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Commercial Arbitration Agreement with the Prerequisites of Negotiation and Mediation Arbitration Agreement made this       day of       , 20       , between       , a corporation organized and existing under (Name of ABC, Inc. ) the laws of the state of       , with its principal office located at (Name of State)       , referred to herein as ABC, and (Street Address, City, County, State, Zip Code)       , a corporation organized and existing under the laws (Name of XYZ, Inc. ) of       , with its principal office located at       , (Name of State) (Street Address)       , referred to herein as XYZ. (City, County, State, Zip Code) I. Matters to be submitted to Arbitration. Any claim or controversy of whatever nature, including but not limited to the issue of whether or not the claim or controversy is subject to these dispute resolution procedures, arising out of or relating to the Agreement dated       , (Date) between the parties, a copy of which is attached hereto as Exhibit A and made a part hereof, or the breach of this Arbitration Agreement, shall be resolved by the dispute resolution procedures set forth below in this Arbitration Agreement, including final and binding arbitration, if necessary. II. Negotiation. It is the intent of the parties that any dispute be resolved informally and promptly through good faith negotiation between employees of the parties or their supervisors. The parties therefore agree that should any dispute or controversy arise, the following steps toward resolution will immediately be taken: A. Correspondence. 1. Either party may initiate negotiation proceedings by sending a certified or registered letter to the other party setting forth the particulars of the dispute, the terms of the Agreement that are involved, and a suggested resolution of the problem. 2. The recipient of the letter must respond within       days with an (Number) explanation and response to the proposed solution. B. Meeting. 1. If correspondence does not resolve the dispute, then the authors of the Commercial Arbitration Agreement Page 1 of 6 letters or their representatives shall meet on at least one occasion and attempt to resolve the matter. The meeting should be at a place selected by the parties, and should they not agree, then at the nearest office of       . (e.g., the Better Business Bureau ) 2. If such meetings do not produce a resolution, then a representative of ABC and a representative of XYZ, are authorized to and will meet and personally confer in a bona fide attempt to resolve the matter. Should this step not produce resolution, then the parties agree to mediation as provided in Section III below. III. Mediation. A. If the controversy is not resolved by informal negotiation within       (Number) days or any mutually agreed extension of time from the first meeting between the representatives of the parties, then the case shall be referred to the nearest office of       for mediation. Mediation shall [e.g., the American Arbitration Association, (the AAA)] consist of an informal, nonbinding conference or conferences between the parties and the mediator jointly, then in separate caucuses in which the mediator will seek to guide the parties to a resolution of the case. B. The parties may select any mutually acceptable member from the qualified mediators of       . If the parties cannot agree or have no (e.g., the AAA) particular choice of a mediator and simply request that the       (e.g., the AAA) assign one to the case, then a list and resumes of available mediators numbering one more than there are parties will be sent to the parties, each of whom shall strike one name leaving the remaining name as the mediator. If more than one name remains, an officer of the       will choose the mediator from the remaining names. (e.g., the AAA) C. The mediation process shall continue until the case is resolved or until such time as the mediator makes a finding that there is no possibility of resolution. D. Section II ( Negotiation ) and this Section III (Mediation) of this Agreement are deemed arbitration clauses for the purpose of enforcing compliance with their provisions. Any party to this Agreement may seek compliance with these contractual provisions by petition to any court of which has jurisdiction. The prevailing party in any such proceeding shall be entitled to the reimbursement of attorney's fees and costs. IV. Arbitration. Should any disputes remain or exist between the parties after completion of the two-step resolution process set forth above, then the parties shall promptly submit any dispute, claim or controversy arising out of or relating to this Agreement, or any alleged breach, including, but not limited to, any matter with respect to the meaning, effect, validity, termination, interpretation, performance or enforcement of this Agreement to binding arbitration administered Commercial Arbitration Agreement Page 2 of 6 by       . (e.g., the AAA) A. Initiation. Arbitration shall be initiated in the following manner: 1. Unless barred by the statute of limitations, any party bound by this Arbitration Agreement may initiate an arbitration at any time after negotiation and mediation procedures as described above have been exhausted by serving, as in a civil action, all parties with notice of the nature of the claim and a demand for arbitration. A claim shall be forever barred if on the date the demand for arbitration is received, the claim, if asserted in a civil action, would be barred by the applicable statute of limitations. 2. The claimant shall file a copy of the Demand for Arbitration and Notice of Claim at any office of       , together with the (e.g., the AAA) appropriate filing fee as provided in such organization’s existing fee schedule. 3. If the responding party desires to file a response or counterclaim, the party must do so within       days of service of the demand. Failure to file a (Number) counterclaim or response will not operate to delay the arbitration proceedings. 4. After the filing of the claim, response and counterclaim, no further claims or counterclaims may be made except on motion to the arbitrator. B. Appointment and Powers of Arbitrator. 1. The case shall be submitted to a single arbitrator chosen by the parties from qualified arbitrators of       . Should the (e.g., the AAA) parties be unable to agree on a choice of arbitrator within       days from (Number) service of the demand for arbitration, then either party may request       to furnish a list of three names and each ( e.g., the AAA) side may strike one name, consequently nominating the remaining person as replacement arbitrator. If more than one name remains, the       ( e.g., the AAA) will choose an arbitrator from the list of remaining names. 2. If the designated arbitrator should die, become incapable of, unwilling to, or unable to serve or proceed with the arbitration, then the party or parties appointing the arbitrator shall have power to appoint another in his or her stead, and such substituted arbitrator shall have all such powers as if he or she had been originally appointed. Commercial Arbitration Agreement Page 3 of 6 3. The arbitrator shall have full power to make such regulations and to give all such orders and directions as he or she shall deem just and expedient, not only in respect to the matters and disputes referred to the arbitrator but also with respect to the mode and times of executing and performing any of the acts, deeds, matters, and things that may be directed to be done or awarded. 4. Should either party refuse or neglect to appoint the arbitrator or to furnish the arbitrator with any papers or information demanded, then the arbitrator is empowered by both parties to proceed ex parte. 5. The arbitrator shall have the authority and power to request the production of any books or records in the possession or control of either of the parties, and to order that either party shall in the meantime have access to and be permitted to inspect and take copies of all or any of the same relating to the matters in dispute. 6. The arbitrator shall have the authority and power to proceed ex parte if either party shall fail, after reasonable notice, to attend hearings before him or her. 7. The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the Agreement of the parties, including, but not limited to, injunctive relief and specific performance of a contract. C. Costs and Fees. Each party shall be responsible for its own costs and expense of the arbitration, and the costs and fees of       shall be borne (e.g., the AAA) equally by the parties. D. Prehearing. Once the arbitrator is chosen, the       (e.g., the AAA) may be directed upon application of any party to schedule a prehearing conference with the arbitrator for the purpose of narrowing the issues, establishing a discovery schedule, arranging an acceptable procedure for any law and motion proceedings and in all respects arranging for the most expeditious hearing possible of the matters in dispute. E. Discovery. Discovery shall be at the discretion of the arbitrator and allowed only upon a showing of good cause using the following guidelines: 1. The arbitrator shall have discretion to order a prehearing exchange of information, including but not limited to the production of requested documents and exchanges of summaries of testimony of proposed witnesses. 2. The depositions of the claimant(s) and respondent(s) shall be allowed as a matter of right. One set of interrogatories shall be allowed. There shall be an early and prompt designation and exchange of the names and addresses of expert witnesses who may be called upon to testify at the arbitration hearing. Their Commercial Arbitration Agreement Page 4 of 6 depositions and all other discovery shall be allowed only upon a showing of good cause. F. Evidence. Formal rules of evidence relating to the order of proof, the conduct of the hearing and the presentation and admissibility of evidence shall not be applicable in this proceeding. Any relevant evidence, including hearsay, may be admitted by the arbitrator if it is the sort of evidence upon which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the admissibility of such evidence in a court of law. G. Time Limits. The award shall be made by the arbitrator on or before       (Number) days after final submission of all matters, or within such extended time, not exceeding altogether       additional days, as the arbitrator shall from time to time direct. (Number) H. Reasoned Opinion. In rendering the award, the arbitrator may set forth the reasons for his or her decision. I. Applicable Law. The arbitration shall follow the substantive law of       . This includes the provisions of statutory law dealing with (Name of State) arbitration, as they may exist at the time of the demand for arbitration, to the extent that such law is not in conflict with this Agreement, and specifically excepting sections of the statute dealing with discovery and requiring notice of hearing date by registered or certified mail. J. Notice. Each party shall be deemed to have consented that any papers, notices, or process necessary or proper for the initiation or continuation of an arbitration under this Agreement, for any related court action, or for the entry of judgment on any award made under these rules, may be served on a party by mail, addressed to the party or representative at the last known address, or by personal service, in or outside the state in which the arbitration takes place, provided that reasonable opportunity to be heard has been granted to the party. The arbitrator or the parties may consent to the use of fax transmission, telex, telegram, or other written forms of electronic communication to give the notices required by this Agreement. K. Finality of Award. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the arbitration laws of the state in which the arbitration is held. Application may be had by any party to any court of general jurisdiction for entry and enforcement of judgment based on the award. V. Severability. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. Commercial Arbitration Agreement Page 5 of 6 VI. No Waiver. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. VII. Entire Agreement. This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement. VIII. Modification of Agreement. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party. IX. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. X. Compliance with Laws In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties. WITNESS our signatures as of the day and date first above stated.             (Name of ABC, Inc. ) (Name of XYZ, Inc. ) By: By: (P rinted Name & Office in Corporation) (P rinted Name & Office in Corporation)             (Signature of Officer) (Signature of Officer) Commercial Arbitration Agreement Page 6 of 6