Service-Level Agreement

1. Service Agreement

This Service Agreement shall commence upon both parties successfully signing and executing the agreement. Client shall pay Red Stone Studio the agreed and accepted monthly service fees which shall be invoiced to Client. Either party may terminate this agreement at any time with 30 days’ notice. Upon termination, Red Stone Studio will provide Client with all deliverables and materials produced during the term of this agreement.

2. Service Levels & Service Credits

Red Stone Studio shall at all times during term of this Agreement provide the Services to meet or exceed the Service Level Performance Measure for each Service Level Performance Criterion, as defined herein below.

Red Stone Studio acknowledges that any failure to meet a Service Level may have a material adverse impact on the business and operations of Client and that it shall entitle Client to the rights set out in this Agreement below, including the right to any Service Credits (as defined below).

Red Stone Studio acknowledges and agrees that any Service Credit is a price adjustment reflecting the value of any lost service caused by failure to meet a Service Level. Both Parties agree that the Service Credits are a reasonable method of price adjustment to reflect poor performance.

Other than Client‘s termination rights as set forth in the Contract, A Service Credit shall be Client‘s exclusive financial remedy for a failure to meet a Service Level.

3. Performance Monitoring

Red Stone Studio shall implement all measurement and monitoring tools and procedures necessary to measure, monitor and report on Red Stone Studio’s performance of the provision of the Services against the applicable Service Levels at a level of detail sufficient to verify compliance with the Service Levels.

Red Stone Studio shall immediately notify Client in writing if the level of performance of Red Stone Studio of any element of the provision by it of the Services during the term of the Contract is likely to or fails to meet any Service Level Performance Measure.

4. Objectives

The objectives of the Service Levels and Service Credits are to:

  1. Ensure that the Services are of a consistently high quality and meet the requirements of Client; 
  2. Provide a mechanism whereby Client can attain meaningful recognition of Red Stone Studio’s failure to deliver the level of service for which it has contracted to deliver; and
  3. Incentivize Red Stone Studio to comply with and to expeditiously remedy any failure to comply with the Service Levels.

5. Service Levels

Service Level Status Resolution Times (Exhibit 1)

6. Service Credits

Service Credits are required to be paid in the event that the Service Level achieved falls below the Service Level Performance Measure in a Service Period.

The Service Credit is determined by the Service Level achieved, the Service Level Performance Measure and the Service Level Threshold and is calculated by using the straight line formula below:

  1. Availability:

                                             Service Credit $ = ((a-x)*c)*d)


a”is the Service Level Performance Measure (%) below which Service Credits become payable;
x”is the Achieved Service Level (%) for a Service Period;
c”is the Service Credit (%) payable if the Achieved Service Level falls below the Service Level Target; and
d”is the amount payable in respect of the Services during the Service Period.