Contract analysis

ARTICLE 1 — DEFINITIONS AND INTERPRETATION

Section 1.1 — Definitions As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement. "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party. For purposes of this

Section 1.2 — Interpretation In this Agreement, unless the context otherwise requires: (a) References to any Article, Section, Schedule, or Exhibit are references to the Articles, Sections, Schedules, and Exhibits of this Agreement, unless otherwise specified. (b) The headings and titles of Articles, Sections, and Schedules are for convenience of reference only and shall not affect the interpretation or construction

Section 2.1 — Scope of Services Service Provider shall provide the Services to Customer as described in this Agreement and the applicable Statements of Work attached hereto as Schedule A, or as may be executed by the Parties from time to time during the Term. The Services consist of the following four (4) primary service components: (a) Cloud Infrastructure Management Services — The management, monitoring, optimizati

Section 2.2 — Statements of Work All Services shall be performed pursuant to one or more executed Statements of Work. Each Statement of Work shall be in a form mutually agreed upon by the Parties and shall include, at a minimum, the following: (a) a detailed description of the Services to be performed; (b) the specific Deliverables to be provided, if any; (c) milestones and timeline for completion of the Services and

Section 2.3 — Service Standards Service Provider shall perform the Services in a professional and workmanlike manner, consistent with the highest industry standards and best practices for providers of similar information technology services to companies of similar size and complexity in the consumer products industry. Without limiting the generality of the foregoing, Service Provider shall: (a) assign qualified perso

Section 2.4 — Key Personnel Service Provider shall designate Key Personnel as set forth in Schedule D to perform and oversee the Services. Service Provider acknowledges that the assignment of Key Personnel is a material consideration for Customer in entering into this Agreement. Service Provider shall not reassign, remove, or replace any Key Personnel without providing at least thirty (30) days' prior written notice

Section 2.5 — Subcontractors Service Provider shall not subcontract, delegate, or otherwise engage any third party to perform any portion of the Services without the prior written consent of Customer. Any request for consent to subcontract shall include detailed information regarding the proposed subcontractor, including the subcontractor's qualifications, the scope of work to be subcontracted, and the measures Servi

Section 2.6 — Transition Services Service Provider shall provide transition-in services during the first ninety (90) days following the Effective Date (the "Transition Period") to facilitate the smooth and orderly migration of the Services from Customer's incumbent IT service provider(s) (as applicable) to Service Provider. During the Transition Period, Service Provider shall: (a) cooperate with Customer and Customer

ARTICLE 3 — TERM AND TERMINATION

Section 3.1 — Initial Term The initial term of this Agreement shall commence on the Effective Date and shall continue for a period of five (5) years, ending on October 31, 2028 (the "Initial Term"), unless earlier terminated in accordance with the provisions of this Article 3.

Section 3.2 — Renewal Following the expiration of the Initial Term, this Agreement shall automatically renew for successive one (1) year periods (each a "Renewal Term"), unless either Party provides written notice of non-renewal to the other Party at least one hundred eighty (180) days prior to the expiration of the then-current Term (whether the Initial Term or any Renewal Term). Fee adjustments for any Renewal Term

Section 3.3 — Termination for Cause Either Party may terminate this Agreement upon thirty (30) days' prior written notice to the other Party if the other Party materially breaches any provision of this Agreement and fails to cure such breach within such thirty (30) day notice period. The notice of termination for cause shall specify in reasonable detail the nature of the breach and the actions required to cure such b

Section 3.4 — Termination for Convenience Customer may terminate this Agreement for convenience, in whole or in part, upon one hundred eighty (180) days' prior written notice to Service Provider. In the event of termination for convenience by Customer, Customer shall pay Service Provider an early termination fee equal to fifty percent (50%) of the remaining Annual Contract Value for the balance of the then-current Te

Section 3.5 — Termination for Change of Control Either Party may terminate this Agreement, without payment of any early termination fee, within thirty (30) days following receipt of written notice of a Change of Control event affecting the other Party. The Party experiencing the Change of Control shall provide prompt written notice to the other Party of such Change of Control event no later than five (5) business day

Section 3.6 — Effect of Termination Upon the expiration or termination of this Agreement for any reason: (a) Service Provider shall immediately cease using all Customer Data and Customer Confidential Information, except as necessary to perform the transition-out services described in Section 3.7; (b) each Party shall return or destroy all Confidential Information of the other Party in its possession or control, and s

Section 3.7 — Transition-Out Services Upon the expiration or termination of this Agreement for any reason, Service Provider shall cooperate in good faith with Customer and Customer's designee(s) to facilitate the orderly transition of the Services to Customer or to a successor service provider designated by Customer. Service Provider shall provide transition-out assistance for a period of up to one hundred twenty (12

Section 4.1 — Service Fees In consideration for the performance of the Services, Customer shall pay Service Provider the following annual fees (collectively, the "Service Fees"): The Total Contract Value for the Initial Term is Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000), calculated as five (5) years multiplied by the Annual Contract Value of $2,950,000 per year. The Service Fees set forth in

Section 4.2 — Payment Terms Service Fees shall be payable quarterly in advance. Service Provider shall submit invoices to Customer on the first business day of each calendar quarter during the Term, and each invoice shall cover the Service Fees for the upcoming calendar quarter. Payment shall be due Net forty-five (45) days from the date of Customer's receipt of a complete and accurate invoice. All amounts payable un

Section 4.3 — Late Payments Any amounts not paid when due shall accrue interest at the rate of one and one-half percent (1.5%) per month (or the maximum rate permitted by applicable law, if lower) from the due date until the date of payment. Notwithstanding the foregoing, Customer shall have the right to withhold payment of any amounts that are the subject of a good-faith dispute, provided that Customer notifies Serv

Section 4.4 — Taxes The Service Fees set forth in this Agreement are exclusive of all applicable sales, use, value-added, excise, and similar taxes, duties, or governmental charges (collectively, "Taxes"). Customer shall be responsible for the payment of all such Taxes arising from the transactions contemplated by this Agreement, excluding any taxes based on Service Provider's net income, capital, or franchise taxes

Section 4.5 — Fee Adjustments For each Renewal Term, Service Provider may increase the Service Fees by the greater of (a) three percent (3%) or (b) the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the United States Bureau of Labor Statistics, for the twelve (12) month period ending on the most recently published index date prior to the commencement of the applicable R

Section 4.6 — Service Level Credits Service Level Credits, as described in Article 5 and Schedule B, shall be applied as credits against future invoices. Service Level Credits shall be Customer's sole and exclusive remedy for Service Provider's failure to meet the applicable Service Levels, without prejudice to Customer's right to terminate this Agreement pursuant to Section 3.3 (Termination for Cause) or Section 5.4

ARTICLE 5 — SERVICE LEVELS AND SERVICE LEVEL CREDITS

Section 5.1 — Service Level Commitments Service Provider shall meet or exceed the Service Levels set forth in Schedule B throughout the Term of this Agreement. Service Level performance shall be measured and reported on a monthly basis, based on the measurement methodologies and tools specified in Schedule B. Service Provider shall provide Customer with written monthly service level performance reports (each a "Month

Section 5.2 — Severity Classifications All incidents and service disruptions affecting the Services shall be classified according to the following severity levels: Severity 1 — Critical: A complete service outage or material degradation of the Services that renders the affected Services substantially unavailable or unusable, or that has a critical impact on Customer's business operations such that Customer is unable

Section 5.3 — Service Level Credits In the event that Service Provider fails to meet the applicable Service Levels, Customer shall be entitled to receive Service Level Credits as follows: (a) Severity 1 Outages: If a Severity 1 outage exceeds four (4) consecutive hours (measured from the time Service Provider acknowledges or should have acknowledged the incident), Customer shall be entitled to a credit of up to fifte

Section 5.4 — Chronic Failure If Service Provider fails to meet any Severity 1 Service Level for three (3) or more months in any rolling twelve (12) month period (a "Chronic Failure"), Customer shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to Service Provider, without payment of any early termination fee under Section 3.4. A Chronic Failure shall constitute a material br

Section 5.5 — Root Cause Analysis For any Severity 1 or Severity 2 incident, Service Provider shall conduct and provide to Customer a written root cause analysis (an "RCA Report") within five (5) business days following the resolution of such incident. Each RCA Report shall include, at a minimum: (a) a detailed description of the incident, including the date, time, duration, and scope of impact; (b) the root cause of

ARTICLE 6 — DATA SECURITY AND PRIVACY

Section 6.1 — Security Standards Service Provider shall implement and maintain comprehensive administrative, technical, and physical safeguards designed to protect Customer Data against unauthorized access, use, disclosure, alteration, destruction, or loss. Such safeguards shall be no less rigorous than: (a) industry best practices for providers of similar services in the information technology industry; (b) the requ

Section 6.2 — Penetration Testing Service Provider shall engage a qualified independent third-party security firm, reasonably acceptable to Customer, to conduct annual penetration testing of all systems, networks, and infrastructure used to provide the Services or to store, process, or transmit Customer Data. Penetration testing shall include, at a minimum, external network penetration testing, internal network penet

Section 6.3 — Data Breach Notification Service Provider shall notify Customer in writing within seventy-two (72) hours of Service Provider's discovery of any actual or reasonably suspected breach of security involving Customer Data (a "Security Incident"). For purposes of this Section, "Discovery" means the point in time at which Service Provider becomes aware, or reasonably should have become aware, that a Security

Section 6.4 — Data Isolation Service Provider shall maintain logical separation of Customer Data from the data of other Service Provider clients at all times during the Term. Customer Data shall be stored in dedicated environments, databases, or partitions with access controls that limit access to authorized Service Provider personnel who have a legitimate need to access such data in connection with the performance o

Section 6.5 — Compliance with Laws Service Provider shall comply with all applicable data protection and privacy laws and regulations in the performance of the Services and in connection with its handling of Customer Data, including without limitation all applicable state data breach notification laws, the California Consumer Privacy Act (CCPA) (to the extent applicable), and any other federal, state, or local laws a

Section 6.6 — Background Checks Service Provider shall conduct background checks on all Service Provider personnel who will have access to Customer Data, Customer systems, or Customer facilities in connection with the performance of the Services. Such background checks shall be conducted prior to such personnel being granted access and shall be consistent with applicable law and industry best practices. Background ch

Section 6.7 — Data Location All Customer Data shall be stored, processed, and transmitted only within the continental United States at all times during the Term of this Agreement. Service Provider shall not transfer, access, or process Customer Data from any location outside the continental United States without Customer's prior written consent. In the event that Customer consents to the storage or processing of Cust

Section 7.1 — Confidential Information Each Party acknowledges that, in the course of performing its obligations and exercising its rights under this Agreement, it may receive or have access to Confidential Information of the other Party. Each Party acknowledges that the Confidential Information of the other Party constitutes valuable proprietary information and trade secrets, the unauthorized disclosure or use of wh

Section 7.2 — Obligations The Receiving Party shall: (a) hold the Disclosing Party's Confidential Information in strict confidence and not disclose such Confidential Information to any third party without the Disclosing Party's prior written consent; (b) use the Disclosing Party's Confidential Information solely for the purpose of performing its obligations or exercising its rights under this Agreement (including, in

Section 7.3 — Exclusions The obligations of confidentiality set forth in this Article 7 shall not apply to information that the Receiving Party can demonstrate: (a) is or becomes publicly available or part of the public domain other than through any act or omission of the Receiving Party in breach of this Agreement; (b) was already known to the Receiving Party, without restriction on disclosure, at the time of disclo

Section 7.4 — Compelled Disclosure If the Receiving Party is required by applicable law, regulation, subpoena, civil investigative demand, court order, or other legal process to disclose any Confidential Information of the Disclosing Party, the Receiving Party shall, to the extent permitted by applicable law: (a) provide prompt written notice to the Disclosing Party prior to making such disclosure, so that the Disclo

Section 7.5 — Return and Destruction Upon the expiration or termination of this Agreement, or upon the written request of the Disclosing Party at any time during the Term, the Receiving Party shall, at the Disclosing Party's election, promptly return or destroy all Confidential Information of the Disclosing Party in its possession or control, including all copies, extracts, summaries, and derivatives thereof, in any

Section 7.6 — Duration The obligations of confidentiality set forth in this Article 7 shall survive the expiration or termination of this Agreement for a period of five (5) years following the effective date of such expiration or termination; provided, however, that with respect to any Confidential Information that constitutes a trade secret under applicable law (including the Defend Trade Secrets Act of 2016 or appl

ARTICLE 8 — INTELLECTUAL PROPERTY

Section 8.1 — Customer Data Ownership All Customer Data is and shall remain the sole and exclusive property of Customer. Service Provider acknowledges that it acquires no rights, title, or interest in or to any Customer Data by reason of this Agreement or its performance of the Services, except for the limited right to use Customer Data solely for the purpose of providing the Services to Customer during the Term of t

Section 8.2 — Pre-Existing Materials Service Provider retains all right, title, and interest in and to the Pre-Existing Materials, including all intellectual Property rights therein. Nothing in this Agreement shall be construed to transfer or assign to Customer any ownership interest in the Pre-Existing Materials. To the extent that any Pre-Existing Materials are incorporated into or necessary for Customer's use of a

Section 8.3 — Work Product and Custom Deliverables All Deliverables created, developed, or produced specifically for Customer under this Agreement or any Statement of Work shall be deemed "works made for hire" as defined under the United States Copyright Act of 1976 (17 U.S.C. § 101 et seq.) to the fullest extent permitted by applicable law, and Customer shall be the sole and exclusive owner of all right, title, and

Section 8.4 — Feedback Customer may, from time to time, provide suggestions, comments, ideas, improvements, or other feedback regarding the Services or Service Provider's products, tools, or methodologies (collectively, "Feedback"). Service Provider shall be free to use, reproduce, disclose, and otherwise exploit such Feedback without restriction and without obligation to Customer, including for the purpose of improv

ARTICLE 9 — REPRESENTATIONS AND WARRANTIES

Section 9.1 — Mutual Representations and Warranties Each Party represents and warrants to the other Party that, as of the Effective Date: (a) it is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization and is qualified to do business in each jurisdiction where the nature of its business or ownership of its properties requires such qualification; (b) it has full

Section 9.2 — Service Provider Representations and Warranties Service Provider represents and warrants to Customer that: (a) the Services shall be performed in a professional and workmanlike manner, consistent with the highest industry standards and best practices for providers of similar information technology services to companies of similar size and complexity in the consumer products industry; (b) the Services sh