    purposes of the Parties in the form of
                                    communications to their respective
                                    accountants, attorneys, bankers or insurers;
                                    or

                           11.1.4           As may be disclosed to the Parties'
                                    immediate family members who shall be bound
                                    by the provisions of this Confidentiality
                                    Clause.

When one of the exceptions set forth in paragraphs 11.1.1 to 11.1.4 applies, the
disclosing party shall only disclose such information as is requested and/or
necessary given the circumstances of the exception. The parties further agree
that if any of the Confidential Information is requested by way of subpoena or
discovery requests in any litigation or arbitration proceeding, the party
responding to such subpoena, request, or process shall immediately notify the
other affected party(ies) to this Agreement so that they may interpose an
objection or motion to quash/limit the discovery request. In the case of a
subpoena, the subpoenaed party shall not produce any Confidential Information
until at least ten (10) days after notification to the other party hereto of the
request for Confidential Information. In the case of a document request or other
discovery requests to a party hereto to produce or disclose Confidential
Information, the Parties agree to give notice to the other party of the request
and to permit the other party to seek an appropriate court order quashing or
limiting the production of such Confidential Information.

                  11.2     In response to questions from third parties (other
than the parties' accountants, attorneys, and insurers), including, without
limitation, the media or Commerce shareholders, about the subject matter of the
Actions during the two (2)-year period

                                 Page 19 of 24
<PAGE>

of paragraph 11.1 or the Confidential Information the Parties agree to limit
their communications to the language of the Press Release, Form 8-K and/or 10-Q
referenced above.

                  11.3     The Commerce Parties may make an unopposed
application to the Court to seal the Court's file with respect to the Actions.

         12.      No Admission.

                  This Agreement affects the settlement of claims that are
contested and denied. Nothing herein shall be construed as an admission by any
party of any liability of any kind to the other party or parties except as
created or referred to herein.

         13.      Entire Agreement / Modification.

                  This Agreement constitutes the entire and exclusive agreement
between the Saline Parties and the Commerce Parties with respect to the Actions
and supersedes and cancels all previous oral or written settlement
communications, proposals, agreements, and commitments. No modifications to this
Agreement, nor any waiver of any rights, will be effective unless assented to in
writing by the party to be charged and the waiver of any breach or default will
not constitute a waiver of any other right hereunder or any subsequent breach or
default. A party's delay in enforcing its rights hereunder will not be construed
as a waiver of such rights or remedies.

         14.      Severability.

                  If any provision of this Agreement as applied to any party or
to any circumstance shall be adjudged by a court to be void and unenforceable,
the same will in no way affect any other provision in this Agreement, the
application of such provision in any

                                 Page 20 of 24
<PAGE>

other circumstances or the validity or enforceability of the Agreement as a
whole. Notwithstanding the foregoing, if any of the following provisions is
adjudged by a court of competent jurisdiction to be unlawful, void or
unenforceable: (1) Commonwealth's payment to Saline of $1,200,000; or (2) the
Commerce Parties' recognition of the validity of the Saline Shares; or (3) the
payment to Ogundiji set forth in paragraph 3.3; then this entire agreement shall
be void and unenforceable and the statute of limitations shall be deemed tolled
for all claims released herein sufficient to place the Parties in their same
respective positions as of the Effective Date.

         15.      Binding on Successors.

                  This Agreement and the covenants and conditions contained
herein apply to and are binding upon, and inure to the benefit of
administrators, executors, legal representatives, assignees, successors, agents,
and assigns of the Parties.

         16.      Construction of Agreement / Joint Preparation.

                  Saline, Mrs. Saline, Ogundiji, Commerce, Commonwealth and the
Commonwealth Directors agree that this Agreement was jointly prepared and that
no presumption in favor of or against Saline, Mrs. Saline, Ogundiji, Commerce,
Commonwealth or the Commonwealth Directors will exist with respect to the
interpretation hereof.

         17.      Governing Law.

                  This Agreement is to be interpreted, enforced, and governed by
and under the laws of the State of California. The Parties agree that this
Agreement was made in Orange County, California, and that they will submit to
the jurisdiction of the California courts in and for the County of Orange for
any dispute concerning this Agreement.

                                 Page 21 of 24
<PAGE>

         18.      Attorneys' Fees.

                  Should any legal action be initiated to enforce or interpret
any part of this Agreement, the "prevailing party" will be awarded its
attorneys' fees actually incurred and costs actually incurred as an item of
costs against the non-prevailing party(ies) involved. The "prevailing party"
will be the party entitled to recover its costs of suit, regardless of whether
such suit proceeds to final judgment.

         19.      Further Documents / Acts.

                  The Parties will execute and deliver all documents and perform
all further acts that may be reasonably necessary to effectuate the provisions
of this Agreement.

         20.      Advice of Counsel.

                  All Parties acknowledge that they have been advised of their
right to seek the advice of counsel relative to the contents of this Agreement,
and acknowledge that they consulted with and have been represented by counsel in
the negotiations leading up to and in the execution of this Agreement.

         21.      Agreement Enforceable By Trial Court In The

                  Inspection Action. The Parties agree that this Agreement will
be enforceable by the trial court in the Inspection Action as provided by Code
of Civil Procedure Section 664.6.
                                            /s/ JOSEPH SALINE
                                         ______________________________________
                                               JOSEPH SALINE

                                            /s/ PATRICIA E. SALINE
                                         ______________________________________
                                               PATRICIA E. SALINE

                                 Page 22 of 24
<PAGE>

                                             /s/ JOSEPH OGUNDIJI
                                         ______________________________________
                                               JOSEPH OGUNDIJI, individually
                                               and as Trustee of the Ogundiji
                                               Family Holdings Trust

                                            COMMERCE ENERGY GROUP, INC.

                                         BY: /s/ PETER WEIGAND
                                         __________________________________
                                               PETER WEIGAND
                                         ITS:  President

                       [signatures continued on next page]

                                         COMMONWEALTH ENERGY CORPORATION

                                             /s/ PETER WEIGAND
                                         ______________________________________
                                               PETER WEIGAND
                                         ITS:  President

                                             /s/ IAN B. CARTER
                                         ______________________________________
                                               IAN B. CARTER

                                             /s/ ROBERT C. PERKINS
                                         ______________________________________
                                               ROBERT C. PERKINS

                                             /s/ BRAD GATES
                                         ______________________________________
                                               BRAD GATES

                       [signatures continued on next page]

                                 Page 23 of 24
<PAGE>

APPROVED AS TO FORM:

ENTERPRISE COUNSEL GROUP

BY: /s/ DAVID A. ROBINSON
_____________________________________
      DAVID A. ROBINSON
      Attorneys for JOSEPH SALINE
      and JOSEPH OGUNDIJI

    /s/ KENNETH J. BERKE
_____________________________________
      KENNETH J. BERKE
      Attorney for PATRICIA E. SALINE

RUS, MILIBAND & SMITH,
A Professional Corporation

BY: /s/ RONALD RUS
_____________________________________
      RONALD RUS
      Attorneys for COMMERCE
      ENERGY GROUP, INC. and
      COMMONWEALTH ENERGY
      CORPORATION

PAUL HASTINGS JANOFSKY & WALKER

BY: /s/ PETER STONE
_____________________________________
      PETER STONE
      Attorneys for COMMERCE
      ENERGY GROUP, INC., and
      COMMONWEALTH ENERGY
      CORPORATION, IAN CARTER,
      ROBERT C. PERKINS and BRAD
      GATES

                                 Page 24 of 24
<PAGE>

                                 EXHIBIT "1" TO

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

THE SECURITIES REPRESENTED HEREBY WERE ISSUED IN A TRANSACTION TO WHICH RULE 145
UNDER THE SECURITIES ACT OF 1933 APPLIES. THESE SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SUCH RULE 145.

<PAGE>

                                 EXHIBIT "2" TO

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.:         FOR COURT USE ONLY

DAVID A. ROBINSON, Bar # 107613                                                 (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline, etc.

DEFENDANT/RESPONDENT: Commonwealth Energy Corporation, etc.,

AND RELATED CONSOLIDATED ACTION
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  01CC10657 c/w 01CC13887
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Petition to Enforce Corporate Code Section 1602
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: JOSEPH P. SALINE

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     X Cross-Respondent and Cross-
  complaints to be dismissed.                                                                         Defendant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:                                                                     See attached for signature of counsel for
                                                                          Respondent, Cross-Petitioners, Defendant and
                                                                          Cross-Complainants
                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [ ] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [ ] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                        Plus Logo]     Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>

                             Joseph P. Saline, etc.
                                       v.
                     Commonwealth Energy Corporation, etc.,
                            and Consolidated Action

                            OCSC Case No. 01CC10657
                          consolidated with 01CC13887

================================================================================

                      ATTACHMENT TO REQUEST FOR DISMISSAL

2.   TO THE CLERK: Consent to the above dismissal is hereby given.

Date:     December __, 2004            RUS, MILIBAND & SMITH,
                                       A Professional Corporation

                                       BY:
                                          --------------------------------------
                                             RONALD RUS
                                             Attorneys for Respondent,
                                             Cross-Petitioner, Defendant and
                                             Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION

                                       In Association With:

Date:     December __, 2004            PAUL, HASTINGS, JANOFSKY & WALKER

                                       BY:
                                          -------------------------------------
                                             PETER STONE
                                             Attorneys for Respondent,
                                             Cross-Petitioners, Defendant and
                                             Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION, IAN CARTER, BRAD
                                             GATES and ROBERT PERKINS
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.          FOR COURT USE ONLY

DAVID A. ROBINSON, Bar No. 107613                                               (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline, etc.

DEFENDANT/RESPONDENT: Ian Carter, etc., et al.

AND RELATED CONSOLIDATED ACTION
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  01CC13887 c/w 01CC10657
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Breach of Contract, et al.
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please dismiss this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (2) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Joseph P. Saline

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     X Cross-Respondent and Cross-
  complaints to be dismissed.                                                                         Defendant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:                                                                     See attached for signature of counsel for
                                                                          Respondent, Cross-Petitioners, Defendants and
                                                                          Cross-Complainants
                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [X] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [X] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL   Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                          Plus         Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>
                             Joseph P. Saline, etc.

                                       v.

                              Ian Carter, et al.,
                            and Consolidated Action

                            OCSC Case No. 01CC13887
                          consolidated with 01CC10657

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

                      ATTACHMENT TO REQUEST FOR DISMISSAL

2.  TO THE CLERK: Consent to the above dismissal is hereby given.

Date: December __, 2004                 RUS, MILBAND & SMITH,
                                        A Professional Corporation

                                        In Association With:
                                        PAUL HASTINGS JANOFSKY & WALKER

                                        BY:_____________________________________
                                             RONALD RUS
                                             Attorneys for Respondent,
                                             Cross-Petitioner, Defendant and
                                             Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION

732/213769vl tl 12/14/04 2 (2465-0008)
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.:         FOR COURT USE ONLY

PETER M. STONE, Bar No. 157994                                                   (714) 668-6200
PAUL HASTINGS JANOFSKY & WALKER LLP
695 Town Center Drive
Seventeenth Floor
Costa Mesa, CA 92626-1924

ATTORNEY FOR (Name): Commonwealth Energy Corporation
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: COMMONWEALTH ENERGY CORPORATION

DEFENDANT/RESPONDENT: JOSEPH OGUNDIJI, etc.

-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  03CC03409
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Declaratory Relief
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   PAUL HASTINGS JANOFSKY & WALKER LLP

PETER M. STONE                                                            ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Commonwealth
                                                                                                            Energy Corporation

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [X] Cross-Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant
  complaints to be dismissed.
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date: December __, 2004

                                                                          ENTERPRISE COUNSEL GROUP ALC
DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for: Joseph Ogundiji
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [X] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [X] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                          Plus         Cal. Rules of Court,
[Rev. January 1, 1997]                         Logo]             rules 383, 1233
  Mandatory Form
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.:         FOR COURT USE ONLY

DAVID A. ROBINSON, Bar No. 107613                                               (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92612

ATTORNEY FOR (Name):   Plaintiffs
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: JOSEPH P. SALINE, et al.

DEFENDANT/RESPONDENT: ROBERT PERKINS, et al.
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  04CC05038
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Breach of Contract, et al.
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Joseph P. Saline
                                                                           and Joseph Ogundiji
* If dismissal requested is of specified parties only, of specified
  causes of action only, or of specified cross-complaints only, so        [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  state and identify the parties, causes of action, or cross-
  complaints to be dismissed.                                             [ ] Cross-complainant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:

                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [ ] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [ ] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                        Plus Logo]     Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.:         FOR COURT USE ONLY

DAVID A. ROBINSON, Bar No. 107613                                               (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline

DEFENDANT/RESPONDENT: Ian Carter, et al.

-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  04CC09285
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Conversion, etc.
-------------------------------------------------------------------------------------------------------------------------------

     -- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
-------------------------------------------------------------------------------------------------------------------------------
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Joseph P. Saline

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant
  complaints to be dismissed.
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:

                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [ ] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [ ] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                        Plus Logo]     Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>
CASE NO. G031829

OC Superior Court Case No. 01CC10657

                     COURT OF APPEAL - STATE OF CALIFORNIA

                           FOURTH APPELLATE DISTRICT

                                 DIVISION THREE

                               JOSEPH P. SALINE,

                            Plaintiff and Appellant,

                                       v.

                        COMMONWEALTH ENERGY CORPORATION,

                           Defendant and Respondent,

                                      and

                   IAN CARTER, ROBERT PERKINS and BRAD GATES,

                          Intervenors and Respondents.

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

                  Appeal from Superior Court, County of Orange
                        The Honorable William M. Monroe
-------------------------------------------------------------------------------
                      STIPULATION FOR DISMISSAL OF APPEAL
-------------------------------------------------------------------------------

                                        PETER M. STONE, ESQ., Bar No. 157994
                                        PAUL HASTINGS JANOFSKY & WALKER, LLP
                                        695 Town Center Drive
                                        Seventeenth Floor
                                        Costa Mesa, CA 92626-1924
                                        Telephone: (714) 668-6200
                                        Facsimile: (714) 979-1921

                                        Attorneys for Defendant and Respondent
                                        COMMONWEALTH ENERGY CORPORATION
<PAGE>
     The parties hereto, by and through their respective counsel, hereby
stipulate as follows:

     1.   Pursuant to Rule 20(c) of the California Rules of Court, the parties
hereby stipulate that the above-referenced Appeal shall be and hereby is
voluntarily dismissed. The parties request that the Court immediately issue its
Remittitur.

     2.   All parties shall bear their own fees and costs on Appeal.

DATED:   December __, 2004              PAUL HASTINGS JANOFSKY & WALKER, LLP

                                        BY:
                                            ------------------------------------
                                            PETER M. STONE
                                            Attorneys for Defendant and
                                            Respondent
                                            COMMONWEALTH ENERGY
                                            CORPORATION and Intervenors and
                                            Respondents IAN CARTER, ROBERT
                                            PERKINS and BRAD GATES

DATED:   December __, 2004              ENTERPRISE COUNSEL GROUP, ALC

                                        BY:
                                            ------------------------------------
                                            DAVID A. ROBINSON
                                            Attorneys for Plaintiff and
                                            Appellant
                                            JOSEPH P. SALINE

<PAGE>
CASE NO. G033699

OC Superior Court Case No. 01CC10657

                     COURT OF APPEAL - STATE OF CALIFORNIA

                           FOURTH APPELLATE DISTRICT

                                 DIVISION THREE

                               JOSEPH P. SALINE,

                            Plaintiff and Appellant,

                                       v.

                  COMMONWEALTH ENERGY CORPORATION, IAN CARTER,
                         ROBERT PERKINS and BRAD GATES,

                          Defendants and Respondents.

________________________________________________________________________________

                Appeal from the Superior Court, County of Orange
                        The Honorable William M. Monroe

________________________________________________________________________________

                      STIPULATION FOR DISMISSAL OF APPEAL

________________________________________________________________________________

                                            PETER M. STONE, ESQ., Bar No. 157994
                                            PAUL HASTINGS JANOFSKY & WALKER, LLP
                                            695 Town Center Drive
                                            Seventeenth Floor
                                            Costa Mesa, CA 92626-1924
                                            Telephone: (714) 668-6200
                                            Facsimile: (714) 979-1921

                                            Attorneys for Defendants and
                                            Respondents
                                            COMMONWEALTH ENERGY CORPORATION and
                                            IAN B. CARTER

<PAGE>
     The parties hereto, by and through their respective counsel, hereby
stipulate as follows:

     1.   Pursuant to Rule 20(c) of the California Rules of Court, the parties
hereby stipulate that the above-referenced Appeal shall be and hereby is
voluntarily dismissed. The parties request that the Court immediately issue its
Remittitur.

     2.   All parties shall bear their own fees and costs on Appeal.

DATED:    December __, 2004        PAUL HASTINGS JANOFSKY & WALKER, LLP

                             BY:
                                  -------------------------------------
                                       PETER M. STONE
                                       Attorneys for Defendants and Respondents
                                       COMMONWEALTH ENERGY
                                       CORPORATION, IAN CARTER, ROBERT
                                       PERKINS and BRAD GATES

DATED:  December __, 2004    ENTERPRISE COUNSEL GROUP, ALC

                             BY:
                                  -------------------------------------
                                       DAVID A. ROBINSON
                                       Attorneys for Plaintiff and Appellant
                                       JOSEPH P. SALINE

<PAGE>

                                 EXHIBIT "3" TO

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.          FOR COURT USE ONLY

DAVID A. ROBINSON, Bar No. 107613                                               (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline, etc.

DEFENDANT/RESPONDENT: Commonwealth Energy Corporation, etc.,

AND RELATED CONSOLIDATED ACTION
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  01CC10657 c/w 01CC13887
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Petition to Enforce Corporate Code Section 1602
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (2) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Joseph P. Saline

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     X Cross-Respondent and Cross-
  complaints to be dismissed.                                                                         Defendant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:                                                                     See attached for signature of counsel for
                                                                          Respondent, Cross-Petitioners, Defendant and
                                                                          Cross-Complainants
                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [ ] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [ ] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL   Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                          Plus         Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>
                             Joseph P. Saline, etc.
                                       v.
                     Commonwealth Energy Corporation, etc.,
                            and Consolidated Action

                            OCSC Case No. 01CC10657
                          consolidated with 01CC13887

================================================================================

                      ATTACHMENT TO REQUEST FOR DISMISSAL

2.  TO THE CLERK: Consent to the above dismissal is hereby given.

Date: December __, 2004                 RUS, MILIBAND & SMITH,
                                        A Professional Corporation

                                        BY:
                                           -----------------------------
                                             RONALD RUS
                                             Attorneys for Respondent,
                                             Cross-Petitioner, Defendant
                                             and Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION

                                        In Association With:

Date: December __, 2004                 PAUL, HASTINGS, JANOFSKY & WALKER

                                        BY:
                                           ------------------------------
                                             PETER STONE
                                             Attorneys for Respondent,
                                             Cross-Petitioners, Defendant and
                                             Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION, IAN CARTER, BRAD
                                             GATES and ROBERT PERKINS

732/213768v1 tl 12/14/04 1 (2465-0008)
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.          FOR COURT USE ONLY

DAVID A. ROBINSON, Bar No. 107613                                               (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline, etc.

DEFENDANT/RESPONDENT: Ian Carter, etc., et al.

AND RELATED CONSOLIDATED ACTION
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  01CC13887 c/w 01CC10657
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Breach of Contract, et al.
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Joseph P. Saline

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     X Cross-Respondent and Cross-
  complaints to be dismissed.                                                                         Defendant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:                                                                     See attached for signature of counsel for
                                                                          Respondent, Cross-Petitioners, Defendants and
                                                                          Cross-Complainants
                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [X] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [X] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                          Plus         Cal. Rules of Court,
[Rev. January 1, 1997]                         Logo]             rules 383, 1233
  Mandatory Form
<PAGE>
                             Joseph P. Saline, etc.
                                       v.
                           Ian Carter, etc., et al.,
                            and Consolidated Action

                            OCSC Case No. 01CC13887
                          consolidated with 01CC10657

================================================================================

                      ATTACHMENT TO REQUEST FOR DISMISSAL

2.  TO THE CLERK: Consent to the above dismissal is hereby given.

Date: December __, 2004                 RUS, MILIBAND & SMITH,
                                        A Professional Corporation

                                        In Association With:
                                        PAUL HASTINGS JANOFSKY & WALKER

                                        BY:
                                           -----------------------------
                                             RONALD RUS
                                             Attorneys for Respondent,
                                             Cross-Petitioner, Defendant
                                             and Cross-Complainant
                                             COMMONWEALTH ENERGY
                                             CORPORATION

732/213769v1 tl 12/14/04 2 (2465-0008)
<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO.:         FOR COURT USE ONLY

PETER M. STONE, Bar No. 157994                                                   (714) 668-6200
PAUL HASTINGS JANOFSKY & WALKER LLP
695 Town Center Drive
Seventeenth Floor
Costa Mesa, CA 92626-1924

ATTORNEY FOR (Name):   Commonwealth Energy Corporation
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: COMMONWEALTH ENERGY CORPORATION

DEFENDANT/RESPONDENT: JOSEPH OGUNDIJI, etc.

-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                  03CC03409
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Declaratory Relief
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   PAUL HASTINGS JANOFSKY & WALKER LLP

PETER M. STONE                                                            ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: Commonwealth
                                                                          Energy Corporation
* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     [X] Cross-Defendant/
  complaints to be dismissed.                                                                           Respondent
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for: Joseph Ogundiji
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [X] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [X] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL  [Legal    Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                          Plus         Cal. Rules of Court,
[Rev. January 1, 1997]                         Logo]             rules 383, 1233
  Mandatory Form
<PAGE>
CASE NO. G033177

OC Superior Court Case No. 01CC13887

                     COURT OF APPEAL - STATE OF CALIFORNIA

                           FOURTH APPELLATE DISTRICT

                                 DIVISION THREE

                               JOSEPH P. SALINE,

                           Plaintiff and Respondents,

                                       v.

                        COMMONWEALTH ENERGY CORPORATION
                                and IAN CARTER,

                           Defendants and Appellants.

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

                  Appeal from Superior Court of Orange County
                         The Honorable James M. Brooks

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

                      STIPULATION FOR DISMISSAL OF APPEAL

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

                                        PETER M. STONE, ESQ., Bar No. 1574994
                                        PAUL HASTINGS JANOFSKY & WALKER, LLP
                                        695 Town Center Drive
                                        Seventeenth Floor
                                        Costa Mesa, CA 92626-1924
                                        Telephone:     (714) 668-6200
                                        Facsimile:     (714) 979-1921

                                        Attorneys for Defendants and Appellants
                                        COMMONWEALTH ENERGY CORPORATION
                                        and IAN B. CARTER

<PAGE>
     The parties hereto, by and through their respective counsel, hereby
stipulate as follows:

     1.   Pursuant to Rule 20(c) of the California Rules of Court, the parties
hereby stipulate that the above-referenced Appeal shall be and hereby is
voluntarily dismissed. The parties request that the Court immediately issue its
Remittitur.

     2.   All parties shall bear their own fees and costs on Appeal.

DATED:    December __, 2004             PAUL HASTINGS JANOFSKY & WALKER, LLP

                                        BY:
                                           -------------------------------------
                                              PETER M. STONE
                                              Attorneys for Defendants and
                                              Appellants
                                              COMMONWEALTH ENERGY
                                              CORPORATION and IAN B. CARTER

DATED:    December __, 2004             ENTERPRISE COUNSEL GROUP, ALC

                                        BY:
                                           ------------------------------------
                                              DAVID A. ROBINSON
                                              Attorneys for Plaintiff and
                                              Respondent
                                              JOSEPH P. SALINE

<PAGE>

                                 EXHIBIT "4" TO

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

<PAGE>
<Table>
<S>                                                                             <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------------
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name and Address):                           TELEPHONE NO:          FOR COURT USE ONLY

DAVID A. ROBINSON, Bar # 107613                                                  (949) 833-8550
ENTERPRISE COUNSEL GROUP, ALC
5 Park Plaza
Suite 450
Irvine, CA 92614

ATTORNEY FOR (Name):   Plaintiff
----------------------------------------------------------------------------
Insert name of court and name of judicial district and branch court, if any:

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
----------------------------------------------------------------------------
PLAINTIFF/PETITIONER: Joseph P. Saline, etc.

DEFENDANT/RESPONDENT: Commonwealth Energy Corporation, etc.,

AND RELATED CONSOLIDATED ACTION
-------------------------------------------------------------------------------------------------------------------------------
                           REQUEST FOR DISMISSAL                                                        CASE NUMBER:

[ ] PERSONAL INJURY, PROPERTY DAMAGE, OR WRONGFUL DEATH                                                 01CC10657 c/w 01CC13887
    [ ] MOTOR VEHICLE          [ ] OTHER
[ ] FAMILY LAW
[ ] EMINENT DOMAIN
[X] OTHER (SPECIFY): Petition to Enforce Corporate Code Section 1602
-------------------------------------------------------------------------------------------------------------------------------

-- A CONFORMED COPY WILL NOT BE RETURNED BY THE CLERK UNLESS A METHOD OF RETURN IS PROVIDED WITH THE DOCUMENT. --
</Table>

1. TO THE CLERK: Please DISMISS this action as follows:

a. (1) [X] With prejudice      (2) [ ] Without prejudice

b. (1) [ ] Complaint           (2) [ ] Petition
   (3) [ ] Cross-complaint filed by (name):                           on (date):
   (4) [ ] Cross-complaint filed by (name):                           on (date):
   (5) [X] Entire action of all parties and all causes of action
   (6) [ ] Other (specify):*

<Table>
<S>                                                                      <C>
Date: December __, 2004                                                   ENTERPRISE COUNSEL GROUP, ALC

DAVID A. ROBINSON                                                         ->
-------------------------------------------------------------------       -------------------------------------------------------
                                                                                             (SIGNATURE)
(TYPE OR PRINT NAME OF [X] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)          Attorney or party without attorney for: JOSEPH P. SALINE

* If dismissal requested is of specified parties only, of specified       [X] Plaintiff/Petitioner  [ ] Defendant/Respondent
  causes of action only, or of specified cross-complaints only, so
  state and identify the parties, causes of action, or cross-             [ ] Cross-complainant     X Cross-Respondent and Cross-
  complaints to be dismissed.                                                                         Defendant
=================================================================================================================================
2. TO THE CLERK: Consent to the above dismissal is hereby given.**

Date:                                                                     See attached for signature of counsel for
                                                                          Respondent, Cross-Petitioners, Defendant and
                                                                          Cross-Complainants
                                                                          ->
-------------------------------------------------------------------       -------------------------------------------------------
(TYPE OR PRINT NAME OF [ ] ATTORNEY  [ ] PARTY WITHOUT ATTORNEY)                               (SIGNATURE)

                                                                          Attorney or party without attorney for:
** If a cross-complaint - or Response (Family Law) seeking
   affirmative relief - is on file, the attorney for cross-
   complainant (respondent) must sign this consent if required by         [ ] Plaintiff/Petitioner  [ ] Defendant/Respondent
   Code of Civil Procedure section 581(i) or (j).                         [ ] Cross-complainant
=================================================================================================================================
</Table>

(To be completed by clerk)
3. [ ] Dismissal entered as requested on (date):
4. [ ] Dismissal entered on (date):                           as to only (name):
5. [ ] Dismissal NOT ENTERED as requested for the following reasons (specify):

6. [ ] a. Attorney or party without attorney notified on (date):
       b. Attorney or party without attorney not notified. Filing party failed
          to provide
          [ ] a copy to conform      [ ] means to return conformed copy

Date:                              Clerk, by                            , Deputy
                                             ---------------------------

--------------------------------------------------------------------------------
Form Adopted by the    REQUEST FOR DISMISSAL   [Legal   Code of Civil Procedure,
Judicial Council of                          Solutions       Section 581 et seq.
 California 982(a)(5)                        Plus LOGO]     Cal. Rules of Court,
[Rev. January 1, 1997]                                           rules 383, 1233
  Mandatory Form
<PAGE>

                             Joseph P. Saline, etc.
                                       v.
                     Commonwealth Energy Corporation, etc.,
                            and Consolidated Action

                            OCSC Case No. 01CC10657
                          consolidated with 01CC13887

================================================================================

                      ATTACHMENT TO REQUEST FOR DISMISSAL

2.   TO THE CLERK: Consent to the above dismissal is hereby given.

Date: December __, 2004                 RUS, MILIBAND & SMITH,
                                        A Professional Corporation

                                        BY:
                                            ------------------------------------
                                             RONALD RUS
                                             Attorneys for Respondent, Cross-
                                             Petitioner, Defendant and Cross-
                                             Complainant
                                             COMMONWEALTH ENERGY CORPORATION

                                        In Association With:

Date: December __, 2004                 PAUL, HASTINGS, JANOFSKY & WALKER

                                        BY:
                                            ------------------------------------
                                             PETER STONE
                                             Attorneys for Respondent, Cross-
                                             Petitioners, Defendant and Cross-
                                             Complainant
                                             COMMONWEALTH ENERGY CORPORATION,
                                             IAN CARTER, BRAD GATES and ROBERT
                                             PERKINS
<PAGE>
CASE NO. G033177

OC Superior Court Case No. 01CC13887

                     COURT OF APPEAL - STATE OF CALIFORNIA

                           FOURTH APPELLATE DISTRICT

                                 DIVISION THREE

                               JOSEPH P. SALINE,

                           Plaintiff and Respondents,

                                       v.

                        COMMONWEALTH ENERGY CORPORATION
                                and IAN CARTER,

                           Defendants and Appellants.

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

                  Appeal from Superior Court of Orange County
                         The Honorable James M. Brooks

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

                      STIPULATION FOR DISMISSAL OF APPEAL

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

                                        PETER M. STONE, ESQ., Bar No. 1574994
                                        PAUL HASTINGS JANOFSKY & WALKER, LLP
                                        695 Town Center Drive
                                        Seventeenth Floor
                                        Costa Mesa, CA 92626-1924
                                        Telephone:  (714) 668-6200
                                        Facsimile:  (714) 979-1921

                                        Attorneys for Defendants and Appellants
                                        COMMONWEALTH ENERGY CORPORATION
                                        and IAN B. CARTER
<PAGE>
     The parties hereto, by and through their respective counsel, hereby
stipulate as follows:

     1.   Pursuant to Rule 20(c) of the California Rules of Court, the parties
hereby stipulate that the above-referenced Appeal shall be and hereby is
voluntarily dismissed. The parties request that the Court immediately issue its
Remittitur.

     2.   All parties shall bear their own fees and costs on Appeal.

DATED:    December __, 2004        PAUL HASTINGS JANOFSKY & WALKER, LLP

                             BY:
                                  -------------------------------------
                                       PETER M. STONE
                                       Attorneys for Defendants and Appellants
                                       COMMONWEALTH ENERGY
                                       CORPORATION and IAN B. CARTER

DATED:  December __, 2004    ENTERPRISE COUNSEL GROUP, ALC

                             BY:
                                  -------------------------------------
                                       DAVID A. ROBINSON
                                       Attorneys for Plaintiff and Respondent
                                       JOSEPH P. SALINE

<PAGE>

                                 EXHIBIT "5" TO

                 SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

FOR IMMEDIATE RELEASE

        COMMERCE ENERGY GROUP REACHES SETTLEMENT WITH SALINE AND OGUNDIJI

COSTA MESA, CA, December __, 2004 -- Commerce Energy Group, Inc. (AMEX: EGR) a
leading U.S. electricity service provider, announced today that it had entered
into a full and comprehensive Settlement Agreement and Mutual General Release
with stockholder and former director of Commonwealth Energy Corporation, Joseph
P. Saline, and stockholder Joseph Ogundiji. The Settlement Agreement effectively
ends all the various legal actions between the parties that began in 2001
without requiring either party to admit fault and with both parties
acknowledging that the resulting settlement is in the best interest of the
Company's stockholders. The Settlement Agreement acknowledges and validates Mr.
Saline's shares in common stock in the Company and provides for a $1.2 million
settlement payment to Mr. Saline. The Settlement Agreement also provides Mr.
Ogundiji with a payment of $222,400 in settlement of all his claims and for
canceling all of his shares of common stock. In addition, Mr. Saline and Mr.
Ogundiji agreed that for the next two years they would submit any future
disputes to mediation before commencing litigation or before they take any steps
to contact the Company's stockholders for any reason related to bringing a proxy
contest.

"We are pleased to have reached settlement with Mr. Saline and Mr. Ogundiji and
to put an end to the ongoing disputes. This allows the company to better
allocate resources, significantly reduce ongoing legal expenditures, and focus
on growing our business for the benefit of all our stockholders", said Commerce
President, Peter Weigand.

About Commerce Energy Group, Inc

Commerce Energy Group, Inc. is a provider of energy products and services to
homeowners, commercial and industrial consumers, utilities, governments and
energy asset owners. Operating since 1998 as Commonwealth Energy Corporation,
Commerce Energy Group now operates through its subsidiaries including
Commonwealth Energy Corporation, which holds FERC and state licenses for retail
and wholesale energy commodities and is a retail electricity provider to homes
and businesses in California, Michigan, Pennsylvania and New Jersey under the
brand name "electricAmerica"; Skipping Stone, an energy consulting firm; and
utiliHost, an outsourcing services and technology provider. For more information
visit http://www.CommerceEnergy.com.

Contact:
Investor Relations
Verna Ray
vray@electric.com
Tel: 714-259-2500

FORWARD-LOOKING STATEMENTS: Certain statements contained within this press
release including, without limitation, statements containing the words
"believe," "anticipate," "expect," "estimate," "await," "continue," "intend,"
"plan" and similar expressions are forward-looking statements that involve risks
and uncertainties. These forward-looking statements, are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict. Actual outcomes and results may differ materially from
what is expressed in, or implied by, such forward-looking statements. The risks
and uncertainties that could cause actual results to differ materially from
those expressed in, or implied by, the forward-looking statements include, but
are not limited to, the volatility of the energy market, competition, operating
hazards, uninsured risks, changes in energy-related state legislation,

<PAGE>

failure of performance by suppliers and transmitters, uncertainties relating to
the pending litigation, changes in general economic conditions, increased or
unexpected competition, and other matters disclosed in Commerce Energy's filings
with the Securities and Exchange Commission. Further, Commerce Energy undertakes
no obligation to release publicly any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

                                       ###

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