Master Services Agreement (“MSA”)
All defined terms in this MSA have the meaning stated in the Scope of Work (“SOW”) or otherwise stated herein.
1. SCOPE OF SERVICES
1.1. Scope of Services. MSP will provide to Client services and products/materials specified in the SOW (the “Services”), subject to timely payment of all applicable fees as set forth in the “Fees” section of this Agreement. Any Services not specifically provided hereunder are outside of the scope of this agreement. Client may request additional services by submitting a written change order and Client will be responsible for any corresponding changes to the estimated fees.
1.2 Support. MSP will provide Client technical support in accordance with the process as set forth in Protek SOW.
1.3 Security. MSP will maintain commercially reasonable security standards and will employ commercially reasonable security measures designed to protect Client from unauthorized access to Client data or Confidential Information. Client and Client’s agents, employees, and contractors will take commercially reasonable security precautions in their use of their systems and the Services. MSP can assist in evaluating Client’s cybersecurity needs, but it is understood and agreed that MSP does not offer nor provide cybersecurity assurances under this Agreement.
2.1. Cooperation. Client will cooperate in good faith with MSP in our performance of Services by providing, without limitation:
(i) appropriate points of contact to (i) authorize all change requests with a financial impact (i.e., normally related to additional added products. services, or resources) and (ii) convey the necessary business and application knowledge necessary for MSP to perform the Services;
(ii) requested information in a timely manner, and assuming full responsibility and liability for the accuracy of all information supplied to MSP by Client and which MSP relies upon in its performance hereunder;
(iii) access to all appropriate computing platforms, documentation and personnel (i.e. end users and technical representatives) necessary to fully understand the current business systems and environments throughout the life of the engagement. Client understands and acknowledges that such access will likely be remote access and MSP shall implement commercially reasonable security measures to remotely access the Client’s systems, such as multi-factor authentication for remote access;
(iv) If MSP does need to be on-site, Client shall provide a suitable working environment for its equipment and MSP to perform the necessary work at Client’s facility. Such environment includes, without limitation, appropriate temperature controls, static electricity and humidity controls, and properly conditioned electrical supply for its equipment. Client shall bear the risk of loss of any equipment located at Client’s facility;
(v) notice of any changes to the environment and not perform any modifications to infrastructure without first notifying MSP due to the effects that such unexpected changes may have on MSP services. MSP is not responsible for incompatibilities introduced by supporting infrastructure that is patched, upgraded, or otherwise modified without consulting MSP. Such unexpected modifications may result in increased work effort and cost of services;
(v) complete control of the necessary access, credentials and accounts to the MSP team to perform its Services under the Agreement. If Client requires a return of administrator credentials or to maintain a copy of administrator credentials, then MSP is not responsible or liable for any Claims arising out of or related to the administrator credentials; and
(vi) testing and acceptance of changes made within the environment.
3. ACCEPTANCE AND CHANGE ORDERS
3.1. Acceptance. Client is responsible for reviewing and approving this Agreement, as well as any quotes provided to Client for onboarding project and Services. If Client rejects any portion of the Agreement related to security, business continuity, or disaster recovery then Client shall be fully responsible for any liability or damages that arise out of Client’s rejection of MSP Plan recommendation.
3.2. Change Orders. Changes to a Client’s Agreement will require a written change order signed by the parties prior to implementation of the changes. Such changes may include, for example, changes to the plan and any corresponding changes to the fees, schedule, or support.
4. FEES, INVOICING, AND TAXES
4.1. Fees. The initial schedule of fees for the Services shall be as indicated in the SOW. Unless otherwise agreed in a written change order, at the annual anniversary of the initial term, MSP rates shall increase up to 5% (current average is 3%) annually. Client’s continued receipt of MSP services following expiration of the initial term shall constitute Client’s acceptance of such modified rates.
4.2. Legacy Device Charge. MSP reserves the right to charge an additional fee for hardware that is (i) out of warranty; (ii) >5 years old; or (iii) has an operating system that is no longer supported by the applicable vendor. The fee will range from $29 – $129 per device dependent upon the severity of the related risk.
4.3. Invoicing and Payment. Payment shall be remitted on a monthly prepaid basis via ACH or CC. Invoiced amounts will be due and payable prior to the fifth day of the month in which Client receives the Services. Client is responsible for providing MSP with Client’s complete and accurate billing and contact information and notifying MSP of any changes to such information.
4.4. Overdue Charges. Subject to the “Payment Disputes” section, if any invoiced amount is not received by MSP by the due date, then without limiting MSP rights or remedies, those charges may accrue late interest at the rate of 1.5% of the outstanding balance per month, or the maximum rate permitted by law, whichever is lower.
4.5. Suspension of Services. Subject to the “Payment Disputes” section, if any amount owing by Client under this or any other agreement for our MSP services is 30 days or more overdue, MSP may, without limiting other rights and remedies, suspend Services until such amounts are paid in full. Such suspension may include a suspension of any third-party services provided through MSP. MSP shall not be liable for any suspension of Services or third-party services arising out of Client’s failure to timely remit payment when due. Failure to remit timely payment shall constitute a material breach of this Agreement.
4.6. Payment Disputes. MSP will not exercise our rights under the “Overdue Charges” or “Suspension of Services” sections above if Client is disputing the applicable charges reasonably and in good faith and are cooperating diligently to resolve the dispute.
4.7. Taxes. It is understood that any Federal, State or Local Taxes applicable shall be added to each invoice for Services rendered under this Agreement. Client shall pay any such taxes unless a valid exemption certificate is furnished to MSP for the state of use.
5. PROPRIETARY RIGHTS AND LICENSES
5.1. Ownership. Client does not grant to MSP any rights in or to Client’s intellectual property except such licenses as may be required for MSP to perform the Services. The Client agrees that MSP may utilize certain items of the Client’s equipment and may gain access to certain parts of the Client facilities. The Client retains title and ownership in all equipment purchased by Client and utilized by MSP and must grant authority for MSP to access the Client’s facility. Facility access may be denied for any reason at any time, however if access to facilities is denied, the Client understands that MSP may be unable to perform their duties adequately and if such a situation should exist, MSP will be held harmless. MSP retains title and ownership in all equipment and intellectual property purchased by MSP or provided by MSP to Client in its provision of the Services.
5.2. Confidential Information. As between the parties, each party retains all ownership rights in and to its Confidential Information.
5.3 Third Party Software and Licenses. Some Services provided under this Agreement may require third-party software. Client agrees to enter into any third-party software agreement necessary for the use and functioning of such third-party software. Client further agrees to comply with all terms of any third party’s agreement for the third-party software. MSP shall not be responsible for any licenses associated with the third-party software and Client represents and warrants that it has obtained any and all required licenses and such licenses are up to date. “Third-party software” means software produced, sold, or licensed from a third party, and purchased, licensed, or otherwise acquired by Client directly from a third party. Any licenses not purchased directly from a third party and provided by MSP in its provision of Services to Client shall remain the sole and exclusive property of MSP. Client acknowledges that MSP is not liable for the performance of any third party products or services used in connection with the Services, or any actions taken by third parties related to or arising from the Services or any failures by third parties to implement adequate security controls or address vulnerabilities with their products.
6.1. Definition of Confidential Information. “Confidential Information” means all information disclosed by a party (“Disclosing Party”) to the other party (“Receiving Party”), whether orally or in writing, 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. Confidential Information of each party includes this Agreement, business and marketing plans, strategies, data, technology and technical information, access credentials, and business processes disclosed by such party. However, Confidential Information does not include any information that (i) is or becomes generally known to the public without breach of any obligation owed to the Disclosing Party, (ii) was known to the Receiving Party prior to its disclosure by the Disclosing Party without breach of any obligation owed to the Disclosing Party, (iii) is received from a third party without breach of any obligation owed to the Disclosing Party, or (iv) was independently developed by the Receiving Party.
6.2. Protection of Confidential Information. The Receiving Party will use the same degree of care that it uses to protect the confidentiality of its own confidential information of like kind (but not less than reasonable care) to (i) not use any Confidential Information of the Disclosing Party for any purpose outside the scope of this Agreement, and (ii) except as otherwise authorized by the Disclosing Party in writing, limit access to Confidential Information of the Disclosing Party to its employees and contractors who need that access for purposes consistent with this Agreement and who have signed confidentiality agreements with the Receiving Party containing protections not materially less protective of the Confidential Information than those herein.
6.3. Compelled Disclosure. The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent compelled by law to do so, provided the Receiving Party gives the Disclosing Party prior notice of the compelled disclosure (to the extent legally permitted) and reasonable assistance, at the Disclosing Party’s cost, if the Disclosing Party wishes to contest the disclosure. If the Receiving Party is compelled by law to disclose the Disclosing Party’s Confidential Information as part of a civil proceeding to which the Disclosing Party is a party, and the Disclosing Party is not contesting the disclosure, the Disclosing Party will reimburse the Receiving Party for its reasonable cost of compiling and providing secure access to that Confidential Information.
6.4 Remedies. The Parties expressly agree that due to the unique nature of the Confidential Information, monetary damages may be inadequate to compensate for any breach the covenants and agreements set forth in this Agreement. Accordingly, the Parties each agree and acknowledge that any such violation or threatened violation may cause irreparable injury and that, in addition to any other remedies that may be available in law, in equity, or otherwise, the Parties shall be entitled to seek injunctive relief against the threatened breach of this Agreement or the continuation of any such breach without the necessity of proving actual damages.
7. REPRESENTATIONS, WARRANTIES, REMEDIES AND DISCLAIMERS
7.1. Representations. Each party represents that it has validly entered into this Agreement and has the legal power to do so.
7.2. Warranty. MSP warrants that the Services will be performed in a professional and workmanlike manner in accordance with generally accepted industry standards. For any breach of the above warranty, Client’s exclusive remedy and MSP entire liability will be the re-performance of the applicable Services. If MSP is unable to re-perform the Services as warranted, Client will be entitled to recover the Services fees paid to MSP for the deficient Services. Client must make any claim under the foregoing warranty to MSP in writing within 90 days of performance of such Services in order to receive warranty remedies.
7.3. Disclaimer. THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND NEITHER PARTY MAKES ANY OTHER WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. CLIENT ACKNOWLEDGES AND AGREES THAT SOFTWARE VIRUSES OR ANY OTHER COMPUTER CODE, FILES OR PROGRAMS DESIGNED TO INTERRUPT, DESTROY OR LIMIT THE FUNCTIONALITY OF ANY COMPUTER SOFTWARE OR HARDWARE OR TELECOMMUNICATIONS EQUIPMENT ARE INHERENT RISKS IN TECHNOLOGY AND MSP MAKES NO REPRESENTATION OR WARRANTIES THAT THE SERVICES PROVIDED UNDER THE AGREEMENT WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY SECURE.
8.1. Indemnification by MSP. MSP will defend Client against any claim, demand, suit or proceeding (“Claim”) made or brought against Client by a third party (i) arising out of death or personal injury to the extent caused by MSP’ personnel in their performance of the Services or (ii) alleging that MSP’s information, design, specification, instruction, software, data or material furnished by MSP hereunder (“Material”) infringes or misappropriates such third party’s intellectual property rights, and will indemnify Client for any damages, attorneys fees and costs finally awarded against Client as a result of, or for amounts paid by Client under a settlement approved in writing by MSP of, any such Claim, all of the foregoing to the extent caused by MSP’ personnel, provided that Client: (a) promptly give MSP written notice of the Claim; (b) give MSP sole control of the defense and settlement of the Claim (except that MSP may not settle any Claim unless it unconditionally releases Client of all liability); and (c) give MSP all reasonable assistance, at MSP’ cost. The above defense and indemnification obligations do not apply to the extent a Claim arises from Client’s breach of this Agreement.
8.2. Client Indemnity. Client will indemnify MSP against any claim, demand, suit or proceeding (“Claim”) made or brought against Client by a third party arising out of or relating to (i) any actual or alleged violation of the Agreement or applicable law, rule, or regulation by Client or any of Client’s representatives, (ii) any claims by third parties arising out of or related to Client’s relationship with such third party, or (iii) any Material furnished by Client hereunder that infringes or misappropriates such third party’s intellectual property rights. Client indemnifies MSP for any damages, attorneys fees and costs finally awarded against MSP as a result of, or for amounts paid by MSP under a settlement approved in writing by Client of, any such Claim, provided that MSP: (a) promptly give Client written notice of the Claim; (b) give Client sole control of the defense and settlement of the Claim (except that Client may not settle any Claim unless it unconditionally releases Client of all liability); and (c) give Client all reasonable assistance, at Client’s cost. The above defense and indemnification obligations do not apply to the extent a Claim arises from MSP’ breach of this Agreement.
8.3 Infringement Remedy. In the event that Material is reasonably believed to infringe or misappropriate a third party’s rights, the provider of such Material may in its discretion and at no cost to the recipient (A) modify or replace the Material so it is no longer claimed to infringe or misappropriate, (B) obtain a license for the recipients continued use of the Material in accordance with this Agreement, or (C) terminate the Agreement upon thirty (30) days written notice.
8.4. Exclusive Remedy. This “Indemnification” section states the indemnifying party’s sole liability to, and the indemnified party’s exclusive remedy against, the other party for any type of Claim described in this section.
9. LIMITATION OF LIABILITY
9.1. Limitation of Liability. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF MSP ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL FEES PAID IN THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THE INCIDENT GIVING RISE TO THE LIABILITY. THE FOREGOING LIMITATION WILL APPLY WHETHER AN ACTION IS IN CONTRACT OR TORT AND REGARDLESS OF THE THEORY OF LIABILITY BUT WILL NOT LIMIT YOUR AND YOUR AFFILIATES’ PAYMENT OBLIGATIONS UNDER THE “FEES AND PAYMENT” SECTION ABOVE.
9.2. Exclusion of Consequential and Related Damages. IN NO EVENT WILL MSP HAVE ANY LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT FOR ANY LOST PROFITS, REVENUES, DATA, GOODWILL, OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL COVER, BUSINESS INTERRUPTION, OR PUNITIVE DAMAGES, WHETHER AN ACTION IS IN CONTRACT OR TORT, AND REGARDLESS OF THE THEORY OF LIABILITY, EVEN IF A PARTY OR ITS AFFILIATES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF A PARTY’S OR ITS AFFILIATES’ REMEDY OTHERWISE FAILS OF ITS ESSENTIAL PURPOSE. THE FOREGOING DISCLAIMER WILL NOT APPLY TO THE EXTENT PROHIBITED BY LAW.
10.1. Term. The subscription term is as stated in the SOW. This Agreement auto-renews for successive one-year terms as stated in the SOW.
10.2 Termination for Convenience. MSP makes a substantial commitment to evaluating and onboarding its Clients. Client or MSP may terminate this Agreement for convenience upon 30 days written notice to the other party. If Client terminates this Agreement for convenience, all fees due and owing for the remainder of the applicable term are non-cancelable and non-refundable. If MSP terminates this Agreement for convenience, MSP shall provide a pro-rata refund for pre-paid fees calculated as of the effective date of termination.
10.3. Termination for Cause. A party may terminate this Agreement for cause: (i) upon 30 days written notice to the other party of a material breach if such breach remains uncured at the expiration of such period, or (ii) if the other party becomes the subject of a petition in bankruptcy or any other proceeding relating to insolvency, receivership, liquidation or assignment for the benefit of creditors.
10.4. Payment Upon Termination. Upon any termination of this Agreement by Client for cause, Client will pay, in accordance with the Fees, Invoicing, Taxes, and Payment section of this Agreement, any unpaid fees and expenses incurred on or before the termination date. In the event that MSP terminates the Agreement for cause, any pre-paid fees for Services charged on a fixed-fee basis are non-refundable. Upon termination or expiration of the Agreement, MSP shall promptly delete any Client data within its possession, including any data on backups, unless otherwise instructed by Client. MSP shall not be liable for any damages or claims arising from its deletion of data after termination or expiration.
10.5. Surviving Provisions. The sections titled “Proprietary Rights and Licenses,” “Confidentiality,” “Representations, Warranties, Exclusive Remedies and Disclaimers,” “Fees, Invoicing and Taxes,” “Indemnification,” “Limitation of Liability,” “Term and Termination” and “General” will survive any termination or expiration of this Agreement.
10.6 Transition Services. If Client is current on payment obligations and this Agreement expires or is terminated by Client for cause in accordance with Section 10.3, MSP agrees to reasonably assist Client in the orderly transition of services to another designated provider in accordance with a mutually agreeable transition plan and subject to MSP’s then-current rates. Client agrees to pay MSP the actual costs of rendering such assistance.
11. EXCLUDED SERVICES
11.1. Excluded Services. Services rendered under this Agreement shall not include: (i) unless expressly agreed in the SOW, the cost of any parts, equipment, Professional Services for setup on any new equipment, or shipping charges of any kind, (ii) unless expressly agreed in writing, the cost of any software, licensing, or software renewal or upgrade fees of any kind; (iii) the cost of any third party vendor or manufacturer support or incident fees of any kind: (iv) the cost to bring Client’s environment up to minimum standards required for the Services (MSP will advise if Client does not meet minimum standards); (v) the cost of service and repair made necessary by the alteration or modification of equipment other than that authorized by MSP, including alterations, software installations or modifications of equipment made by Client’s employees, Client’s vendors, or anyone other than MSP; (vi) programming (modification of software code) and program (software) maintenance of any kind; (ix) any loss or corruption (whether direct or indirect) of Client Data, and (x) training services of any kind; (xi) Any work on home networks, equipment, ISP, etc. If Client fails to bring its environment up to minimum standards as described by MSP in the outset of the Services, then MSP may immediately terminate this agreement with no adverse effects.
12. GENERAL PROVISIONS
12.1. Entire Agreement. This Agreement is the entire agreement regarding the Services and supersedes all prior and contemporaneous agreements, proposals or representations, written or oral, concerning its subject matter. No modification, amendment, or waiver of any provision of this Agreement will be effective unless in writing and signed by the party against whom the modification, amendment or waiver is to be asserted. Notwithstanding any language to the contrary therein, no terms or conditions stated in any other documentation the Client provides to MSP will be incorporated into or form any part of this Agreement, and all such terms or conditions will be void. This Agreement shall be construed and interpreted fairly, in accordance with the plain meaning of its terms, and there shall be no presumption or inference against the party drafting this Agreement in construing or interpreting the provisions hereof.
12.2. Relationship of the Parties. The parties are independent contractors. This Agreement does not create a partnership, franchise, joint venture, agency, fiduciary or employment relationship between the parties. Each party will be solely responsible for payment of all compensation owed to its employees, as well as all employment-related taxes.
12.3. No Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement.
12.4. Subcontractors. MSP may, in our reasonable discretion, use subcontractors inside or outside the United States to perform any of its obligations hereunder.
12.5. Waiver. No failure or delay by either party in exercising any right under this Agreement will constitute a waiver of that right.
12.6. Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the provision will be deemed null and void, and the remaining provisions of this Agreement will remain in effect.
12.7. Force Majeure. Neither party shall be liable for any delay or failure to perform hereunder due to floods, riots, strikes, freight embargoes, acts of God, acts of war or hostilities of any nature, laws or regulations of any government (whether foreign or domestic, federal, state, county or municipal) or any other similar cause beyond the reasonable control of the party affected. A party relying on such an event to excuse its performance hereunder shall, as soon as reasonably possible, notify the other party in writing of the nature of that event and the prospects for that party’s future performance and shall thereafter, while that event continues, respond promptly and fully in writing to all reasonable requests for information from the other party relating to that event and those prospects.
12.8 Notice. Notwithstanding any provision to the contrary, email notice shall be effective only if the receiving party subsequently acknowledges receipt of such email via a return email to the other party in which the original email is either referenced or reproduced. Notice provided in any method other than by email shall be deemed given either when delivered personally, or by courier, or by facsimile machine with printed transmittal confirmation sheet; or, two (2) days after mailing, postage prepaid by registered or certified mail, return receipt requested, addressed to the party for whom it is intended with copies provided to the address set forth above or to such other addresses as a party shall hereafter designate in writing to another party. Subject to the terms described herein, the parties acknowledge and agree that electronic mail (“email”) and/or digital copies or electronic transmissions satisfy all “writing” requirements under this Agreement.
12.9 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah. The parties agree that the sole and exclusive venue for any and all issues, claims, causes of action or matters arising from or related to this Agreement shall be in the federal or state courts located in Salt Lake City, Utah.
12.10 Assignment. Neither party may assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the other party’s prior written consent (not to be unreasonably withheld), provided however, either party may assign this Agreement in its entirety without the other party’s consent in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets. Notwithstanding the foregoing, if a party is acquired by, sells substantially all of its assets to, or undergoes a change of control in favor of, a direct competitor of the other party, then such other party may terminate this Agreement upon written notice. A party’s sole remedy for any purported assignment by the other party in breach of this paragraph will be, at the non-assigning party’s election, termination of this Agreement upon written notice to the assigning party. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.
12.11 Insurance. MSP agrees to maintain insurance coverage under this Agreement in the following areas: (a) Commercial General Liability including (i) bodily injury, (ii) property damage, (iii) contractual liability coverage, and (iv) personal injury in an amount not less than one-million dollars ($1,000,000) per occurrence; (b) Business Automobile Liability for owned, hired and non-owned vehicles in an amount of not less than One Million Dollars ($1,000,000) for each accident; (c) Workers Compensation at statutory limits; and (d) Professional Liability Insurance covering errors and omissions and wrongful acts in the performance of the Services. Such insurance will bear a combined single limit per occurrence of not less than One Million Dollars ($1,000,000). Client shall secure at its own cost and expense Property Insurance for its IT equipment. The policy should include coverage for replacement cost valuation on IT equipment, waiver of coinsurance for the insured property, and insured for “All Risk/Special Perils” with an extension of coverage for Flood and Earthquake. Client shall also maintain Cyber Liability insurance to insure Client’s cyber exposures. Specific limits and coverages should be evaluated by a qualified insurance broker or risk manager to determine your specific coverage and policy limit requirements.
12.11.1 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) AND EMPLOYERS PROFESSIONAL LIABILITY GENERAL LIABILITY. PROPERTY INSURANCE, COMMERCIAL UMBRELLA/EXCESS, CYBER OR OTHER COMMERCIAL LIABILITY INSURANCE OBTAINED BY EITHER PARTY. CLIENT WILL NOT HOLD THE MSP RESPONSIBLE FOR SUCH LOSSES AND WILL CONFIRM THAT THE CLIENTS INSURANCE POLICIES REFERENCED ABOVE PROVIDES FOR THE WAIVER OF SUBROGATION INCLUDED IN THE MASTER SERVICE AGREEMENT.
12.12 Non-Solicitation. During the term of this Agreement and for a period of twenty-four months thereafter, neither party shall, directly or indirectly, in any manner solicit employment for any person who performed any work related to this agreement who is then in the employment of the other party. A general advertisement or notice of a job listing or opening shall not be construed as a solicitation or inducement for the purposes of this Section and the hiring of any such employees or independent contractors who freely responds to such posting thereto shall not be in breach of this Section. If either party breaches this section then the breaching party shall, on demand, pay to the non-breaching party a sum equal to one year’s salary or an equivalent amount if that individual is paid on an hourly basis plus the recruitment costs incurred by the non-breaching party to replace that individual.