diff --git a/CLAUDE.md b/CLAUDE.md
index 724c9cd9a..65a783829 100644
--- a/CLAUDE.md
+++ b/CLAUDE.md
@@ -120,7 +120,7 @@ const projectChats = db.select().from(chats).where(eq(chats.projectId, id)).all(
 - **React Query**: Server state via tRPC (auto-caching, refetch)
 
 ### Claude Integration
-- Dynamic import of `@anthropic-ai/claude-code` SDK
+- Dynamic import of `@anthropic-ai/claude-agent-sdk` SDK
 - Two modes: "plan" (read-only) and "agent" (full permissions)
 - Session resume via `sessionId` stored in SubChat
 - Message streaming via tRPC subscription (`claude.onMessage`)
diff --git a/build.sh b/build.sh
new file mode 100755
index 000000000..f1c2569bd
--- /dev/null
+++ b/build.sh
@@ -0,0 +1,7 @@
+bun install
+bun run claude:download  # Download Claude binary (required!)
+bun run codex:download   # Download Codex binary (required!)
+bun run build
+bun run package:mac 
+bun run package:win
+bun run package:linux
\ No newline at end of file
diff --git a/openspec/project.md b/openspec/project.md
index 9fa38c628..6d1711332 100644
--- a/openspec/project.md
+++ b/openspec/project.md
@@ -11,7 +11,7 @@
 | Components | Radix UI, Lucide icons, Motion, Sonner |
 | State | Jotai, Zustand, React Query |
 | Backend | tRPC, Drizzle ORM, better-sqlite3 |
-| AI | @anthropic-ai/claude-code |
+| AI | @anthropic-ai/claude-agent-sdk |
 | Package Manager | bun |
 
 ## Project Conventions
@@ -30,7 +30,7 @@
   - Zustand: Sub-chat tabs and pinned state (persisted to localStorage)
   - React Query: Server state via tRPC (auto-caching, refetch)
 - **Database**: Drizzle ORM with SQLite, auto-migration on app startup
-- **Claude Integration**: Dynamic import of `@anthropic-ai/claude-code` SDK with two modes: "plan" (read-only) and "agent" (full permissions)
+- **Claude Integration**: Dynamic import of `@anthropic-ai/claude-agent-sdk` SDK with two modes: "plan" (read-only) and "agent" (full permissions)
 
 ### Testing Strategy
 [Testing approach not yet established - to be defined]
@@ -53,6 +53,6 @@
 - Dev vs Production use separate userData paths and protocols
 
 ## External Dependencies
-- **Claude Code SDK**: `@anthropic-ai/claude-code` for AI interactions
+- **Claude Code SDK**: `@anthropic-ai/claude-agent-sdk` for AI interactions
 - **21st.dev CDN**: Auto-update manifests and releases at `cdn.21st.dev`
 - **OAuth Provider**: Authentication flow
diff --git a/src/main/lib/trpc/routers/claude.ts b/src/main/lib/trpc/routers/claude.ts
index a987b06eb..b8c7b00f5 100644
--- a/src/main/lib/trpc/routers/claude.ts
+++ b/src/main/lib/trpc/routers/claude.ts
@@ -1772,7 +1772,7 @@ ${prompt}
                 includePartialMessages: true,
                 // Load skills from project and user directories (skip for Ollama - not supported)
                 ...(!isUsingOllama && {
-                  settingSources: ["project" as const, "user" as const],
+                  settingSources: ["project" as const, "local" as const, "user" as const],
                 }),
                 canUseTool: async (
                   toolName: string,
@@ -1979,23 +1979,20 @@ ${prompt}
                 pathToClaudeCodeExecutable: claudeBinaryPath,
                 // Session handling: For Ollama, use resume with session ID to maintain history
                 // For Claude API, use resume with rollback/fork support
-                ...(resumeSessionId && {
-                  resume: resumeSessionId,
-                  // Fork support - resume at specific point and create new session
-                  ...(shouldForkResume && forkResumeAtUuid && !isUsingOllama
-                    ? {
-                        resumeSessionAt: forkResumeAtUuid,
-                        forkSession: true,
-                      }
-                    : // Rollback support - resume at specific message UUID (from DB)
-                      resumeAtUuid && !isUsingOllama
-                      ? { resumeSessionAt: resumeAtUuid }
-                      : { continue: true }),
-                }),
-                // For first message in chat (no session ID yet), use continue mode
-                ...(!resumeSessionId && { continue: true }),
+                // resume is mutually exclusive with continue (SDK contract)
+                ...(resumeSessionId
+                  ? {
+                      resume: resumeSessionId,
+                      // Fork support - resume at specific point and create new session
+                      ...(shouldForkResume && forkResumeAtUuid && !isUsingOllama
+                        ? { resumeSessionAt: forkResumeAtUuid, forkSession: true }
+                        : // Rollback support - resume at specific message UUID (from DB)
+                          resumeAtUuid && !isUsingOllama
+                          ? { resumeSessionAt: resumeAtUuid }
+                          : {}),
+                    }
+                  : { continue: true }),
                 ...(resolvedModel && { model: resolvedModel }),
-                // fallbackModel: "claude-opus-4-5-20251101",
                 ...(input.effort && { effort: input.effort }),
               },
             }
diff --git a/src/renderer/components/dialogs/settings-tabs/agents-models-tab.tsx b/src/renderer/components/dialogs/settings-tabs/agents-models-tab.tsx
index eb692afd7..5f7a7f46b 100644
--- a/src/renderer/components/dialogs/settings-tabs/agents-models-tab.tsx
+++ b/src/renderer/components/dialogs/settings-tabs/agents-models-tab.tsx
@@ -760,7 +760,7 @@ export function AgentsModelsTab() {
                     onChange={(e) => setModel(e.target.value)}
                     onBlur={handleBlurSave}
                     className="w-full"
-                    placeholder="claude-3-7-sonnet-20250219"
+                    placeholder="claude-sonnet-4-6"
                   />
                 </div>
               </div>
diff --git a/src/renderer/features/agents/lib/ipc-chat-transport.ts b/src/renderer/features/agents/lib/ipc-chat-transport.ts
index 3988f972c..216147f2b 100644
--- a/src/renderer/features/agents/lib/ipc-chat-transport.ts
+++ b/src/renderer/features/agents/lib/ipc-chat-transport.ts
@@ -94,16 +94,9 @@ const ERROR_TOAST_CONFIG: Record<
       "Your previous chat session expired. Send your message again to start fresh.",
   },
   EXECUTABLE_NOT_FOUND: {
-    title: "Claude CLI not found",
+    title: "Claude binary missing",
     description:
-      "Install Claude Code CLI: npm install -g @anthropic-ai/claude-code",
-    action: {
-      label: "Copy command",
-      onClick: () =>
-        navigator.clipboard.writeText(
-          "npm install -g @anthropic-ai/claude-code",
-        ),
-    },
+      "The bundled Claude binary could not be found. Reinstalling 1Code should restore it.",
   },
   NETWORK_ERROR: {
     title: "Network error",