## Revised Sections ### Section 7. Indemnification. (a) Vendor shall defend, indemnify, and hold harmless Bellhaven, its affiliates, and their respective officers, directors, employees, and agents from and against all third-party claims, demands, damages, liabilities, costs, and expenses, including reasonable attorneys’ fees, arising out of or relating to any claim that the Services, or any component of the Services provided by Vendor, infringe any intellectual property rights of a third party. (b) Vendor’s obligations under Section 7(a) shall not apply to the extent that a claim arises solely from (i) modifications to the Services made by or on behalf of Bellhaven, or (ii) a combination of the Services with products, services, or materials not provided by Vendor, if the alleged infringement would not have occurred absent such modification or combination. ### Section 8. Limitation of Liability. (a) Except as provided in Section 8(c), and except for Customer’s payment obligations, neither party’s aggregate liability arising out of or relating to this Agreement, whether in contract, tort, statute, or otherwise, shall exceed the fees paid or payable by Customer to Vendor during the twelve (12) months immediately preceding the event giving rise to the claim; if the Agreement has been in effect for less than twelve (12) months, this amount will be the annualized equivalent of the fees payable for the initial term. (b) Except as provided in Section 8(c), in no event shall either party be liable to the other for indirect, incidental, consequential, special, or punitive damages, including lost profits or loss of data. (c) The limitations in Sections 8(a) and 8(b) do not apply to (i) Vendor’s indemnification obligations under Section 7; (ii) claims arising from a breach of confidentiality obligations under this Agreement; or (iii) claims arising from Vendor’s failure to comply with its data-security obligations under this Agreement. Clauses (ii) and (iii) are collectively referred to as “Data Breach and Confidentiality Claims.” For any Data Breach and Confidentiality Claim, the aggregate liability of the party against whom the claim is asserted shall not exceed the greater of (A) two (2) times the amount set forth in Section 8(a) and (B) $4,000,000. Nothing in this Section 8 limits Customer’s payment obligations. ### Section 9. Intellectual Property; Data. (a) As between Bellhaven and Vendor, Vendor owns all right, title, and interest in the Services. As between Bellhaven and Vendor, Bellhaven owns all right, title, and interest in Bellhaven Data. (b) “Customer Data” means all data, content, materials, and other information submitted by or on behalf of Bellhaven to or through the Services. “Usage Data” means data and metadata concerning Bellhaven’s use of the Services, including logs, queries, and telemetry. “Bellhaven Data” means Customer Data, Usage Data, and any derivatives, compilations, outputs, analyses, or results derived from Customer Data or Usage Data, including aggregated or de-identified data derived from such data. (c) Bellhaven grants Vendor a non-exclusive, non-transferable, limited license during the Term to use, copy, and process Bellhaven Data solely to provide and support the Services to Bellhaven. Vendor will not use Bellhaven Data for any purpose other than providing the Services to Bellhaven, including without limitation to train models or to improve Vendor’s products or services for any other customer, without Bellhaven’s prior written opt-in in each instance. This prohibition applies to aggregated or de-identified data derived from Bellhaven Data. (d) If Bellhaven provides Feedback, Bellhaven grants Vendor a non-exclusive, perpetual, royalty-free license to use, reproduce, and modify Feedback solely to improve Vendor’s products and services. Bellhaven retains all right, title, and interest in Feedback. This is a license only, not an assignment, and Vendor obtains no ownership interest in Feedback. (e) The rights granted to Vendor under this Section 9 are non-exclusive. Nothing in this Agreement grants Vendor any exclusive right to Bellhaven Data, Feedback, or Bellhaven’s business, and Bellhaven remains free to use other vendors and to develop its own products and services. (f) This Agreement will renew automatically for successive one-year terms, and not for any longer term, unless either party gives written notice of non-renewal at least one hundred eighty (180) days before the end of the then-current term. --- ## Rationale Memo ### Section 7 The revised Section 7 replaces the draft’s one-way Customer indemnity with Vendor indemnification for third-party intellectual property claims. It includes only the permitted carve-out for claims arising solely from Bellhaven modifications or combinations. This satisfies the mandate that Vendor defend and indemnify Bellhaven. The single point I expect Vendor to contest hardest is the scope and uncapped nature of the intellectual property indemnity; Vendor will likely try to narrow covered IP rights or require the indemnity to sit inside the ordinary liability cap. ### Section 8 The revised Section 8 moves the aggregate cap from three months to twelve months of fees and creates a separate data-breach/confidentiality cap of two times the ordinary cap, with the permitted $4 million floor. Vendor’s indemnification obligations, confidentiality breach claims, and Vendor data-security obligations are carved out of the ordinary cap and consequential-damages exclusion. The mutual consequential-damages waiver and Customer payment carve-out are retained for other claims. The hardest point will be Vendor’s insistence that indemnity and data-security liabilities remain within one aggregate cap or remain subject to the consequential-damages exclusion. ### Section 9 The revised Section 9 gives Bellhaven ownership of Customer Data, Usage Data, and all derivatives, including aggregated or de-identified derivatives. It replaces the Feedback assignment with a non-exclusive license only, prohibits Vendor from using Bellhaven Data to train models or improve services for other customers without Bellhaven’s prior written opt-in, confirms no exclusivity, and limits automatic renewals to one-year terms. The hardest point will be Vendor’s objection to the restriction on using Usage Data and derivatives, even in de-identified form, for model training or product improvement.