TERMS AND CONDITIONS

1. Definitions

a. “Documentation” means the user guides, online help, release notes, training materials and other documentation provided or made available by Company to an Authorized User regarding the use or operation of the SaaS Services.
b. “Authorized User” means, with respect to Customer, its owner, employees, or authorized contractors while doing work for Customer.
c. “Authorized User Content” means certain data, content, or materials provided by an Authorized User when using the SaaS Services.

Authorized User is solely responsible for the accuracy, quality, integrity, legality, reliability, appropriateness, and copyright of all Authorized User Content. Authorized User shall obtain and maintain any rights, consents, and approvals required to grant Company and authorized third parties the right to access and use any Authorized User Content for the purposes described herein.

d. “Malicious Code” means viruses, worms, time bombs, Trojan horses, and other harmful or malicious code, files, scripts, agents, or programs.

e. “Maintenance Services” means the support and maintenance services provided by Company to Customer pursuant to this Agreement and Exhibit A.

f. “Other Services” means all technical and non-technical services performed or delivered by Company under this Agreement, including, without limitation, implementation services, consulting, professional and/or customer services, training and other services but excluding the SaaS Services and the Maintenance Services. Other Services will be provided on a time and material basis at such times or during such periods, as may be specified in a Schedule and mutually agreed to by the parties. All Other Services will be provided on a non-work for hire basis.

g. “SaaS Services” means the specific Company web-based, on-line, hosted software as a service listed in a Schedule that provides use of Company’s Software and made available provided to the Customer and its Authorized User, over a network on a term-use basis.

h. “Software” means the object code version of any software to which Customer and its Authorized Users are provided access as part of the SaaS Services, including any updates or new versions.

i. “Schedule” is a written document executed by Company and Customer for the purpose of licensing use of the SaaS Services (e.g., Quote for Products and Services) consistent with the terms and conditions of this Agreement.

2. Grant of License

a. Grant. Subject to the terms and conditions of this Agreement, Company hereby grants to Customer and its Authorized Users who have been registered with Customer, a non-exclusive and nontransferable license, without right of sublicense, during the Subscription Term, to access and use the Software in connection with SaaS Services via the Internet. Customer agrees that its purchase of subscription(s) for the SaaS Services is neither contingent upon the delivery of any future functionality or features nor dependent upon any oral or written public comments made by Company with respect to future functionality or features. Upon expiration or termination of this Agreement, the rights and licenses granted hereunder will automatically terminate, and Customer and any Authorized User may not continue to use the SaaS Services.

b. Restrictions. The license granted in subsection (a) above is conditioned upon Customer and its Authorized Users’ compliance with the terms and conditions of this Agreement and all applicable law. Customer may use the SaaS Services and Documentation for its internal business purposes as well as commercialization and support of its Authorized Users as provided for herein. Customer and Authorized Users shall not: (i) permit any third party to access or use of the SaaS Services except as permitted herein, (ii) modify or create derivative works based on the SaaS Services or Documentation; (iii) modify, reverse engineer, translate, disassemble, or decompile the SaaS Services or Documentation, or cause or permit others to do so, except and only to the extent such activity is expressly permitted by applicable law; (iv) access or use the SaaS Services, or in order to (A) build a competitive product or service, or (B) copy any ideas, features, functions, or graphics of the SaaS Services, or Documentation; and (v) remove or obscure any title, trademark, copyright, and/or restricted rights notices or labels from SaaS Services or Documentation. Violation of any provision of this Section shall be the basis for immediate termination of this Agreement and the SaaS Services by Company and all Authorized Users.

3. Use of SaaS Services.

a. General Access and Use. The SaaS Services may be used and accessed for Authorized Users for Customer’s own internal.

b. Terms of Use. Customer, for itself and its Authorized Users, acknowledges that the Company maintains Terms of Use, located at https://formationscorp.com/terms-of-use/ (the “Terms of Use”). Nothing in the Terms of Use will modify this Agreement, and in the event of any conflict between the Terms of Use and the terms of this Agreement as applied to Customer and its Authorized Users, the terms of this Agreement shall apply.

c. Company Responsibilities. Company shall endeavor to respond to the Customer support inquiries within a reasonable time, provided that the Customer with any information and/or materials reasonably requested, including without limitation any information needed to replicate, diagnose, and correct any error or other problem reported by Customer (for itself or any Authorized User) relating to the access or use of the SaaS Services.

d. Customer Responsibilities. Customer shall be responsible for itself and all Authorized Users’ compliance with this Agreement including all Authorized User Content. Customer for itself and its Authorized Users Authorized User shall not (i) use the SaaS Services to store or transmit infringing, libelous, or otherwise unlawful or tortious material, or to store or transmit material in violation of third- party privacy rights, (ii) use the SaaS Services to store or transmit Malicious Code, (iii) interfere with or disrupt the integrity or performance of the SaaS Services or third- party data contained therein or any systems or networks or violate the regulations, policies, or procedures of such networks used with the SaaS Services, (iv) attempt to gain unauthorized access to the SaaS Service or its related systems or networks, the Company data or the data of any other Company customers, or (v) harass or knowingly or intentionally interfere with another Company customer’s use and enjoyment of the SaaS Services. Any conduct by Authorized User that in Company’s sole discretion restricts or inhibits any other Company customer from using or enjoying the SaaS Services is expressly prohibited. Authorized User will use commercially reasonable efforts to prevent unauthorized access to, or use of, the SaaS Services, and notify Company promptly of any such unauthorized access or use.

e. Username and Password. Customer and/or Authorized User, as applicable, are solely responsible for maintaining the confidentiality of each username and password used with Authorized User accounts. Customer is responsible for any and all activities that occur under all Authorized User’s accounts. Customer will notify Company immediately of any unauthorized use of Authorized User’s accounts or any other breach of security. Company will not be liable for any loss that Authorized User may incur as a result of someone else using Authorized User’s passwords or accounts, either with or without the Authorized User’s knowledge.

f. Customer / Authorized User Input. Customer or Authorized User is solely responsible for collecting and inputting all Authorized User Content, and for ensuring that the Authorized User Content is accurate and up to date and does not (i) include anything that actually or potentially infringes or misappropriates the copyright, trade secret, trademark or other intellectual property right of any third party, or (ii) contain anything that is obscene, defamatory, harassing, offensive or malicious. Customer shall: (i) notify Company immediately of any unauthorized use of any password or user id or any other known or suspected breach of security, (ii) report to Company immediately and use reasonable efforts to stop any unauthorized use of the SaaS Services that is known or suspected by Customer or any Authorized User, and (iii) not provide false identity information to gain access to or use the Software of the SaaS Services.

g. Compliance with Laws. Each party shall comply with all applicable local, state, national and foreign laws in connection with its use of the SaaS Services, including those laws related to data privacy, international communications, and the transmission of technical or personal data. Customer acknowledges that Company exercises no control over the content of the information transmitted by Customer or any Authorized User through the SaaS Services. Customer and Authorized User shall not upload, post, reproduce or distribute any information, software or other material protected by copyright, privacy rights, or any other intellectual property right without first obtaining the permission of the owner of such rights.

h. Reserved Rights. Company reserves the right in its sole discretion to decline to license access and use of the SaaS Services to Authorized Users. Company further reserves the right in its sole discretion to terminate Authorized User’s license to access and use the SaaS Services, at any time, for reasons including, but not limited to, a breach or other violation of the terms and conditions set forth in this Agreement; abuse of the SaaS Services or Company’s underlying systems; illegal or misrepresentative use of the SaaS Services or underlying systems; and acts or circumstances detrimental to Company, its other customers, associates, business partners, suppliers, or others, whether or not such circumstances are directly under the control of Authorized User. Company shall promptly communicate to Authorized User its decision to terminate Authorized User’s license to access and use the SaaS Services pursuant to this Section as well as, if it so chooses, the relevant reason(s) for such termination. Authorized User agrees to provide any assistance reasonably requested by Company in connection with such termination. Termination under this subsection (f) shall be without any liability to Authorized User whose access and use license is terminated.

4. Intellectual Property Rights

a. General. Subject to the limited licenses granted in Section 2 (a) Company, or its licensors (where applicable) shall own all right, title and interest in and to the Company’s Cfidential Information, Software, SaaS Services, Documentation including, without limitation, all modifications, improvements, upgrades, derivative works and feedback related thereto and intellectual property rights therein this Agreement. Customer agrees to assign all right, title and interest it may have in the foregoing to Company this Agreement.

b. Ownership of Authorized User Content. Customer exclusively owns all right, title, and interest in and to the Authorized User Content and Authorized User Confidential Information. In the event of termination or expiration of your contract, and if legally permissible and requested by Authorized User within thirty (30) days of such termination or expiration, Company agrees to: (i) return to Authorized User the Authorized User Content; or (ii) destroy or permanently erase the Authorized User Content. After such 30-day period, Company will have no other further obligation to maintain or provide access to Authorized User Content, and shall have the right to destroy the Authorized User Content and permanently erase the Authorized User Content without any liability to Authorized User.

c. Suggestions. Company shall exclusively own all right, title, and interest in and to any suggestions, ideas, enhancement requests, recommendations, or other feedback provided by Customer or any Authorized User relating to the SaaS Services, Software, or Other Services.

5. Confidential Information

a. Each party (the “Disclosing Party” for purposes of this Section 5) may disclose to the other party (the “Receiving Party” for purposes of this Section 5) certain non-public information relating to such party’s business, including, without limitation, technical, marketing, financial, personnel, planning, and other information that is marked confidential, or which the Receiving Party should reasonably know to be confidential given the nature of the information and the circumstance of disclosure (“Confidential Information”). The Receiving Party agrees that it will not disclose Disclosing Party’s Confidential Information except (i) to the employees, contractors, advisors, or agents of the Receiving Party to the extent that they need to know that Confidential Information for the purpose of performing such party’s obligations under your contract, and who are bound by confidentiality terms with respect to that Confidential Information no less restrictive than those contained in this Section 5; or (ii) as required to be disclosed by law, to the extent required to comply with that legal obligation, provided that the Receiving Party will promptly notify the Disclosing Party of such obligation, unless otherwise prohibited by such law or legal obligation.

b. With respect to the SaaS Services delivered to Authorized Users, the definition of Confidential Information set forth in this Agreement shall include the Authorized User Content and the SaaS Services (including all underlying software and systems of Company used with the SaaS Services), subject to the exceptions set forth in this Agreement.

6. Warranties

a. Company represents and warrants that it will provide the SaaS Services in a professional manner consistent with general industry standards and that the SaaS Services will perform substantially in accordance with the Documentation. For any beach of a warranty, Customer’s exclusive remedy shall be as provided in Section 11 (Term and Termination).

b. Company warrants during the term of your contract that the SaaS Services will be free of material defects and will function in substantial conformance to the Documentation provided to Customer and its Authorized User by Company. COMPANY DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES THAT THE FUNCTIONS PERFORMED BY THE SAAS SERVICES WILL MEET CUSTOMER OR AUTHORIZED USER’S REQUIREMENTS, THAT THE OPERATION OF THE SAAS SERVICES WILL BE UNINTERRUPTED OR ERROR FREE, OR THAT ALL DEFECTS IN THE SAAS SERVICES WILL BE CORRECTED. COMPANY DOES NOT PROVIDE LEGAL FINANCIAL, OR INVESTMENT ADVICE AND HAS NO OBLIGATION TO REVIEW OR AUDIT ANY AUTHORIZED USER CONTENT OR OTHER INFORMATION PROVIDED VIA THE SAAS SERVICES INCLUDING, WITHOUT LIMIATION, ANY TAX RETURNS OR OTHER INFORMATION SUBMITTED TO ANY STATE OR FEDERAL TAX AUTHORITY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING LIMITED WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, AND COMPANY DISCLAIMS ANY AND ALL OTHER WARRANTIES OR CONDITIONS, WHETHER EXPRESS, IMPLIED, ORAL, OR WRITTEN, INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, REASONABLE CARE, AND/OR FITNESS FOR A PARTICULAR PURPOSE (WHETHER OR NOT Company KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE). TO THE EXTENT PERMITTED BY APPLICABLE LAW, COMPANY FURTHER DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS, AND/OR REPRESENTATIONS OF TITLE AND NON- INFRINGEMENT. THE SAAS SERVICES ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY COMPANY OR ITS AUTHORIZED USERS SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF COMPANY’S OBLIGATIONS HEREUNDER. NO ACTION FOR BREACH OF THE LIMITED WARRANTY SET FORTH IN THIS SECTION 6 MAY BE COMMENCED MORE THAN ONE (1) YEAR FOLLOWING IN WHICH THE CLAIM AROSE.

7. Limitation of Liability

NEITHER PARTY (NOR ANY LICENSOR OR OTHER SUPPLIER OF COMPANY) SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST BUSINESS, PROFITS, DATA OR USE OF ANY SERVICE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE NATURE OF THE CLAIM (INCLUDING NEGLIGENCE), EVEN IF FORESEEABLE OR THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NEITHER PARTY’S AGGREGATE LIABILITY FOR DAMAGES UNDER THIS AGREEMENT, REGARDLESS OF THE NATURE OF THE CLAIM (INCLUDING NEGLIGENCE), SHALL EXCEED THE FEES PAID OR PAYABLE BY CUSTOMER UNDER THIS AGREEMENT DURING THE 12 MONTHS PRECEDING THE DATE THE CLAIM AROSE. The foregoing limitations shall not apply to the parties’ obligations (or any breach thereof) under Sections entitled “Restriction”, “Indemnification”, or “Confidentiality”.

8. Indemnification

a. Indemnification by Company. Company will indemnify, defend and hold Customer, its officers, directors, affiliates, subsidiaries, agents, and employees, harmless from any loss, damages, costs, or expenses, including reasonable attorneys’ fees, arising out of a third-party claim or action against such parties:

(i) for injuries or damage to any person or property to the extent caused by the negligent acts or omissions of Company or its personnel;

(ii) by any person claiming ownership or possessory interest, lien, trust, pledge, or security interest in any Company equipment or software, including without limitation any attempt by such third party to take possession of the equipment or software;

(iii) based on an actual or alleged infringement of any United States patent, copyright, service or trademark or other intellectual or industrial property right (including, without limitation, misappropriation of trade secrets) arising out of or connected with the Company’s delivery of the SaaS Services; or

(iv) based on a violation of any applicable laws, rules, or regulations.

b. Indemnification by Customer. Customer will indemnify, defend and hold Company, its officers, directors, affiliates, subsidiaries, agents, and employees, harmless from any loss, damages, costs, or expenses, including reasonable attorneys’ fees, arising out of a third-party claim or action against such parties:

(i) for injuries or damage to any person or property to the extent caused by the acts or omissions of Customer, or the Customer’s personnel, or any Authorized User including, without limitation, any Claims arising from Exclusion Event or Authorized User Content;

(ii) based on an actual or alleged infringement of any patent, copyright, service or trademark or other intellectual or industrial property right (including, without limitation, misappropriation of trade secrets) resulting from any Customer provided hardware or software or any Authorized User Content;

(iii) by any person claiming ownership or possessory interest, lien, trust, pledge, or security interest in any equipment or software provided to Customer or any Authorized User, including without limitation any attempt by such third party to take possession of the equipment or software, unless such claim results from acts or omissions of Company; or

(iv) based on a violation of any applicable laws, rules, or regulations.

c. Conditions on Indemnification. The parties shall cooperate to provide an efficient and effective defense of the claim and to control costs and attorneys’ fees consistent with a proper defense. The indemnified party will provide indemnifying party with reasonable assistance, information and authority necessary for indemnifying party to perform its obligations under this Section 8, and indemnifying party will reimburse the indemnified party for all reasonable expenses incurred in providing such assistance and information. At the indemnifying party’s request and expense, the indemnified party shall permit the indemnifying party to exercise sole control of the defense or settlement of the claim; provided, that the indemnifying party will not enter into a settlement agreement that adversely affects the indemnified party’s rights or obligations, or has the effect of creating any liability or obligation (whether legal or equitable) on the indemnified party, without the prior written approval of the indemnified party. A party’s approval shall not be unreasonably withheld or delayed.

d. Remedies for Infringement. If the SaaS Services, or any portion thereof are enjoined under any award or settlement, Company, at its option and expense, will:

(i) procure the right to continue using SaaS Services;

(ii) replace the SaaS Services or infringing portion thereof with a non-infringing product or service; or

(iii) modify SaaS Services so they become non-infringing.

If the remedies set forth in (a) through © are not possible on commercially reasonable terms, Company may terminate the Subscription Term for the allegedly infringing SaaS Services, and repay to Customer any amount paid by Customer with respect to the Subscription Term following the termination date. Notwithstanding the foregoing, Company shall not be liable for any claim of infringement resulting for any claim based on (i) the Authorized User Content, (ii) modification of the SaaS Services not authorized by Company, or (iii) use of the SaaS Services other than in accordance with the Documentation and this Agreement.

The foregoing states the Company’s entire liability and Customer’s exclusive remedy for infringement of intellectual property rights.

9. Access and Monitoring.

Company and its authorized subcontractors may access Authorized User’s account and Authorized User Content as necessary to identify or resolve technical problems or respond to complaints about the SaaS Services or as may be required by law. Company shall also have the right, but not the obligation, to monitor the SaaS Services to determine Authorized User’s compliance with this Agreement. Without limiting the foregoing and with two (2) days prior notice, Company shall have the right to remove any material submitted to the SaaS Services that Company finds to be in violation of the provisions of this Agreement.

10. Orders and Payment.

a. Orders. Customer shall order SaaS Services pursuant to a Schedule. All services acquired by Customer shall be governed exclusively by this Agreement and the applicable Schedule. In the event of a conflict between the terms of a Schedule and this Agreement, the terms of the Schedule shall take precedence.

b. Invoicing and Payment. Unless otherwise provided in the Schedule, Company shall invoice Customer for all fees on the Schedule effective date. Customer shall pay all undisputed invoices, or portions thereof, within 30 days after Customer receives the invoice. Except as expressly provided otherwise on a schedule, all fees are non-refundable. All fees are stated in United States Dollars, and must be paid by Customer to Company in United States Dollars.

c. Renewals. Company shall have the right to increase the per-unit pricing during for any Renewal Periods by up to five percent (5%) above the applicable pricing in the prior Subscription Term subject to Company providing written notice to Customer ninety (90) days prior to expiration of the then-current Subscription Term. The Subscription Term will automatically renew unless either party gives the other notice of non-renewal at least sixty (60) days prior to the then current Subscription Term. Except as expressly provided in the applicable Schedule, renewal of promotional or one-time priced Subscription Term will be at the Company’s applicable list price in effect at the time of the applicable renewal. Notwithstanding anything to the contrary, any renewal in which subscription volume for any SaaS Services has decreased from the prior Subscription Period will result in repricing at renewal without regard to the prior Subscription Period’s per-unit pricing.

d. Expenses. Customer will reimburse Company for its reasonable, out-of-pocket travel and related expenses incurred in performing the Services. Company shall notify Customer prior to incurring any such expense. Company shall comply with Customer’s travel and expense policy if made available to Company prior to the required travel.

e. Taxes. Company shall bill Customer for applicable taxes as a separate line item on each invoice. Customer shall be responsible for payment of all sales and use taxes, value added taxes (VAT), or similar charges relating to Customer’s purchase and use of the services. Customer shall not be liable for taxes based on Company’s net income, capital or corporate franchise.

11. Term and Termination.

a.Term of Agreement. Except as expressly provided in an applicable Schedule, the term of the initial provision of the SaaS Services shall be for twelve (12) months (“Initial Period”) from the Effective Date. After the Initial Period, the SaaS Services shall be automatically renewed (with the rate increase as provided for in Section 7(c) for additional twelve (12) month periods (each a “Renewal Period” and together with the Initial Period, the “Subscription Term”) as provided for in Section 10 (c). This Agreement shall begin on the Effective Date and shall continue until (i) expiration of the Subscription Term or (ii) terminated by either party as outlined in subsection (b).

b. Termination

(i) Customer shall have a one-time opportunity to terminate this Agreement without liability upon written notice received by the Company within thirty (30) days of the Effective Date.

(ii) Either party may terminate this Agreement immediately upon a material breach by the other party that has not been cured within thirty (30) days after receipt of notice of such breach.

c. Suspension for Non-Payment. Company reserves the right to suspend delivery of the SaaS Services if Customer fails to timely pay any undisputed amounts due to Company under this Agreement, but only after Company notifies Customer of such failure and such failure continues for fifteen (15) days. Suspension of the SaaS Services shall not release Customer of its payment obligations under this Agreement. Customer agrees that Company shall not be liable to Customer or to any third party for any liabilities, claims or expenses arising from or relating to suspension of the SaaS Services resulting from Customer’s nonpayment.

d. Suspension for Ongoing Harm. Company reserves the right to suspend delivery of the SaaS Services if Company reasonably concludes that Customer or an Authorized User’s use of the SaaS Services is causing immediate and ongoing harm to Company or others. In the extraordinary case that Company must suspend delivery of the SaaS Services, Company shall notify Customer as soon as practicable of the suspension and the parties shall diligently attempt to resolve the issue. Company shall not be liable to Customer or to any third party for any liabilities, claims or expenses arising from or relating to any suspension of the SaaS Services in accordance with this subsection (d). Nothing in this subsection (d) will limit Company’s rights under subsection (e) below.

e. Effect of Termination Other than for Cause. In the event that Customer should request to terminate this Agreement prior to the agreed-upon term, the Company may grant such request, but in addition to any other rights that Company may have, and regardless of the cause of termination or suspension, Customer shall be required to pay Company according to the provisions provided for herein for the cumulative SaaS Services Fees unpaid and outstanding through the then-current Subscription Term. Notwithstanding herein anything to the contrary, if Customer terminates this Agreement at any time other than termination for breach as provided in subsection (b), then all payments made prior to the date of termination shall be non-refundable.

f. Effect of Termination.

(i) Upon termination of this Agreement or expiration of the Subscription Term, Company shall immediately cease providing the SaaS Services and all usage rights granted under this Agreement shall terminate.

(ii) If Company terminates this Agreement due to a breach by Customer, then Customer shall immediately pay to Company all amounts then due under this Agreement and to become due during the remaining term of this Agreement, but for such termination. If Customer terminates this Agreement due to an uncured breach by Company, then Company shall repay to Customer all pre-paid amounts for any unperformed SaaS Services scheduled to be delivered after the termination date.

(iii) Upon termination of this Agreement and upon subsequent written request by the disclosing party, the receiving party of tangible Confidential Information shall immediately return such information or destroy such information and provide written certification of such destruction, provided that the receiving party may permit its legal counsel to retain one archival copy of such information in the event of a subsequent dispute between the parties.

12. General Provisions.

a. Non-Exclusive Service. Customer acknowledges that SaaS Services is provided on a non-exclusive basis. Nothing shall be deemed to prevent or restrict Company’s ability to provide the SaaS Services or other technology, including any features or functionality first developed for Customer, to other parties.

b. Personal Data. Customer hereby acknowledges and agrees that Company’s performance of this Agreement may require Company to process, transmit and/or store Customer or Authorized User personal data or the personal data of Customer employees and Affiliates. By submitting personal data to Company, Customer agrees that Company and its Affiliates may process, transmit and/or store personal data only to the extent necessary for, and for the sole purpose of, enabling Company to perform its obligations to under this Agreement. In relation to all Personal Data provided by or through Customer to Company, Customer will be responsible as sole Data Controller for complying with all applicable data protection or similar laws including those within the European Economic Area (EEA), the United Kingdom and Switzerland as well as the State of California that regulate the processing of Personal Data and special categories of data as such terms are defined by applicable law. Customer agrees to obtain all necessary consents and make all necessary disclosures before including Personal Data in Content and using the Software and SaaS Services. Customer confirms that Customer is solely responsible for any Personal Data that may be contained in User Content, including any information which Company shares with third parties on Customer or any Authorized User’s behalf. Customer is solely responsible for determining the purposes and means of processing Personal Data by Company under this Agreement, including that such processing according to Customer’s instructions will not place Company in breach of applicable data protection laws. Prior to processing, Customer will inform Company about any special categories of data contained within Personal Data and any restrictions or special requirements in the processing of such special categories of data, including any cross border transfer restrictions. Customer is responsible for ensuring that the Company meets such restrictions or special requirements.

c. Company Personal Data Obligations. In performing the SaaS Services, Company will comply with the its privacy statement, which is available at https://formationscorp.com/privacy-policy/ and incorporated herein by reference (“Privacy Statement”). The Privacy Statement is subject to change at Company’s discretion; however, such policy changes will not result in a material reduction in the level of protection provided for Customer data during the period for which fees for the services have been paid. The services policies referenced in this Agreement specify our respective responsibilities for maintaining the security of Authorized User data in connection with the SaaS Services. Company reserves the right to provide the SaaS Services from directly, through cloud providers, and/or through use of subcontractors, worldwide. Company will only process Customer and/or Authorized User Personal Data in a manner that is reasonably necessary to provide SaaS Services and only for that purpose. Customer and its Authorized Users agree to provide any notices and obtain any consent related to Company’s use of the data for provisioning the SaaS Services, including those related to the collection, use, processing, transfer and disclosure of personal information. Customer shall have sole responsibility for the accuracy, quality, integrity, legality, reliability, and appropriateness and retains ownership of all of Authorized User Content.

d. Assignment. Neither party may assign this Agreement or any right under this Agreement, without the consent of the other party, which consent shall not be unreasonably withheld or delayed; provided however, that either party may assign this Agreement to an acquirer of all or substantially all of the business of such party to which this Agreement relates, whether by merger, asset sale or otherwise. This Agreement shall be binding upon and inure to the benefit of the parties’ successors and permitted assigns. Either party may employ subcontractors in performing its duties under this Agreement, provided, however, that such party shall not be relieved of any obligation under this Agreement.

e. Notices. Except as otherwise permitted in this Agreement, notices under this Agreement shall be in writing and shall be deemed to have been given (a) five (5) business days after mailing if sent by registered or certified U.S. mail, (b) when transmitted if sent by facsimile, provided that a copy of the notice is promptly sent by another means specified in this section, or © when delivered if delivered personally or sent by express courier service. All notices shall be sent to the other party at the address set forth on the cover page of this Agreement.

f. Force Majeure. Each party will be excused from performance for any period during which, and to the extent that, such party or any subcontractor is prevented from performing any obligation under this Agreement, in whole or in part, including, without limitation, all circumstances or causes beyond the reasonable control of a party, including war, threat of war or warlike conditions, blockade, embargo, fire, explosion, lightning, storm, drought, flood, earthquake or other natural disaster, pandemic or epidemic, power failure of a scope and time period consistent with “force majeure,” shortage of labor or supplies, supply chain issues, strikes, lock outs, acts of terrorism, riot, civil unrest, insurrection, acts of government or other international bodies, political subdivision and any other events which by nature could not have been foreseen by the parties or, if it could have been foreseen, were unavoidable by a reasonable prudent business.

g. Waiver. No waiver shall be effective unless it is in writing and signed by the waiving party. The waiver by either party of any breach of this Agreement shall not constitute a waiver of any other or subsequent breach.

h. Severability. If any term of this Agreement is held to be invalid or unenforceable, that term shall be reformed to achieve as nearly as possible the same effect as the original term, and the remainder of this Agreement shall remain in full force.

i. Entire Agreement. This Agreement (including all Schedules and exhibits except those specifically excluded (e.g. Exhibit B – Supplement – Annual Engagement Letter) contains the entire agreement of the parties and supersedes all previous oral and written communications by the parties, concerning the subject matter of this Agreement. If there is any inconsistency between the Terms and Conditions and the then-current Annual Engagement Letter, the then-Current Annual Engagement Letter shall take precedence. This Agreement may be amended solely in a writing signed by both parties. Standard or printed terms contained in any purchase order or sales confirmation are deemed rejected and shall be void unless specifically accepted in writing by the party against whom their enforcement is sought; mere commencement of work or payment against such forms shall not be deemed acceptance of the terms.

j. Survival. Sections 1, 4, 5, 7, 8, 10, and 12 of this Agreement shall survive the expiration or termination of this Agreement for any reason.

k. Publicity. Company may include Customer’s name and logo in its customer lists and on its website. Upon signing, Company may issue a high-level press release announcing the relationship and the manner in which Customer will use the Company solution. Company shall coordinate its efforts with appropriate communications personnel in Customer’s organization to secure approval of the press release if necessary.

l. Export Regulations. Export laws and regulations of the United States and any other relevant local export laws and regulations apply to the SaaS Services. Customer agrees that such export control laws govern its use of the SaaS Services (including technical data) and any services deliverables provided under this Agreement, and Customer agrees to comply with all such export laws and regulations. Customer agrees that no data, information, software programs and/or materials resulting from services (or direct product thereof) will be exported, directly or indirectly, in violation of these laws.

m. No Third Party Beneficiaries. This Agreement is an agreement between the parties, and confers no rights upon either party’s employees, agents, contractors, partners of customers or upon any other person or entity.

n. Independent Contractor. The parties have the status of independent contractors, and nothing in this Agreement nor the conduct of the parties will be deemed to place the parties in any other relationship. Except as provided in this Agreement, neither party shall be responsible for the acts or omissions of the other party or the other party’s personnel.

o. Derived Data. Notwithstanding anything to the contrary, Company shall have the right to collect and analyze data and other information relating to the provision, use and performance of various aspects of the SaaS Services, Software, and Other Services provided to Customer and Authorized User and related systems and technologies (including, without limitation, information concerning Authorized User Content and data derived therefrom), and Company will be free (during and after the term hereof) to (i) use such information and data to improve and enhance any of the foregoing services and for other development, diagnostic and corrective or improvement purposes in connection with the services, product testing, research and development opportunities including, without limitation, research into learning and development practices and corresponding effectiveness, and other Company offerings, and (ii) disclose such data solely in aggregate or other de-identified form in connection with its business.

p. Dispute Resolution. Customer’s satisfaction is an important objective to Company in performing its obligations under this Agreement. Except with respect to intellectual property rights, if a dispute arises between the parties relating to the interpretation or performance of this Agreement or the grounds for the termination hereof, the parties agree to hold a meeting within fifteen (15) days of written request by either party, attended by individuals with decision-making authority, regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute prior to pursuing other available remedies. If, within fifteen (15) days after such meeting, the parties have not succeeded in resolving the dispute, either party may protect its interests by any lawful means available to it as provided for in subsection (q).

q. Governing Law; Venue. This Agreement shall be governed by the laws of the State of Washington, excluding its conflict of law principles. The United Nations Convention on Contracts for the International Sale of Goods shall not apply. Any legal action or proceeding arising under this Agreement will be brought exclusively in the federal or state courts located in the Western District of Washington and the parties irrevocably consent to the personal jurisdiction and venue therein.

r. Compliance with Laws. Company shall comply with all applicable local, state, national and foreign laws in connection with its delivery of the SaaS Services, including those laws related to data privacy, international communications, and the transmission of technical or personal data

s. Signatures. This Agreement may be executed in multiple counterparts, each of which when executed will be an original, and all of which, when taken together, will constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission (including via pdf) will be effective as delivery of a manually executed counterpart.

t. Disclosures and Notices; Electronic Signature Consent.

(i) Consent to Electronic Disclosures and Notices: By subscribing to the SaaS Services, Customer, for itself and its Authorized Users, agrees that such subscription and use of any Authorized User’s accounts constitutes Customer’s electronic signature, and Customer consents to electronic provision of all disclosures and notices from Formations (“Notices”), including those required by applicable law. Customer also agrees that its electronic consent will have the same legal effect as a physical signature.

(ii) Methods of Delivery: Customer agrees that Formations can provide Notices regarding the SaaS Services to you through its website or when Customer and/or its Authorized Users access the SaaS Services, or by mailing Notices to the email or physical addresses identified to Formations. Notices may include notifications about Customer’s account, changes to the SaaS Services, or other information Formations is required to provide to Customer and/or its Authorized Users. Customer, for itself and its Authorized Users, also agrees that electronic delivery of a Notice has the same legal effect as if we provided you with a physical copy. Formations will consider a Notice to have been received by Customer within 24 hours of the time a Notice is either posted to its website or emailed to Customer. If Customer or any Authorized User is having problems viewing or accessing any Notices, please contact Formations in order to find another means of delivery.

(iii) Withdrawing Consent: Due to the nature of the SaaS Services, Customer, for itself and its Authorized Users, will not be able to begin using the SaaS Services without agreeing to electronic delivery of Notices. However, Customer may choose to withdraw your consent to receive Notices electronically by contacting Formations in writing.

EXHIBIT A: SUPPORT AND MAINTENANCE SERVICES

Company will provide general support and maintenance services to Customer (or its Authorized Users if the parties agree).

Company will provide the SaaS Service to Customer and its Authorized Users, not including Scheduled Downtime (as defined below). With respect to the SaaS Services, Company guaranties uptime of ninety-five percent (95%) (“Uptime Guaranty”).

Scheduled Downtime time will not exceed [ ] hours per month, and will take place between 9:00 PM to 6:00 AM PT/PST (“Non-Peak Hours”). The SaaS Service will function and be available as provided in this Agreement with the Uptime, specified below (with the exception of Scheduled Downtime).

Additional Definitions:

“Downtime” means, for the SaaS Services, if there is more than a five percent (5%) user error rate. Downtime is measured based on server side error rate.

“Downtime Period” means, for the SaaS Services, a period of sixty (60) consecutive minutes of Downtime. Intermittent Downtime for a period of less than sixty (60) minutes will not be counted towards any Downtime Periods.

“Scheduled Downtime” means those times where Company notified Customer of periods of Downtime at least three (3) days prior to the commencement of such Downtime. There will be no more than 40 hours of Scheduled Downtime per calendar year. Scheduled Downtime is not considered Downtime for purposes of this Service Level and Support Services Agreement, and will not be counted towards any Downtime Periods.

The Customer’s sole remedy for availability or quality of the SaaS Services including any failure to meet the Uptime Guaranty is a credit of such period’s SaaS Service Fees against the last month of the Term.

EXHIBIT B: SUPPLEMENT – ANNUAL ENGAGEMENT LETTER

Thank you for selecting FORMATIONSUS, LLC (“we” or “FORMATIONS”) to perform services and assist you with your tax compliance (“Tax Services”). The purpose of this annual engagement letter (“Annual Engagement Letter”) is to confirm the terms of our engagement and the services we will provide for a specific agreed-upon tax period Services (e.g. calendar year 2020, 2021, 2024, etc.) (“Applicable Tax Period”). The effective date of this, and every future, Annual Engagement Letter will be the date that you confirm via Electronic Notice (or in writing if provided by Formations) of (i) your continued engagement of FORMATIONS for Tax Services, (ii) the Applicable Tax Period; (iii) the price and fees related to the Applicable Tax Period, and (iii) confirmation that the terms and conditions of the Annual Engagement Letter apply for the Applicable Tax Period (collectively, the “Annual Confirmation Terms”).

While this Annual Engagement Letter is included as a supplement to the SaaS Agreement dated between the parties it is a separate agreement. As such, for each Applicable Tax Period in which you provide Electronic Notice (or in writing) confirming the Annual Confirmation Terms, the Engagement Letter will effectively be a new agreement between the parties and embodies the entire agreement regarding the Tax Services to be rendered by FORMATIONS for the Applicable Tax Period, and you the terms of this Engagement Letter will govern. We appreciate the opportunity to assist you and look forward to working with you.

INCLUDED SERVICES: The included services are specified in the Customers specific quote per annual agreement and annual engagement letter.

This engagement pertains only to the 12-month service agreement that includes the preparation of your tax return.

Our responsibilities do not include preparation of any other tax returns that may be due to any tax authority, unless explicitly outlined in the scope of this engagement.

The receipt of tax information implies acceptance of this proposal.

FORMATIONS AND ITS AFFILIATES

FORMATIONS is part of a global network of related firms (collectively, the “Affiliates”). FORMATIONS may draw on the resources of its Affiliates, together with their respective affiliates, parent, subsidiaries, third-party contractors, etc., in each case within or outside of the United States in connection with the provision of Tax Services. You agree that FORMATIONS may provide information received in connection with this engagement letter to the FORMATIONS Affiliates for such purposes. FORMATIONS will be solely responsible for the provision of the Tax Services and for the protection of the information provided to Affiliates.

CONSENT TO DISCLOSE YOUR INFORMATION

Notwithstanding anything to the contrary in this letter, you agree that FORMATIONS may disclose any information in its possession to its Affiliates and discuss such information as required in order to perform the Tax Services.

In addition, you authorize FORMATIONS to participate in discussions with and to disclose your information, including, but not limited to your tax returns, to your agents, representatives, administrators or professional advisors (including other accountants, attorneys, financial and other professional advisors), their respective officers, directors or employees, and other parties as you made direct to us in writing (email is acceptable). The foregoing consent is valid until you provide written notice to the contrary. You may request in writing a more limited disclosure than the foregoing.

CLIENT RESPONSIBILITIES

The timeliness of your cooperation is essential to our ability to complete this engagement. Specifically, we must receive sufficient information from which to prepare your returns 30 days prior to filing deadline. If you are not able to provide all documentation by that date, it is your responsibility to inform us as such so we can file an extension on your behalf.

To the best of your knowledge, all information provided by you or on your behalf is and will continue to be accurate and complete in all material respects. It is your responsibility to provide and/or update, where necessary, all the information required for the preparation of complete and accurate returns. You should retain all the documents, canceled checks and other information, including but not limited to mileage logs, charitable contributions, bank statements and receipts for all deductible expenses that form the basis of income and deductions. These may be necessary to prove accuracy and completeness of the returns to a taxing authority. You also agree to answer all questions fully so that our firm can properly prepare your return. While we may not be required to verify the information you provide us, we are required by federal regulations to ask you for clarification of information that is inconsistent or incomplete. When such deductions cannot be substantiated, we will exclude them from the tax return.

Our work, in connection with the preparation of your income tax returns, does not include procedures in the discovery of defalcations or other irregularities, should any exist. However, should we find any irregularities or unusual items we will promptly bring them to your attention. We will render such accounting and bookkeeping assistance as determined to be necessary for preparation of the income tax returns. If we discover any errors or omissions on a prior year return, we will bring this to your attention as well.

We may encounter instances where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretations of the law and other supportable positions. In those instances, we will use professional judgment in resolving such questions and/or conflicts in interpretation. Unless otherwise instructed by you, we will resolve such questions in your favor whenever possible.

Your returns may be selected for review by the taxing authorities. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such governmental tax examination, we will be available, upon request, to represent you under a separate engagement letter for that representation.

You have the final responsibility for the income tax returns, and therefore, you should review them carefully before you sign. Please allow a minimum of three calendar weeks for the preparation and review of your income tax returns. The Internal Revenue Service and other regulatory agencies declare preparation and disclosure standards. Noncompliance with these standards can result in the assessment of penalties on both the preparer of a tax return and on the taxpayer. If we conclude that we are obligated to disclose a position and you refuse to permit the disclosure, we reserve the right to withdraw from the engagement and you agree to compensate us for our services to the date of withdrawal. Our engagement with you will terminate upon our withdrawal.

Please note that any person or entity subject to the jurisdiction of the United States (including individuals, corporations, partnerships, trusts, and estates) having a financial interest in, or signature or other authority over, bank accounts, securities, or other financial accounts having an aggregate value exceeding $10,000 at any time during the calendar year in a foreign country, shall report such a relationship. Although there are some limited exceptions, filing requirements also apply to taxpayers that have direct or indirect control over a foreign or domestic entity with foreign financial accounts, even if the taxpayer does not have foreign account(s).

Failure to disclose the required information to the U.S. Department of the Treasury may result in substantial civil and/or criminal penalties. If you and/or your entity have a financial interest in, or signature authority over, any foreign accounts, you are responsible for the FBAR to be received by the Department of the Treasury with your individual tax return (including extension).

Should we receive any request for the disclosure of privileged information from any third party, including a subpoena or IRS summons, we will notify you. In accordance with federal law, other than a subpoena or summons, we will not disclose your tax return for any purpose without first receiving your written consent. The IRS permits you to authorize us to discuss, on a limited basis, aspects of your return for one full year after the return’s due date. Your consent to such a discussion is evidenced by checking a box on the return. Unless you tell us otherwise, we will check that box authorizing the IRS to discuss your return with us. By executing this engagement letter, you consent to FORMATIONS using your contact information to send you, by any medium: firm newsletters, surveys, press releases, information concerning firm seminars and non-tax- related services, and any other communication sent to some or all of the firm’s clients. We will not share, rent nor sell the information you provide. This consent shall be valid for five years. If you do not want to receive such messages, simply send an e-mail to info @Formations.com with remove me from your mailing list” in the subject line.

EXTENDING COMPLETION DEADLINES

You agree that in the event your returns cannot be completed by the due date, it may become necessary for us to apply to extend the due date. Applying for an extension of time to file only extends the time to file, not the time to pay. Therefore, any estimated tax due with this filing must be paid with the extension. If the extended deadline applies to you, all documentation must be received no later than 30 days prior to the filing deadline.

If tax documents are not received timely, it may be necessary to complete the tax return with the information provided and file an amendment at a later date with the updated documents. Please note, there is an additional charge for amended returns. Also, the audit period begins at the date of filing, including extensions.

REQUEST FOR ADDITIONAL SERVICES

You may request that we perform additional services not considered by this engagement letter. If this occurs, we will communicate with you regarding the scope and estimated cost of these additional services, including but not limited to amended tax returns, audits, and examinations. Engagements for additional services may necessitate that we issue a separate engagement letter to reflect the obligations of both parties. In the absence of any other written communications from us documenting such additional services, our services will be governed by the terms of this engagement letter.

Your returns may be selected for review by the taxing authorities. In the event of an audit, you may be requested to produce documents, records or other evidence to substantiate the items of Income and deduction shown on a tax return. Any proposed adjustments by the examining agent are subject to certain rights of appeal. In the event of such government tax examination, we will be available, upon request, to represent you. However, such additional services are not included in the fees presented in this engagement letter.

CONFIDENTIALITY

FORMATIONS agrees to maintain the confidentially of information obtained from you. FORMATIONS will not disclose to any confidential information to a third party, without first obtaining your consent. Confidential information shall be defined as information construed by FORMATIONS in its reasonable discretion to concern your business, financial, sales, marketing or technical information. Confidential information does not include information that:

(i) is or becomes public other than through a breach of this letter;

(ii) is subsequently received by the recipient from a third party who, to the recipient’s knowledge, owes no obligation of confidentiality to the disclosing party with respect to that information;

(iii) was known to the recipient at the time of disclosure or is thereafter created independently; (iv) is disclosed as necessary to enforce the recipient’s right under this letter; or

(v) must be disclosed under applicable law, legal process, or professional regulations.

INDEMNIFICATION

You agree to indemnify and hold FORMATIONS harmless from and against any and all third-party claims, losses, liabilities, and damages arising from or relating to the services or deliverables under this engagement letter, except to the extent finally determined to have resulted from FORMATIONS’s gross negligence or intentional misconduct relating to such services and/or deliverables.

To the fullest extent permitted by applicable law and professional regulations, you shall indemnify us, our Affiliates or our subcontractors, members, shareholders, directors, officers, partners, principles or employees (collectively, “FORMATIONS Persons”) against all claims by third parties (including your affiliates and attorneys) and resulting liabilities, losses, damages, costs and expenses (including reasonable external and internal legal costs) arising from or related to the Tax Services, including any deliverables provided to you, except to the extent finally determined to have resulted from FORMATIONS’s gross negligence or intentional misconduct relating to such Tax Services and/or deliverables.

SPECIAL ENGAGEMENT TERMS CONCERNING DISCLOSURES AND FILING OF INFORMATIONAL TAX RETURNS RELATED TO TAXPAYER’S FOREIGN ACTIVITIES

U.S. filing obligations related to foreign financial accounts and foreign financial assets

As part of your filing obligations, you are required to report the maximum value of specified foreign financial assets and financial accounts, which include financial accounts with foreign institutions and certain other foreign non-account investment assets that exceed certain thresholds. You are responsible for informing FORMATIONS of all those foreign assets, so we may properly advise you regarding your filing obligations.

Foreign filing obligations

If you or your company does business overseas, you may also responsible for complying with the tax filing requirements of other countries. You acknowledge and agree that 1) we have no responsibility to raise these issues with you and 2) that foreign filing obligations are not within the scope of this engagement. There are additional filing and disclosure requirements related to taxpayer’s foreign business activities as follows:

The following paragraphs outline the typical types of foreign compliance issues and our firm’s responsibilities for helping your company navigate through the complexity of those issues:

A: Foreign Bank Accounts Disclosures

The IRS has imposed very strict filing requirements related to ownership of foreign bank accounts (aggregate value of $10,000 or more) by business entities, and to individuals who are directors, officers, or have ownership in foreign companies. Failure to file these required informational returns could result in very substantial penalties. Our office will not assume that you are subject to these filing requirements unless you specifically advise FORMATIONS that you have foreign bank accounts, foreign financial or that you are a director, officer of or have ownership in foreign companies. However, we are happy to explain the rules in detail upon request.

Any person or entity subject to the jurisdiction of the United States (includes individuals, corporations, partnerships, trusts, and estates) who has a financial interest in, or signature or other authority over, bank accounts, securities, or other financial accounts having an aggregate value exceeding $10,000 in a foreign country, shall report such a relationship and account information via FORM Fin CEN FORM 114. If you do not provide FORMATIONS with information regarding any interest or signature authority you may have in a foreign account, FORMATIONS will not be able to prepare any of the required disclosure statements, including FORM Fin CEN Form 114.

The filing requirements also apply to taxpayers that have direct or indirect control over a foreign or domestic entity with foreign financial accounts, even if the taxpayer does not have foreign account(s). For example, a corporate-owned foreign account would require filings by the corporations and by the individual corporate officers with signature authority. Failure to disclose the required information to the U.S. Department of the Treasury may result in substantial civil and/or criminal penalties.

B: Ownership in Foreign Sole-proprietorships, Disregarded Entities, Corporations and Partnerships

The Internal Revenue Service requires detailed disclosure and reporting of certain corporate and financial information, as well as related party transactions:

under IRC Section 6038(a) with respect to certain Taxpayer-owned foreign corporations using Form 5471;
under IRC Section 6046A with respect to U.S. person with an interest in a foreign partnership using (Form 8865);
under IRC Section 6011,6012,6031 and 6038 and related regulations with respect to Foreign Disregarded Entities using (Form 8858);

All of the forms stated in 1), 2) and 3) above are due when the personal income tax return is due, including extensions. Therefore, an officer, director, or shareholder in a foreign corporation, a partner in a foreign partnership, or an owner in a foreign disregarded entity may be required to file Form 5471, Form 8865, Form 8858 and other related forms and schedules. The regulations provide for a monetary penalty of $10,000 for each Form 5471, Form 8865 or Form 8858 that is filed after the due date of the income tax return (including extensions) or that does not include complete and accurate information as defined under the regulations. By your signature below, you accept responsibility for providing FORMATIONS the required information about the company’s officer, director, shareholder, partner, or owner. You also agree to provide FORMATIONS with the information necessary to prepare the appropriate Form 5471(s), Form 8865 or Form 8858. You acknowledge and agree that FORMATIONS assumes no liability for any tax underpayment, interest and penalties associated with missing, late or incomplete filing pursuant to the regulations related to Form 5471, Form 8865, Form 8858, or any other tax forms which report foreign transactions.

You agree to accept responsibility for timely providing FORMATIONS with financial statements of your foreign businesses that are in compliance with U.S. Tax and Accounting Standards. For simple scenarios, FORMATIONS is happy to provide assistance with converting your foreign financial statements into U.S. standards upon request. For more complicated foreign operations, we ask that you seek additional third-party professional help to have those foreign financial statements converted into U.S. tax and accounting standards. FORMATIONS will be happy to provide our recommend contacts to help you with the specific tasks.

C. The new Global Intangible Low-Taxed Income (GILTI) Rules (IRC 951A)

Pursuant to the new tax code IRC Section 951A added by Pub. L. 115-97 (TCJA or Tax Reform), US companies’ tax exposures have been significantly broadened to include foreign earnings that, prior to tax reform, had not been subject to current U.S. taxation. The GILTI regime effectively imposes a worldwide minimum tax on foreign earnings and subjects U.S. shareholders of controlled foreign corporations (CFCs) to current taxation on most income earned through a CFC in excess of a 10% return on certain of the CFC’s tangible assets. The GILTI calculation is extremely complex and requires affected companies to correctly convert and assess their foreign earnings and profits using U.S. tax standards. You acknowledge and agree that FORMATIONS assumes no liability for penalties and interests associated with the calculation of the new GILTI Tax and for determining your foreign business’s earnings and profits used in GILTI calculation, and for other income tax purposes.

Ultimate responsibility for tax liability, assessments and penalties

You have final responsibility for your income tax returns. FORMATIONS will provide you with a copy of your electronic income tax returns and accompanying schedules and statements for review prior to filing with the IRS and state and local tax authorities (as applicable). You agree to review and examine them carefully for accuracy and completeness.
You are ultimately responsible for the validity of income and deductions reported on your income tax return. FORMATIONS will rely on you to provide true, accurate, and complete data. Please review the return before signing and mailing it, and feel free to call anytime if you have any questions including how the return was prepared or if you think you have discovered an error. It is easier to correct the mistakes before they have been sent to the IRS.

FORMATIONS will use our professional judgement in preparing your return. Whenever we become aware that possibly applicable tax laws are unclear or that there are conflicting interpretations of the law by authorities, we will explain the issues to you. FORMATIONS will adopt whatever position you request on your return that we believe can be defended under the law. FORMATIONS cannot, however, prepare a return for which we know that a reportable income(s) has been omitted or an indefensible position(s) have been taken.

Statute of Limitations – Generally, there is a statute of limitations for the IRS to assess taxes on a taxpayer which expires three (3) years from the due date of the return or the date on which it was filed, whichever is later. A return is considered to be filed on the due date of the return if it was filed on or before its due date. Similarly, the taxpayer has three years from the date of the original deadline of the return to claim a refund. Amended returns claiming additional refunds must be filed with the IRS before the three-year statue of the limitation expires. – In situations where FORMATIONS either made an error or misinterpreted the application of tax laws in the forms during our tax preparation, we would be happy to assist with making the necessary amendments to the tax return at no extra charge. However; our responsibilities with the tax preparation will only be limited to the periods which are covered under the IRS’s Statue of Limitations. You acknowledge and agree to hold harmless FORMATIONS and its partners, principals, shareholders, officers, directors, members, employees, agents or assigns with respect to any additional tax, penalties, interest imposed on you by tax authorities, loss of potential refunds, or overpayment of taxes resulting from audits, corrections or amendment of any tax filings. Further, you acknowledge and agree to hold harmless FORMATIONS and its partners, principals, shareholders, officers, directors, members, employees, agents or assigns with respect to any economic loss, loss of economic gains, or other fines or fees not associated with the IRS but may occur as a result of tax preparation or planning prepared by FORMATIONS.

LIMIT OF ACCOUNTANT’S LIABILITY

You acknowledge and agree that the our total liability as the accountant for any breach of this agreement, for any failure to perform any terms of this agreement, for any claims relating to or arising out of its performance of this agreement, and for its own ordinary or gross negligence (but not its reckless or willful misconduct) in any aspect of FORMATIONS’s relationship with you as the client, shall not exceed the fees paid to and received by our firm under this agreement. This limitation of liability excludes any and all expectation damages; damages resulting from any loss in the value of FORMATIONS’s performance; special consequential and incidental damages; damages for lost profits, savings or business opportunity; any foreseeable damages; and exemplary damages and shall be your exclusive remedy.

If we become aware of any additional tax returns that you are obligated to file, we will promptly advise you to do so. Please keep all supporting documentation, including receipts, cancelled checks, and worksheets to support any personal, investment, rental and business deductions claimed, and the purposes for those deductions. As a reminder, any deductions taken on a tax return must be conventional, ordinary and necessary.
You will be required to verify and sign a completed Form 8879, IRS e-file Signature Authorization, and any similar state and local equivalent authorization form before your returns can be filed electronically.
In the event that you do not wish to have your income tax returns filed electronically, please contact our firm. Additional procedures will apply. You will be responsible for reviewing the paper returns for accuracy, signing them, and filing them timely with the tax authorities.

RESOLUTION OF POTENTIAL ETHICAL CONFLICTS

The potential for conflicts of interest exists in any engagement. In the event we, in our sole discretion, believe that a conflict has arisen affecting our ability to service your account in accordance with either the ethical standards of our firm or the ethical standards of our profession, we may be required to suspend or terminate our services.

COMMUNICATION

In providing our Tax Services to you, we may communicate by facsimile transmission, send data over the Internet, store electronic data via computer software applications hosted remotely on the Internet (Cloud), or allow access to data through third-party vendors’ secured portals or clouds.

Electronic data that is confidential may be transmitted or stored using these methods. We may use third-party service providers to store or transmit this data, such as providers of tax return preparation software. In using these data communication and storage methods, our firm employs measures designed to maintain data security. We use all reasonable efforts to keep such communications and data access secure in accordance with our obligations under applicable laws and professional standards. We also require all of our third-party vendors to do the same and use only secured portals or secure cloud hosting that maintains data physically within the United States. You recognize and accept that we have no control over the unauthorized interception or breach of any communications or data once it has been sent or has been subject to unauthorized access, notwithstanding all reasonable security measures employed by us or our third-party vendors, and consent to our use of these electronic devices and applications and submission of confidential client information to third-party service providers during this engagement.

RECORD RETENTION

In accordance with our firm’s current document retention policy, we will retain copies of the records you have supplied us for your engagement for a period of seven years. All of your original records will be returned to you upon request. When records are returned to you, it is your responsibility to retain and protect the records for possible future use, including potential examination by governmental or regulatory agencies.

After seven years, our files will no longer be available. Physical deterioration or catastrophic events may shorten the time during which our records will be available. Effective with the 2013 filings, FORMATIONS went to a paperless environment. As a result, the retention copies of the federal and/or state income tax compliance will be sent to you via secured email. Upon request we will provide you with a paper copy.

TIME OF PAYMENT

We require a non-refundable down payment upon signing this engagement letter. No work will be performed for the services outlined in this engagement prior to receiving payment information and the down payment. Final payment of the remaining fee is due upon completion of your tax return and before filing the return with appropriate agencies. Invoices received from FORMATIONS are due upon receipt.

Past due accounts will be assessed interest charges of 12% per annum on the unpaid balance. In accordance with our firm’s policies, work may be suspended if your account becomes 30 days or more overdue and will not be resumed until your account is paid full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed the tax returns. You will be obligated to compensate us for all time expended and to reimburse us for all out-of- pocket expenditures through the date of termination.

EFFECTIVE DATE

This agreement becomes effective upon receipt of a signed copy of this engagement letter and concludes upon the termination of this engagement, if earlier.

TERMINATION

This engagement may be terminated with or without cause for any reason by either party upon written notice. Within thirty (30) days following termination, you will pay any amount due to FORMATIONS, and FORMATIONS will return any information belonging to you at the reasonable written request from you.

ATTORNEY FEES & JURISDICTION

You may not make a claim or bring proceedings relating to the Tax Services or otherwise under this letter against any of our Affiliates or other FORMATIONS Persons. In the event of a dispute over any matter concerning the engagement (including payment of our fees and costs) which results in arbitration or litigation, it is agreed the prevailing party shall be awarded reasonable attorney fees, expenses and costs incurred after the earlier of the filing of litigation or the demand for arbitration.

This engagement will be governed by the laws of the state of Washington, without regard to its choice of law provisions. Jurisdiction over and venue of any suit arising out of or related to this engagement shall be exclusively in King County Superior Court.

Disclosures and Notices; Electronic Signature Consent

a. Consent to Electronic Disclosures and Notices: By using Formations for Tax Services, you agree such agreement constitutes your electronic signature, and you consent to electronic provision of all disclosures and notices from Formations (“Notices”), including those required by applicable law. You also agree that your electronic consent will have the same legal effect as a physical signature.

Methods of Delivery: You agree that Formations can provide Notices regarding the Tax Services to you through its website or by mailing Notices to the email or physical addresses identified to Formations. Notices may include notifications about changes to the Tax Services, changes to the Annual Engagement Letter (which will apply to the next Applicable Tax Period in which you agree to have FORMATIONS provide Tax Services), or other information Formations is required to provide to you. You also agree that electronic delivery of a Notice has the same legal effect as if we provided you with a physical copy. Formations will consider a Notice to have been received by you within 24 hours of the time a Notice is either posted to its website or emailed to you. If you are having problems viewing or accessing any Notices, please contact Formations in order to find another means of delivery.

e. Withdrawing Consent: Due to the nature of the Tax Services, you, will not be able to begin using the SaaS Services without agreeing to electronic delivery of Notices. However, Customer may choose to withdraw your consent to receive Notices electronically by contacting Formations in writing.
However, you may choose to withdraw your consent to receive Notices electronically by terminating use of the Tax Services and notifying us of such termination in writing.

THANK YOU. We appreciate the opportunity to present this engagement to you and we are looking forward to serving you.

Acknowledgment of Terms of Engagement

By executing a purchase order or confirming your desire to use FORMATIONS’ Tax Services for a specific Applicable Tax Period and confirm, as new, the terms and conditions of the Annual Engagement Letter as of the date you provide such confirmation.