1.1. Agreement & Acceptance
This Managed AI Services Agreement (“Agreement”) is entered into between LG Networks, Inc., a Texas corporation (“Provider”), and the Client identified on the cover page (“Client”). By executing this Agreement, Client accepts all terms and conditions set forth herein. This Agreement supersedes all prior proposals, representations, and understandings between the parties relating to the subject matter hereof.
1.2. Service Delivery
1.2.1 LG Networks will provision and manage the Hatz AI platform on Client’s behalf. Provider acts as a managed service layer; the underlying platform infrastructure is operated by Hatz AI, Inc., subject to their platform terms.
1.2.2 Provider will use commercially reasonable efforts to maintain platform availability consistent with Hatz AI’s published service levels. Provider does not guarantee uninterrupted access and is not liable for downtime attributable to Hatz AI’s infrastructure, third-party integrations, or force majeure events.
1.2.3 Provider reserves the right to modify the scope of services upon thirty (30) days written notice where required by changes in the underlying platform, regulatory requirements, or material changes to Provider’s cost structure.
1.3. Client Responsibilities
1.3.1 Client agrees to designate an internal point of contact responsible for coordinating onboarding, user provisioning, and ongoing communications with LG Networks.
1.3.2 Client is responsible for ensuring that its users comply with the Acceptable Use Policy set forth in Section 3 of this Agreement.
1.3.3 Client acknowledges that AI-generated outputs are probabilistic in nature and may contain errors. Client is solely responsible for reviewing, validating, and acting upon any AI-generated content before use in business decisions, legal proceedings, medical advice, financial guidance, or any other consequential application.
1.4. Intellectual Property
1.4.1 Client retains ownership of all data, content, and materials submitted to the platform (“Client Data”). Provider claims no ownership interest in Client Data.
1.4.2 Custom AI applications built by LG Networks for Client under this Agreement are owned by Client upon full payment of all associated fees. Provider retains ownership of its proprietary methodologies, templates, and know-how used in development.
1.4.3 LG Networks retains all rights, title, and interest in its proprietary tools, processes, and pre-existing intellectual property. Nothing in this Agreement constitutes a transfer of Provider’s intellectual property to Client.
1.5. Representations & Warranties
1.5.1 Provider represents that it has the right to enter into this Agreement and deliver the services described herein.
1.5.2 Client represents that it has the authority to enter into this Agreement and that its use of the platform will comply with all applicable laws and regulations.
1.5.3 EXCEPT AS EXPRESSLY STATED HEREIN, ALL SERVICES ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.
2. Limitation of Liability
2.1. Mutual Limitation
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF BUSINESS, LOSS OF DATA, OR COST OF SUBSTITUTE SERVICES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
2.2. Aggregate Cap
IN NO EVENT SHALL LG NETWORKS’ TOTAL CUMULATIVE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL FEES PAID BY CLIENT TO LG NETWORKS DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
2.3. AI Output Disclaimer
2.3.1 Client expressly acknowledges that AI-generated outputs may be inaccurate, incomplete, or misleading. LG Networks is not liable for any decisions, actions, losses, or damages arising from Client’s reliance on AI-generated content.
2.3.2 Client is solely responsible for compliance with industry-specific regulations (including but not limited to HIPAA, FINRA, state bar rules, and SOX) as they relate to Client’s use of AI tools within its organization.
2.4. Exceptions
The limitations in this Section 2 shall not apply to: (a) either party’s indemnification obligations; (b) damages arising from a party’s gross negligence or willful misconduct; or (c) Client’s obligation to pay fees owed under this Agreement.
2.5. Essential Basis
The parties acknowledge that the limitations of liability and disclaimers of warranties in this Agreement form an essential basis of the bargain between the parties, and that LG Networks would not have entered into this Agreement absent such limitations.
2.6. Platform-Layer Liability Carve-Out
2.6.1 LG Networks acts as a managed service layer on top of the Hatz AI platform, which is independently owned and operated by Hatz AI, Inc. LG Networks does not own, control, or operate the underlying platform infrastructure, data centers, or AI model integrations that comprise the Hatz AI platform. Accordingly, LG Networks expressly excludes liability for any loss, damage, corruption, unauthorized access, or unavailability of Client Data arising from or attributable to: (a) the Hatz AI platform infrastructure or systems; (b) Hatz AI’s third-party large language model service providers (including but not limited to OpenAI, Anthropic, Google, and others); (c) Hatz AI’s data handling, retention, or deletion practices; or (d) any failure, breach, or act or omission of Hatz AI, Inc. or its subprocessors.
2.6.2 In the event of a platform-layer data loss, breach, or service failure attributable to Hatz AI, Inc., LG Networks’ sole obligation shall be to: (a) promptly notify Client upon receiving notice from Hatz AI; (b) cooperate in good faith with Client’s reasonable requests to escalate the matter to Hatz AI; and (c) provide Client with available documentation or correspondence from Hatz AI relevant to the incident. LG Networks shall have no obligation to provide financial compensation for losses attributable to Hatz AI’s platform-layer failures.
2.6.3 Nothing in this Section 2.6 limits LG Networks’ liability for its own direct acts or omissions, including failures within LG Networks’ direct control such as account misconfiguration, unauthorized disclosure by LG Networks’ personnel, or LG Networks’ failure to perform its managed service obligations.
2.7. Hatz AI End Customer Terms — Client Disclosure & Acknowledgment
2.7.1 Client acknowledges that access to and use of the Hatz AI platform is subject to Hatz AI’s End Customer Terms (available at hatz.ai/end-customer-terms), which govern the relationship between Client and Hatz AI, Inc. directly with respect to platform-layer matters including but not limited to: data handling, platform liability, intellectual property in AI outputs, and acceptable use obligations. LG Networks is not a party to the End Customer Terms and cannot modify, waive, or expand any rights or obligations set forth therein.
2.7.2 CLIENT IS HEREBY EXPRESSLY NOTIFIED THAT HATZ AI’S TOTAL CUMULATIVE LIABILITY TO END CUSTOMERS UNDER THE HATZ AI END CUSTOMER TERMS IS CAPPED AT THE GREATER OF ONE HUNDRED DOLLARS ($100) OR THE APPLICABLE STATUTORY REMEDY. THIS CAP APPLIES TO ALL PLATFORM-LAYER CLAIMS INCLUDING DATA LOSS, BREACH, AND SERVICE UNAVAILABILITY. CLIENT SHOULD EVALUATE THIS LIMITATION WHEN DETERMINING APPROPRIATE DATA HANDLING PRACTICES, CYBER INSURANCE COVERAGE, AND RISK TOLERANCE FOR PLATFORM USE.
2.7.3 In the event of a conflict between this Agreement and the Hatz AI End Customer Terms with respect to platform-layer matters, the Hatz AI End Customer Terms shall control. In the event of a conflict with respect to managed service matters within LG Networks’ direct control, this Agreement shall control. LG Networks recommends that Client review the Hatz AI End Customer Terms and Privacy Policy independently and consult legal counsel with any questions prior to execution of this Agreement.
3. Data Privacy & Acceptable Use
3.1. Data Governance
3.1.1 LG Networks will process Client Data solely to deliver the services described in this Agreement. Client Data will not be used to train, fine-tune, or improve any AI model operated by LG Networks, Hatz AI, or any third party, except where Client has provided explicit written consent.
3.1.2 The Hatz AI platform is SOC 2 Type 2 certified. LG Networks will maintain commercially reasonable administrative, technical, and physical safeguards consistent with industry standards to protect Client Data from unauthorized access, disclosure, or destruction.
3.1.3 Client Data will be processed and stored in data centers located within the United States unless Client and Provider agree otherwise in writing.
3.2. Data Retention & Deletion
3.2.1 Upon termination or expiration of this Agreement, Client’s End Customer Content will remain available on the Hatz AI platform for export or download for fifteen (15) days following the effective date of termination, expiration, or account migration, consistent with Hatz AI’s End Customer Terms. LG Networks will notify Client of this window promptly upon termination. After fifteen (15) days, Hatz AI has no obligation to retain Client’s End Customer Content and may delete it pursuant to Hatz AI’s internal data policies. LG Networks shall have no liability for data loss resulting from Client’s failure to export within this window. Notwithstanding the foregoing, Hatz AI may retain anonymized and aggregated data derived from Client’s usage indefinitely for platform analytics purposes; such retained data will not contain personally identifiable information or content attributable to Client. LG Networks will delete any Client Data held solely within LG Networks’ own systems (outside the Hatz AI platform) within thirty (30) days of termination, except as required by applicable law or legal hold obligations.
3.2.2 Client may request an export of its End Customer Content at any time during the Term by submitting a written request to its LG Networks account manager. LG Networks will facilitate the export request with commercially reasonable efforts within ten (10) business days. Client acknowledges that export capabilities are dependent on the Hatz AI platform’s available export functionality, and LG Networks’ obligation is to coordinate and assist the export process rather than guarantee a specific format or completeness of data not stored within LG Networks’ own systems.
3.3. Confidentiality
3.3.1 Each party agrees to treat the other party’s Confidential Information with the same degree of care it uses to protect its own confidential information, but no less than reasonable care.
3.3.2 “Confidential Information” means any non-public information disclosed by one party to the other that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure.
3.3.3 Confidentiality obligations shall survive termination of this Agreement for a period of three (3) years.
3.4. Acceptable Use Policy
Client agrees that it will not, and will not permit its users to, use the Hatz AI platform to:
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- Generate, distribute, or store content that is unlawful, harassing, defamatory, obscene, or otherwise objectionable;
- Violate any applicable law or regulation, including privacy laws, export control laws, or intellectual property laws;
- Attempt to gain unauthorized access to the platform, other tenants’ data, or underlying infrastructure;
- Input or process information that Client does not have the legal right to use, share, or process;
- Use AI outputs in high-stakes automated decision-making without appropriate human review (including medical diagnosis, legal determinations, or credit decisions);
- Reverse engineer, decompile, or attempt to extract source code from the platform;
- Resell, sublicense, or otherwise commercialize access to the platform without prior written consent from LG Networks.
Violation of this Acceptable Use Policy may result in immediate suspension of services without refund, and LG Networks reserves the right to terminate this Agreement for cause under Section 4.3.
3.5. Breach Notification
In the event of a confirmed security breach affecting Client Data within systems under LG Networks’ direct control, LG Networks will notify Client within seventy-two (72) hours of discovery, consistent with applicable data breach notification laws. For breaches attributable to the Hatz AI platform or its subprocessors, LG Networks’ notification obligation is governed by Section 2.6.2 and shall be triggered by, and timed from, LG Networks’ receipt of notice from Hatz AI. LG Networks will cooperate with Client’s reasonable requests to investigate and remediate the breach.
