1. Term of Service and Guarantees
1.1 Incorporated Documents
The following documents are incorporated into and made a part of this MSA by reference: (a) the CTS Terms of Service (the “TOS”), which set forth the service-specific terms for CTS Managed IT, CTS Cyber Security, and CTS Hosted Voice (VoIP) services, together with any documents incorporated into the TOS (including the CTS Hosted Voice (VoIP) Services terms and the CTS VoIP 911 (E911) Service — Notice and Acknowledgment); and (b) the CTS “17 Written Guarantees,” the operative terms of which are set forth in Section 2.9 of this MSA. All references in this MSA to the “TOS” mean the CTS Terms of Service so incorporated.1.2 Order of Precedence
In the event of a conflict among the documents comprising the agreement between the Parties, the following order of precedence controls: (i) the applicable SOW, Quote, or Change Order; (ii) this MSA; (iii) the TOS and its incorporated documents; and (iv) all other incorporated documents. Non-conflicting terms of each document remain in full force and effect. Notwithstanding the foregoing, the operative terms of Section 2.9 govern the Service Level Guarantees and the 17 Written Guarantees.2. General Requirements & Conditions
2.1 System
For these Terms, “System” encompasses products, equipment, services, software, computer networks, and other listed SOW services. During each SOW term, Client refrains from modifying or moving the System, or installing software, without CTS’s explicit authorization. Unauthorized System additions won’t be supported under this MSA or SOW.2.2 Maintenance and Updates
CTS installs Updates if compatible with the System’s configuration, disclaiming liability for Update-related issues. Properly installed Updates leading to downtime or losses aren’t CTS’s responsibility if installed as per manufacturer’s instructions.2.3 Third-Party Service Providers
CTS may engage Third-Party Providers to fulfill SOW needs. Client adheres to Third-Party Provider terms; CTS conveys Third-Party warranties. Terms and conditions of Third-Party Contracts will be communicated to Client via SOW.2.4 Third-Party Product Vendors
Third-Party Product Vendors supply machinery and equipment per SOW requisites.2.5 Third-Party Support
In hardware or software issues needing vendor or OEM support, CTS may contact vendor or OEM on Client’s behalf, with Client covering incurred costs exceeding $100 unless exigent. Client’s consent is essential.2.6 Subcontractors
CTS may involve Subcontractors for specific SOW services.2.7 Conditions of Service
For inclusion in CTS’s IT Services Program, Client’s System must meet CTS’s serviceability criteria. Client is responsible for providing an appropriate workspace, access, environment, and efficient System operation for monitoring and services. CTS’s service hours are standard business hours unless adjusted in a later SOW.2.8 Service Limitations
Services outside the scope of the SOW, such as consumables, upgrades, non-warranty support, and specific hardware or software, are not included. CTS is not accountable for problems arising from unauthorized network alterations. Parts covered by manufacturer warranties are not within the scope unless otherwise mentioned. Effective virus mitigation necessitates proper backups and antivirus software. Data restoration resulting from failures is not covered unless explicitly stated. Any supplementary services will be charged at CTS’s prevailing labor rates.2.9 Service Hours, Enhanced Response Commitments, and Service Level Guarantees
2.9.1 Regular hours
CTS will provide standard Services Monday through Friday from 8:00 AM to 5:00 PM Arizona time (“Regular Hours”), excluding the designated Holidays set forth in Section 2.9.10. In the event that Client requests CTS to perform Services outside of Regular Hours or during a designated Holiday (“After Hours”), CTS may choose to perform such Services either on-site or remotely, in accordance with the Fees set forth in the applicable Quote or TOS, except as modified by the Enhanced Response Commitments below.2.9.2 Enhanced Response Commitments
Notwithstanding the Regular Hours set forth above, CTS provides the following Enhanced Response Commitments to all Clients in active good standing on a CTS Managed IT Services agreement: (a) Critical Priority Incidents. For incidents meeting the Critical Priority definition in Section 2.9.3, CTS commits to first engineer response within one (1) hour of ticket creation, twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year, with no Holiday exclusion. If CTS fails to meet this commitment, Client’s next monthly Managed IT Services invoice shall be credited in full, automatically and without Client request (the full-month credit under this subsection (a) applies to Critical Priority incidents only). (b) Standard Priority Incidents. For all other priority levels (High, Medium, Low), CTS commits to first engineer response within one (1) hour of ticket creation during Regular Hours, excluding designated Holidays. For tickets created outside Regular Hours or during a Holiday, the response clock begins at the start of the next Regular Hours period.2.9.3 Critical Priority Definition
“Critical Priority” means an incident meeting one or more of the following criteria: (a) complete loss of network connectivity affecting all users at a Client location; (b) complete loss of email send/receive functionality for all users; (c) complete loss of access to Client’s primary line-of-business application affecting all users; (d) confirmed or strongly suspected active ransomware, malware infection, or cybersecurity incident; (e) complete server, hypervisor, or virtualization platform failure affecting production workloads; (f) telephony system complete outage where telephony is a CTS-managed service. Critical Priority does not include single-user issues, printing issues, performance degradation that does not constitute a complete outage, password resets, software bugs with available workarounds, or scheduled maintenance windows. Priority classification is made by CTS in its reasonable discretion based on the criteria above. Disputes regarding priority classification shall be escalated to the CTS Owner and resolved within five (5) business days.2.9.4 Eligible Ticket Channels
To be eligible for the Enhanced Response Commitments, Client must open the ticket via (i) the CTS client portal; (ii) the helpdesk@cloud-cts.com email address; or (iii) for Critical Priority incidents only, the CTS 24/7 emergency line. Voicemails, text messages, direct messages to individual CTS staff, and other non-tracked communications do not start the response clock until converted into a ticket through one of the eligible channels.2.9.5 Status Update Cadence
CTS commits to providing proactive status updates on open tickets at the following cadence, measured during Regular Hours except where noted: Priority Update Cadence Critical Every 2 hours, 24/7/365 until resolution High Every 4 Regular Hours Medium Once per business day Low Every 2 business days A “status update” means a customer-facing note added to the ticket through the CTS ticketing system or direct communication from a CTS engineer. If Client must initiate contact with CTS to request a status update during Regular Hours on a ticket that has exceeded the cadence above, Client shall receive a fifty dollar ($50) credit on Client’s next invoice, automatically applied without Client request. Credits under this subsection are limited to one credit per ticket per cadence period.2.9.6 Live-Answer Commitment
If Client calls the CTS main support line, (480) 605-4465, during Regular Hours with an Urgent issue and reaches voicemail, Client shall receive a one hundred dollar ($100) credit on Client’s next invoice, automatically applied without Client request. “Urgent” means an issue meeting the Critical Priority definition in Section 2.9.3 or classified as High Priority by CTS in its reasonable discretion. Outside Regular Hours, calls route to CTS’s after-hours system for Critical Priority incidents. The live-answer commitment does not apply outside Regular Hours, during designated Holidays, or to calls regarding non-Urgent matters.2.9.7 On-Site Response Commitment
For Critical Priority incidents requiring on-site support at a Client location within the Phoenix Metro Service Area, CTS commits to dispatching a technician on-site within four (4) hours during Regular Hours. If CTS fails to meet this commitment, Client shall receive a two hundred dollar ($200) service credit on Client’s next invoice, automatically applied without Client request. The “Phoenix Metro Service Area” is defined as Client locations within a forty-five (45) minute drive of CTS’s office at 1525 S Higley Rd Ste 104, Gilbert, AZ 85296 under normal traffic conditions. A current list of in-scope cities is included in each Client’s SOW. The on-site response clock begins when (i) a Critical Priority ticket is created via an Eligible Ticket Channel and (ii) the assigned CTS engineer determines that on-site response is necessary. On-site response outside Regular Hours is available on a best-effort basis at standard After Hours rates and is not subject to the four-hour commitment.2.9.8 Uptime Commitment
For systems explicitly identified in Client’s SOW as under CTS’s continuous management (“Managed Systems”), CTS commits to 99.9% uptime measured monthly. If a Managed System falls below 99.9% uptime in a given calendar month within CTS’s scope of control, Client shall receive a pro-rated credit on the affected service line on Client’s next invoice, automatically applied without Client request. Uptime is measured via CTS’s monitoring platform on a per-calendar-month basis. The following are excluded from downtime calculations: (a) scheduled maintenance windows announced with at least five (5) business days’ notice to Client; (b) emergency security patching where delay would create greater risk than the temporary outage, with reasonable notice provided to Client where practicable; (c) outages caused by Client action, Client inaction, or Client-side configuration changes not authorized by CTS; (d) outages caused by third-party vendor failure or service degradation outside CTS’s reasonable control; (e) force majeure events as defined in Section 30; (f) downtime occurring during designated Holidays where the affected Managed System is not configured for high-availability operation under the SOW; (g) downtime occurring before the system was placed under CTS’s continuous management or after such management was terminated.2.9.9 Ransomware Recovery Commitment
If Client’s business is impacted by a ransomware incident while Client is under active CTS Managed IT Services and Cyber Security Services management, CTS commits up to fifteen thousand dollars ($15,000) toward documented recovery costs, subject to the eligibility requirements below. Eligibility requires all of the following at the time of the incident: (a) Client is in active good standing on both a CTS Managed IT Services agreement and a CTS Cyber Security Services tier (Bronze, Silver, or Gold) per the TOS; (b) Client has maintained Cyber Liability Insurance as required by Section 22 of this MSA; (c) The full CTS security stack applicable to Client’s Cyber Security Services tier was deployed and operational on all in-scope endpoints and infrastructure; (d) Client has implemented CTS’s documented security recommendations, including but not limited to multi-factor authentication, patch management compliance, and user security awareness training where applicable to Client’s tier; (e) The ransomware incident was not caused by Client’s gross negligence, intentional misconduct, or deliberate circumvention of CTS-implemented security controls. The $15,000 commitment is an aggregate cap per Client per twelve (12)-month period and applies toward documented recovery costs only, including incident response labor, system restoration, and third-party forensic services. The commitment does not include ransom payments, regulatory fines, business interruption losses, or any costs covered by Client’s Cyber Liability Insurance.2.9.10 Designated Holidays
The following Holidays are observed by CTS:| Holiday | Date Observed |
|---|---|
| New Year’s Day | January 1 |
| Martin Luther King Jr. Day | 3rd Monday of January |
| President’s Day | 3rd Monday of February |
| Memorial Day | Last Monday in May |
| Juneteenth | June 19 |
| Independence Day | July 4 |
| Labor Day | 1st Monday in September |
| Veterans Day | November 11 |
| Thanksgiving Day | 4th Thursday in November |
| Day after Thanksgiving | 4th Friday in November |
| Christmas Eve | December 24 |
| Christmas Day | December 25 |
2.9.11 90-Day Satisfaction Guarantee
During the first ninety (90) days following Client’s Managed Services go-live date as defined in the SOW (the “Satisfaction Period”), Client may request a full refund of Managed IT Services fees paid to CTS during the Satisfaction Period if Client is not satisfied with CTS’s Services, provided that Client has first notified CTS of specific service deficiencies in writing and given CTS fifteen (15) business days to cure such deficiencies. Refund requests must be submitted in writing to CTS during the Satisfaction Period via email to info@cloud-cts.com or via certified mail to CTS’s principal office address. Refund requests submitted after the Satisfaction Period ends are not eligible. The 90-Day Satisfaction Guarantee covers Managed IT Services monthly fees only. It does not cover (a) onboarding labor billed separately under the SOW; (b) third-party software licenses, including but not limited to Microsoft 365 and similar per-seat licenses, which are non-cancellable once purchased per the Termination provisions of the TOS; (c) hardware purchased through or on behalf of CTS; (d) Cyber Security Services tier fees; or (e) Out-of-Scope work performed at standard hourly rates. Upon a valid refund request, CTS will assist with orderly termination per the TOS termination provisions, and Client agrees to pay actual costs of transition assistance.2.9.12 Backup Integrity Commitment
For systems explicitly covered by CTS’s backup services as identified in the SOW, CTS commits to (i) weekly backup verification and (ii) quarterly full restore testing. If a documented restore failure occurs on a covered system, and the documented cause is CTS’s failure to follow its verification procedures, Client shall receive a six (6)-month credit on the affected backup service line. Verification and restore tests are scheduled during Regular Hours. Tests scheduled during weeks containing a designated Holiday may be performed in the immediately following week without penalty.2.9.13 Credit Mechanics and Remedy Cap
All credits issued under this Section 2.9 are issued automatically by CTS, applied to Client’s next invoice without requiring Client to submit a claim. CTS will identify and document each credit through its ticketing and monitoring systems. If Client believes a credit was owed but not issued, Client may notify CTS in writing within sixty (60) days of the missed commitment for review. Aggregate Remedy Cap. In no calendar month shall the total credits issued under this Section 2.9 exceed one hundred percent (100%) of Client’s monthly Managed IT Services fee for that month, excluding the Backup Integrity credit under Section 2.9.12 and the Ransomware Recovery commitment under Section 2.9.9, which are governed by their own caps. Single-Source Reference. The Service Level Guarantees set forth in this Section 2.9 constitute Client’s exclusive remedies for missed response times, missed updates, missed live-answer, missed on-site response, missed uptime targets, ransomware events, satisfaction-period termination, and backup verification failures. Marketing materials published by CTS, including the “17 Written Guarantees” published at cloud-cts.com, are descriptive summaries and are governed by the operative terms of this Section 2.9.3. Response and Reporting
3.1.1 Response
CTS commits to Services and timely response, except during Client’s Downtime, Vendor-Side Downtime, security needs, or force majeure events.3.1.2 Scheduled Downtime
Scheduled maintenance may occur, communicated with at least five (5) business days’ notice, except emergencies.3.1.3 Client’s Downtime
Delays due to Client’s actions or omissions aren’t CTS’s responsibility.3.1.4 Vendor-Side Downtime
Delays due to third-party providers or vendors aren’t CTS’s responsibility.4. Confidentiality and Non-Disclosure
CTS and Client shall protect Confidential Information, using at least the same degree of care each Party uses to protect its own confidential information, but in no event less than reasonable care. Confidential Information includes proprietary data, customer info, pricing, methodologies, and terms. Disclosure to third parties without prior written consent is prohibited. Confidential Information does not include information that (a) is or becomes publicly available through no fault of the receiving Party, (b) was known to the receiving Party prior to disclosure, (c) is independently developed without use of the disclosing Party’s Confidential Information, or (d) is required to be disclosed by law or court order, provided the receiving Party gives prompt written notice to the disclosing Party. The obligations under this Section shall survive termination of this Agreement for a period of three (3) years. Each Party acknowledges that a breach of this Section may cause irreparable harm and that the non-breaching Party shall be entitled to seek equitable relief in addition to any other remedies available at law.5. Provision of Materials and Services to CTS
Client provides personnel, hardware, software, and facilities for CTS’s service provision. Access to information and facilities must be granted.6. Responsibility for Equipment
The Client collaborates on equipment requirements. Adjustments are managed through Change Orders. The Client guarantees the appropriate quality, craftsmanship, and legality of the supplied materials.7. Client Data Ownership and Responsibility
Client is solely responsible for data accuracy, ownership, and legality.8. Intellectual Property
CTS retains all right, title, and interest in and to all intellectual property developed or created by CTS in the course of performing Services (“CTS IP”), including all tools, methodologies, frameworks, scripts, and pre-existing materials. Subject to Client’s timely payment of all fees, CTS grants Client a limited, non-exclusive, non-transferable, non-sublicensable license to use CTS IP solely in connection with Client’s internal business operations during the term of the applicable SOW. Upon termination or expiration of the SOW, such license shall immediately terminate.9. License Agreements
The Client obtains a software license, subject to Minimum Requirements. Verification is conducted for the Client’s software updates and licensing. EULAs may be applicable and must be adhered to. The Client bears responsibility for third-party products.10. Working Environment
The Client shall provide a suitable working environment for any System, Product, or Equipment located at the Client’s facility. This environment includes maintaining the appropriate temperature, static electricity, and humidity controls, as well as ensuring a properly conditioned electrical supply for each piece of Equipment. The Client shall assume the risk of loss for any Equipment located at their facility.11. CTS’s Employees, Agents, or Subcontractors
The Client acknowledges that CTS has invested significantly in recruiting, training, and administration for its agents. From the Effective Date of the last SOW until one year after the termination of any SOW, the Client agrees not to hire or contract CTS’s employees, agents, or subcontractors who worked on any Service. In the event of a breach of this Section 11, Client shall be liable for actual damages incurred by CTS, including but not limited to recruitment, training, and lost business opportunity costs. CTS may also seek injunctive relief to enforce this provision.12. Warranty
CTS guarantees that it or its contracted subcontractors will execute services in line with specified criteria, as detailed in these Terms, SOWs, or work orders. In case of a breach, CTS will make reasonable efforts to rectify non-conforming services within ten (10) business days after receiving written notice. If rectification is impractical, CTS will reimburse the fees paid by the Client for such services. However, CTS’s direct product warranty becomes void if the product undergoes (a) alterations, modifications, or repairs by parties other than CTS, (b) misuse or operation outside specifications, or (c) improper site preparation or maintenance. The Service Level Guarantees set forth in Section 2.9 are in addition to, and not in lieu of, the warranty remedies in this Section 12.13. Software, Hardware, and Security
The Client acknowledges the potential risks associated with data loss and network disruptions. To mitigate the risk of network failures, the Client is responsible for maintaining robust security measures for their computer and information system, encompassing regular software and hardware updates. The Client commits to adhering to recommended software and hardware updates and upholding the specified security standards and policies endorsed by CTS.14. Client Cyber Security
Unless Client has separately contracted for CTS Cyber Security Services under an applicable SOW or TOS tier, the services extended to the Client do not encompass any type of internet security monitoring, cyber security surveillance, cyber terrorism monitoring, or other cyber threat safeguards. It is strongly advisable for the Client to consider engaging CTS for cyber protection services aimed at proactive monitoring of cyber controls and activities. CTS is available to assess the Client’s requirements and offer a Cyber Security Assessment to facilitate CTS’s cyber security safeguarding.15. Telemarketing and Unsolicited Emails
In no event, including negligent acts or omissions, shall CTS or its subcontractors be liable for direct, indirect, or consequential losses or expenses, including loss of profits, due to data breaches resulting from unsolicited emails, direct mail, or unauthorized data collection activities.16. Terrorism
CTS shall not be liable for direct, indirect, or consequential losses or expenses resulting from acts of terrorism, cyberterrorism, sabotage, or similar actions.17. Extraordinary Events
CTS shall not be liable for direct, indirect, or consequential losses or expenses resulting from failures or malfunctions of electrical, mechanical, or telecommunications infrastructure and equipment or services due to extraordinary events, including natural disasters, pandemics, and physical events.18. Release with Limitation of Liability
Except for liabilities arising from gross negligence or willful misconduct, CTS’s aggregate liability under this Agreement shall not exceed the fees paid by Client in the twelve (12) months preceding the claim. CTS shall not be liable for special, indirect, or consequential damages, including lost profits, unless caused by gross negligence or willful misconduct.19. Mutual Indemnification and Hold Harmless
Both parties agree to defend, indemnify, and hold each other harmless from third-party liabilities, damages, and costs arising from their own negligence or willful misconduct. CTS’s indemnification obligations under this Section are subject to the limitation of liability set forth in Section 18. Client shall additionally indemnify and hold CTS harmless from any liabilities, damages, and costs arising from Client’s breach of its obligations under Sections 7, 9, 13, 14, and 39 of this Agreement.20. CTS Insurance
CTS agrees to maintain adequate insurance coverage. The coverage includes General Liability, Automobile Liability, Workers Compensation, and Professional Liability Insurance to cover errors and omissions.21. Client’s Insurance
21.1 Commercial Property Insurance
Client shall secure at Client’s own cost and expense Property Insurance for the equipment that is part of the provisions of the service agreement. The policy shall include the following coverages:- Replacement cost valuation on CTS’s equipment.
- Waiver of coinsurance for the insured property.
- Insured for All Risk / Special Perils with an extension of coverage for Flood and Earthquake.
22. Cyber Insurance
Client shall secure and maintain for the duration of the contract Cyber Liability Insurance to insure Client’s cyber exposures, with minimum coverage limits of not less than one million dollars ($1,000,000) per occurrence and in the aggregate, or such higher limits as may be appropriate for Client’s industry and risk profile as determined by a qualified insurance broker or risk manager. Client shall provide CTS with a certificate of insurance evidencing such coverage upon request. Maintenance of Cyber Liability Insurance is also a condition of eligibility for the Ransomware Recovery Commitment under Section 2.9.9.23. Mutual Waiver of Subrogation
TO THE EXTENT PERMITTED BY LAW, EACH PARTY WAIVES ALL RIGHTS AGAINST THE OTHER FOR RECOVERY OF DAMAGES TO THE EXTENT THESE DAMAGES ARE COVERED BY THE WORKERS COMPENSATION (TO THE EXTENT PERMITTED BY LAW), EMPLOYERS LIABILITY, PROFESSIONAL LIABILITY GENERAL LIABILITY, PROPERTY INSURANCE, COMMERCIAL UMBRELLA / EXCESS, CYBER OR OTHER COMMERCIAL LIABILITY INSURANCE OBTAINED BY EITHER PARTY. CLIENT WILL NOT HOLD CTS, ITS SUBCONTRACTORS AND/OR THIRD-PARTY SERVICE PROVIDERS RESPONSIBLE FOR SUCH LOSSES AND WILL CONFIRM THAT CLIENT’S INSURANCE POLICIES REFERENCED ABOVE PROVIDE FOR THE WAIVER OF SUBROGATION INCLUDED IN THE MASTER SERVICE AGREEMENT.
24. Disclaimers
The express remedies set forth in these Terms will constitute Client’s exclusive remedies, and CTS’s sole obligation and liability, for any claim (a) that a Service or deliverable provided hereunder does not conform to specifications or is otherwise defective, or (b) that the Services were performed improperly. Client’s exclusive remedies for missed service level commitments are set forth in Section 2.9.EXCEPT FOR THE LIMITED WARRANTY IN SECTION 12 FOR SERVICES AND ANY THIRD-PARTY WARRANTIES PASSED THROUGH UNDER SECTION 2.3, ALL SERVICES, HARDWARE, SOFTWARE, AND DELIVERABLES ARE PROVIDED ‘AS-IS.’ CTS DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT. CTS DOES NOT GUARANTEE THAT SERVICES OR DELIVERABLES WILL BE UNINTERRUPTED, ERROR-FREE, OR MEET CLIENT’S SPECIFIC REQUIREMENTS.
CTS DOES NOT WARRANT THAT THE SERVICES OR ANY DELIVERABLES WILL MEET ANY OF CLIENT’S REQUIREMENTS NOT SET FORTH HEREIN, THAT ANY DELIVERABLES WILL OPERATE IN THE COMBINATIONS THAT CLIENT MAY SELECT FOR USE, THAT THE OPERATION OF ANY DELIVERABLES WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT ALL ERRORS WILL BE CORRECTED. IF PRE-PRODUCTION (E.G., ALPHA OR BETA) RELEASES OF SOFTWARE ARE PROVIDED TO CLIENT, SUCH COPIES ARE PROVIDED AS-IS WITHOUT WARRANTY OF ANY KIND.
No statement by any CTS employee or agent, orally or in writing, will serve to create any warranty or obligation not set forth herein or to otherwise modify these Terms in any way whatsoever.