Exhibit 10.20
Execution Copy
MASTER PROFESSIONAL SERVICES AGREEMENT
This Master Professional Services Agreement, effective as of November 15,
1999, is made by and between Systems Consulting Company, Inc., with its
principal place of business at 537 Congress Street, 5th Floor, Portland, Maine
04101 ("Client") and Sapient Corporation, with a place of business at 10
Exchange Place, 21st Floor, Jersey City, New Jersey 07302 ("Consultant"), sets
forth the terms and conditions under which Consultant will provide services to
Client.
In consideration of the mutual promises contained herein, Client and
Consultant agree as follows:
1. Services.
1.1 Consultant agrees to provide certain services (the "Services") to
Client for specific projects that are mutually agreed upon from time to time
(the "Projects" or individually a "Project") between Client and Consultant. Each
Project will be set forth on a separate "Work Statement" substantially in the
form attached hereto as Appendix A. Each Work Statement, when executed by an
authorized representative of both parties, shall constitute a separate agreement
and, except for provisions herein which are specifically excluded or modified in
such Work Statement, each such Work Statement shall incorporate therein all of
the terms and conditions of this Agreement. In the event of any conflict between
the terms and conditions of this Agreement and the terms and conditions of any
Work Statement, the terms and conditions of such Work Statement shall govern.
1.2 In the event the fees for any Project are fixed, the additional terms
and conditions set forth on Appendix B hereto will apply and if Services are
being provided on a time and materials basis, the additional terms and
provisions set forth on Appendix C will apply. In the event any Project includes
website development, the additional terms and conditions included on Appendix D
will apply.
1.3 Each Work Statement shall, to the extent applicable, contain: (i) a
description of the Project and the Services to be performed by Consultant; (ii)
the tasks to be completed by Client and any third parties; (iii) a description
of the deliverables to be produced by Consultant; (iv) the schedule for
completion of each deliverable or stage of a Project; (v) the fees to be paid to
Consultant for such Services and a payment schedule for fixed-price Projects,
and (vi) such additional information as the parties may wish to include.
1.4 During the course of Consultant's performance of any Project, Client
may request changes in the Services. Consultant shall incorporate any such
changes provided that the parties execute a change order setting forth the
amended scope of work, program specifications, delivery dates and the impact on
the compensation to be paid to Sapient. If the parties are unable to agree on a
change order setting forth the specified information, then the parties may agree
to complete the Project according to the original Work Statement.
2. Term. This Agreement shall remain in effect for three years from the date
first written above unless earlier terminated by either party as provided
herein. After the initial three-year term expires, this Agreement will renew
automatically for additional one-year periods unless earlier terminated by
either party as provided herein.
3. Payment for Services.
3.1 Client will pay to Consultant the fees set forth in the applicable
Work Statement for the performance of the Services described therein. If
invoicing and payment are tied to milestone payments, a payment schedule shall
be included in the Work Statement. If invoicing and payment are not tied to
milestone payments, Consultant will invoice Client monthly at the rates set
forth in the Work Statement. All invoices are payable within 30 days of receipt.
Unless otherwise provided in the Work Statement, fees do not include computer
hardware costs and third party software costs, which shall be paid by Client.
All amounts paid by Client to Consultant prior to the execution of this
Agreement which relate to any Project covered by this Agreement shall be
credited and deducted from the amounts set forth on the related Work Statement.
3.2 Client shall reimburse Consultant for reasonable out-of-pocket
expenses incurred by Consultant and its personnel in connection with its
performance of Services. Consultant will provide Client with reasonably detailed
invoices for such expenses on a monthly basis and Client agrees to pay the total
amount shown as due on each invoice within 30 days after receipt thereof.
4. Cooperation and Access. Client agrees to cooperate, as set forth in each Work
Statement, with Consultant to the extent necessary for Consultant to perform its
Services thereunder. In addition to the activities listed on each Work
Statement, Client cooperation shall include, but not be limited to, providing
Consultant with all necessary equipment, material, information, assistance and
access to, and use of, Client's premises, computers and other equipment during
normal business hours. Client shall also provide Consultant with access to
Client's personnel during normal business hours, including, but not limited to,
the persons listed on each Work Statement. Consultant agrees to comply at all
times with the Client's applicable rules and regulations regarding safety,
security, use and conduct provided Consultant has notice of same.
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5. Confidentiality.
5.1 As used in this Agreement, "Confidential Information" shall mean all
confidential, proprietary or secret information, including without limitation
components, parts, drawings, data sketches, plans, programs, specifications,
techniques, processes, algorithms, inventions and other information or material,
owned, possessed or used by either Consultant or Client which is at any time so
designated by such party in writing "Confidential" or "Proprietary", whether by
letter or by the use of a proprietary stamp or legend, prior to the time any
such Proprietary Information is disclosed to the other party. In addition,
information which (i) would be apparent to a reasonable person, familiar with
the disclosing party's business and the industry in which it operates, that such
information is of a confidential or proprietary nature the maintenance of which
is important to the disclosing party or (ii) is orally or visually disclosed to
the other party or which is not designated in writing as confidential,
proprietary or secret at the time of disclosure but within a reasonable time
after such disclosure the disclosing party delivers to the receiving party a
written document describing such Proprietary Information and referencing the
place and date of such disclosure and the names of the employees of the party to
whom such disclosure was made, shall constitute Confidential Information.
Notwithstanding anything herein to the contrary, the terms of this Agreement,
and Consultant's methodologies, work approaches, tutorials, procedures,
techniques, algorithms, and processes, shall constitute Consultant Confidential
Information without the requirement of designating it as such either in writing
or by use of a stamp or legend.
5.2 The provisions of Section 5.1 notwithstanding, Confidential
Information shall not include any information to the extent it (i) is or becomes
a part of the public domain through no act or omission on the part of the
receiving party, (ii) is in the receiving party's possession, without actual or
constructive knowledge of an obligation of confidentiality with respect thereto,
at or prior to the time of disclosure under this Agreement, (iii) is disclosed
to the receiving party by a third party having no obligation of confidentiality
with respect thereto, (iv) is independently developed by the receiving party
without reference to the disclosing party's Confidential Information or (v) is
released from confidential treatment by written consent of the disclosing party.
5.3 Each of Consultant and Client shall hold in confidence and not
disclose (except on a confidential basis to its employees, agents, consultants
or subcontractors who need to know in connection with the Project or, on a
confidential basis to any third party in connection with Client's valid exercise
of the Materials Deliverable License and the Elements Deliverable License (as
defined in Sections 6.2 and 6.3, below), provided that any such recipient is
bound to preserve the confidentiality thereof) all Confidential Information
received from the other party in the same
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manner and to the same extent as it holds in confidence its own Confidential
Information of a similar nature and value, and shall not use any such
Confidential Information except for purposes contemplated by this Agreement.
5.4 Each of Consultant and Client shall take appropriate action by
instruction or agreement with its employees, agents, consultants and
subcontractors to satisfy its obligations under this Section 5 and each shall be
responsible for any breach of this Section 5 by its employees, agents,
consultants or subcontractors.
6. Intellectual Property Rights.
6.1 Artistic Elements. The latest work-product delivered to Client,
including without limitation, all designs, software, computer programs, data,
documents, artistic elements created specifically and uniquely for Client (such
as final forms of images, artwork and text) for use in screen display ("Artistic
Elements"), and all other materials included in such deliverable, including any
Preexisting Materials (defined below) and Consultant Program Elements included
therein, are referred to herein as the "Deliverables." Consultant acknowledges
and agrees that all Deliverables other than Preexisting Materials and Consultant
Program Elements shall constitute "works made for hire" for Client within the
meaning of the Copyright Act of 1976, as amended, and shall be the exclusive
property of Client, and Consultant assigns to Client all right, title and
interest and copyright in such Deliverables to Client. Upon Client's request,
Consultant agrees to execute any instruments and do all things reasonably
necessary by Client in order to further perfect Client's ownership rights.
Client hereby grants to Consultant a non-exclusive, royalty free, perpetual,
irrevocable (except in the event of a termination of this Agreement or the
applicable Work Statement under Sections 7.4 or 13.2) license to use, copy,
operate, process, modify and sublicense the Deliverables solely to perform its
Services hereunder.
6.2 (a) Definition and Ownership of Preexisting Materials. Client
acknowledges and agrees that the materials created for Client by Consultant may
contain software, UI conventions, UI design patterns, and other design and
development tools and materials that were (A) developed by Consultant prior to
the execution of this Agreement or the commencement of work for Client; (B)
developed by Consultant during the course of this Agreement or any Work
Statement but were developed at Consultant's cost; or (C) developed by
Consultant during the course of this Agreement or any Work Statement but are not
uniquely applicable to the particular specifications, characteristics or
functions of the Deliverables created for Client hereunder or thereunder (those
items described in this subsection (C), only, are referred to as the "Generic
Materials"), and (D) enhancements and derivatives of such work (those items
described in subsections (A), (B), (C) and (D), are referred to collectively as
the "Preexisting Materials"). Client acknowledges and agrees that Consultant
retains all right, title and interest in such Preexisting Materials and all
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subsequent enhancements thereto.
(b) License to Preexisting Materials. Subject to the provisions of
Sections 13.1 and 13.3 below, Consultant hereby grants to Client a
non-exclusive, non-transferable (except as provided herein), royalty free,
perpetual and irrevocable (except in the event of a termination of this
Agreement or the applicable Work Statement under Section 7.1) license, to use,
copy, modify, operate and create derivative works from the Preexisting Materials
included in the Deliverables to the extent reasonably necessary to enable Client
to (A) utilize, maintain and create "Enhancements" (as defined below) to the
Deliverables (the license described in this clause (A) only is referred to as
the "Materials Deliverable License" and such license shall include the right to
sublicense the Preexisting Materials solely in connection with the maintenance
and use of the Deliverables and the creation, maintenance, use and modification
of Enhancements thereto); and (B) provided that Client's exercise of such
license with respect to the Preexisting Materials (excluding the Generic
Materials) isnot undertaken with any competitor of Consultant, to develop,
utilize and maintain (i) internal websites and (ii) external initiatives not
permitted under 6.2(b)(A) in the product exchange, contract management, or
healthcare areas (collectively, the "Permitted Initiatives") (the license
described in clause (B) only is referred to as the "Materials External License"
and shall not include any right to sublicense the Preexisting Materials other
than to a website hosting company to the extent allowed under Section 6.4).
"Enhancements" shall mean any modification or extension of the Deliverable that
pertains to the creation (e.g. product selection, product marketing, product
information gathering and dissemination) and management (e.g. price management,
eligibility management, chargeback/rebated management) of contractual
relationships and the procurement of products via the web, regardless of
industry.
6.3 (a) Description and Ownership of Consultant Program Elements. Client
further acknowledges and agrees that (A) software programs, routines,
user-interface conventions and other development tools which Consultant develops
during the course of this Agreement or any Work Statement but which are (i)
developed at Consultant's cost (the "Independent Program Elements") or (ii)
developed by Consultant during the course of this Agreement or any Work
Statement but which are not uniquely applicable to the particular specifications
and performance capabilities, characteristics or functions of the Deliverables
(the "Generic Program Elements"), (B) any elements of code developed or utilized
by Consultant not embodied in the direct data representation of the Deliverables
and techniques developed or utilized by Consultant for importing, exporting,
displaying and manipulating such Deliverables, and (C) any enhancements and
derivatives to those items described in clauses (A) or (B) (those items
described in clauses (A), (B) and (C) are collectively referred to as the
"Consultant Program Elements"), shall remain the exclusive property of
Consultant.
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(b) License to Consultant Program Elements. Subject to the
provisions of Sections 13.1 and 13.3 below, Consultant hereby grants to Client a
non-exclusive, non-transferable (except as provided herein), royalty-free,
perpetual and irrevocable (except in the event of a termination of this
Agreement or the applicable Work Statement under Sections 7.1) license to use,
copy, modify, operate, and create derivative works of the Consultant Program
Elements as reasonably required for the use of the Deliverables to the extent
necessary to enable Client to (A) utilize, maintain and create Enhancements (as
defined in 6.2(b)) to the Deliverables (the license described in clause (A) only
is referred to as the "Elements Deliverable License" and such license shall
include the right to sublicense the Consultant Program Elements solely in
connection with the maintenance and use of the Deliverables and the creation,
maintenance, use and modification of Enhancements thereto); and (B) provided
that Client's exercise of such license with respect to the Consultant Program
Elements (excluding the Generic Program Elements) is not undertaken with any
competitor of Consultant, to develop, utilize and maintain the Permitted
Initiatives (the license described in clause (B) only is referred to as the
"Elements External License" and shall not include any right to sublicense the
Consultant Program Elements other than to a website hosting company to the
extent allowed under Section 6.4).
6.4 Restrictions; Sublicensing. Client shall limit use of and access to
the Preexisting Materials and Consultant Program Elements to such of Client's
employees, agents and subcontractors as are directly involved in the utilization
of, maintenance of and creation of Enhancements and/or the Deliverables and/or
the development, utilization and maintenance of the Permitted Initiatives and
who are bound to preserve the confidentiality thereof. Except as explicitly
provided herein, Client shall not disclose, distribute or resell to any third
party, including without limitation any competitor of Consultant, the
Preexisting Materials, Program Elements or any enhancements thereto or
derivative works thereof. Notwithstanding any provision to the contrary in this
Agreement, subject to the provisions of Sections 13.1 and 13.3 below, Client
shall have the right to (A) transfer any license granted to it hereunder to any
successor of Client's Healthcare Exchange internet business, provided that any
suchtransferee is bound to preserve the confidentiality thereof and further
provided that such transferred license shall be revocable to the extent it
exceeds Client's license rights in the event of a subsequent termination of this
Agreement under Sections 13.1 or 13.3, and (B) sublicense to any third party
website hosting company solely to the extent necessary for such company to
provide website hosting services to Client.
6.5 Solely for the purpose of enabling it to utilize the licenses granted
to it hereunder, and subject to all payments required hereunder and under the
applicable Work Statement and compliance with all of the other terms and
conditions of this Agreement, Consultant agrees to deliver one copy of the
Deliverables or any portion thereof written in a programming language employed
by computer programmers
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which must be translated into the language of a machine before it can be
executed.
6.6 To the extent that there is a good faith question with respect whether
a particular Deliverable or portion thereof is categorized as an Artistic
Element, Preexisting Material (Generic Material or otherwise), or Consultant
Program Element (Generic Program Element or otherwise), the parties agree to
cooperate in good faith to reach a mutually acceptable clarification consistent
with the terms of this Agreement.
6.7 Client further agrees that its Deliverables may be based on
Consultant's Confidential Information or Preexisting Materials and that the
delivery of Services shall not impair Consultant's right to make, prepare,
create, procure or market products or services now or in the future, whether or
not competitive with Client or its business.
6.8 Notwithstanding anything in this Agreement to the contrary, Consultant
and Client shall be free to use for any purpose the Residuals resulting from its
work on the Project. The term "Residuals" means information in intangible form,
which may be retained by persons performing or receiving the Services such as
ideas, concepts, know-how, techniques and which do not contain any Confidential
Information of the other party.
7. Indemnification.
7.1 In the event that any action is brought against Client based on a
claim that the Deliverables infringe any valid United States patent, copyright
or trade secret of a third party, Consultant shall indemnify, defend and hold
harmless Client and its officers, directors, employees, subcontractors, legal
counsel, accountants, stockholders, successors and assigns against such action
at Consultant's expense and pay all claims and expenses (including reasonable
attorneys' fees) and damages finally awarded in such action or settlement which
are attributable to such claim. Client agrees to promptly notify Consultant of
any such action; provided, however, that the failure to so notify Consultant
shall not relieve Consultant of its indemnification obligation except to the
extent Consultant is materially and adversely prejudiced by such failure to
notify. Consultant shall have sole control of the defense of any such action and
all negotiations for its settlement or compromise, provided that, where
Consultant reasonably determines that a settlement or compromise would be
significantly restrictive for Client, Consultant will seek Client's prior
written approval, which shall not be unreasonably withheld, before entering such
settlement or compromise. Client shall cooperate reasonably with Consultant in
the defense, settlement or compromise of any action described in this
subsection, and Consultant shall diligently pursue such defense, settlement or
compromise. Such cooperation shall be at Consultant's expense. In the event that
a final injunction is obtained against Client's use of the
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Deliverables, or if Consultant reasonably believes that Client's use of the
Deliverables could be so enjoined, or if in Consultant's opinion any Deliverable
is likely to become the subject of a successful claim of such infringement,
Consultant shall, at its option and expense, (i) procure for Client the right to
continue using the Deliverables as provided in this Agreement, (ii) replace or
modify the Deliverables so that they become non-infringing (so long as the
functionality of the Deliverables is essentially unchanged) or, in the event
neither of the previous two options can be effected by Consultant, (iii)
terminate the applicable Work Statement and the rights granted thereunder and
refund to Client the amount paid to Consultant for the Deliverables, plus in
each case any claims, expenses and damages as provided above. This Section 7.1
states Consultant's entire liability and Client's exclusive remedy for
infringement.
7.2 Notwithstanding the foregoing, Consultant shall not have any liability
to Client under this Section 7 to the extent that any infringement or claim
thereof is based upon (i) the combination, operation or use of a Deliverable in
combination with equipment or software not supplied or recommended by Consultant
hereunder where the Deliverable would not itself be infringing, (ii) compliance
with designs, specifications or instructions provided by Client (the "Client
Designs"), where, but for such compliance, the Deliverable would not be
infringing, (iii) use of a Deliverable in an application or environment for
which it was not designed or not contemplated under this Agreement, where, but
for such use, the Deliverable would not be infringing, or (iv) modifications of
a Deliverable by anyone other than Consultant where the unmodified version of
the Deliverable would not be infringing.
7.3 Except in the case of suits or actions arising under Sections 5, 6 or
7, neither party shall bring any suit or action arising out of breach of this
Agreement against the other more than two years after the breach or harm from
the breach has been discovered by management of the party bringing suit and no
such suit or action shall be brought by either party more than three years from
Client's final acceptance of the related Program.
7.4 In the event that an action is brought against Consultant based on a
claim that any Deliverable, Enhancement or Permitted Initiative infringes any
valid United States patent, copyright or trade secret of a third party, to the
extent that such infringement is a result of (A) Consultant's compliance with
Client Designs or (B) an Enhancement not developed by Consultant or (C) a
Permitted Initiative not developed by Consultant, Client shall indemnify, defend
and hold harmless Consultant and its officers, directors, employees, legal
counsel, accountants, stockholders, subcontractors, successors and assigns
against such action at Client's expense and pay all claims and expenses
(including reasonable attorneys' fees) and damages finally awarded in such
action or settlement which are attributable to such claim. Consultant agrees to
promptly notify Client of any such action; provided, however, that the failure
to so notify Client shall not relieve Client of its indemnification obligation
except to the
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extent Client is materially and adversely prejudiced by such failure to notify.
Client shall have sole control of the defense of any such action and all
negotiations for its settlement or compromise, provided that, where Client
reasonably determines that a settlement or compromise would be significantly
restrictive for Consultant, Client will seek Consultant's prior written
approval, which shall not be unreasonably withheld, before entering such
settlement or compromise. Consultant shall cooperate reasonably with Client in
the defense, settlement or compromise of any action described in this
subsection, and Client shall diligently pursue such defense, settlement or
compromise. In the event that a final injunction is obtained against
Consultant's provision of Services hereunder with respect to the Client Designs,
or if Client reasonably believes that Consultant's provision of Services
hereunder with respect to the Client Designs could be so enjoined, or if in
Client's opinion any Deliverable is likely to become the subject of a successful
claim of such infringement as a result of Consultant's compliance with Client
Designs, Client shall, at its option and expense, (i) procure for Consultant the
right to continue using the Client Designs in connection with its Services
hereunder, (ii) replace or modify the Client Designs so that they become
non-infringing or, in the event neither of the previous two options can be
reasonably effected by Client, (iii) terminate the applicable Work Statement and
the rights granted thereunder and pay Consultant an amount equal to the pro
rated amount of Services provided at such termination, less any amounts already
paid by Client for such Services, plus in each case any claims, expenses and
damages as provided above. This Section 7.4 states Client's entire liability and
Consultant's exclusive remedy for infringement.
7.5 THE FOREGOING INDEMNIFICATION PROVISIONS STATE THE ENTIRE LIABILITY OF
THE PARTIES WITH RESPECT TO INFRINGEMENT OR ALLEGED INFRINGEMENT OF PATENTS,
COPYRIGHTS, TRADEMARKS, TRADE SECRETS AND OTHER INTELLECTUAL OR PROPRIETARY
RIGHTS BY THE DELIVERABLES OR THEIR USE.
8. Warranties.
8.1 Consultant warrants that the Services performed under this Agreement
and all Work Statements will be performed in a professional and workmanlike
manner and that Consultant has the required skills and experience to perform the
Services set forth in this Agreement. Consultant also warrants the Deliverables
will be based upon the description of the Deliverables stated in that certain
Design Deliverables Binder dated October 29, 1999 and will conform to the
description of the Deliverables stated in the Work Statement. Consultant further
warrants that Consultant is the owner and otherwise has the right to use or
distribute the material and methodologies used in connection with providing the
Deliverables. Consultant will comply with all applicable federal, state and
local laws in the performance of its obligations under this Agreement.
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8.2 Consultant agrees to fix any deficiencies in any Deliverable which is
a software program or Artistic Element within the period following the Live Date
(as defined on the applicable Work Statement hereto) of such Deliverable set
forth on the related Work Statement (the "Warranty Period"), using the process
and definitions included on Appendix D hereto. With respect to any Deliverable
that is a software program or Artistic Element, Consultant shall have no
obligation to make corrections, repairs or replacements to such Deliverable
which result, in whole or in part, if the deficiency results from (i) errors
that relate solely to the third party software procured or provided by Client
which forms a part of a Deliverable, (ii) catastrophe, fault or negligence of
Client, (iii) improper or unauthorized use of the Deliverable, (iv) use of the
Deliverable in a manner for which they were not designed, including, without
limitation, use of the Deliverable in connection with computer hardware other
than as specified in the related Work Statement, (v) modifications of the
Deliverable by anyone other than Consultant or its employees or agents, or (vi)
causes external to the Deliverable such as, but not limited to, power failure or
electric power surges.
8.3 In the event the Deliverables include the delivery of software or code
by Consultant, Consultant further warrants that such Deliverables will be "Year
2000 Compliant" provided that (i) all products (for example, hardware, software
and firmware) procured or provided by Client and used with the Deliverables
properly exchange accurate date data with the Deliverables and are Year 2000
Compliant, (ii) all development tools procured or provided by Client and used by
Consultant are Year 2000 Compliant, (iii) the Deliverables are used in
accordance with any associated documentation provided by Consultant, and (iv)
Client has installed and is using the most current version (including without
limitation any fixes, patches, interim releases and updates) of the Deliverables
at the time noncompliance with the warranty is reported. Consultant warrants
that all software or documentation incorporated into the Deliverables and
furnished by a third party with whom Consultant has contracted directly
Consultant is Year 2000 Compliant. "Year 2000 Compliant" means that: (A) date
data from at least 1900 through 2101 will process without error or interruption
in any level of computer software developed by Consultant, including but not
limited to, microcode, firmware, system and application programs, files,
databases and computer services; (B) there will be no loss of any functionality
of the Deliverables with respect to the introduction, processing or output of
records containing dates falling on or after January 1, 2000; (C) the design of
the Deliverables shall accommodate, at a minimum, all of the following: (1) date
data century recognition, (2) calculations which accommodate same- and
multi-century formulas and date values, (3) input/output values that reflect the
century, and (4) correct processing of leap year dates (of which the year 2000
is one); (D) Deliverables delivered by Consultant will perform all date-related
operations accurately without human intervention, other than date data entry
that is part of the normal functions of the Deliverables; and (E) the
Deliverables will respond to two-digit date input in a way that resolves any
ambiguity as to century in a
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disclosed, defined and predetermined manner.
8.4 UNLESS OTHERWISE INCLUDED IN A WORK STATEMENT, THE FOREGOING
WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, THOSE CONCERNING MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND NO REPRESENTATION OR STATEMENT NOT EXPRESSLY CONTAINED IN THIS
AGREEMENT AND ANY WORK STATEMENT WILL BE BINDING ON CONSULTANT AS A WARRANTY. IN
THE CASE OF BREACH OF THE FOREGOING WARRANTIES BY CONSULTANT, CLIENT WILL
OUTLINE WITH PARTICULARITY THE DEFECTS IN THE DELIVERABLES OR SERVICES AND
CONSULTANT WILL COOPERATE WITH CLIENT AND CORRECT THE DEFECTS WITHIN A TIME
PERIOD REASONABLY ACCEPTABLE TO CLIENT.
9. Acceptance. "Acceptance" shall mean that a Deliverable successfully meets the
acceptance criteria set forth in the applicable Work Statement. Any Deliverable
needing acceptance from Client will be deemed accepted if Client does not
respond within the period specified in the related Work Statement or if Client
uses the deliverable for commercial purposes prior to completing its formal
acceptance procedure.
10. Limitation of Liability. EXCEPT IN THE CASE OF A BREACH OF SECTIONS 5
(CONFIDENTIALITY) AND AS PROVIDED IN SECTION 7 (INDEMNIFICATION), OR AS
OTHERWISE SET FORTH IN THIS SECTION, IN NO CASE SHALL EITHER PARTY'S MAXIMUM
LIABILITY ARISING OUT OF THIS AGREEMENT, WHETHER BASED UPON WARRANTY, CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, EXCEED IN THE AGGREGATE THE ACTUAL
PAYMENTS RECEIVED BY CONSULTANT UNDER THE WORK STATEMENT TO WHICH THE CLAIM
RELATES. IN THE CASE OF A BREACH OF SECTION 6 (INTELLECTUAL PROPERTY RIGHTS), IN
NO CASE SHALL EITHER PARTY'S MAXIMUM LIABILITY ARISING OUT OF THIS AGREEMENT,
WHETHER BASED UPON WARRANTY, CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHERWISE, EXCEED IN THE AGGREGATE AN AMOUNT EQUALLING TWO TIMES THE ACTUAL
PAYMENTS RECEIVED BY CONSULTANT UNDER THE WORK STATEMENT TO WHICH THE CLAIM
RELATES. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF
OPPORTUNITIES, LOSS OF DATA, OR LOSS OF USE DAMAGES, ARISING OUT OF THIS
AGREEMENT OR ANY WORK STATEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
11. Publicity. Each party may (i) summarize generally in oral form the nature of
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the services performed under this Agreement and (ii) include the other party's
name and logo on its customer/service provider list(s), provided that no such
disclosure shall include either party's Confidential Information . Except as
permitted in the immediately preceding sentence or in a Work Statement, neither
party may use the other's name or logo in any marketing materials without such
party's prior consent.
12. Non-Solicitation. During the period of performance of Services by Consultant
hereunder and for 12 months thereafter, Client and Consultant each agree not to
solicit or induce any employee of the other who was an employee during such
period to terminate his or her employment with the other or to hire any employee
of the other who was an employee during such period without the prior written
approval of the employing company.
13. Termination.
13.1 Any Work Statement may be terminated by either party, by written
notice to the other party (the "Defaulting Party"), in the event of a material
breach by the Defaulting Party of any of its obligations under such Work
Statement and failure by the Defaulting Party to remedy such breach within
thirty (30) days after written notice of such breach is provided to the
Defaulting Party. In the event of such termination, neither party shall be
relieved of any of its obligations incurred prior to such termination and each
party shall have any and all rights and remedies available to it at law or in
equity. Upon the effective date of any valid termination pursuant to this
subsection, Client shall be entitled to the Deliverables or portions thereof
covered by the terminated Work Statement only to the extent such Deliverables or
portions thereof were paid for by Client as of the effective date of the
termination (for purposes of this subsection, the "Paid Deliverables") in their
then-current forms, "as is", without any warranty, which Paid Deliverables shall
constitute "works made for hire" for Client within the meaning of the Copyright
Act of 1976, as amended, and shall be the exclusive property of Client. To the
extent such Paid Deliverables incorporate Preexisting Materials or Program
Elements, Client shall have with respect to such Preexisting Materials and
Program Elements or portions thereof the Materials Deliverable License and the
Elements Deliverable License set forth under Sections 6.2(b) and 6.3(b), above.
To the extent such Paid Deliverables incorporate Preexisting Materials or
Program Elements, and provided that Client has paid to Consultant, in the
aggregate, at least 80% of the fees for Services pursuant to the terminated Work
Statement, Client shall have with respect to such Preexisting Materials and
Program Elements the Materials External License and the Elements External
License set forth under Sections 6.2(b) and 6.3(b), above.
13.2 This Agreement and all Work Statements (except any irrevocable
licenses granted hereunder) may be terminated, by either party, effective
immediately and without notice, in the event of (i) the dissolution, termination
of existence,
12
liquidation or insolvency of the other party, (ii) the appointment of a
custodian or receiver for the other party, (iii) the institution by or against
the other party of any proceeding under the United States Bankruptcy Code or any
other foreign, federal or state bankruptcy, receivership, insolvency or other
similar law affecting the rights of creditors generally, or (iv) the making by
the other party of a composition of, or any assignment or trust mortgage for the
benefit of, creditors.
13.3 In the event that Client fails to pay in full, within 30 calendar
days after receipt, any invoice rendered by Consultant for payments due under
any Work Statement (other than an invoice subject to a good faith dispute over
fees which will be resolved in accordance with the Dispute Resolution Process
set forth on Appendix E attached hereto), and such failure is not cured within
10 business days after receipt of written notice thereof from Consultant,
Consultant shall have the right to terminate the applicable Work Statement and
all rights granted thereunder, except as otherwise set forth herein, effective
immediately upon delivery of written notice of termination to Client. Upon
termination of any Work Statement pursuant to this subsection, Client shall
promptly return to Consultant (or, at Consultant's option, destroy and certify
in writing to Consultant that it has destroyed) the original and all copies of
the Deliverables that are not "Paid Deliverables", as defined below, including
source code, archival copies, compilations, translations, partial copies,
updates and modifications, if any, and shall delete all copies of such
Deliverables from its computer libraries or storage facilities. Upon the
effective date of any termination by Consultant pursuant to this subsection,
Client shall be entitled to the Deliverables or portions thereof covered by the
terminated Work Statement only to the extent such Deliverables or portions
thereof were paid for by Client as of the effective date of the termination (for
purposes of this subsection, the "Paid Deliverables") in their then-current
forms, "as is", without any warranty, which Paid Deliverables shall constitute
"works made for hire" for Client within the meaning of the Copyright Act of
1976, as amended, and shall be the exclusive property of Client. To the extent
such Paid Deliverables incorporate or reasonably require the use of Preexisting
Materials or Program Elements, Client shall have with respect to such
Preexisting Materials and Program Elements or portions thereof the Materials
Deliverable License and the Elements Deliverable License set forth under
Sections 6.2(b) and 6.3(b), above. To the extent such Paid Deliverables
incorporate or reasonably require the use of Preexisting Materials or Program
Elements, and provided that Client has paid to Consultant, in the aggregate, at
least 80% of the fees for Services pursuant to the terminated Work Statement,
Client shall have with respect to such Preexisting Materials and Program
Elements the Materials External License and the Elements External License set
forth under Sections 6.2(b) and 6.3(b), above.
13.4 Work Statements under this Agreement may be terminated as provided in
Section 7 hereof.
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13.5 Sections 3, 5, 6, 7, 8, 10, 12, 13.1, 13.3 and 14 hereof and any
accrued rights to payment and remedies for breach of this Agreement shall
survive, in accordance with their terms, the completion of Consultant's Services
hereunder and the expiration or termination of this Agreement or any Work
Statement.
14. Remedies. Because a breach of any obligations set forth in Sections 5, 6,
12, 13.1 and 13.3 will irreparably harm either party and substantially diminish
the value of each party's proprietary rights in the Deliverables or its
Confidential Information, Client and Consultant agree that if either party
breaches any of its obligations thereunder, the other party shall, without
limiting its other rights or remedies, be entitled to equitable relief
(including, but not limited to, injunctive relief) to enforce its rights
thereunder, including without limitation protection of its proprietary rights.
The parties agree that a party need not invoke the procedures set forth on
Appendix E attached hereto in order to seek relief for a breach of any
obligations set forth in Sections 5, 6 and 12.
15. Force Majeure. In the event that either party is prevented from performing,
or is unable to perform, any of its obligations under this Agreement due to any
act of God, fire, casualty, flood, war, strike, lock out, failure of public
utilities, injunction or any act, exercise, assertion or requirement of any
governmental authority, epidemic, destruction of production facilities,
insurrection, inability to obtain labor, materials, equipment, transportation or
energy sufficient to meet needs, or any other cause beyond the reasonable
control of the party invoking this provision ("Force Majeure Event"), and if
such party shall have used reasonable efforts to avoid such occurrence and
minimize its duration and has given prompt written notice to the other party,
then the affected party's failure to perform shall be excused and the time for
performance shall be extended for the period of delay or inability to perform
due to such occurrence.
16. Taxes. The fees and other amounts payable pursuant to this Agreement are
exclusive of, and Client shall pay, all federal, state, local, municipal or
other sales, use, transfer, excise, property and other taxes and duties imposed
with respect to the delivery of the Services or any Deliverable and their
supplying to Client, except for taxes based on Consultant's net income.
17. Notices. Any notice or communication required or permitted under this
Agreement or any Work Statement shall be in writing and shall be deemed received
(i) on the date personally delivered, (ii) upon confirmed receipt if sent by
telecopier, (iii) the next business day after sending if sent by Federal Express
or any other next-day carrier service, or (iv) the third business day after
mailing via first-class mail, postage prepaid, to a party at the address
specified below or such other address as either party may from time to time
designate to the other:
14
To Consultant: To Client:
Sapient Corporation Systems Consulting Company, Inc.
10 Exchange Place, 21st Floor 537 Congress Street, 5th Floor
Jersey City, NJ 07302 Portland, Maine 04101
Attention: Bill Herman Attention: CEO
Vice President
With a copy to:
Sapient Corporation Lucash, Gesmer & Updegrove, LLP
25 First Street 40 Broad Street
Cambridge, MA 02141 Boston, MA 02109
Attention: Deborah E. Gray Attention: William Contente
Vice President
and General Counsel
18. Disputes. Other than as provided in Section 14, any dispute or claim arising
out of or relating to this Agreement or any Work Statement shall be resolved in
accordance with the Dispute Resolution Process set forth on Appendix E attached
hereto.
19. Miscellaneous.
19.1 This Agreement and its Appendices and Work Statements constitute the
entire agreement between Consultant and Client with respect to the subject
matter hereof and supersede all prior agreements, promises, understandings and
negotiations, whether written or oral, regarding the subject matter hereof,
including any terms and conditions included on Client's purchase orders. This
Agreement and any Work Statement cannot be amended unless in writing and signed
by duly authorized representatives of each party.
19.2 In the event that any provision of this Agreement or any Work
Statement is held by a court of competent jurisdiction to be unenforceable
because it is invalid or in conflict with any law of any relevant jurisdiction,
the validity of the remaining provisions shall not be affected, and the rights
and obligations of the parties shall be construed and enforced as if the
Agreement or such Work Statement did not contain the particular provisions held
to be unenforceable and the unenforceable provisions shall be replaced by
mutually acceptable provisions which, being valid, legal and enforceable, come
closest to the intention of the parties underlying the invalid or unenforceable
provision.
19.3 Neither this Agreement, any Work Statement or any rights or licenses
15
granted hereunder may be assigned, delegated or subcontracted by any party
without the written consent of the other party, except that (i) a party may
assign and transfer this Agreement and any Work Statement and its rights and
obligations hereunder and thereunder to any third party which succeeds to
substantially own all of its business and assets or assign or transfer any
rights to receive payments hereunder, (ii) Client may assign and transfer this
Agreement and any Work Statement and its rights and obligations hereunder and
thereunder to any company controlled by, controlling, or under common control
with Client, provided that such company is not a competitor of Consultant as to
the business currently conducted by Consultant as of the date of this Agreement,
(iii) Consultant may subcontract its obligations hereunder to any third party
service providers or wholly owned subsidiaries of Consultant provided that
Consultant remains primarily liable to Client hereunder and (iv) Client may
assign and transfer this Agreement and any Work Statement and its rights and
obligations hereunder and thereunder to any successor of Client's Healthcare
Exchange internet business.
19.4 This Agreement shall be interpreted and enforced in accordance with
the laws the state of Massachusetts without regard to the conflict of laws
provisions thereof.
19.5 The parties hereto are independent contractors. Nothing herein shall
be deemed to constitute either party as the representative, agent, partner or
joint venture of the other.
19.6 Each party has full power and authority to enter into and perform
this Agreement and the person signing this Agreement on behalf of each party
hereto has been properly authorized and empowered to enter into this Agreement.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year indicated above.
SAPIENT CORPORATION
By: /s/ William Herman
-------------------------------
Name: William Herman
Title: Vice President
SYSTEMS CONSULTING COMPANY, INC.
By: /s/ Leigh Powell
-------------------------------
Name: Leigh Powell
Title: President & CEO
17
APPENDICES
Appendix A - - Form of Work Statement
Appendix B - - Additional Terms and Conditions for Fixed Price Projects
Appendix C - - Additional Terms and Conditions for Time & Material Projects
Appendix D - - Additional Terms and Conditions for Website Development
Services
Appendix E - - Dispute Resolution Process
18
APPENDIX A
to Master Professional Services Agreement
Form of Work Statement
This Work Statement No. ___ is entered into as of this ___ day of _________,
1999 by and between _______________ ("Client") and Sapient Corporation
("Consultant") and is deemed to be incorporated into that certain Master
Professional Services Agreement dated as of ____________, 1999 by and between
Client and Consultant (the "Master Agreement'). Any terms used herein but not
defined shall have the meaning ascribed to such term in the Master Agreement.
1. Name and Description of Project:
2. Description of Deliverables
[Attach Scope Matrix if Applicable]
3. List of Assumptions
This section defines the assumptions under which Consultant has based its
fees for the services being performed under this Work Statement. This is to
ensure there are no misunderstandings regarding the scope of the Project. Any
deviation from these assumptions, similar to any deviation in scope of the
Project, that effects the delivery date for the Deliverables or requires
Consultant to incur additional expenses in order to deliver the Deliverables on
the delivery date may be predicated upon an extension of the Project and a
change in the fees and/or timeline by Consultant pursuant to Section 1.4 and
Appendix B of the Master Agreement.
4. Documentation to be Produced by Consultant
Consultant will provide all technical documentation of code to be
delivered to Client following Final Acceptance of the _____________ [Name of the
software Deliverable] by Client.
19
5. Key Personnel Assigned for Each Party
Consultant:
Client:
6. Project Schedule
7. Tasks To Be Completed By Client
8. Warranty Period.
9. Payment Schedule [Include this Section ONLY if a fixed price project]
The contract price for the Services to be performed by Consultant under this
Work Statement No. ___ is $_______________, which shall be paid on the following
schedule:
- ------------------------------------------------------
Milestone Amount Invoice
Date
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
ALTERNATIVE 9. Time and Material Rates [Include project personnel names and
daily billable rates]
All payments shall be sent to Consultant's lock box address at:
Sapient Corporation
P. O. Box 4886
Boston, MA 02212
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year indicated above.
Sapient Corporation
By: __________________
Print Name:
Title
Client: __________________
By: _________________
Print Name:
Title:
21
Appendix B
to Master Professional Services Agreement
Additional Terms and Conditions for Fixed Price Work Statements
1. Extensions.
1.1 Consultant agrees that the Project is to be completed with the Work
Schedule included on Appendix A. If, however, a Project is extended due to any
act by Consultant, Client will not be charged for such extension and Consultant
will absorb the cost of the resources required during such extension and
Consultant will use its best efforts to rectify the situation that is causing
the extension as soon as possible.
1.2 In the event Consultant's performance under any Work Statement is
delayed because of any act or omission of Client or any third parties hired by
the Client to work on a Project (including, without limitation, Client's failure
to meet delivery dates of required Client assistance listed in a Work Statement,
to deliver any material to be provided by the Client when and as required, or to
perform any of its covenants or obligations thereunder, whether or not caused by
a Force Majeure Event), then for each day of extension caused by such delay,
Consultant shall be entitled to a one-day extension of the delivery dates set
forth in the Work Statement for Consultant's performance.
1.3 In addition, Client shall reimburse Consultant for any fees and
expenses incurred by Consultant as a result of such delay referred to in Section
1.2 of this Appendix B if the delay causes Consultant to extend its Services
past the final delivery date set forth in the Work Statement or requires
Consultant to add additional personnel to its team in order to meet the dates
set forth on the related Work Statement. Such fees will be reduced by 50% if the
delay, hindrance or interference is caused by a Force Majeure Event affecting
Client.
1.4 Notwithstanding the foregoing, if Client's resources or personnel on
any Project change significantly from the design phase to the development phase
or during the development phase, and Consultant reasonably believes that such
changes will result in an increase cost to Consultant or cause Consultant to
miss a Project milestone, Consultant may cause a Project extension and increase
the fees payable by Client for that Project based on Consultant's good faith
efforts to accurately estimate its additional costs and project timeline impact
caused by a change in the Client resources. Consultant shall notify Client
immediately if Consultant believes that any change to Client resources will
result in an extension under this Section or increase in the contract price and
Client will have the option to either proceed with its proposed change or not.
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APPENDIX C
to Master Professional Services Agreement
Additional Terms and Conditions for Time & Material Projects
1. Price. The fees and expenses included on this Work Statement are estimates
only. The final fees and expenses will be set forth on Consultant's final
invoice to Client. If Consultant reasonably anticipates the aggregate fees and
expenses to exceed the original estimate by more than 10%, then Consultant shall
seek the Client's approval and Consultant shall have the right to suspend work
without liability and with a day-for-day extension of any subsequent deadlines
until the Client shall have provided such approval or agreed upon a reduction in
scope of Services.
2. Records. Consultant will maintain complete and accurate records of the work
performed hereunder, the amounts invoiced and time worked. Such records will be
in accordance with standard accounting practices and will include time logs.
Client will have the right to inspect and audit Consultant's records at
Consultant's place of business during normal business hours at a mutually
acceptable time during each Project and for a period of one year thereafter.
Client agrees to give Consultant at least 15 business days prior written notice
of its intent to inspect Consultant's records. Consultant may not exercise this
inspection right more than two times each calendar year.
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APPENDIX D
to Master Professional Services Agreement
Additional Terms and Conditions for Website Development Projects
1. Upon Consultant's completion of its Services under a Work Statement that
relates to the creation or modification of Client's web site and continuing for
a period of two years, such web site shall contain a notice prepared by Client
and approved by Consultant, such approval not to be unreasonably withheld, that
credits Consultant as the developer of the web site.
2. Client shall obtain the releases, licenses, permits and other authorization
to use copyrighted materials, copyrighted software code, artwork or any other
property or rights belonging to third parties obtained by Client for use by
Consultant in performing the Services for Client. Consultant is not responsible
for the accuracy, completeness and proprietary information concerning Client
products that Client furnishes to Consultant.
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APPENDIX E
to Master Professional Services Agreement
Dispute Resolution Process
The following procedures shall be used to resolve any disputes, claims or
controversies ("disputes") between us as provided herein, except for disputes
involving Sections 5, 6 or 12 of this Agreement. If any of these provisions are
determined to be invalid or unenforceable, the remaining provisions shall remain
in effect and binding on the parties to the fullest extent permitted by law.
1. Discussion; Management. The parties shall first employ the full resources of
the Executive Committee to resolve all disputes expeditiously and informally.
The Executive Committee shall be composed of the following representatives of
the Client and Consultant:
Consultant: Bill Herman, Vice President
Josh Alwitt, Vice President
Client: Tim Curran, Vice President and General Manager, Imany.com
Terry Nicholson, Vice President and General Manager, SCC
In the event that such dispute cannot be resolved by the Executive Committee,
the parties shall each involve an independent executive officer of the
respective parties, each of whom shall review and discuss the dispute between
them and attempt to resolve it by agreement. If such dispute cannot be resolved
by the foregoing method within a reasonable period of time, the parties shall
resort to the mediation procedure set forth below.
2. Mediation
2.1 Either party may submit a dispute to mediation by providing written
notice to the other party. In the mediation process, the parties will try to
resolve their differences voluntarily with the aid of an impartial mediator, who
shall attempt to facilitate negotiations. The mediator shall be selected by
agreement of the parties. If the parties cannot otherwise agree on a mediator, a
mediator shall be designated by the American Arbitration Association or any
successor organization ("AAA") at the request of a party. Any mediator so
designated must be acceptable to all parties.
2.2 The mediation shall be conducted as specified by the mediator and
agreed upon by the parties. The parties agree to discuss their differences in
good faith and to attempt, with the assistance of the mediator, to reach an
amicable resolution of the dispute.
25
2.3 The mediation shall be treated as a settlement discussion and
therefore shall be confidential. The mediator may not testify for either party
in any later proceeding relating to the dispute. No recording or transcript
shall be made of the mediation proceedings.
2.4 Each party shall bear its own costs in the mediation. The fees and
expenses of the mediator shall be shared equally by the parties.
3. Arbitration.
3.1 If a dispute has not been resolved within 30 days after the written
notice beginning the mediation process (or a longer period, if the parties agree
to extend the mediation), the mediation shall terminate and the dispute shall be
settled by arbitration. The arbitration shall be conducted in accordance with
the procedures in this Exhibit and the Arbitration Rules for Professional
Accounting and Related Disputes of the AAA ("AAA Rules"). In the event of a
conflict, the provisions of this Appendix E shall control.
3.2 The arbitration shall be conducted before a single arbitrator,
regardless of the size of the dispute, to be selected as provided in the AAA
Rules. Any issue concerning the extent to which any dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be governed by the Federal
Arbitration Act and resolved by the arbitrator. No potential arbitrator may
serve unless he or she has agreed in writing to abide and be bound by these
procedures.
3.3 Unless provided otherwise herein, the arbitrator may not award
non-monetary or equitable relief of any sort. They shall have no power to award
(a) damages inconsistent with this Agreement or (b) punitive damages or any
other damages not measured by the prevailing party's actual damages, and the
parties expressly waive their right to obtain such damages in arbitration or in
any other forum. In no event, even if any other portion of these provisions is
held to be invalid or unenforceable, shall the arbitrator have power to make an
award or impose a remedy that could not be made or imposed by a court deciding
the matter in the same jurisdiction.
3.4 No discovery shall be permitted in connection with the arbitration
unless it is expressly authorized by the arbitrator upon a showing of
substantial need by the party seeking discovery.
26
3.5 All aspects of the arbitration shall be treated as confidential.
Neither the parties nor the arbitrator may disclose the existence, content or
results of the arbitration, except as necessary to comply with legal or
regulatory requirements. Before making any such disclosure, a party shall give
written notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interests.
3.6 The result of the arbitration shall bind the parties, and judgment on
the arbitrator's award may be entered in any court having jurisdiction. Each
party shall bear its own costs of the arbitration. The fees and expenses of the
arbitrator shall be shared equally by the parties.
27