Service Agreement

This Services Agreement (“Agreement”) is entered into between ShadowRock Consulting LLC, a Texas limited liability company with its principal address at 3007 Mohican St., El Dorado Hills, CA 95762 (“Service Provider”), and the individual or legal entity accepting these terms (“Customer”). Each may be referred to individually as a “Party” and collectively as the “Parties.”

IMPORTANT NOTICE & LEGAL ACKNOWLEDGMENT

BY CLICKING A BOX OR BUTTON INDICATING ACCEPTANCE, EXECUTING A STATEMENT OF WORK (“SOW”) OR ORDER FORM REFERENCING THIS AGREEMENT, OR COMMENCING/CONTINUING USE OF SERVICES, CUSTOMER AGREES TO BE LEGALLY BOUND BY ALL TERMS HEREIN, INCLUDING SUBSEQUENT MODIFICATIONS IN ACCORDANCE WITH SECTION 16.

CUSTOMER ACKNOWLEDGES AND AGREES THAT:

1. BUSINESS-TO-BUSINESS TRANSACTIONS ONLY: Customer enters into this Agreement solely in a business capacity and not as a consumer.
2. MATERIAL TERMS CONSPICUOUSLY DISCLOSED: Customer acknowledges and expressly agrees to the material terms identified throughout this Agreement and summarized in this Important Notice, including non-refundable fees and non-contingent payment obligations (Section 4.1), auto-renewal (Section 2.3), 12-month licensing commitments (Section 2.2), customer delay penalties (Section 7.2), post-termination payment obligations accelerating all remaining minimum fees for the term plus a 25% liquidated termination fee for Customer convenience terminations or Service Provider terminations for Customer breach (Sections 8.2 & 8.3), background IP retention (Section 9.1), liability caps and comprehensive warranty disclaimers including non-guarantee of results (Sections 11 & 12), customer indemnification obligations (Section 13), non-solicitation liquidated damages (Section 14), unilateral modification rights (Section 16), and mandatory binding arbitration with jury trial and class action waivers (Section 17).
3. OPPORTUNITY TO REVIEW AND CONSULT COUNSEL: Customer confirms it has had full opportunity to review this Agreement and consult independent legal counsel. Customer voluntarily waives any defense based on failure to read, understand, or receive explanation of any provision herein.

1. DEFINITIONS

1.1 “Acceptance” means Customer’s express written approval of a Deliverable, or deemed acceptance pursuant to Section 6.

1.2 “Affiliate” means any entity controlling, controlled by, or under common control with a Party, where “control” means ownership or control of more than 50% of voting interests.

1.3 “Background IP” means any intellectual property, software, code, tools, methodologies, frameworks, libraries, templates, trade secrets, and know-how that: (a) existed prior to the Effective Date; (b) is developed by Service Provider outside the scope of Services; or (c) is identified as Background IP in an SOW.

1.4 “Customer Data” means all data, information, content, and materials provided by Customer or processed/stored by Service Provider on Customer’s behalf in connection with the Services.

1.5 “Customer Delay” means any delay caused by Customer’s failure to provide required materials, decisions, feedback, meeting attendance, or system access within specified timeframes.

1.6 “Deliverable” means any tangible or intangible work product created by Service Provider for Customer under an SOW.

1.7 “Effective Date” means the date Customer first accepts this Agreement via any acceptance method described above.

1.8 “Fees” means all compensation payable by Customer to Service Provider as specified in applicable SOWs, Change Orders, or rate cards.

1.9 “Innovations” means pre-existing or independently developed tools, methods, designs, software, frameworks, or techniques owned by Service Provider and utilized in delivering Services.

1.10 “Licensed Services” means third-party software, platforms, or hosted services provided, resold, sublicensed, or administered by Service Provider for Customer’s use.

1.11 “Services” means professional, consulting, configuration, implementation, managed, or Licensed Services performed by Service Provider pursuant to an SOW.

1.12 “SOW” or “Statement of Work” means a written agreement executed by both Parties detailing specific Services, scope, and Fees.

1.13 “Service Provider IP” means all intellectual property, proprietary information, technology, content, trade secrets, software, code (source and object code), systems, tools, frameworks, methodologies, algorithms, processes, templates, workflows, documentation, trade names, trademarks, service marks, and brand identifiers owned, developed, or licensed by Service Provider prior to, outside of, or during the term of this Agreement, including all Background IP, Innovations, and any modifications, enhancements, or derivative works of any of the foregoing.

2. SERVICES & SERVICE PLANS

2.1 SOW Execution & Order of Precedence

Service Provider shall perform Services specified in mutually executed SOWs. Each SOW incorporates and is governed by this Agreement. In the event of a conflict between this Agreement and a duly executed SOW, the SOW shall prevail over this Agreement solely with respect to the specific subject matter or provision of this Agreement that the SOW explicitly states an intent to override.

2.2 Service Plans

SOWs shall designate the applicable Service Plan governing delivery and billing:

2.2.1 Fixed Fee

Services and Deliverables are provided for a set fixed Fee as specified in the SOW, regardless of the actual hours expended by Service Provider. Reimbursable expenses are charged in addition to the fixed Fee. Customer scope reductions or early termination by Customer shall not reduce the fixed Fee, and Customer remains fully obligated to pay the entire fixed Fee specified in the SOW. Only in the event that Service Provider terminates an SOW for convenience prior to project completion shall the fixed Fee be adjusted to reflect only the work actually performed by Service Provider through the effective termination date, calculated at Service Provider’s standard hourly rates (not to exceed the total fixed Fee).

Unless the SOW expressly states otherwise, fixed-fee Services, including quick-start and launch packages, have a ninety (90) calendar-day delivery window from the applicable Start Date determined under Section 2.3. The engagement ends upon Acceptance of all Deliverables or expiration of that window, whichever occurs first, subject to the extensions and preserved remedies in Section 2.3. The engagement does not automatically renew. Customer’s failure to request, schedule or participate in Services within that window does not entitle Customer to a refund or credit. Expiration alone does not constitute Acceptance of an undelivered Deliverable.

2.2.2 Time and Materials (T&M)

Customer pays for actual time expended by Service Provider personnel at the hourly rates specified in the SOW or Service Provider’s rate card. Unless the SOW expressly states otherwise, Service Provider invoices monthly in arrears, with no minimum hours, minimum spend or annual commitment. The engagement continues until completion of the agreed Services or termination under Section 8 and does not automatically renew. An estimate or budget does not create a minimum purchase commitment. Service Provider itemizes reimbursable travel and project expenses separately, and all invoices are payable in accordance with Section 4.1.

2.2.3 Recurring Retainer

Unless the SOW expressly states otherwise, Customer commits to an initial term of twelve (12) months from the applicable Start Date, with monthly billing in advance. The SOW specifies either an hours allocation or dedicated personnel capacity (“Dedicated Personnel”). The engagement automatically renews for successive twelve (12) month terms, subject to the non-renewal procedure in Section 2.3. Service Provider charges Customer’s payment method on file at the beginning of each billing cycle. For hours-based retainers, unused hours expire at the end of that cycle without rollover, refund or credit, and overages are billed in arrears at the overage rate specified in the SOW. For Dedicated Personnel, the Fee reserves the agreed availability regardless of Customer utilization; hours allocation, deduction, expiration, rollover and hourly overages do not apply. Monthly billing does not create a month-to-month cancellation right or shorten the committed term.

2.2.4 Milestone-Based

Services and Deliverables shall be divided into discrete project phases or groups of Deliverables (“Milestones”), each associated with a specific Fee set forth in the SOW. Service Provider shall notify Customer in writing upon completion of each Milestone. Fees associated with a Milestone become immediately due and payable upon Customer’s written Acceptance or deemed Acceptance (pursuant to Section 6) of all Deliverables within that Milestone. Reimbursable expenses shall be billed in addition to Milestone Fees. Any work requested outside the defined scope of a Milestone shall be billed separately at Service Provider’s overage or standard hourly rates.

Unless the SOW expressly states otherwise, the engagement continues until Acceptance of all Milestones or termination under Section 8 and does not automatically renew. If the SOW specifies no project schedule, the Parties will plan for completion within one hundred eighty (180) calendar days after the applicable Start Date, subject to project dependencies, approved changes and Section 7.2. This planning target does not itself extinguish performance obligations or establish Acceptance.

2.2.5 One-Time Pre-Paid Retainer

Customer purchases a fixed allocation of professional service hours for use within ninety (90) calendar days after the applicable Start Date determined under Section 2.3, unless the SOW expressly specifies a different period. Full payment is required before Services begin. All Services must be performed within that service window, subject to extensions under Section 2.3. At expiration, all unused hours automatically expire and are forfeited without refund, credit or rollover, and Service Provider may close the engagement regardless of the remaining hours balance. Additional purchases have their own service windows unless the SOW states otherwise and do not revive expired hours. The engagement does not automatically renew. Overages and reimbursable expenses remain payable as provided in the SOW and this Agreement.

2.2.6 Recurring Licensing

Customer receives access to Licensed Services administered or provided by Service Provider, subject to a minimum commitment of twelve (12) months from first access that survives termination of this Agreement or any SOW. Unless the SOW expressly states otherwise, the engagement automatically renews for successive twelve (12) month terms, subject to the non-renewal procedure in Section 2.3. Fees are billed monthly unless the SOW specifies a different schedule or a disclosed third-party licensing commitment requires annual payment. The SOW must identify any longer non-cancellable third-party commitment. Service Provider may modify renewal pricing upon at least thirty (30) days’ written notice before the renewal term. Monthly billing does not shorten the minimum licensing commitment.

2.3 Service Plan Terms, Service Windows & Renewal

Each Service Plan’s duration, billing and renewal defaults are stated in Section 2.2. If an SOW includes more than one Service Plan, each default applies only to its corresponding Services. Completion or expiration of one Service Plan does not renew, extend or terminate another.

The applicable Start Date is the start date stated in the SOW. If no start date is stated, the Start Date is the date both Parties have executed the SOW or, for Services requiring prepayment, the later of execution and Service Provider’s receipt of the required prepayment. The first-access commencement rule in Section 2.2.6 governs Recurring Licensing.

Customer must request and schedule Services with sufficient time for completion during the applicable service window. Customer inactivity, delayed kickoff, partial use, an extension request or a subsequent purchase does not automatically extend that window. Notwithstanding Section 7.2, delivery schedule extensions resulting from Customer Delay do not extend the fixed service windows in Sections 2.2.1 and 2.2.5. Service Provider will extend an affected service window to the extent its own failure to provide reasonably requested Services prevents their use within that window. Service Provider may also grant a courtesy extension in writing specifying a revised expiration date. A courtesy extension creates no entitlement to further extensions and does not change the expiration of another purchase. Service-window expiration does not limit remedies otherwise available for Service Provider’s breach.

For Recurring Retainer and Recurring Licensing Services, Customer must give written notice of non-renewal at least thirty (30) days before the current term expires, delivered in accordance with Section 18.8. Renewal pricing is Service Provider’s then-current pricing, subject to applicable notice requirements and the pricing notice in Section 2.2.6. Service Provider may send a renewal reminder and will provide any renewal notice required by applicable law.

2.4 Service Provider Discretion

Service Provider retains absolute discretion over the selection, assignment, management, tools, methodologies, and technical approaches of personnel used to perform Services, provided Deliverables conform to SOW specifications.

3. SCOPE CHANGES

3.1 Change Order Procedure

Customer may request changes to the scope of Services, Deliverables, timelines, or specifications under an active SOW by submitting a detailed written change request to Service Provider. Within five (5) Business Days of receiving such request (or such longer period as reasonably required for complex requests), Service Provider shall evaluate the request and provide Customer with a written estimate detailing: (a) any modifications to Fees or payment schedules; (b) the estimated impact on project timelines, Milestones, and delivery dates; and (c) any additional resource or technical requirements. No scope change, modification, or adjustment shall become effective or binding upon either Party unless and until both Parties execute a formal written Change Order. Service Provider shall have no obligation to perform any work associated with a requested change until a Change Order is fully executed. If Customer fails to approve and execute Service Provider’s Change Order estimate within ten (10) Business Days of receipt, the change request shall be conclusively deemed withdrawn, and Service Provider shall continue performance under the existing SOW without modification.

3.2 Emergency Changes

Service Provider reserves the right to immediately implement necessary system, security, technical, or legal compliance adjustments without Customer’s prior written approval if Service Provider determines in its sole discretion that immediate action is required to prevent security breaches, system instability, or legal non-compliance. Service Provider shall document such emergency work in a Change Order provided to Customer within five (5) Business Days of implementation. Customer shall pay for all emergency work at the emergency support rates specified in the applicable SOW or, if no emergency rate is specified, at one hundred fifty percent (150%) of Service Provider’s standard hourly rates.

4. FEES, INVOICING & PAYMENT TERMS

4.1 Payment Terms, Non-Refundability & No Contingency

ALL FEES ARE STRICTLY NON-REFUNDABLE AND ARE NOT CONTINGENT ON ANY RESULTS, MILESTONES (EXCEPT AS EXPRESSLY SET FORTH IN A MILESTONE-BASED SOW), REVENUE TARGETS, FINANCIAL RETURNS, OR SPECIFIC OUTCOMES. Customer shall pay all Fees in U.S. Dollars within fifteen (15) days of invoice date (“Due Date”) via the payment method specified by Service Provider. Customer’s obligation to pay all Fees when due is absolute, unconditional, and completely independent of the business outcomes, success, or performance results derived from the Services. For pre-paid Service Plans, full payment is required prior to commencement of Services. All Fees are exclusive of applicable federal, state, or local taxes (excluding taxes based on Service Provider’s net income), which Customer shall pay.

4.2 Late Payments, Interest & Suspension

Past-due balances accrue interest at the rate of 1.5% per month (18% per annum) or the maximum lawful rate permitted under California law, whichever is lower, calculated daily. Customer shall reimburse Service Provider for all collection agency fees, court costs, and reasonable attorneys' fees incurred in collecting past-due amounts. In addition, a $50 returned payment fee applies to failed payment transactions.

4.3 Service Suspension for Non-Payment

If Customer fails to pay any amount when due, Service Provider may, without prior notice or liability, immediately suspend all Services, system access, and Deliverable work product. Suspension does not relieve Customer of its obligation to pay all Fees due through the end of the committed term. Reactivation following non-payment suspension requires full payment of all outstanding balances, accrued late interest, and a reactivation fee equal to 10% of the outstanding balance or $250.00, whichever is greater.

4.4 Authorized Travel and Reimbursable Expenses

Customer must expressly authorize travel in advance in writing, including email, through its authorized representative. That authorization makes Customer responsible for the charges below under any Service Plan, without a separate Change Order or further approval of expenses that comply with this Section, subject to any written budget or limitation and any express SOW provision. This Section constitutes Service Provider’s standard client travel reimbursement policy.

Unless expressly included in the SOW Fees, Customer shall reimburse reasonable and necessary expenses of authorized travel at actual cost without markup: economy or coach airfare and ordinary baggage charges; standard-room lodging; economy or intermediate rental cars and fuel; ground transportation, parking, tolls and necessary business internet access. Personal-vehicle mileage is reimbursable at the then-current IRS business mileage rate, without separate fuel reimbursement. Personal upgrades, entertainment, companion travel and other personal expenses are excluded.

Lodging is reimbursable at actual cost up to the GSA lodging rate for the work location and travel dates, plus applicable lodging taxes and mandatory property fees; any excess requires Customer’s written approval. Meals and incidental expenses are payable at the corresponding GSA allowance, at 75% on the first and last travel days and reduced for meals provided without charge. Items covered by that allowance are not reimbursable separately. For locations outside the continental United States, the corresponding Department of Defense or Department of State rates apply.

Customer shall reimburse unavoidable, nonrecoverable travel costs and change or cancellation charges resulting from Customer’s requested changes or cancellation. Service Provider shall credit Customer for refunds or usable vendor credits attributable to reimbursed expenses. Service Provider shall itemize charges and provide receipts for lodging and other actual-cost expenses of $75 or more; meal and incidental allowances require no receipts. Customer shall pay travel charges under Section 4.1. This Section does not authorize separate charges for travel time.

5. LICENSED SERVICES & THIRD-PARTY PROVIDERS

5.1 Disclaimer of Third-Party Liability

Customer acknowledges that Licensed Services originate from Third-Party Providers and are governed exclusively by such third parties’ terms of service, acceptable use policies, and privacy policies. SERVICE PROVIDER EXPRESSLY DISCLAIMS ALL WARRANTIES AND LIABILITY FOR LICENSED SERVICES, INCLUDING DOWNTIME, OUTAGES, DATA LOSS, CORRUPTION, FEATURE REMOVAL, SECURITY VULNERABILITIES, OR THIRD-PARTY PRICING CHANGES.

“Third-Party Providers” means third-party software vendors, cloud infrastructure hosts, platform providers, API suppliers, or service vendors whose products, platforms, or services are resold, sublicensed, integrated with, administered by, or utilized by Service Provider in delivering the Services or Licensed Services to Customer.

5.2 Discontinuation

If a Third-Party Provider modifies or discontinues a Licensed Service, Service Provider may substitute a comparable service, adjust Fees proportionally, or terminate the affected portion of the SOW without penalty or liability.

5.3 Fee Adjustments

Any price increases passed down by mandatory Third-Party Providers or Licensed Services shall be passed through directly to Customer upon notice.

6. DELIVERABLE ACCEPTANCE & REMEDIES

6.1 Performance Completion & Shortcoming Requirements

Upon completion of a Deliverable or performance of Services under an SOW (including conclusion of a billing cycle or service milestone), Service Provider shall provide written notification or invoice. Customer shall have ten (10) Business Days (“Review Period”) to evaluate the Services or Deliverables solely against the express specifications in the applicable SOW. To reject performance, Customer must provide a detailed written notice of rejection within the Review Period specifying the material failure of performance. Any such claimed non-performance or shortcoming must be material, strictly measured against express SOW obligations, and accompanied by objective, verifiable, and reproducible evidence demonstrating that the Services were not performed in accordance with the SOW. Subjective dissatisfaction or post-hoc claims of incomplete performance shall not excuse payment or constitute a valid rejection.

6.2 Deemed Acceptance of Services

If Customer fails to issue a written notice of rejection containing the objective, verifiable proof required under Section 6.1 within the ten (10) Business Day Review Period, or if Customer utilizes the benefit of the Services in its business operations, the Services shall be conclusively, irrevocably, and fully deemed completed and accepted.

6.3 Cure & Exclusive Remedy

If Customer timely submits a valid written rejection containing the objective, verifiable proof required under Section 6.1, Service Provider shall have ten (10) Business Days to cure the identified non-conformances and redeliver. If Service Provider is actively working in good faith and utilizing commercially reasonable efforts to resolve the non-conformances, the cure period shall automatically extend for such additional time as is reasonably necessary to complete the cure. Upon redelivery, Customer shall have a second Review Period of five (5) Business Days to evaluate the cured Deliverable. Re-performance pursuant to this Section constitutes Customer’s sole and exclusive remedy, and Service Provider’s sole liability, for defective or non-conforming Deliverables or Services.

7. CUSTOMER OBLIGATIONS & DELAYS

7.1 Customer Obligations

Customer shall: (a) provide timely access to accurate Customer Materials, systems, facilities, and qualified personnel; (b) designate an authorized primary contact with full decision-making authority; (c) participate in scheduled meetings; and (d) maintain complete, independent backups of all Customer Data prior to and during performance of Services.

7.2 Customer Delay Consequences

Any Customer Delay shall automatically extend Service Provider’s delivery schedules and Milestones day-for-day, plus reasonable additional time to remobilize personnel and resources. If a Customer Delay exceeds five (5) Business Days, Service Provider may invoice Customer, and Customer shall pay, for idle resource time at seventy-five percent (75%) of the applicable hourly rates for personnel held available for Customer’s engagement. No additional idle-resource charge applies to Dedicated Personnel capacity already covered by the recurring Fee. If a Customer Delay exceeds thirty (30) consecutive calendar days, such delay shall constitute a material breach of this Agreement and the affected SOW by Customer, empowering Service Provider to immediately terminate the affected SOW for cause upon written notice and accelerate all unpaid Fees, minimum commitments, and termination liquidated damages pursuant to Section 8.2. Customer’s failure to attend three (3) consecutive scheduled meetings without providing at least twenty-four (24) hours' prior written notice shall likewise constitute a material breach. Standard Review Periods under Section 6 do not count toward the 5-day Customer Delay threshold unless Customer fails to provide feedback or required materials after the Review Period expires.

Service Provider reserves the right to suspend performance of Services and withhold Deliverables during any period in which Customer is in material breach of its obligations under Section 7.1 or in delay under Section 7.2. Any such operational suspension shall not constitute a breach by Service Provider or relieve Customer of its payment obligations.

8. TERM AND TERMINATION

8.1 Agreement Term

This Agreement commences on the Effective Date and remains in effect until all SOWs have expired or been terminated.

8.2 Termination for Material Breach

Either Party may terminate this Agreement or any SOW if the other Party materially breaches any provision of this Agreement or an SOW and fails to cure such material breach within ten (10) Business Days following receipt of written notice detailing the breach.

Notwithstanding the foregoing cure period, Service Provider may terminate this Agreement or any SOW immediately upon written notice to Customer if Customer: (a) fails to pay any invoiced amount within ten (10) days following its Due Date; (b) breaches its obligations under Section 10 (Confidentiality); (c) breaches Section 14 (Recruitment & Personnel Conversion Fee); or (d) becomes insolvent, files for bankruptcy, makes an assignment for the benefit of creditors, or enters into receivership.

IF SERVICE PROVIDER TERMINATES THIS AGREEMENT OR ANY SOW DUE TO CUSTOMER'S MATERIAL BREACH (INCLUDING NON-PAYMENT OR EXTENDED CUSTOMER DELAY UNDER SECTION 7.2), CUSTOMER SHALL IMMEDIATELY PAY TO SERVICE PROVIDER: (A) ALL FEES AND EXPENSES FOR SERVICES PERFORMED AND WORK COMPLETED THROUGH THE TERMINATION EFFECTIVE DATE; (B) ALL ACCELERATED UNPAID MINIMUM FEES, PRE-PAID FEES, RETAINERS, COMMITTED RECURRING LICENSING FEES, AND COMMITTED ALLOCATIONS FOR THE ENTIRE REMAINDER OF THE THEN-CURRENT INITIAL OR RENEWAL TERM; (C) ALL NON-CANCELLABLE THIRD-PARTY COMMITMENTS INCURRED BY SERVICE PROVIDER; AND (D) A LIQUIDATED TERMINATION FEE EQUAL TO TWENTY-FIVE PERCENT (25%) OF THE REMAINING UNPAID CONTRACT VALUE OF THE AFFECTED SOW.

8.3 Termination for Convenience

Service Provider may terminate this Agreement or any SOW for convenience at any time upon thirty (30) days’ written notice without penalty. Customer may terminate an SOW for convenience upon thirty (30) days’ written notice.

REGARDLESS OF WHICH PARTY TERMINATES THIS AGREEMENT OR ANY SOW FOR CONVENIENCE (OR FOR ANY OTHER REASON), CUSTOMER SHALL REMAIN FULLY AND UNCONDITIONALLY OBLIGATED TO PAY SERVICE PROVIDER FOR ALL SERVICES PERFORMED, WORK COMPLETED, DELIVERABLES (OR WORK-IN-PROGRESS) CREATED, AND REIMBURSABLE EXPENSES INCURRED THROUGH THE EFFECTIVE DATE OF TERMINATION.

IF CUSTOMER TERMINATES THIS AGREEMENT OR ANY SOW FOR CONVENIENCE PRIOR TO THE EXPIRATION OF THE THEN-CURRENT INITIAL OR RENEWAL TERM, ALL UNPAID MINIMUM FEES, PRE-PAID FEES, RETAINERS, COMMITTED RECURRING LICENSING FEES, AND COMMITTED ALLOCATIONS FOR THE ENTIRE REMAINDER OF SUCH TERM SHALL IMMEDIATELY ACCELERATE AND BECOME DUE AND PAYABLE ON THE EFFECTIVE DATE OF TERMINATION. In addition, Customer shall immediately pay: (a) All non-cancellable third-party commitments incurred by Service Provider; and

(b) A liquidated termination fee equal to twenty-five percent (25%) of the remaining unpaid contract value of the SOW.

8.4 Payment for Work-in-Progress & Liquidated Damages Enforceability

For fixed-fee or milestone-based arrangements where termination occurs prior to the completion and Acceptance of a defined Deliverable or Milestone (whether terminated by Customer for convenience under Section 8.3 or by Service Provider for Customer breach under Section 8.2), Customer shall pay Service Provider for all work-in-progress and Services performed through the effective date of termination calculated on a time-and-materials basis at Service Provider’s then-current standard hourly rates.

The Parties explicitly agree under California Civil Code Section 1671 that actual damages resulting from Customer’s early termination for convenience or default/material breach are impracticable or extremely difficult to ascertain. The acceleration of remaining minimum fees, non-cancellable third-party commitments, and the 25% liquidated termination fee together represent a reasonable pre-estimate of Service Provider’s lost profits, unrecoverable resource allocation costs, and administrative overhead, and are agreed upon as liquidated damages and not a penalty.

Normal completion or expiration of a non-renewing engagement under Sections 2.2 and 2.3 is not an early termination and does not itself trigger a liquidated termination fee. For Time and Materials Services with no express minimum purchase commitment, estimated or unrequested future hours are not unpaid minimum Fees or remaining unpaid contract value under Sections 8.2 or 8.3.

8.5 Survival

Expiration or termination of this Agreement or any SOW for any reason shall not relieve either Party of any obligation or liability accrued prior to the effective date of termination.

Without limiting the generality of the foregoing, the following provisions shall expressly survive the expiration or termination of this Agreement and all SOWs in full force and effect:

• Section 1 (Definitions);
• Section 2.2.6 (12-Month Recurring Licensing Commitments);
• Section 4 (Fees, Payment Terms, Non-Refundability, Late Fees, Interest, and Suspension);
• Section 7.2 (Customer Delay Consequences & Idle Resource Charges);
• Section 8.2 & Section 8.3 (Fee Acceleration, Non-Cancellable Commitments, and Liquidated Termination Fees);
• Section 8.4 (Work-in-Progress & Liquidated Damages Enforceability);
• Section 9 (Intellectual Property, Service Provider IP Retention, Conditional Assignment, Embedded Licenses, Customer Materials, Archival Retention, and Feedback);
• Section 10 (Confidentiality & Trade Secret Protections);
• Section 11 (Limited Warranty Expiration, IP Warranty Carveouts, Disclaimers, and No Guarantee of Results);
• Section 12 (Limitation of Liability & Waiver of Consequential Damages);
• Section 13 (Customer Indemnification, Service Provider IP Indemnity Limits, Remedies, and Defense Conditions);
• Section 14 (Recruitment & Personnel Conversion / Placement Fee);
• Section 15 (Data Security Safeguard Limitations, Incident Definitions, and Cost Allocation);
• Section 17 (Governing Law, Mandatory Arbitration, Class Action Waiver, Jury Waiver, Attorneys' Fees, and Asymmetrical Claims Limitation); and
• Section 18 (Miscellaneous, Entire Agreement, Severability, Non-Waiver, Assignment, and Notices).

9. INTELLECTUAL PROPERTY & OWNERSHIP

9.1 Service Provider IP & Background IP Retention

9.1.1 Sole and Exclusive Ownership

Service Provider (or its licensors) is, and shall remain, the sole and exclusive owner of all right, title, and interest in and to all intellectual property, proprietary information, and technology created, acquired, or developed by Service Provider prior to, outside of, or during the performance of this Agreement, including:

• (a) All Background IP and Innovations;
• (b) All business names, trade names, trademarks, service marks, logos, trade dress, domain names, and brand identifiers of Service Provider;
• (c) All source code, object code, software architecture, databases, data models, scripts, algorithms, development tools, utility programs, software libraries, API integrations, and technical documentation;
• (d) All methodologies, frameworks, workflows, delivery processes, technical know-how, concepts, ideas, research, trade secrets, configurations, templates, schematics, and designs; and
• (e) Any modifications, enhancements, derivative works, updates, or improvements to any of the foregoing, regardless of whether suggested, requested, or contributed to by Customer.

9.1.2 Reservation of Rights & Residuals

Service Provider reserves all rights not expressly granted to Customer in this Agreement. No implied licenses, rights, or transfers of ownership are granted to Customer under any trademark, patent, copyright, trade secret, or other intellectual property right of Service Provider. Customer acknowledges that Service Provider is in the business of providing consulting, technical, and implementation services, and nothing in this Agreement shall restrict or limit Service Provider’s right to develop, maintain, license, or market similar services, software, tools, or deliverables for itself or third parties, or to utilize general concepts, ideas, skills, methodologies, and know-how retained in the memories of Service Provider personnel.

9.2 Assignment and Ownership of Deliverables

9.2.1 Conditional Assignment

Subject to, and strictly conditioned upon, Customer’s full, final, and non-appealable payment of all applicable Fees, expenses, and invoices due under the applicable SOW, Service Provider hereby assigns to Customer all of Service Provider’s right, title, and interest in and to the custom Final Deliverables created specifically and exclusively for Customer under such SOW.

9.2.2 Exclusions from Assignment

The assignment set forth in Section 9.2.1 applies solely to the customized, client-specific elements of the Final Deliverables and expressly excludes:

• (a) All Background IP, Innovations, and Service Provider IP incorporated into or underlying the Deliverables (which remain exclusively owned by Service Provider pursuant to Section 9.1);
• (b) All Third-Party Services, open-source software, and Licensed Services (which remain governed by their respective third-party license terms); and
• (c) Any draft, unaccepted, or work-in-progress Deliverables created prior to final Acceptance and payment.

9.2.3 Consequences of Non-Payment or Default

If Customer fails to pay any Fees when due, or if an SOW is terminated due to Customer’s breach prior to full payment, no ownership rights in any Deliverables or work product shall transfer to Customer. In such event, Customer shall immediately cease all use of, return, or permanently delete all copies of any Deliverables, work-in-progress, or related material provided by Service Provider, and Service Provider shall retain sole and unencumbered title to all work product.

9.3 Embedded Service Provider IP License

To the extent any Background IP, Innovations, or Service Provider IP (including pre-existing software, code libraries, frameworks, or tools) are incorporated into, embedded within, or required for the operation of any assigned Final Deliverable, Service Provider grants Customer a perpetual, non-exclusive, non-transferable, non-sublicensable, royalty-free, worldwide license to use such Service Provider IP solely as embedded in, integrated with, and strictly necessary for the internal operational use of that specific Final Deliverable.

Customer shall not: (a) reverse engineer, decompile, disassemble, or attempt to derive the source code or underlying structure of any embedded Service Provider IP; (b) separate, extract, or distribute embedded Service Provider IP independently from the Final Deliverable; or (c) use embedded Service Provider IP to provide commercial services or software products to third parties.

The license granted under this Section 9.3 is explicitly conditioned upon Customer’s ongoing compliance with this Agreement and timely payment of all applicable Fees. Service Provider reserves the right to revoke or suspend such license upon written notice in the event of Customer’s uncured material breach or non-payment.

9.4 Customer Materials, Data License, & Feedback

9.4.1 Customer Materials & License Grant

Customer retains sole ownership of all right, title, and interest in and to Customer Materials and Customer Data. Customer grants Service Provider, its Affiliates, and its third-party contractors/subcontractors a worldwide, non-exclusive, royalty-free, fully paid-up license to host, copy, transmit, perform, display, modify, adapt, format, store, and otherwise use Customer Materials and Customer Data solely to perform the Services, fulfill SOW obligations, verify compliance, and provide support. Customer represents and warrants that it owns or has secured all necessary rights, permissions, and third-party licenses to provide Customer Materials to Service Provider without infringing any third-party rights or laws.

9.4.2 Archival & Backup Retention

Service Provider shall have the right to retain copies of Customer Materials and Customer Data following expiration or termination of this Agreement solely to the extent required for legal compliance, audit obligations, tax records, or automated, non-targeted system backups maintained in the ordinary course of business.

9.4.3 Feedback

Customer irrevocably assigns to Service Provider all right, title, and interest (including all intellectual property rights) in and to any feedback, suggestions, enhancements, ideas, recommendations, or feature requests provided by Customer or its personnel regarding the Services, technology, software, or operations of Service Provider. Service Provider shall be free to use, implement, commercialize, and exploit such feedback without restriction, attribution, or compensation to Customer.

10. CONFIDENTIALITY

10.1 Confidentiality Obligations

Each Party (“Recipient”) shall protect and preserve the strictly confidential nature of all Confidential Information disclosed by or on behalf of the other Party (“Discloser”). Recipient shall:

• (a) Hold all Confidential Information in strict confidence using at least the same degree of care it uses to protect its own confidential information of like nature, but in no event less than a reasonable degree of care;
• (b) Not disclose, divulge, or grant access to Discloser’s Confidential Information to any third party, except to its own officers, directors, employees, legal advisors, financial accountants, and approved subcontractors (“Representatives”) who have a legitimate “need to know” such information to fulfill obligations or exercise rights under this Agreement; and
• (c) Ensure that all Representatives receiving Confidential Information are bound by written confidentiality agreements or professional ethical duties no less restrictive than those set forth in this Section 10. Recipient shall remain fully liable for any unauthorized disclosure or use of Confidential Information by its Representatives.

“Confidential Information” means all non-public, proprietary, or confidential information disclosed by one Party (“Discloser”) to the other Party (“Recipient”) under or in connection with this Agreement, whether orally, visually, or in writing, and whether recorded on physical or electronic media, including: (a) trade secrets, inventions, source code, software architecture, designs, algorithms, APIs, formulas, data models, technical data, and product roadmaps; (b) business plans, financial information, pricing structures, SOW proposals, customer lists, vendor lists, and marketing strategies; (c) the terms, pricing, and conditions of this Agreement and any SOW; and (d) any other information that is designated as confidential or proprietary, or that a reasonable person under the circumstances would understand to be confidential.

10.2 Survival Period

The confidentiality obligations under this Section 10 shall remain in full force and effect during the term of this Agreement and for a period of five (5) years following the expiration or effective date of termination of this Agreement; provided, however, that with respect to any Confidential Information that constitutes a trade secret under applicable law (including the California Uniform Trade Secrets Act), such confidentiality obligations shall survive indefinitely for as long as such information remains a trade secret.

10.3 Exceptions

Confidential Information shall not include any information that Recipient can demonstrate through objective, contemporaneous written records:

• (a) Is or becomes generally known or available to the public without breach of this Agreement by Recipient or its Representatives;
• (b) Was already lawfully known to or in the possession of Recipient prior to disclosure by Discloser, free of any obligation of confidentiality;
• (c) Is independently developed by Recipient without reliance on, access to, or reference to Discloser’s Confidential Information; or
• (d) Is rightfully received by Recipient from a third party without restrictions on disclosure and without breach of any legal or contractual duty of confidentiality owed to Discloser.

10.4 Legal Compulsion & Mandatory Disclosures

If Recipient or any of its Representatives receives a subpoena, court order, administrative demand, or other legal process requesting or compelling disclosure of Discloser’s Confidential Information, Recipient shall (to the extent legally permissible) provide Discloser with prompt written notice so that Discloser may seek a protective order, confidential treatment, or other appropriate legal remedy. If no protective order is obtained, Recipient shall disclose only that portion of Confidential Information that its legal counsel advises it is legally required to disclose, and shall exercise reasonable efforts to obtain reliable assurances that confidential treatment will be afforded to the disclosed information.

10.5 Injunctive Relief

Recipient acknowledges that any unauthorized use, disclosure, or misappropriation of Discloser’s Confidential Information may cause irreparable harm and significant injury to Discloser for which monetary damages alone would be an inadequate remedy. Accordingly, in the event of any actual or threatened breach of this Section 10, Discloser shall be entitled to seek immediate injunctive relief, specific performance, and any other equitable remedies from a court or arbitrator of competent jurisdiction, without the necessity of posting a bond or proving actual monetary damages.

10.6 Precedence of Separate Non-Disclosure Agreements

If the Parties have executed a separate, formal Non-Disclosure Agreement (NDA) signed by authorized officers of both Parties that specifically addresses the protection of confidential information exchanged between them, the terms of such separate NDA shall control and supersede this Section 10 to the extent of any direct, explicit conflict between their terms

11. LIMITED WARRANTIES & DISCLAIMERS

11.1 Limited Performance & Non-Infringement Warranty

Service Provider warrants that: (a) Services shall be performed in a professional manner consistent with industry standards; and (b) custom Deliverables created solely by Service Provider will not infringe issued U.S. patent or registered copyright as delivered. THIS LIMITED WARRANTY EXPIRES NINETY (90) DAYS FOLLOWING ACCEPTANCE (“WARRANTY PERIOD”).

The limited warranty set forth in Section 11.1 shall not apply, and Service Provider shall have no warranty obligation, liability, or indemnification duty, for any claim of infringement or misappropriation arising out of or resulting from:

• (a) Any modification, alteration, enhancement, or derivative work of the Deliverable made by Customer or any third party not authorized in writing by Service Provider;
• (b) The combination, operation, or use of the Deliverable with any software, hardware, system, network, interface, data, or product not supplied or expressly approved in writing by Service Provider;
• (c) Service Provider’s compliance with Customer’s specifications, designs, instructions, requirements, source code, or Customer Materials;
• (d) Customer’s use of the Deliverable in a manner inconsistent with its documentation, outside the scope of the applicable SOW, or in breach of this Agreement;
• (e) Customer’s failure to implement any update, bug fix, or modified version provided by Service Provider that would have avoided or cured the alleged infringement; or
• (f) Open-source software, third-party software, or third-party APIs embedded within or utilized by the Deliverable

11.2 COMPREHENSIVE WARRANTY DISCLAIMER & NO GUARANTEE OF RESULTS

EXCEPT AS EXPRESSLY STATED IN SECTION 11.1, ALL SERVICES AND DELIVERABLES ARE PROVIDED “AS IS”AND “AS AVAILABLE.” SERVICE PROVIDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, AND SYSTEM INTEGRATION. CUSTOMER EXPRESSLY ACKNOWLEDGES AND AGREES THAT SERVICE PROVIDER DOES NOT GUARANTEE, WARRANT, OR REPRESENT THAT THE SERVICES OR DELIVERABLES WILL ACHIEVE ANY SPECIFIC RESULTS, FINANCIAL OUTCOMES, PROFIT MARGINS, REVENUE TARGETS, COST SAVINGS, EFFICIENCIES, OR BUSINESS SUCCESS. SUCCESS DEPENDS ON NUMEROUS FACTORS OUTSIDE SERVICE PROVIDER’S CONTROL, AND SERVICE PROVIDER DISCLAIMS ALL LIABILITY FOR FAILURE TO ACHIEVE EXPECTED OUTCOMES. SERVICE PROVIDER DOES NOT WARRANT THAT SERVICES WILL BE UNINTERRUPTED, SECURE, OR ERROR-FREE.

12. LIMITATIONS OF LIABILITY

12.1 EXCLUSION OF INDIRECT & CONSEQUENTIAL DAMAGES

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL SERVICE PROVIDER BE LIABLE TO CUSTOMER OR ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, OR FOR LOSS OF PROFITS, REVENUE, DATA, GOODWILL, SAVINGS, OR BUSINESS INTERRUPTION, REGARDLESS OF THEORY OF LIABILITY (CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE), EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

12.2 MONETARY CUMULATIVE LIABILITY CAP

EXCLUDING SERVICE PROVIDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, SERVICE PROVIDER’S TOTAL AGGREGATE CUMULATIVE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, ALL SOWS, AND ALL SERVICES SHALL BE STRICTLY LIMITED TO THE LESSER OF:

(A) THE TOTAL FEES ACTUALLY PAID BY CUSTOMER TO SERVICE PROVIDER UNDER THE SPECIFIC SOW GIVING RISE TO LIABILITY IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM; OR

(B) ONE HUNDRED THOUSAND DOLLARS ($100,000.00).

12.3 Data Backups & Restorations

Customer is solely responsible for maintaining complete data backups. Service Provider's liability for data corruption or loss is strictly limited to using commercially reasonable efforts to assist Customer in restoring data from Customer’s most recent clean backup, subject to the monetary cap in Section 12.2.

13. INDEMNIFICATION

13.1 Customer Indemnification Obligation

Customer shall defend, indemnify, and hold harmless Service Provider, its Affiliates, officers, directors, employees, contractors, and agents from and against all claims, liabilities, losses, judgments, damages, and expenses (including reasonable attorneys' fees) arising out of or relating to: (a) Customer Materials, including third-party IP infringement claims; (b) Customer’s breach of this Agreement or SOW; (c) Customer’s use of Deliverables in violation of applicable law; or (d) Customer’s gross negligence or willful misconduct.

13.2 Service Provider Indemnification

13.2.1 Scope of Indemnity

Subject to the conditions, procedures, carveouts, and limitations set forth in this Section 13, Service Provider shall indemnify and hold harmless Customer against direct monetary damages actually awarded by a court of competent jurisdiction in a final, non-appealable judgment (or agreed to in a written settlement executed by Service Provider) resulting solely from a third-party claim alleging that custom Final Deliverables created solely by Service Provider directly infringe an issued United States patent or registered copyright. Service Provider shall have no duty or obligation under this Agreement to defend Customer, pay defense or legal fees prior to a final judgment, or provide legal representation in connection with any third-party action, suit, or proceeding.

13.2.2 Exclusions & Carveouts

Service Provider shall have no obligation, liability, or duty to defend or indemnify Customer under Section 13.2.1 for any claim of infringement or misappropriation to the extent arising out of or resulting from:

• (a) Any modification, alteration, enhancement, or derivative work of the Deliverables made by Customer or any third party not authorized in writing by Service Provider;
• (b) The combination, operation, or use of the Deliverables with any software, hardware, network, system, interface, data, or product not supplied or expressly approved in writing by Service Provider;
• (c) Service Provider’s compliance with Customer’s specifications, designs, wireframes, code, instructions, requirements, or Customer Materials;
• (d) Customer’s continued use of the Deliverables after being notified of an alleged infringement or after being provided a non-infringing update, modification, or replacement by Service Provider;
• (e) Customer’s use of the Deliverables in a manner inconsistent with its documentation, outside the scope of the applicable SOW, or in breach of this Agreement; or
• (f) Open-source software, third-party software, third-party services, or third-party APIs embedded within or utilized by the Deliverable.

13.2.3 Service Provider Remedies & Mitigation

If a Deliverable becomes, or in Service Provider’s reasonable opinion is likely to become, the subject of an infringement claim, Service Provider shall have the option, at its sole discretion and expense, to: (a) procure for Customer the right to continue using the Deliverable; (b) replace or modify the Deliverable so that it becomes non-infringing while retaining substantially equivalent functionality; or (c) if options (a) and (b) are not commercially feasible, terminate the applicable SOW upon written notice and refund to Customer any pre-paid, unearned Fees for the affected Deliverable (less reasonable amortization for past use). Section 13.2 states Service Provider’s sole and exclusive liability, and Customer’s sole and exclusive remedy, for any actual or alleged infringement, misappropriation, or violation of any intellectual property or proprietary rights arising out of or relating to the Services, Deliverables, or this Agreement.

13.2.4 Liability Cap & Defense Conditions

Service Provider’s total aggregate liability arising out of or relating to this Section 13.2 shall be strictly capped at, and shall not exceed, the total Fees actually paid by Customer to Service Provider under the specific SOW giving rise to the claim. Service Provider’s obligations under this Section 13.2 are expressly conditioned upon Customer: (i) providing prompt written notice of the claim to Service Provider within ten (10) days of receipt; (ii) granting Service Provider sole and exclusive control over the defense and settlement of the claim; and (iii) providing all reasonable cooperation and assistance to Service Provider at Service Provider’s expense

13.3 Customer Indemnity Cap

Customer’s aggregate indemnity obligations under Section 13.1 are capped at the greater of three times (3x) total Fees paid in the preceding 12 months or $500,000, except for claims arising from gross negligence, willful misconduct, fraud, or breach of confidentiality, which remain uncapped.

14. RECRUITMENT & PERSONNEL CONVERSION FEE

14.1 Non-Solicitation & Notice

During the term of this Agreement and for a period of twelve (12) months following the expiration or termination of the applicable SOW under which personnel provided Services, Customer shall not directly or indirectly solicit for employment or engagement any employee, developer, or contractor of Service Provider who was assigned to or materially involved in performing Services for Customer. General public job postings or employment advertisements not targeted specifically at Service Provider personnel shall not constitute a breach of this Section 14.1.

14.2 Conversion / Placement Fee

The Parties acknowledge that Service Provider invests substantial time, effort, and expense in recruiting, training, and retaining its personnel. In the event Customer directly or indirectly hires, contracts with, or engages any employee or contractor of Service Provider who performed Services under an SOW during the preceding twelve (12) months (whether permitted or in breach of Section 14.1), Customer shall pay Service Provider a recruitment and personnel conversion fee equal to one hundred percent (100%) of the hired individual’s annualized total compensation (including base salary, target bonuses, and projected contractor fees) expected at the new position, or fifty thousand dollars ($50,000), whichever is greater.

14.3 Enforceability & Pre-Estimate of Costs

Customer agrees that the conversion fee set forth in Section 14.2 represents a reasonable pre-estimate under California Civil Code Section 1671 of Service Provider’s actual costs to recruit, onboard, train, and replace qualified replacement personnel and lost operational capacity, and is agreed upon as an arm's-length commercial placement fee and reimbursement mechanism, and not a penalty or restraint on trade. Customer shall pay such conversion fee within ten (10) Business Days of the individual’s start date with Customer.

15. DATA SECURITY & INCIDENT NOTIFICATION

15.1 Safeguards & Limitations

Service Provider shall maintain commercially reasonable administrative, physical, and technical safeguards designed to protect Customer Data from unauthorized access, loss, or disclosure. Customer agrees that: (a) Service Provider’s security obligations apply strictly to systems under Service Provider’s direct administrative control; (b) Customer remains solely responsible for the security, protection, and backup of its own credentials, devices, and systems; and (c) Service Provider does not warrant or guarantee that its security measures are error-free, impenetrable, or immune to third-party criminal acts or sophisticated cyber-attacks.

15.2 Security Incident Definition & Notice

• (a) Definition. A “Security Incident” means an actual, confirmed breach of security directly resulting in unauthorized access to, or unauthorized acquisition, alteration, or destruction of, unencrypted Customer Data in Service Provider’s possession. Routine, unconfirmed, or unsuccessful security events—including pings, port scans, denial-of-service attempts, failed login attempts, or malware blocked by security controls—do not constitute a Security Incident.
• (b) Notification Timeline. Service Provider shall notify Customer in writing of a confirmed Security Incident affecting Customer Data within seventy-two (72) hours following final confirmation of the incident by Service Provider’s security personnel. Up to forty-eight (48) hours spent performing initial investigation, triage, and verification prior to final confirmation shall be excluded from such notification window.

15.3 Incident Response, Costs & Remediation

• (a) Remediation Scope. In the event of a confirmed Security Incident, Service Provider’s sole obligation shall be to take commercially reasonable steps to contain and mitigate the impact of the Security Incident within its systems.
• (b) Cost Allocation. Unless the Security Incident is determined by a final, non-appealable court order to have resulted directly from Service Provider’s gross negligence or willful misconduct, Customer shall be solely responsible for all costs, fees, and expenses associated with responding to the Security Incident, including: (i) public relations and customer notification costs; (ii) credit monitoring, identity theft protection, or legal compliance costs incurred by Customer; and (iii) any regulatory fines or penalties assessed against Customer.
• (c) Investigation Constraints. Service Provider shall not be required to provide Customer with access to Service Provider’s proprietary source code, underlying infrastructure, or data belonging to third parties or other clients during any incident investigation.

16. AMENDMENTS & MODIFICATIONS

16.1 Master Terms Modifications & Notice

Service Provider reserves the right to modify the general terms of this Agreement from time to time. Service Provider shall provide Customer with written notice of any material modification to this Agreement at least thirty (30) calendar days prior to its effective date via direct email to Customer’s primary billing or legal contact on file, or via a prominent notification within Service Provider’s account portal. Non-material updates (such as clerical corrections or formatting changes) take effect immediately upon posting.

16.2 Effect on Active SOWs & Future Engagements

• (a) Future SOWs: Modified terms shall automatically apply to all SOWs executed, renewed, or extended on or after the effective date of such modification.
• (b) Currently Active SOWs: Unless Customer opts out under Section 16.3, modified terms shall apply prospectively to active, unexpired SOWs beginning thirty (30) days following notice.

16.3 Customer Opt-Out & Remedy

If a material modification adversely and materially alters Customer’s rights or financial obligations under an active, ongoing SOW, Customer may object to such modification by delivering written notice to Service Provider within fifteen (15) calendar days of receiving notice of the modification. Upon Service Provider's receipt of Customer's timely objection:

• (a) Service Provider may, in its sole discretion, elect to allow the affected active SOW to continue under the unmodified, prior version of this Agreement through the remainder of the then-current initial SOW term; or
• (b) If Service Provider declines to waive the modification for the affected SOW, Customer may terminate the affected SOW without penalty, acceleration of unearned future minimum fees, or payment of the 25% liquidated termination fee, provided Customer pays Service Provider for all Services performed, work-in-progress, and reimbursable expenses incurred through the effective date of termination. Customer’s failure to deliver a written objection within fifteen (15) calendar days, or Customer’s continued use of Services or execution of new SOWs following the effective date, constitutes binding acceptance of the modified terms.

17. GOVERNING LAW, ARBITRATION & VENUE

17.1 Governing Law

This Agreement, all SOWs, and any claims arising out of or related to the transaction shall be governed by and construed in accordance with the internal laws of the State of California, without regard to conflicts of law principles.

17.2 Mandatory Binding Arbitration

Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement, any SOW, the breach thereof, or the Services provided shall be resolved exclusively through final and binding arbitration administered by the American Arbitration Association (AAA) under its Commercial Arbitration Rules. Arbitration shall be conducted by a single neutral arbitrator selected in accordance with AAA rules in Sacramento, California, in the English language. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

17.3 FAA, Small Claims & Injunctive Exception

This arbitration provision is made pursuant to a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1–16). Either Party may bring an individual action in a small claims court of competent jurisdiction in Sacramento County, California for claims within such court’s statutory limits ($10,000 or less). Notwithstanding Section 17.2, either Party may seek temporary, preliminary, or permanent injunctive or other equitable relief in a court of competent jurisdiction to protect or enforce its intellectual property rights, Confidential Information, or trade secrets without waiving arbitration rights.

17.4 CLASS ACTION & REPRESENTATIVE PROCEEDING WAIVER

ALL CLAIMS AND DISPUTES MUST BE ARBITRATED OR LITIGATED ON AN INDIVIDUAL BASIS AND NOT ON A CLASS, CONSOLIDATED, OR REPRESENTATIVE BASIS. CUSTOMER IRREVOCABLY WAIVES ALL RIGHTS TO INITIATE, JOIN, COVER, OR PARTICIPATE AS A PLAINTIFF, CLASS MEMBER, OR PRIVATE ATTORNEY GENERAL IN ANY CLASS ACTION, CLASS ARBITRATION, OR REPRESENTATIVE PROCEEDING AGAINST SERVICE PROVIDER. If a court or arbitrator determines that applicable law precludes enforcement of this Section 17.4 as to a particular claim for relief (such as public injunctive relief under California law), that specific claim shall be severed from arbitration and stayed pending final resolution of all arbitratable claims.

17.5 JURY TRIAL WAIVER

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE CALIFORNIA LAW, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY SOW, OR THE SERVICES.

17.6 Judicial Jurisdiction & Venue

For non-arbitrable matters, enforcement of arbitration awards, or seeking emergency equitable relief under Section 17.3, the Parties consent to the sole and exclusive jurisdiction and venue of the state courts located in Sacramento County, California, or the United States District Court for the Eastern District of California.

17.7 Attorneys’ Fees & Collection Costs

If any legal action, arbitration, or proceeding is brought to enforce or interpret this Agreement or collect unpaid Fees, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable attorneys’ fees, court/arbitration costs, paralegal fees, expert witness fees, and collection agency fees incurred in connection therewith, in addition to any other relief awarded.

17.8 Limitation on Period to Bring Claims

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ANY ARBITRATION DEMAND, LAWSUIT, OR LEGAL PROCEEDING BROUGHT BY CUSTOMER AGAINST SERVICE PROVIDER ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY SOW, OR THE SERVICES MUST BE COMMENCED WITHIN ONE (1) YEAR FOLLOWING THE INITIAL ACCRUAL OF THE CAUSE OF ACTION. FAILURE BY CUSTOMER TO COMMENCE AN ACTION WITHIN SUCH ONE-YEAR PERIOD SHALL CONSTITUTE AN ABSOLUTE AND IRREVOCABLE WAIVER AND BAR OF SUCH CLAIM. THIS ONE-YEAR LIMITATION PERIOD SHALL NOT APPLY TO SERVICE PROVIDER’S RIGHT TO INITIATE COLLECTION PROCEEDINGS, ARBITRATION, OR LEGAL ACTIONS TO RECOVER UNPAID FEES, INTEREST, EXPENSES, OR LIQUIDATED DAMAGES OWED BY CUSTOMER UNDER THIS AGREEMENT OR ANY SOW.

18. MISCELLANEOUS

18.1 Entire Agreement & Priority of Documents

This Agreement, together with all active SOWs, Change Orders, and exhibits, constitutes the complete, final, and exclusive statement of agreement between the Parties regarding its subject matter and supersedes all prior or contemporaneous discussions, proposals, negotiations, promises, and agreements, whether oral or written. Pre-printed, conflicting, or additional terms contained on any Customer purchase order, procurement form, vendor portal, or acknowledgment are explicitly rejected, shall be deemed null and void, and shall have no legal force or effect, even if signed or acknowledged by Service Provider. In the event of a direct conflict, the order of precedence shall be: (a) a fully executed SOW (solely regarding the specific scope of that SOW); (b) a fully executed Change Order; and (c) this Agreement.

18.2 Severability & Judicial Modification

If any provision of this Agreement (or any SOW) is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall not be voided entirely. Instead, it shall be modified and reformed to the minimum extent necessary to render it valid, legal, and enforceable while preserving its original economic intent and risk allocation. If such modification is not legally permissible, the invalid provision shall be severed, and all remaining provisions of this Agreement shall continue in full force and effect.

18.3 Non-Waiver

No failure or delay by either Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise preclude any other or further exercise thereof or the exercise of any other right.

18.4 Assignment

Customer shall not assign, delegate, or transfer this Agreement or any SOW, by operation of law or otherwise, without Service Provider’s prior written consent. Any attempted assignment without consent shall be void. Service Provider may freely assign, transfer, or delegate this Agreement, SOWs, or its rights and duties hereunder to an Affiliate or in connection with a merger, acquisition, corporate reorganization, or sale of substantially all assets or equity.

18.5 Force Majeure

Neither Party shall be liable or deemed in default for any failure or delay in performing its obligations under this Agreement (except for Customer’s payment obligations) to the extent caused by events beyond its reasonable control, including acts of God, fire, flood, natural disasters, war, terrorism, civil unrest, cyberattacks, systemic internet or power grid outages, labor strikes, or government mandates/restrictions (“Force Majeure Event”). A Party experiencing a Force Majeure Event shall give prompt notice to the other Party. If a Force Majeure Event continues continuously for more than sixty (60) calendar days, either Party may terminate the affected SOW upon written notice, provided Customer pays Service Provider for all Services performed, work-in-progress, and non-cancellable third-party commitments incurred through the date of termination.

18.6 Insurance

Service Provider shall maintain during the term of this Agreement: (a) Commercial General Liability insurance of at least $1,000,000 per occurrence / $2,000,000 aggregate; (b) Professional Liability / Technology Errors & Omissions insurance of at least $1,000,000 per claim; and (c) Cyber Liability insurance of at least $1,000,000 per claim. Service Provider shall provide certificates of insurance upon written request, no more than once per calendar year.

18.7 Marketing Rights & Publicity

Customer grants Service Provider a limited, non-exclusive, royalty-free license to use Customer’s name, trade name, and logo on Service Provider’s website, marketing materials, and sales presentations to identify Customer as a client. Case studies, press releases, or detailed public success stories require Customer’s written approval; provided, however, that Customer’s approval shall be deemed granted if Customer fails to object in writing within ten (10) Business Days following receipt of Service Provider's draft proposal.

18.8 Notices

All formal legal notices, demands, or communications under this Agreement must be in writing and delivered: (a) by personal delivery; (b) by a nationally recognized overnight courier (tracking required); or (c) by electronic mail with confirmation of delivery. Notices to Service Provider shall be sent to legal@shadowrock.io. Notices to Customer shall be sent to the primary address or email specified in the most recent SOW. Notices are deemed received upon confirmed delivery.

18.9 Independent Contractor Status

The relationship between Service Provider and Customer is solely that of independent contractors. Nothing in this Agreement or any SOW shall be construed to create a partnership, joint venture, agency, franchise, sales representative, or employment relationship between the Parties. Neither Party is an agent or legal representative of the other, and neither Party has any authority to assume, create, or bind the other Party to any obligation, representation, or responsibility, express or implied. Service Provider retains sole control over the manner, means, and methods of performing the Services, and Service Provider’s personnel shall not be entitled to any employee benefits, workers' compensation, or insurance provided by Customer.

18.10 Compliance with Laws & Export Control

Each Party shall comply with all applicable federal, state, and local laws, statutes, and regulations in connection with its performance under this Agreement. Customer shall not export, re-export, or transfer, directly or indirectly, any software, technology, or technical data provided by Service Provider in violation of U.S. export control laws or sanctions programs.

18.11 Electronic Signatures & Counterparts

This Agreement, SOWs, and Change Orders may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed signature page by electronic signature service (e.g., DocuSign), PDF email transmission, or electronic clickwrap acceptance shall be legal, valid, and binding under the Federal E-SIGN Act and California UETA.

18.12 No Third-Party Beneficiaries & Construction

This Agreement is entered into solely for the benefit of the Parties hereto and their respective permitted successors and assigns. Nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, or remedy. The rule of construction that ambiguities are resolved against the drafting party shall not apply to this Agreement.