This Master Services Agreement (the "MSA") is entered into as of the Effective Date by and between Avala AI, Inc., a Delaware corporation with offices at 403 Broderick Street, Unit 3, San Francisco, CA 94117 ("Avala"), and the customer identified on the applicable order form ("Customer"). Avala and Customer are each a "Party" and together the "Parties."
This MSA governs Avala's provision of Services to Customer under one or more Statements of Work (each, a "SoW") executed by the Parties from time to time.
1. Services
1.1 Services and SoWs
Avala will provide annotation, sensor fusion, calibration, dataset management, managed auto-labeling, and related services (the "Services") to Customer as described in each SoW. Each SoW, when signed by both Parties, is incorporated into and governed by this MSA. The Parties may execute additional SoWs from time to time under this MSA.
1.2 Non-Exclusivity
Avala is a non-exclusive provider. Neither Party is obligated to purchase or provide any minimum volume of Services except as expressly committed in a SoW.
1.3 Independent Contractor
Avala performs the Services as an independent contractor. Nothing in this MSA creates a partnership, joint venture, or employment relationship between the Parties. Neither Party may bind the other.
2. Fees and Payment
2.1 Fees
Fees for the Services are set forth in each SoW. Unless a SoW provides otherwise, Avala invoices Customer in accordance with the payment schedule in the applicable SoW. All fees are in U.S. dollars.
2.2 Payment
Invoices are payable per the terms in the applicable SoW (or, if silent, Net 30 days from invoice date) by ACH or wire transfer to the account designated by Avala in writing.
2.3 Disputed Amounts
Customer may dispute any invoice in good faith by written notice to Avala within fifteen (15) business days of receipt, identifying the disputed items with reasonable specificity. Undisputed amounts remain payable per Section 2.2. The Parties will work in good faith to resolve disputes within fifteen (15) business days of notice.
2.4 Late Payment
Undisputed amounts not paid by the due date accrue interest at the lesser of 1% per month or the maximum rate permitted by law. Avala may suspend Services on ten (10) business days' written notice for any undisputed amount more than thirty (30) days past due, provided that any prepaid amounts are credited against the suspended period.
2.5 Taxes
Stated fees are exclusive of sales, use, and similar transactional taxes, which Customer will pay or reimburse where lawfully assessed. Each Party is responsible for its own income taxes.
3. Term and Termination
3.1 Term
This MSA takes effect on the Effective Date and continues until terminated under this Section 3. Each SoW has its own term as set forth in the SoW.
3.2 Termination for Convenience (MSA)
Either Party may terminate this MSA for convenience on thirty (30) days' prior written notice, provided that any SoW then in effect continues to govern through its stated term unless separately terminated.
3.3 Termination for Material Breach
Either Party may terminate this MSA or any SoW for material breach if the breach is not cured within thirty (30) days after written notice describing the breach with reasonable specificity.
3.4 Effect of Termination
On termination of any SoW, Customer will pay Avala for all Services performed through the effective date of termination, plus any minimum or prepaid commitments under the SoW that remain unsatisfied (except in the case of termination by Customer for Avala's uncured material breach, in which case unsatisfied minimums are excused on a prospective basis). Sections 4 through 9, 11, and 12 survive any termination.
3.5 Emergency Suspension
Avala may immediately suspend Customer's access to the Mission Control platform or the Services without prior notice if Avala reasonably determines that Customer's account has been compromised, is being used fraudulently, or poses an imminent security risk to Avala's systems or other customers. Avala will restore access as soon as the underlying risk is resolved.
4. Confidentiality
4.1 NDA Governs Where in Place
If a Mutual Non-Disclosure Agreement between Customer (or its affiliate) and Avala AI, Inc. (the "NDA") is in effect, the Parties' confidentiality obligations are governed by the NDA, which is hereby incorporated into this MSA by reference. The NDA's confidentiality and non-use obligations continue in effect throughout the term of this MSA and survive termination per the NDA's own survival terms. To the extent the NDA expires before this MSA terminates, the Parties will execute a renewal NDA on substantially the same terms, and the obligations of the NDA will continue in effect until renewed.
4.2 Default Covenants
If no NDA is in effect at the time a SoW is executed (or during any gap between NDAs), the following default confidentiality covenants apply and bind each Party, with retroactive effect to the start of the engagement, until an NDA is executed:
(a) Confidential Information means any non-public information disclosed by one Party (the "Disclosing Party") to the other (the "Receiving Party") in connection with this MSA or any SoW, including Customer Data, Deliverables, Avala Technology, pricing, business plans, technical information, and any information a reasonable person would understand to be confidential under the circumstances.
(b) Obligations. The Receiving Party will (i) use Confidential Information solely to perform its obligations and exercise its rights under this MSA, (ii) not disclose Confidential Information to any third party except to its employees, contractors, advisors, and affiliates who have a need to know and are bound by written or professional confidentiality obligations no less protective than this Section 4.2, and (iii) protect Confidential Information using at least the same degree of care it uses to protect its own confidential information of like importance, and in no event less than a reasonable degree of care.
(c) Exclusions. Confidential Information does not include information that (i) is or becomes publicly available through no fault of the Receiving Party, (ii) was rightfully known to the Receiving Party without restriction before disclosure, (iii) is rightfully received from a third party without a duty of confidentiality, or (iv) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information.
(d) Compelled Disclosure. If the Receiving Party is required by law or binding legal process to disclose Confidential Information, it will, where legally permitted, give the Disclosing Party prior written notice and reasonable cooperation, at the Disclosing Party's expense, so the Disclosing Party may seek a protective order or otherwise contest the disclosure.
(e) Survival. Obligations under this Section 4.2 survive for three (3) years after termination of this MSA, except that obligations with respect to Customer Data and any information that constitutes a trade secret under applicable law survive for so long as such information remains a trade secret.
If an NDA is subsequently executed, the NDA governs from its effective date forward, and any disclosures made before that date remain subject to this Section 4.2.
5. Intellectual Property and Data
5.1 Customer Data
As between the Parties, Customer owns all data, sensor recordings, telemetry, and other materials that Customer provides to Avala for use in performing the Services ("Customer Data"). Customer grants Avala a non-exclusive, royalty-free, worldwide license to use Customer Data solely as necessary to perform the Services and to fulfill Avala's obligations under this MSA and any SoW. The Parties acknowledge that Customer Data derived from the operation of autonomous vehicles, robots, or other systems may incidentally include personal information such as images of faces or license plates of individuals in public spaces; Avala will handle such information consistent with its security program in Section 6. If Customer Data is expected to include categories of personal information subject to sector-specific regulation, Customer will notify Avala in advance so the Parties can confirm appropriate processing measures, including any necessary data processing addendum. Customer is responsible for maintaining its own copies of Customer Data. Avala provides the Services as an annotation and data-processing provider and is not a system of record or backup service for Customer Data.
5.2 Deliverables
As between the Parties, Customer owns all annotations, labels, and inference outputs that Avala delivers to Customer under a SoW ("Deliverables"). Title to Deliverables transfers to Customer upon payment of the fees applicable to those Deliverables.
5.3 Avala Technology
As between the Parties, Avala owns and retains all right, title, and interest in and to its underlying platform, tools, methodologies, Mission Control software, auto-labeling models, training pipelines, model weights, evaluation infrastructure, documentation, and any improvements thereto, in each case whether existing prior to or developed during performance of the Services and not consisting of Deliverables (collectively, "Avala Technology"). Avala Technology does not include Customer Data or Deliverables.
5.4 Model Training on Customer Data
Avala may train, fine-tune, and improve auto-labeling and related models using Customer Data solely (a) to provide the Services to Customer and (b) to develop and improve Avala Technology in ways that do not embody, identify, or expose Customer Data, Deliverables, or Customer's confidential information. Avala will not provide Customer-specific fine-tuned model weights or Customer-derived training data to any third party, and will not use Customer Data to train models that are sold or licensed to any direct competitor of Customer (e.g., other developers or operators of comparable autonomous systems, vehicles, or robots, or a specific list of competitors provided by Customer in writing from time to time).
5.5 Anonymized Metrics
Avala may collect and generate anonymized, aggregated operational metrics derived from the Services (e.g., throughput, accuracy distributions, system telemetry). As between the Parties, Avala solely and exclusively owns all right, title, and interest in and to such anonymized metrics, and Customer hereby assigns to Avala any rights it may have therein. To the extent any such rights are not assignable, Customer grants Avala a perpetual, irrevocable, worldwide, royalty-free, fully paid-up, sublicensable license to use and exploit those rights. Avala will not publicly disclose Customer's identity, Customer Data, or Customer-specific Deliverables without Customer's prior written consent, except as expressly permitted in Section 5.8 (Customer Identification).
5.6 Open Source
Avala will not incorporate open-source software into Deliverables under terms that would require Customer to disclose, license, or distribute Customer Data, Deliverables, or any Customer software as a condition of using the Deliverables.
5.7 Feedback and Suggestions
From time to time, Customer may share with Avala feedback, comments, ideas, or suggestions about the Services, Mission Control platform, Avala Technology, or potential new products and features ("Suggestions"). Avala may incorporate Suggestions into its products and services without obligation to or compensation of Customer. For clarity, this Section does not grant Avala any rights in Customer Data, Deliverables, or Customer's other confidential information, all of which remain governed by the other provisions of this MSA and the NDA.
5.8 Customer Identification
Avala may identify Customer as a customer of Avala by company name and logo, subject to Customer's standard brand usage guidelines, (a) on Avala's website, (b) in standard fundraising and investor materials, (c) in customer lists used in sales and marketing, and (d) in similar marketing collateral. Avala will obtain Customer's prior written approval before publishing (i) any case study, white paper, or other detailed account of the engagement, (ii) any press release referencing the engagement, or (iii) any quotation attributed to Customer or any Customer personnel. Customer may request at any reasonable time that Avala adjust or remove a particular public reference, and Avala will accommodate the request in materials produced after the request, with reasonable transition time for materials already in circulation.
5.9 Return or Deletion
Upon termination or expiration of this MSA, or Customer's written request, Avala will securely delete or return all Customer Data; provided, however, that Avala may retain trained model weights and anonymized metrics developed in compliance with Sections 5.4 and 5.5, and standard encrypted backups subject to continued confidentiality obligations.
5.10 Use Restrictions
Customer will not, and will not allow any third party to: (a) use the Services or Deliverables to create, train, develop, or improve any auto-labeling, annotation, or similar competitive machine learning models or services; (b) use the Services for benchmarking or competitive analysis of Avala; or (c) sell, resell, or distribute the Deliverables to any unaffiliated third party other than as integrated into Customer's proprietary models and products.
6. Privacy and Security
6.1 Security Program
Avala will maintain a written information security program with administrative, technical, and physical safeguards designed to protect Customer Data against unauthorized access, use, alteration, and disclosure. Avala's security program is and will remain consistent with SOC 2 controls applicable to a service provider in Avala's industry. Upon Customer's reasonable request, not more than once per year, Avala will provide a summary of its current security program and the results of its most recent SOC 2 audit, subject to confidentiality. Avala and its subcontractors may perform the Services from multiple locations, including locations outside the United States, and Avala applies its security program and data protection controls consistently across all such locations.
6.2 Personal Data
If Customer Data includes personal information regulated by applicable privacy laws (including the California Consumer Privacy Act), Avala will process such personal information only as a service provider acting on Customer's documented instructions to provide the Services. Avala will not sell or share such personal information and will not combine it with personal information received from third parties except as permitted by applicable law. The Parties will execute a data processing addendum at Customer's reasonable request if required by applicable law.
6.3 Security Incidents
Avala will notify Customer in writing without undue delay, and in any event within seventy-two (72) hours, after Avala confirms a Security Incident affecting Customer Data. "Security Incident" means a confirmed unauthorized access to, or acquisition of, Customer Data in Avala's possession or control. Avala will reasonably cooperate with Customer to investigate and mitigate the Security Incident.
6.4 Use and Disclosure of Customer Data
Avala will not access, use, or disclose Customer Data except (a) to provide the Services, (b) to train and improve auto-labeling and related models as expressly permitted in Section 5.4, (c) as directed by Customer, or (d) as required by law. If Avala is required by law or binding legal process to disclose Customer Data, Avala will, where legally permitted, give Customer prior written notice and reasonable cooperation, at Customer's expense, so Customer may seek a protective order or otherwise contest the disclosure.
7. Representations and Warranties
7.1 Mutual
Each Party represents and warrants to the other that (a) it has full corporate power and authority to enter into this MSA and to perform its obligations, and (b) execution and performance of this MSA does not breach any agreement to which it is bound.
7.2 Avala Warranties
Avala represents and warrants that (a) it will perform the Services in a professional and workmanlike manner consistent with industry standards, (b) the Deliverables, as delivered by Avala, will not infringe or misappropriate the intellectual property rights of any third party, and (c) Avala will not knowingly introduce malicious code into Customer's systems or the Deliverables. Avala's sole obligation, and Customer's sole remedy, for breach of clause (a) is the defect rework process set forth in the applicable SoW, provided that if Avala fails to successfully remediate the affected Deliverables after the agreed remediation cycles, Customer will be entitled to a refund of the fees paid for those specific non-conforming Deliverables.
7.3 Customer Warranties
Customer represents and warrants that it has the right to provide Customer Data to Avala for use in performing the Services and that such use will not infringe or misappropriate the rights of any third party or violate any applicable law.
7.4 Disclaimer
EXCEPT FOR THE WARRANTIES EXPRESSLY STATED IN THIS SECTION 7, THE SERVICES AND DELIVERABLES ARE PROVIDED "AS IS," AND AVALA DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. No statement, representation, or warranty made by any Avala employee, agent, or representative outside this MSA, whether oral or written, will be binding on Avala unless expressly set forth in this MSA or a SoW.
7.5 Nature of Outputs
The Parties acknowledge that Deliverables and any inference outputs produced by machine learning models reflect probabilistic predictions and may not be uniformly accurate across all inputs. Customer will employ human review and other validation steps appropriate to its use case before relying on Deliverables in production or in safety-critical contexts. Customer is responsible for decisions made, advice given, actions taken, and omissions in reliance on the Deliverables. Avala will have no liability for such decisions or actions, except as expressly provided in Section 7.2 (Avala Warranties), Section 8 (Indemnification), and the defect rework obligations in the applicable SoW.
8. Indemnification
8.1 By Avala
Avala will defend, indemnify, and hold harmless Customer and its officers, directors, and employees from and against any third-party claim alleging that the Deliverables, as delivered by Avala and used by Customer in accordance with this MSA, infringe or misappropriate any intellectual property right of a third party. Avala's obligations under this Section 8.1 do not apply to claims arising from (a) modifications to the Deliverables not made by Avala, (b) combination of the Deliverables with materials not supplied by Avala where the claim would not arise but for such combination, (c) use of the Deliverables outside the scope contemplated by this MSA or the applicable SoW, or (d) Customer Data.
8.2 Infringement Remedies
If Avala reasonably believes that a Deliverable is or may become subject to a claim covered by Section 8.1, Avala may, at its option and expense, (a) procure for Customer the right to continue using the affected Deliverable, (b) modify or replace the Deliverable so it is no longer infringing while remaining substantially equivalent in function, or (c) if neither (a) nor (b) is commercially reasonable, terminate the affected SoW and refund any prepaid, unused fees attributable to the Deliverable. The remedies in this Section 8.2 are Customer's exclusive remedies for IP infringement claims.
8.3 By Customer
Customer will defend, indemnify, and hold harmless Avala and its officers, directors, and employees from and against any third-party claim arising from (a) Customer Data, including any claim that Avala's use of Customer Data as authorized under this MSA infringes or misappropriates the rights of a third party, or (b) Customer's use of the Deliverables in violation of this MSA or applicable law, or (c) the physical deployment, operation, or actions of Customer's autonomous systems, vehicles, or robots, including any claims for bodily injury, death, or tangible property damage.
8.4 Procedure
The indemnified Party will (a) promptly notify the indemnifying Party of the claim, (b) give the indemnifying Party sole control of the defense and any settlement (provided that any settlement requiring the indemnified Party to admit liability or take affirmative action requires the indemnified Party's prior written consent, not to be unreasonably withheld), and (c) provide reasonable cooperation at the indemnifying Party's expense. Failure to provide prompt notice will not relieve the indemnifying Party of its obligations except to the extent it is materially prejudiced by the delay.
8.5 Cost of Legal Process
If Avala receives a subpoena, discovery demand, or other compulsory legal process from a third party arising out of the matters described in Section 8.3, Customer will reimburse Avala for the reasonable cost of responding, including reasonable attorneys' fees and the time of Avala personnel at Avala's then-current rates. This Section does not apply to legal process arising from Avala's own breach of this MSA.
9. Limitation of Liability
9.1 Liability Cap
Except for the Excluded Claims (Section 9.3), each Party's aggregate liability arising out of or related to this MSA, whether in contract, tort, or any other legal theory, will not exceed the total fees paid or payable by Customer to Avala under this MSA in the twelve (12) months preceding the event giving rise to the claim.
9.2 No Indirect Damages
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, OR FOR LOST PROFITS, LOST REVENUE, LOST BUSINESS, OR LOST DATA, OR THE COST OF COVER OR PROCUREMENT OF SUBSTITUTE SERVICES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9.3 Excluded Claims and Super-Cap
The cap in Section 9.1 does not apply to the following claims (collectively, the "Excluded Claims"):
(a) Uncapped Claims — the following claims are not subject to any cap on liability:
(i) a Party's gross negligence or willful misconduct; and
(ii) Customer's payment obligations for Services properly performed.
(b) Super-Capped Claims — the following claims are subject to a higher cap as set forth below:
(i) a Party's indemnification obligations under Section 8;
(ii) breach of confidentiality obligations under the NDA or Section 4; and
(iii) infringement or misappropriation of the other Party's intellectual property.
For Super-Capped Claims, each Party's aggregate liability will not exceed the greater of (A) three (3) times the total fees paid or payable by Customer under this MSA in the twelve (12) months preceding the claim, or (B) One Million U.S. Dollars (US$1,000,000).
The exclusion in Section 9.2 (no indirect damages) continues to apply to all claims, including the Excluded Claims.
9.4 Allocation of Risk
The Parties acknowledge that the disclaimers, exclusions, and limitations of liability in Sections 7 and 9 reflect a deliberate and agreed allocation of risk between the Parties, that this allocation is an essential basis of the bargain, and that Avala's pricing for the Services reflects this allocation. These provisions apply notwithstanding the failure of essential purpose of any limited remedy.
10. Insurance
Throughout the term of this MSA, Avala will maintain, at its own expense, commercial general liability insurance with limits of at least US$1,000,000 per occurrence and US$2,000,000 in the aggregate, errors and omissions / technology professional liability insurance with limits of at least US$1,000,000 per claim, cyber liability insurance with limits of at least US$1,000,000 per claim, and workers' compensation insurance as required by applicable law. Avala will provide certificates of insurance evidencing such coverage upon Customer's reasonable request.
11. Dispute Resolution and Governing Law
11.1 Informal Resolution
Before commencing any formal proceeding, the Parties will attempt to resolve any dispute through good-faith discussions between senior representatives for a period of at least fifteen (15) business days following written notice of the dispute.
11.2 Governing Law and Venue
This MSA is governed by the laws of the State of California, without regard to its conflict of laws principles. Subject to Section 11.1, the Parties consent to exclusive jurisdiction and venue in the state and federal courts located in San Francisco County, California for any dispute arising out of or related to this MSA. Each Party irrevocably waives any objection to such jurisdiction or venue.
11.3 Equitable Relief
Each Party acknowledges that a breach of confidentiality or intellectual property obligations may cause irreparable harm not adequately remedied by monetary damages. The non-breaching Party is entitled to seek injunctive or other equitable relief without the requirement to post bond.
11.4 Limitation on Claims
No action arising out of any breach or claimed breach of this MSA or any SoW may be brought by either Party more than one (1) year after the cause of action has accrued.
12. General
12.1 Notices
All formal notices under this MSA will be in writing and effective upon delivery by email with confirmation of receipt to the addresses designated by the Parties in the applicable order form or SoW (or such other address as a Party designates in writing). Routine operational communications may be made by email without confirmation. Notices to Avala may be sent to [email protected] and to Avala AI, Inc., 403 Broderick Street, Unit 3, San Francisco, CA 94117, Attn: Emal Alwis, CEO.
12.2 Assignment
Neither Party may assign this MSA without the other Party's prior written consent, except that either Party may assign this MSA without consent in connection with a merger, acquisition, reorganization, or sale of all or substantially all of its assets, provided that the assignee assumes all obligations under this MSA in writing.
12.3 Entire Agreement; Order of Precedence
This MSA, together with the NDA, all executed SoWs, and any addenda signed by both Parties, constitutes the entire agreement between the Parties as to its subject matter and supersedes all prior or contemporaneous understandings, written or oral. In the event of conflict, the following order of precedence applies (in descending order): the NDA (as to confidentiality), this MSA, then the applicable SoW. A SoW may amend or supersede a specific provision of this MSA only if the SoW expressly identifies the affected provision and states the Parties' intent to modify it. Any terms or conditions stated in a Customer purchase order, vendor onboarding or registration portal, security questionnaire, request for proposal or information, or similar procurement or due-diligence document are null and void and will have no effect on this MSA or any SoW, regardless of any failure of Avala to object to such terms.
12.4 Amendment
This MSA may be amended only by a written instrument signed by authorized representatives of both Parties.
12.5 Waiver; Severability
No failure or delay in exercising any right under this MSA operates as a waiver of that right. If any provision is held unenforceable, the remaining provisions remain in full force and effect, and the unenforceable provision will be modified to the minimum extent necessary to make it enforceable.
12.6 Force Majeure
Neither Party will be liable for any failure or delay in performance (other than payment obligations) to the extent caused by events beyond the Party's reasonable control, provided the affected Party gives prompt notice and uses commercially reasonable efforts to resume performance. If a force majeure event continues for more than thirty (30) consecutive days, either Party may terminate the affected SoW on written notice.
12.7 Counterparts; Electronic Signature
This MSA may be executed in counterparts and via electronic signature (including DocuSign or equivalent), each of which constitutes an original and which together constitute one agreement.
12.8 No Third-Party Beneficiaries
This MSA is for the sole benefit of the Parties and their permitted successors and assigns. Nothing in this MSA creates any rights in any third party.
13. Contact
If you have questions about this MSA or wish to request a signed version, contact us at:
Email: [email protected] Address: Avala AI, Inc., 403 Broderick Street, Unit 3, San Francisco, CA 94117