diff --git a/mcp_server/client.py b/mcp_server/client.py
index 37391b1..e1ce7c1 100644
--- a/mcp_server/client.py
+++ b/mcp_server/client.py
@@ -6,6 +6,7 @@ with proper error handling, retries, and timeout management.
 """
 
 import json
+import time
 import urllib.request
 import urllib.error
 import urllib.parse
@@ -82,7 +83,7 @@ class NoteDiscoveryClient:
             method=method,
         )
         
-        # Execute with retries
+        # Execute with retries and exponential backoff
         last_error = None
         for attempt in range(self.config.max_retries):
             try:
@@ -94,7 +95,7 @@ class NoteDiscoveryClient:
                         status_code=response.status,
                     )
             except urllib.error.HTTPError as e:
-                # HTTP error (4xx, 5xx)
+                # HTTP error (4xx, 5xx) - don't retry, return immediately
                 error_body = ""
                 try:
                     error_body = e.read().decode("utf-8")
@@ -109,11 +110,16 @@ class NoteDiscoveryClient:
                     status_code=e.code,
                 )
             except urllib.error.URLError as e:
-                # Network error - retry
+                # Network error - retry with backoff
                 last_error = f"Connection error: {e.reason}"
+                if attempt < self.config.max_retries - 1:
+                    time.sleep(2 ** attempt * 0.1)  # 0.1s, 0.2s, 0.4s...
                 continue
             except TimeoutError:
+                # Timeout - retry with backoff
                 last_error = f"Request timed out after {self.timeout}s"
+                if attempt < self.config.max_retries - 1:
+                    time.sleep(2 ** attempt * 0.1)  # 0.1s, 0.2s, 0.4s...
                 continue
             except json.JSONDecodeError as e:
                 return APIResponse(
diff --git a/mcp_server/server.py b/mcp_server/server.py
index 8dc734a..55f1ed1 100644
--- a/mcp_server/server.py
+++ b/mcp_server/server.py
@@ -164,6 +164,35 @@ class MCPServer:
     # Tool Implementations
     # =========================================================================
     
+    def _validate_path(self, path: str) -> tuple[bool, str]:
+        """
+        Validate a path for safety.
+        
+        Args:
+            path: The path to validate
+            
+        Returns:
+            Tuple of (is_valid, error_message)
+        """
+        if not path:
+            return False, "path is required"
+        
+        # Reject path traversal attempts
+        if ".." in path:
+            return False, "path cannot contain '..'"
+        
+        # Reject absolute paths (Unix and Windows)
+        if path.startswith("/") or path.startswith("\\"):
+            return False, "path cannot be absolute"
+        if len(path) >= 2 and path[1] == ":":  # Windows drive letter (e.g., C:)
+            return False, "path cannot be absolute"
+        
+        # Reject null bytes (security)
+        if "\x00" in path:
+            return False, "path contains invalid characters"
+        
+        return True, ""
+    
     def _format_response(self, response: APIResponse) -> str:
         """Format API response as readable text."""
         if not response.success:
@@ -242,8 +271,9 @@ class MCPServer:
     def _tool_get_note(self, args: dict) -> str:
         """Get note content."""
         path = args.get("path", "")
-        if not path:
-            return "Error: path is required"
+        is_valid, error = self._validate_path(path)
+        if not is_valid:
+            return f"Error: {error}"
         
         response = self.client.get_note(path)
         
@@ -341,8 +371,9 @@ class MCPServer:
         path = args.get("path", "")
         content = args.get("content", "")
         
-        if not path:
-            return "Error: path is required"
+        is_valid, error = self._validate_path(path)
+        if not is_valid:
+            return f"Error: {error}"
         if not content:
             return "Error: content is required"
         
@@ -356,8 +387,9 @@ class MCPServer:
     def _tool_delete_note(self, args: dict) -> str:
         """Delete a note."""
         path = args.get("path", "")
-        if not path:
-            return "Error: path is required"
+        is_valid, error = self._validate_path(path)
+        if not is_valid:
+            return f"Error: {error}"
         
         response = self.client.delete_note(path)
         
@@ -369,8 +401,9 @@ class MCPServer:
     def _tool_create_folder(self, args: dict) -> str:
         """Create a folder."""
         path = args.get("path", "")
-        if not path:
-            return "Error: path is required"
+        is_valid, error = self._validate_path(path)
+        if not is_valid:
+            return f"Error: {error}"
         
         response = self.client.create_folder(path)
         
@@ -402,8 +435,10 @@ class MCPServer:
     def _tool_get_template(self, args: dict) -> str:
         """Get template content."""
         name = args.get("name", "")
-        if not name:
-            return "Error: name is required"
+        # Validate template name (same rules as paths for safety)
+        is_valid, error = self._validate_path(name)
+        if not is_valid:
+            return f"Error: {error.replace('path', 'name')}"
         
         response = self.client.get_template(name)
         
@@ -450,10 +485,22 @@ class MCPServer:
                 # Notifications don't get responses
             
             elif method == "tools/list":
+                if not self._initialized:
+                    self._send_response(
+                        request_id,
+                        error=self._error(-32002, "Server not initialized")
+                    )
+                    return
                 result = self.handle_list_tools(params)
                 self._send_response(request_id, result)
             
             elif method == "tools/call":
+                if not self._initialized:
+                    self._send_response(
+                        request_id,
+                        error=self._error(-32002, "Server not initialized")
+                    )
+                    return
                 result = self.handle_call_tool(params)
                 self._send_response(request_id, result)