Nicolai Law Group, P.C. Monthly Memos 01/01

Monthly Memos

January 1, 2001

Subject: CPR Business-To-Business E-Commerce Initiative

The CPR Institute for Dispute Resolution has announced a Business-To-Business E-Commerce Alternate Dispute Resolution Initiative. The goal of the initiative is to lend some measure of commercial certainty in an otherwise undefined and very rapidly developing legal and commercial environment. We have digested the materials issued by CPR here for you. This is an important development and promises to be the first in many voluntary multinational, multi-industry alternate dispute resolution initiatives to handle e-commerce disputes.

WHO IS CPR?

CPR's mission is to install alternate dispute resolution, or ADR, into the mainstream of corporate law departments and law firm practice – to make the legal profession the preferred delivery system of ADR. To fulfill its mission, CPR is engaged in an integrated agenda of research and development, education, advocacy and dispute resolution. It is the leading proponent of ADR managed by the parties and a highly qualified neutral, or self-administered ADR.

BACKGROUND & EXPLANATION

Rationale

While much public attention has been focused on the resolution of consumer disputes, most e-commerce -- in terms both of number of transactions and of size of those transactions -- is between businesses. It is estimated that business-to-business ("B2B") on-line sales will be $406.2 billion in 2000 and increase to nearly $2,700 billion in 2004.

One immediate promise of B2B e-commerce is markedly increased efficiency of procurement and sourcing. Although many facets of commercial enterprise have realized very substantial transformations and efficiencies in the past several years, industrial procurement processes have experienced few such improvements. Sourcing markets have been non-fluid, difficult to enter, and relatively sluggish, with crucial product attributes like pricing awkward to compare among market participants.

Inefficiencies in traditional procurement processes are endemic. Materials needs are reported often only when needed and unavailable, dictating a rushed, inefficient and costly procurement process. Product selection and price comparison are performed using volumes of catalogues supplied by intermediaries. Many purchase orders contain errors requiring reprocessing. The many parties involved in processing, receiving and paying for orders all require copies.

The recent introduction of easily-accessible electronic data interchanges has changed all that. Internal information sharing and operational linkages within organizations allow the arrival of Enterprise Resource Planning ("ERP").

The difference in time, human resources, lack of error and other transaction costs is dramatic. Some believe that business procurement through e-commerce can result in transaction cost savings of as much as 90%. That is only part of the savings. B2B e-commerce also promises more efficient and direct price and quality comparisons. A purchaser can easily identify the products available and compare quality, specifications and price.

B2B e-commerce is beneficial to buyers and sellers. It lowers barriers to market entry for new market participants; increases competition by enhancing product comparisons; decreases obstacles to administrative approval and monitoring; centralizes and manages materials needs; and contributes to efficient operations.

Dealing with a new partner presents both benefits and risks. What happens when something goes wrong? What defenses are available to performing an electronic contract and how might they be asserted? Assuming good faith by all parties, can disputes from electronic agreements be anticipated so that, when they occur, they are managed professionally, in the interests of all parties?

The Legal Uncertainties

Current commercial practice relies on written documents signed by the party to be charged with performance as evidence of an agreement. Electronic commerce happens without paper, without signature and without seal. Even a "battle of forms" may be inapplicable where there are no "forms" to battle with. Further complications arise when electronic agents are used to convey offer and acceptance, raising the possibility of third-party interception and a lack of certainty as to the integrity and authority of the offer or acceptance.

For several years, the legal community has addressed these issues through academic writing and, recently, uniform statutory proposals. The purpose of these proposals is to create an initial fabric of legal principles that would give some certainty to electronic commercial deals.

In the U.S., several state legislatures enacted versions of the Uniform Electronic Transactions Act (UETA). However, many states modified the model Act, making enforcement inconsistent. In 2000, the federal government enacted the Electronic Signatures Act, which creates some consistency among states that enacted UETA but still left gaps with states that did not.

Global efforts included a series of directives issued by the European Commission and efforts by UNCITRAL, the Global Dialogue on E-Commerce, and other government and non-government organizations. None of these initiatives promise to accomplish, in the near term, the ultimate goal – to create a universally recognized legal framework against which contracting partners may allocate risk with some level of assurance that breach of the promises in a particular contract will be remedied.

By nature, all electronic commerce is global. A company solicits international inquiry by posting a website. The global commercial community has never agreed on a single principle even to govern initial questions like jurisdiction, much less substantive law. Businesses have every reason to be fearful about entering into an agreement when there is substantial doubt about what country (much less court) has the authority to decide disputes arising from it.

Unless it wants to await the creation and development of statutory and case law, the commercial community must create its own "best practices" and abide by them in the spirit of efficiency and economic rationality, rather than legal compulsion. This is the spirit that drives the CPR B2B E-Commerce Initiative.

The CPR B2B E-Commerce Initiative

The Initiative addresses business-to-business transactions exclusively. Legitimate public concerns about e-commerce regulation and dispute resolution have focused almost exclusively on consumer transactions. The business community is capable of taking care of itself.

This is as it should be. Those who enter the B2B electronic commerce environment do so at their own commercial risk and prudently obtain legal, technological and other advice before committing capital and reputation. Businesses are more able to bargain to advantage, and to allocate risk of nonperformance, than consumers are.

It is incumbent on the business community to create its own commercially reasonable code of behavior for creating and executing electronic transactions. CPR has prepared four tools that address two of the most crucial uncertainties in commercial agreements: contract formation and management of the disputes that inevitably arise from commercial transactions, particularly within a mature supply chain.

The Four Tools

Most participants in B2B markets are discovering as they go. Market structures are too new, business opportunities too diverse, and the path too untrod for lawyers to assess all risks and manage them.

Acknowledging the variety of postures, contexts and interests businesses have in B2B, CPR has developed four tools for B2B participants. They address contract formation and dispute resolution

A. The CPR Global E-Commerce Commitment

This tool addresses both the legal uncertainties of contract formation and the challenges of enforcing contract terms. The format is a bilateral commitment. A signer of the Commitment agrees to legally bind itself to waiving certain defenses to contract formation, and to an explicit dispute resolution protocol. These undertakings are incorporated as terms of any electronic contract between Commitment signers unless expressly superseded by an inconsistent term in a particular electronic contract.

Scope

The Commitment applies only to contracts formed electronically. It also excludes the following types of electronic contracts:

• Consumer contracts;

• Contracts to which at least one party is an individual;

• Contracts to sell or assign intellectual property rights; and

• Contracts for patent or computer source code licensing.

Contract Formation

Subject to certain conditions, companies participating in the Commitment waive defenses to the formation of an enforceable electronic contract on the grounds of the absence of an "ink" writing or signature, the absence of a physical seal, and the use of electronic agents. Certain defenses of lack of authority and integrity are also waived.

Dispute Resolution

Companies participating in the Commitment agree that disputes arising from electronic contracts subject to the Commitment will be negotiated and, if necessary, mediated within a brief time schedule. Although they agree to consider submitting unresolved disputes to binding arbitration, they are not obligated to do so. Procedures for mediation and arbitration are left to the parties, although without agreement otherwise, the CPR Mediation Procedure will apply.

This procedure does not compromise participants’ legal options in any way. Nothing in the Commitment is a waiver of any participant’s legal right to assert any claim or defense in any forum any time, to obtain provisional relief, or to initiate or respond to any lawsuit, arbitration or other adjudicative action. Although participants in the Commitment agree to stay adjudicative proceedings as long as the negotiation/mediation procedure continues, they need do so only as far as, in their sole judgment, doing so would not prejudice their legal rights.

Effectiveness

The Commitment would not be effective without a minimum number of participants. Participants would be posted in the CPR website, and authorized to use a specially designed Certification Mark. This Mark distinguishes them as participants in the Commitment, presumably granting them a competitive advantage in electronic bidding because they would be more reliable, certain and trustworthy business partners.

B. The CPR B2B E-Commerce ADR Commitment

This Commitment is restricted to dispute resolution and does not address contract formation. It differs from the CPR Global E-Commerce Commitment in the following ways:

• It is not intended to legally bind the signatories;

• It entirely excludes intellectual property disputes;

• It requires no fee; and

• It contemplates the display of no certification mark.

Similar to the Global Commitment, the ADR Commitment waives no legal rights, adopts a "default" procedure for mediation, and otherwise mirrors the broader Global Commitment.

CPR’s experience in pre-dispute ADR Commitments in other contexts teaches that the utility of these instruments is not in their enforceability, but in their use as "door-openers." A major obstacle to negotiating commercial dispute settlements is the fear of being seen as weak. A signer of the ADR Commitment avoids that risk. A Commitment signer can explain that it is perfectly prepared to stand on its rights and litigate the matter, but that as a matter of principle and business prudence it has adopted a policy of offering to negotiate/mediate all such disputes, including those in which it is confident of its legal posture.

C. The CPR Model ADR Provision for B2B E-Contracts

This tool is a template for a dispute resolution protocol for E-commerce transactions. It closely reflects the ADR procedures set forth in the two Commitments above. It is intended to be inserted in electronic contracts offered by a particular company and agreed to by a counterparty as part of the offer/acceptance process.

The specific target of this tool is the supply-chain participant. Companies may have hundreds of vendors, suppliers and customers with which they deal in procurement transactions that are the bulk of their electronic contracts. These electronic contracts perform the same function as the paper purchase order. This model ADR provision is for such dealings, providing a non-litigious method of negotiating resolution to disputes that inevitably arise in the everyday course of dealing between ongoing business partners.

D. The CPR Model ADR Provision for B2B Platforms and Exchanges

The final tool is a version of the CPR Model ADR Provision for B2B E-Contracts written to be used by horizontal and vertical exchanges and marketplaces for transactions conducted in those marketplaces. Participants would have to agree to this provision, and other standard terms, to use and participate in the exchange’s marketplace.

One consequence of an exchange’s featuring such a term in its terms and conditions is to give participants more certainty that transactions reached on the exchange will result in the value they anticipate when they contract. Lacking fraud or bad faith, exchange participants are assured that their counterparty is committed to resolving disputes on a business-driven basis, using a process that generally yields a commercially reasonable, mutually satisfactory outcome.

A PRIMER ON CONSENSUAL NON-BINDING DISPUTE RESOLUTION

Everyone wants to avoid litigation. Avoiding litigation among business partners in a mature and mutually beneficial supply chain relationship is particularly important for three reasons: cost savings, reducing commercial uncertainty and preserving valuable longterm relationships that might be jeopardized by short-term hostilities and belligerence. The global environment of e-commerce makes litigating business disputes particularly inappropriate.

Jurisdictional and legal uncertainties also dictate that disputes be resolved in a nonadjudicative way, if possible. While court judgments and nonappealable arbitration awards are final, they are expensive to get and highly uncertain as to outcome. Managers can better assess the facts in a dispute, and the long-term business interests of the disputants, than courts or arbitrators can. Resolutions that reflect the participants’ interests are preferable to resolutions that reflect merely their legal positions.

CPR urges the use of negotiation, followed if necessary by mediation, in the resolution of disputes arising from B2B e-commerce. Mediation is a process in which a third party neutral -– a mediator -– sits with the disputing parties and actively helps them to reach a settlement.

Mediation should not be confused with binding arbitration or other forms of private adjudication. The mediation process is facilitative, and non-binding. The mediator has no authority to make any binding decisions or impose a resolution. The role of the mediator -– and the goal of the process -– is to help parties achieve their own resolution. The only compulsory feature of mediation is the mutually negotiated settlement agreement that usually results from it.

Many features of mediation commend themselves to multijurisdictional electronic commerce. Mediation is private and usually confidential. It is highly flexible and informal. Typically, it is concluded expeditiously at moderate cost. The subject matter can be complex or simple, the stakes large or small, the number of parties few or many. An exchange of information commonly occurs in a mediation, on terms agreed upon by the parties. All parties participate in -- and control -- the ground rules. The process typically is far less adversarial than litigation or arbitration, and therefore less disruptive of ongoing business relationships. Since other options are not foreclosed if mediation should fail, entering mediation presents few risks.

Mediation also works. In voluntary mediation failure is the exception. Time and again, with the assistance of a skillful mediator, parties to a great variety of business disputes and other types of disputes have bridged wide gaps in position and developed creative, mutually advantageous solutions. The principal precondition to successful mediation is that the parties share a genuine desire to resolve the dispute promptly and fairly.

In mediation, parties are urged to consider sources of value other than the money or rights in dispute. Not all cases lend themselves to creative solutions, but even when the amount of money damages is the principal issue, the nonpartisan perspective of a trusted mediator can be very helpful in creating an agreement.

Mediation also has salutary effects tangential to actual settlement of a present dispute. For example, when a client has unrealistic expectations, of which the lawyer is reluctant to disabuse him, the considered views of a respected mediator can be valuable as a "reality check."

There are different styles of mediation, e.g., "facilitative mediation" and "evaluative mediation." The parties can seek out a mediator whose style matches their appetite. With all styles, the dynamics of the negotiations usually change markedly with the addition of the neutral mediator. Mediation enables parties to express perceptions, feelings and information directly to one another in a safe, controlled environment managed by the mediator. The mediator helps to build a problem solving atmosphere. This manner of communication often reduces hostility and helps rational discussion. Mediation gives the parties a sense of ownership both in the dispute and in its resolution.

Mediation also can be a highly efficient dispute resolution process. The mediation process can "telescope" into a few days factual and legal development likely to consume many months in litigation.

One important feature of mediation is that each party can discuss with the mediator certain confidential information and proprietary interests on the understanding that they will not be revealed to the other party. Using that knowledge, a skillful mediator often can identify hidden interests and settlement alternatives that would not have been considered in unassisted negotiations and that may help overcome barriers to settlement.

Principals on each side participate. They deal directly with each other. Each party is given an opportunity to state its business goals and interests, its legal position and its views regarding the conduct and issues in dispute. The primary focus is on solving problems and developing a solution. Business disputes are often resolved based on underlying business interests and concerns--not only on the legal rules or fact differences.

Once parties to a dispute agree to mediate, they often arrive at a resolution even before the mediation process begins. The imminence of a mediation, much like the imminence of a trial, can induce parties and attorneys to focus on the case and to enter serious negotiations. Negotiations to establish a fair procedure for resolving a dispute create an atmosphere of cooperative problem-solving that is conducive to resolving the dispute itself.

There is no one right way to conduct a mediation. However, any mediation is helped when all parties understand and have agreed upon the procedure that will be followed. The tools comprising the CPR B2B E-Commerce Initiative all refer to the CPR Mediation Procedure as being followed without an agreement to adopt another procedure. Parties retain the freedom to choose how the mediation will take place; indeed, they may adapt the CPR Procedure to their own needs. But without agreement on rules they may nevertheless conduct the mediation using the "default" provisions in the commitment or contract provision.

Despite its advantages, once a dispute has arisen, the parties often are reluctant to propose mediation. Even if a first proposal is made, it is too often peremptorily rejected. Consequently, CPR has historically urged parties entering business agreements to plan for how to resolve disputes, either by including clauses providing for unfacilitated negotiation and mediation of future disputes or by entering into industry-specific commitments that articulate their willingness to negotiate/mediate defined types of conflicts with other industry members.

Conclusion

Sophisticated businesses seek out relationships that yield mutual benefits. But those relationships – particularly when expressed electronically rather than conventionally – are not without challenges and disputes that current law may not satisfactorily address.

Sophisticated business must assume the task of self-direction, self-regulation, and proactive management of commercial relationships, rather than relying on legislative or common law developments that may not be suitable and that business does not control. The voluntary B2B e-commerce protocols should lend some measure of commercial certainty in an otherwise undefined and very rapidly developing legal and commercial environment.

THE CPR BUSINESS-TO-BUSINESS E-COMMERCE

INITIATIVE TOOLS

These are the text of the four tools used in the CPR Initiative. Ed.

The CPR Global E-Commerce Commitment

Businesses that attempt to contract electronically with other businesses confront inconsistent laws of contract formation and enforcement. The undersigned Company seeks to create enforceable business-to-business electronic contracts, and to resolve disputes concerning those contracts in an expeditious and businesslike way.

Therefore, the undersigned Company, intending to be legally bound, to the extent permitted by applicable law, commits to all other companies signing this Commitment (individually "Company" or "Party" and collectively "Companies" or "Parties") as follows:

Definitions: Definitions of certain terms are contained in the Appendix to this Commitment.

Scope: This Commitment applies to E-Contracts. An E-Contract is a Commercial Contract formed electronically where, at the time of entering into the Commercial Contract, all of the parties to the Commercial Contract are Companies, for: the purchase or sale of goods or services; the licensing of, and access to, intellectual property and Informational Rights including the licensing of software and trademarks; and access to electronic databases. Excluded from the definition of E-Contracts are: Consumer Contracts; contracts for the sale or assignment of intellectual property rights; and contracts for the licensing of patents or computer source code.

Freedom of Contract: The Parties to any E-Contract may modify any provision of this Commitment by mutual agreement to the extent such modifications are enforceable.

Contract Formation Commitment: The Company will adopt and adhere to the following rules in the formation of an E-Contract with other Companies:

(a) When Companies attempt to create an E-Contract, for the purposes of applicable law they are deemed to have agreed to conduct the transaction Electronically.

(b) If an E-Contract or applicable law requires a record to be provided, sent, or delivered in writing, an Electronic Record satisfies the contract or applicable law if the Electronic Record is capable of retention (e.g. printing or storing) by the recipient at the time of receipt.

(c) If a law requires a signature, an Electronic Signature satisfies the law.

(d) An Electronic Record or Electronic Signature in connection with an E-Contract is attributable to a person if it was the act of the person (the act of a person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to whom the Electronic Record or Electronic Signature was attributed).

(e) An E-Contract subject to this Commitment may be formed by the interaction of Electronic Agents of the Parties even if no individual was aware of or reviewed the Electronic Agents' actions or the resulting terms and agreements.

To the extent that the other Parties to an E-Contract have adhered to these rules, the Company will (1) recognize and not dispute the legal formation or enforceability of any E-Contract with the complying Parties, based upon whether an Electronic Signature, Electronic Record, use of Electronic Agents, or attribution of a signatory is valid in any mediation, arbitration, litigation or other proceedings; and (2) cooperate with the complying Companies to formalize (e.g., notarize) the E-Contract if such formalization is necessary for the E-Contract's enforceability under applicable law.

Dispute Resolution Commitment: In the event of a dispute of any kind arising out of an E-Contract with a Party, executives of the Company having authority to resolve the matter will negotiate. If the Parties have not resolved the dispute by such negotiation within 14 calendar days (unless extended by mutual agreement), the Parties will engage in mediation of the dispute, provided that the Company shall not be obligated to mediate any dispute if a party (whether or not a party to the E-Contract at issue) that is indispensable to the resolution of the dispute is unwilling to join the mediation. Any mediation that takes place pursuant to this Commitment shall be conducted according to the then current CPR Mediation Procedure (available at the CPR Website, www.cpradr.org), unless some other procedure is mutually agreed upon. All mediation proceedings are non-binding and confidential. If mediation fails to result in the resolution of the dispute within 60 days of selection of the mediator, any party may unilaterally terminate the procedure and pursue other remedies. Thereafter, the Parties may consider proposing submission of the dispute to arbitration, under the appropriate CPR Arbitration Rules or any other rules.

Nothing in this Commitment shall constitute a waiver of the Company's legal right to assert any claims or defenses whatsoever or to obtain provisional relief. In the event that the Company initiates a lawsuit, arbitration or other adjudicative action with respect to an E-Contract, then it shall agree to stay all proceedings in such action for as long as the negotiation and mediation contemplated by this Commitment continue insofar as, in its sole judgment, doing so would not prejudice its legal rights. Each Party is required to continue to perform its obligations under the applicable E-Contract pending final resolution of any dispute arising out of the E-Contract, unless to do so would be impossible or impracticable under the circumstances.

Substantive Law/Choice of Law or Forum: Except as provided in this Commitment, the substantive legal consequences of any E-Contract shall be determined by applicable law. The Parties' choice of legal jurisdiction or forum will make the E-Contract subject to such legal jurisdiction or forum. In the event of any dispute arising out of the E-Contract, it is the intent of the Parties that the exclusive choice of law or forum be given the broadest possible legal effect and consideration.

Effectiveness, Termination: This Commitment does not apply to any E-Contract entered into by the Company prior to the date of the Company's execution of this Commitment. The Company may terminate this Commitment at any time upon notice to CPR. Such termination shall be effective upon the earlier of (1) posting of such termination by CPR on the CPR Website, or (2) actual notice by the terminating Company to a prospective contracting Company.

Registration, Certification Mark: The Company will be deemed a participant to this Commitment upon the receipt by the CPR of an executed copy of this Commitment, and of an Annual Registration Fee, currently in the amount of $ 250.00 U.S., and will remain a participant until notice of termination or until fewer than twenty (20) Companies remain participants. A list of currently participating Companies in good standing and other information concerning the Commitment will be maintained at the CPR Website. Such participants may display a CPR Certification Mark showing that they are signatories of this Commitment. The use of the CPR Certification Mark by the Company is subject to the terms and conditions for such use, from time to time, established by CPR and posted on the CPR Website.

Affiliates: The Company will use commercially reasonable efforts to cause its Affiliates as they, from time to time, become Company Affiliates, to enter into this Commitment.

No Rights In Third Parties: This Commitment shall create no rights in third parties.

Severability: If any part of this Commitment is unenforceable under applicable law, all other parts of the Commitment shall nevertheless remain in full force and effect.

SIGNATURE BLOCK

APPENDIX

"Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise including, but not limited to, subsidiaries, which are controlled by a Company.

"Commercial Contract" means an electronic contract that is not a Consumer Contract.

"Consumer" is an individual who is a buyer of goods, services, licensed software or data that the individual, at the time of contracting, intends to use primarily for personal, family or household purposes.

"Consumer Contract" means a contract between a merchant and a consumer.

"Controlled" means the ownership of in excess of 50% of the voting or equity securities of the Affiliate or the power to direct or cause the direction of the management and operating policies of the Affiliate by contract, voting trust or otherwise.

"CPR" means the CPR Institute for Dispute Resolution, a not-for-profit corporation.

"CPR Certification Mark" means a graphic design that is the intellectual property of CPR, license to which is granted to Companies in good standing pursuant to the terms of this Commitment and such other terms and conditions that may be established from time to time by CPR and published at the CPR Website.

"CPR Website" means http://www.cpradr.org.

"Electronic Agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

"Electronically" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

"Electronic Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form, that is created, generated, sent, communicated, received or stored by electronic means.

"Electronic Signature" means an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

"Informational Rights" include all rights in information created under laws governing patents, copyrights, mask works, trade secrets, trademarks, publicity rights, or any other law that gives a person, independently of contract, a right to control or preclude another person's use of or access to the information on the basis of the rights holder's interest in the information.

The CPR B2B E-Commerce ADR Commitment

Businesses that attempt to contract electronically with other businesses confront inconsistent laws of contract enforcement. The undersigned Company seeks to resolve disputes concerning those contracts in an expeditious and businesslike way.

Therefore, the undersigned Company commits to all other companies signing this Commitment (individually "Company" or "Party" and collectively "Companies" or "Parties") as follows:

Definitions: Definitions of certain terms are contained in the Appendix to this Commitment.

Scope: This Commitment applies to E-Contracts. An E-Contract is a Commercial Contract formed Electronically where, at the time of entering into the Commercial Contract, all of the parties to the Commercial Contract are Companies, for the purchase or sale of goods or services. Excluded from the definition of E-Contracts are: Consumer Contracts; contracts for the sale or assignment of intellectual property rights; contracts for the licensing of, and access to, intellectual property and Informational Rights including the licensing of software and trademarks; contracts for access to electronic databases; and contracts for the licensing of patents or computer source code.

Freedom of Contract: The Parties to any E-Contract may modify any provision of this Commitment by mutual agreement.

Dispute Resolution Commitment: In the event of a dispute of any kind arising out of an E-Contract with a Party, executives of the Company having authority to resolve the matter will negotiate. If the Parties have not resolved the dispute by such negotiation within 14 calendar days (unless extended by mutual agreement), the Parties will engage in mediation of the dispute, provided that the Company shall not be obligated to mediate any dispute if a party (whether or not a party to the E-Contract at issue) that is indispensable to the resolution of the dispute is unwilling to join the mediation. Any mediation that takes place pursuant to this Commitment shall be conducted according to the then current CPR Mediation Procedure (available at the CPR Website, www.cpradr.org), unless some other procedure is mutually agreed upon. All mediation proceedings are non-binding and confidential. If mediation fails to result in the resolution of the dispute within 60 days of selection of the mediator, any party may unilaterally terminate the procedure and pursue other remedies. Thereafter, the Parties may consider proposing submission of the dispute to arbitration; under the appropriate CPR Arbitration Rules or any other rules.

Affiliates: The Company will use commercially reasonable efforts to cause its Affiliates as they, from time to time, become Company Affiliates, to enter into this Commitment.

No Rights In Third Parties: This Commitment shall create no rights in third parties.

SIGNATURE BLOCK

APPENDIX

"Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise including, but not limited to, subsidiaries, which are controlled by a Company.

"Commercial Contract" means an electronic contract that is not a Consumer Contract.

"Consumer Contract" means a contract between a merchant and a consumer.

"CPR" means the CPR Institute for Dispute Resolution, a not-for-profit corporation.

"CPR Website" means http://www.cpradr.org.

"Electronically" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

Model ADR Provision For B2B E-Contracts

This Model ADR Provision is designed for inclusion in the standard electronic contract forms that businesses currently use with vendors, suppliers, customers and other regular business partners. It provides for negotiation and mediation of disputes arising from the contract, with an optional provision for binding arbitration.

"In the event of a dispute of any kind arising out of this E-Contract, executives of the Parties hereto having authority to resolve the matter will negotiate. If the Parties have not resolved the dispute by such negotiation within 14 calendar days (unless extended by mutual agreement), the Parties will engage in mediation of the dispute, provided that the Parties shall not be obligated to mediate any dispute if an entity that is indispensable to the resolution of the dispute is unwilling to join the mediation.

Any mediation that takes place pursuant to this provision shall be conducted according to the then current CPR Mediation Procedure (available at the CPR Website, www.cpradr.org), unless some other procedure is mutually agreed upon. All mediation proceedings are non-binding and confidential. If mediation fails to result in the resolution of the dispute within 60 days of selection of the mediator, any Party may unilaterally terminate the procedure and pursue other remedies. Thereafter, the Parties may consider proposing submission of the dispute to arbitration under the appropriate CPR Arbitration Rules or any other rules.

Unless otherwise expressly provided, nothing in this E-Contract shall constitute a waiver of the legal right of any Party hereto to assert any claims or defenses whatsoever or to obtain provisional relief. In the event that any Party hereto initiates a lawsuit, arbitration or other adjudicative action with respect to this E-Contract, then it shall agree to stay all proceedings in such action for as long as the negotiation and mediation contemplated by this provision continue insofar as, in its sole judgment, doing so would not prejudice its legal rights. Each Party is required to continue to perform its obligations under this E-Contract pending final resolution of any dispute arising hereunder, unless to do so would be impossible or impracticable under the circumstances."

Model ADR Provision For B2B Platforms And Exchanges

This tool is a recommended provision for horizontal and vertical exchanges that impose uniform conditions upon participants in the exchange. It ensures that dispute resolution is addressed "at the front end" of transactions on the exchange, and provides sellers and buyers with a modicum of certainty that they will have a procedure for recourse in the event of a disagreement as to contract formation or performance, with a procedure that is business-driven rather than legalistic.

"In the event of a dispute of any kind arising out of any transaction executed through this Exchange ("Transaction"), parties to the Transaction agree that their executives having authority to resolve the matter will negotiate. If the parties have not resolved the dispute by such negotiation within 14 calendar days (unless extended by mutual agreement), the parties will engage in mediation of the dispute, provided that the parties shall not be obligated to mediate any dispute if an entity that is indispensable to the resolution of the dispute is unwilling to join the mediation.

Any mediation involving any Transaction shall be conducted according to the then current CPR Mediation Procedure (available at the CPR Website, www.cpradr.org), unless some other procedure is mutually agreed upon. All mediation proceedings are non-binding and confidential. If mediation fails to result in the resolution of the dispute within 60 days of selection of the mediator, any party may unilaterally terminate the procedure and pursue other remedies. Thereafter, the parties may consider proposing submission of the dispute to arbitration under the appropriate CPR Arbitration Rules or any other rules.

Unless otherwise expressly provided, nothing in this agreement shall constitute a waiver of any party's legal right to assert any claims or defenses whatsoever or to obtain provisional relief. In the event that any party to any Transaction initiates a lawsuit, arbitration or other adjudicative action with respect to any claim relating to a Transaction, then it shall agree to stay all proceedings in such action for as long as the negotiation and mediation contemplated by this agreement continue insofar as, in its sole judgment, doing so would not prejudice its legal rights. Each party to any Transaction in dispute is required to continue to perform its obligations pursuant to the Transaction pending final resolution of any dispute, unless to do so would be impossible or impracticable under the circumstances."