TERMS AND CONDITIONS OF PURCHASE

Except as may be otherwise provided on the face of the applicable Purchase Order, the following Terms and Conditions shall apply to any purchases by Company 3 Studios Inc., or any of its divisions, subsidiaries, brands, successors, assigns or affiliated entities (“Company 3”):

1. TERMS OF AGREEMENT: The purchase order, together with these terms and conditions, and any attachments and exhibits, specifications, drawings, notes, instructions and other information, whether physically attached or incorporated by reference (collectively the “Purchase Order”), constitutes the entire and exclusive agreement between the applicable Company 3 facility and the supplier (“Vendor”) identified in the Purchase Order. Vendor’s electronic acceptance, acknowledgement of the Purchase Order, or commencement of performance constitutes Vendor’s acceptance of these terms and conditions. Notwithstanding the foregoing, if a master agreement covering procurement of the goods or services described in the Purchase Order exists between Vendor and Company 3, the terms of such master agreement shall prevail over any inconsistent terms herein.

2. PRICES; INVOICING:

A. The Purchase Order may not be filled at prices higher than those last quoted or charged by Vendor to Company 3, unless otherwise specified herein.

B. Unless otherwise specified in the Purchase Order, the price for the goods and/or services includes all taxes and other charges such as shipping and delivery charges, duties, customs, tariffs, imposts and government-imposed surcharges. Vendor will, at Company 3’s request, break-out from the price all such taxes and other charges, in its invoices. Vendor shall use its best efforts to assist Company 3 in all legal efforts to minimize the taxes resulting from the performance of the Purchase Order.

C. Payment will be in the currency of the country in which the Company 3 entity or affiliate identified in the Purchase Order is located, and if the price set forth in the Purchase Order is not in the local currency, then Company 3 will determine the local currency equivalent of the price as of date of payment.

D. Company 3 will make any payments due under a Purchase Order within seventy-five (75) days after its receipt of a valid invoice from Vendor.

E. Invoice Detail. Each invoice shall show: (a) the Goods/Service Order number to which the invoice relates; (b) the valid Purchase Order number relating to the Goods/Service Order; (c) the Company 3 billing information identified on the applicable Goods/Service Order; and (d) the specific items billed, including hours billed for each of Vendor’s personnel performing under each Service Order. Company 3, at its sole discretion, may refuse to pay any invoice not containing the required detail and, instead, return the invoice to Vendor within thirty (30) days of receipt. In such event, Company 3 shall not be obligated to pay any sums billed by such returned invoice until thirty (30) days after Company 3 receives a properly corrected invoice therefor.

F. E-mail Invoices. Invoices should be submitted to Company 3 using the following e-mail address:
APInvoices@company3.com

3. DELIVERY DATES AND QUANTITIES: The dates of delivery and quantities specified herein are of the essence of the Purchase Order, and delivery of all items must be made within the time specified. If deliveries cannot be made on time and in the quantities specified, Vendor shall promptly notify Company 3, and Company 3 shall have the right to purchase some or all of the items elsewhere.

4. RETURN PERIOD: Company 3 reserves the right to return the equipment to Vendor, opened or unopened, within 60 days at no cost to Company 3. Vendor will pay all costs of shipping and insurance for the return of equipment.

5. NO MINIMUM PURCHASE; NON-EXCLUSIVE RELATIONSHIP. Nothing in these terms shall obligate Company 3 to purchase any minimum quantity of products or services, or to commit to any minimum spend, volume, or usage level, unless otherwise set forth in an agreement signed by Company 3. Company 3’s purchase of any products or services hereunder shall be at Company 3’s sole discretion. Company 3 retains the unrestricted right to engage, contract with, or purchase from any third-party products or services that are the same as, similar to, or competitive with those offered by Vendor, without obligation or liability to Vendor.

6. Neither the Purchase Order nor any part thereof shall be assigned by Vendor without the written consent of Company 3.

7. CHANGES: Company 3 shall have the right, by written change order, to make changes from time to time as to packing, testing, destination, specifications, designs, and postponements of delivery. If such changes cause an increase or decrease in the amount due, or in the time required for delivery, an equitable adjustment shall be made, and the Purchase Order shall be modified in writing.

8. WARRANTIES: Vendor expressly warrants all items covered by the Purchase Order to be free from defects in material and workmanship and to be of the quality, size, description and dimensions required, and the express warranty shall not be deemed waived by reason of receipt of said terms and/or payment thereof by Company 3. Vendor further warrants that all items covered by the Purchase Order will conform and comply with all applicable provisions of governmental laws, ordinances, rules and regulations. The foregoing are in addition to all other warranties, expressed and implied, applicable to any items purchased hereunder.

9. INSPECTION AND REJECTION: All items furnished will be subject to inspection and approval before acceptance by Company 3. Company 3 reserves the right to reject any items that do not fulfill the specifications of the Purchase Order or time of the delivery and (a) to return the rejected items to Vendor at Vendor’s risk and expense for full credit at the order price, without prejudice to any right to damages for such breach;(b) to require Vendor to replace at Vendors’ expense rejected items at the unit price of the Purchase Order; or (c) to consider the Purchase Order breached as to the rejected quantity and cancelled as to any unfilled portion of the Purchase Order, and to hold Vendor fully liable for such breach and cancellation.

10. DATA: Vendor agrees not to use or disclose any data or designs furnished by or belonging to Company 3, except in the performance of the Purchase Order. Upon Company 3’s request all such data or designs, and all copies thereof, shall be promptly returned to Company 3.

11. PATENTS: Vendor guarantees that the items furnished under the Purchase Order, and the sale or use of them, will not infringe any patents, copyrights, or trademarks. In the event of any claim of such infringement against Company 3 or Company 3’s customers based on items furnished by Vendor hereunder, Vendor agrees to repurchase such items from Company 3 at the order price, and to indemnify, defend and save harmless Company 3 and all such customers from all expenditures of any nature whatsoever incurred by Company 3 and/or such customers as a result thereof.

12. TERMINATION FOR DEFAULT: Company 3 may by written notice of default to Vendor, terminate the whole or any part of the Purchase Order if (a) Vendor fails to make delivery of the ordered items within the time specified herein;(b) Vendor fails to perform any of the other provisions of the Purchase Order, or so fails to make progress as to endanger performance of the Purchase Order in accordance with its terms; or (c) Vendor becomes insolvent or the subject of proceedings under any law relating to bankruptcy or the relief of debtors. In the event of such termination, Company 3 may procure similar items upon such terms and in such manner as the Company 3 may deem appropriate, and Vendor shall be liable to Company 3 for any excess costs for such similar items. Company 3’s rights and remedies under the paragraph are in addition to any other rights and remedies provided by law or under the Purchase Order.

13. LIMITATION OF LIABILITY: Company 3’s total liability for any and all loss or damage arising out of or in connection with any contract for services shall be limited to the total sums paid by Company 3 under such contract. IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL COMPANY 3 BE LIABLE TO ANY PARTY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES WHATSOEVER.

14. MODIFICATIONS; NONWAIVER: No agreement or other understanding in any way modifying these terms and conditions shall be binding upon Company 3 unless made in writing and signed by authorized representative of Company 3. Company 3 reserves the right to make changes to its standard terms and conditions from time to time. An up-to-date copy will be available at http://www.company3.com/terms-conditions-service/ or on request. Company 3 personnel are not authorized to amend, alter, waive or modify the terms of these terms. Company 3 shall not be bound by any terms or conditions contained in Vendor’s acknowledgement forms, invoices, or other communications, unless acceptance of such terms and conditions is expressly made by Company 3 in writing. In no event shall the receipt of any items by Company 3 be deemed as acceptance of any such terms or conditions. No waiver by either party of any default on the part of the other party shall be deemed a waiver of any subsequent default.

15. GOVERNING LAW; VENUE: The Purchase Order and Vendor’s acceptance thereof shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws principles. The exclusive venue for all legal proceedings shall be the County of Los Angeles, California , and each party hereby irrevocably submits to the jurisdiction of such courts. In any action relating to the Purchase Order or the items covered by the Purchase Order, the prevailing party shall be entitled to recover costs and reasonable attorney’s fees.

16. PERSONAL INFORMATION. Vendor may receive Personal Information from Company 3, its affiliates or third parties for the purpose of performing services on behalf of Company 3 or providing products as described in the Purchase Order. Vendor agrees that with regard to all Personal Information collected, processed, stored or transmitted by, or accessible to Vendor in the course of their services, Vendor will process such Personal Information only on behalf of Company 3, according to the directions set forth by Company 3, and will not retain, use, or disclose any Personal Information provided by Company 3 (or provided by an affiliate or a third party on Company 3’s behalf) or collected by Vendor on Company 3’s behalf for any purpose other than (i) providing the services and/or products under the Purchase Order; (ii) using the Personal Information internally to verify or maintain the quality or safety of the services and/or products provided under the Purchase Order; or (iii) using the Personal Information to comply with Vendor’s legal obligations.

As used herein, “Personal Information” means any information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household. Personal information includes any information relating to an identified or identifiable person that is defined by applicable data protection law as covered by such or similar term, as well as information that would be publicly available where such would otherwise be protected as personal information by applicable law.

Vendor acknowledges that it is prohibited from: (i) selling or sharing the Personal Information; (ii) retaining, using, or disclosing the Personal Information for any purpose other than providing to Company 3 the services and/or products specified in the Purchase Order; (iii) retaining, using, or disclosing the Personal Information outside of the direct business relationship with Company 3; (iv) combining Personal Information received from, or on behalf of, Company 3 with Personal Information that Vendor receives from or on behalf of another person or entity, or that Vendor collects from its own interactions with individuals, except as permitted by applicable law. Vendor certifies that it understands and will comply with the restrictions contained herein. Vendor shall notify Company 3 promptly if Vendor determines that it can no longer meet its obligations under this Section 16 with respect to Personal Information.

With respect to all Personal Information processed by Vendor in connection with the Purchase Order, Vendor shall: (i) implement and maintain reasonable administrative, technical, and physical safeguards designed to protect Personal Information against unauthorized access, use, disclosure, alteration, or destruction; (ii) cooperate with Company 3 in responding to requests from individuals exercising rights under applicable data protection law; (iii) upon termination or expiration of the Purchase Order, at Company 3’s election, delete or return all Personal Information in Vendor’s possession and certify such deletion or return in writing; (iv) upon Company 3’s reasonable request, make available to Company 3 information necessary to demonstrate Vendor’s compliance with this Section 16 and permit Company 3 or its designee to conduct audits of Vendor’s data processing practices; and (v) comply with all obligations applicable to Vendor under applicable data protection laws and regulations with respect to its processing of Personal Information under the Purchase Order.

To the extent Vendor processes personal data of individuals located in the European Economic Area, the United Kingdom, or Switzerland (“European Personal Data”) in connection with the Purchase Order, Vendor shall, in addition to the obligations set forth above: (i) process such European Personal Data only on Company 3’s documented instructions and for the purposes specified in the Purchase Order; (ii) implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk, in accordance with Article 32 of the EU General Data Protection Regulation (Regulation (EU) 2016/679) (the “EU GDPR”) and the UK General Data Protection Regulation (the “UK GDPR”), as applicable; (iii) not transfer European Personal Data to any country outside the EEA, UK, or Switzerland unless adequate safeguards are in place in accordance with applicable law (including, where required, executing the EU Standard Contractual Clauses or UK International Data Transfer Agreement, as applicable); (iv) notify Company 3 without undue delay, and in any event within twenty-four (24) hours, upon becoming aware of a personal data breach involving European Personal Data; (v) not engage any sub-processor without Company 3’s prior written consent; and (vi) maintain records of processing activities as required under Article 30 of the EU GDPR. To the extent required by applicable law, the parties shall enter into a separate Data Processing Agreement incorporating additional terms required by the EU GDPR and/or UK GDPR.

17. CONFIDENTIALITY.
A. Definition. “Confidential Information” means all non-public information disclosed by or on behalf of Company 3 to Vendor in connection with the Purchase Order, whether disclosed orally, in writing, electronically, or by inspection, including without limitation: (i) unreleased or pre-release content, media, footage, audio, images, scripts, storyboards, and other creative materials; (ii) proprietary workflows, processes, techniques, color science, look-up tables, software, tools, and Methods; (iii) business and financial information, including pricing, customer lists, vendor lists, and strategic plans; (iv) information relating to Company 3’s customers, their projects, and their content; and (v) the terms of the Purchase Order. Confidential Information shall not include information that: (a) is or becomes publicly available through no fault of Vendor; (b) was rightfully in Vendor’s possession prior to disclosure by Company 3 without restriction; (c) is rightfully received by Vendor from a third party without restriction and without breach of any obligation of confidentiality; or (d) is independently developed by Vendor without use of or reference to Company 3’s Confidential Information.

B. Obligations. Vendor shall: (i) hold all Confidential Information in strict confidence; (ii) not disclose Confidential Information to any third party without Company 3’s prior written consent; (iii) use Confidential Information solely for the purpose of performing its obligations under the Purchase Order; (iv) limit access to Confidential Information to those of its employees, contractors, and agents who have a need to know and who are bound by confidentiality obligations no less protective than those set forth herein; and (v) protect Confidential Information using at least the same degree of care it uses to protect its own confidential information, but in no event less than reasonable care.

C. Compelled Disclosure. If Vendor is compelled by law, regulation, or legal process to disclose Confidential Information, Vendor shall (i) provide Company 3 with prompt written notice to the extent legally permitted, (ii) cooperate with Company 3 in seeking a protective order or other appropriate remedy, and (iii) disclose only the minimum amount of Confidential Information required.

D. Return and Destruction. Upon expiration or termination of the Purchase Order, or upon Company 3’s written request at any time, Vendor shall promptly return or destroy (at Company 3’s election) all Confidential Information and all copies, extracts, and derivatives thereof, and shall certify such return or destruction in writing upon request. Notwithstanding the foregoing, Vendor may retain copies of Confidential Information to the extent required by applicable law or regulation, provided that such retained information shall remain subject to the obligations of this Section 17 indefinitely.

E. Survival. The obligations of this Section 17 shall survive expiration or termination of the Purchase Order for a period of five (5) years from the date of disclosure; provided that obligations with respect to trade secrets shall continue for so long as such information remains a trade secret under applicable law, and obligations with respect to unreleased content shall continue indefinitely.

18. ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING.

A. No Training on Company 3 Content. Vendor shall not use any Company 3 data, content, materials, Confidential Information, or Personal Information provided by or on behalf of Company 3 (collectively, “Company 3 Materials”) as training data, fine-tuning data, calibration data, prompts, inputs, context, retrieval-augmented generation sources, or benchmark data for any artificial intelligence or machine learning model, system, or tool, whether proprietary to Vendor or provided by a third party, without Company 3’s prior written consent.

B. Disclosure of AI Tools. If Vendor uses or intends to use any artificial intelligence or machine learning tools, systems, or technologies (including generative AI) in the performance of services or provision of goods under the Purchase Order, Vendor shall disclose such use to Company 3 in writing prior to commencement. Company 3 reserves the right to approve or reject the use of such tools in its sole discretion.

C. IP Ownership. To the extent any deliverables or work product under the Purchase Order are generated or assisted by artificial intelligence or machine learning tools, all right, title, and interest in such deliverables and work product shall vest in Company 3 upon creation, and Vendor hereby assigns all such rights to Company 3. Vendor shall not claim any ownership, license, or other right in such deliverables by virtue of the AI tools used.

D. Flow-Down. Vendor shall ensure that any subcontractor or third-party service provider engaged by Vendor in connection with the Purchase Order is bound by restrictions no less protective than those set forth in this Section 18.

E. Customer Opt-Out Compliance. Company 3 may notify Vendor that specific materials are subject to its customer’s restrictions on AI/ML use. Upon receipt of such notice, Vendor shall comply with such restrictions and shall not use the identified materials for any AI/ML purpose.

19. CONTENT AND DATA SECURITY.

A. Security Standards. Vendor shall implement and maintain administrative, technical, and physical safeguards designed to protect Company 3 Materials and Personal Information against unauthorized access, use, disclosure, alteration, destruction, or loss. Such safeguards shall be no less protective than industry standard practices for the type of information at issue and shall include, at a minimum: (i) access controls limiting access to authorized personnel on a need-to-know basis; (ii) encryption of data in transit and at rest; (iii) secure authentication mechanisms; (iv) logging and monitoring of access to Company 3 Materials; (v) regular security testing and vulnerability assessments; and (vi) secure disposal of Company 3 Materials when no longer needed.

B. Personnel. Vendor shall ensure that all personnel with access to Company 3 Materials or Personal Information are subject to appropriate confidentiality obligations and have received training on information security and data protection practices.

C. Audits. Upon reasonable written notice, Company 3 shall have the right to audit or inspect (or engage a qualified third party to audit or inspect) Vendor’s compliance with the security requirements of this Section 19, including review of Vendor’s security policies, procedures, and controls. Vendor shall cooperate with any such audit and provide reasonable access to relevant records, systems, and personnel. Company 3 shall conduct such audits during normal business hours and shall use reasonable efforts to minimize disruption to Vendor’s operations.

20. SECURITY INCIDENT NOTIFICATION.

A. Notification. Vendor shall notify Company 3 in writing within twenty-four (24) hours of discovering or reasonably suspecting any unauthorized access to, acquisition of, use of, disclosure of, or loss of confidential information or personal information (a “Security Incident”). Such notification shall include, to the extent known: (i) the nature and scope of the Security Incident; (ii) the Company 3 Materials or Personal Information affected; (iii) the measures taken or proposed to contain and remediate the Security Incident; and (iv) the identity of any third parties affected.

B. Cooperation. Vendor shall cooperate with Company 3 in investigating and remediating any Security Incident, including by providing reasonable access to relevant records, systems, and personnel. Vendor shall not make any public statement or notification regarding a Security Incident involving Company 3 Materials or Personal Information without Company 3’s prior written consent, except as required by applicable law.

C. Costs. To the extent a Security Incident results from Vendor’s failure to comply with its obligations under these Terms, Vendor shall bear all reasonable costs associated with investigating, remediating, and responding to such Security Incident, including notification costs, credit monitoring services, and regulatory fines or penalties.

21. INSURANCE.
Vendor shall obtain and maintain, at its own expense, throughout the term of each Purchase Order and for a period of three (3) years thereafter, the following insurance coverage from insurers with an A.M. Best rating of A- VII or better (or equivalent):

A. Commercial General Liability insurance with limits of not less than $2,000,000 per occurrence and $5,000,000 in the aggregate, covering bodily injury, property damage, personal injury, and advertising injury.

B. Professional Liability / Errors and Omissions insurance with limits of not less than $5,000,000 per claim and $5,000,000 in the aggregate, covering wrongful acts, errors, and omissions in the performance of services.

C. Cyber Liability insurance with limits of not less than $5,000,000 per claim and $5,000,000 in the aggregate, covering data breaches, network security failures, unauthorized access, and privacy violations.

D. Property Insurance with limits sufficient to cover 100% of the full replacement cost of all machinery, equipment, tools, and business personal property used in connection with the performance of services or provision of goods hereunder, including coverage for property off-premises, in transit or in the care, custody and control of the Vendor at a Company 3 location.

E. Workers’ Compensation insurance as required by applicable law.

F. Company 3 shall be named as an additional insured on the Commercial General Liability, Professional Liability andCyber Liability policies. All policies shall contain a waiver of subrogation in favor of Company 3 and shall provide that Company 3 shall receive not less than thirty (30) days’ prior written notice of cancellation, non-renewal, or material change. Vendor shall provide certificates of insurance evidencing the foregoing coverage upon request.
22. SUBCONTRACTING. Vendor shall not subcontract, delegate, or otherwise engage any third party to perform any portion of its obligations under the Purchase Order without Company 3’s prior written consent. Any approved subcontractor shall be bound by terms no less protective than those set forth in these Terms, including without limitation the confidentiality (Section 16), AI/ML (Section 17), content security (Section 18), and security incident notification (Section 19) provisions. Vendor shall remain fully responsible for the acts and omissions of its subcontractors as if such acts or omissions were those of Vendor.

23. TERMINATION FOR CONVENIENCE. Company 3 may terminate all or any part of the Purchase Order for convenience at any time by providing Vendor not less than thirty (30) days’ prior written notice. In the event of such termination, Company 3 shall pay Vendor for: (i) goods delivered and accepted prior to the effective date of termination; (ii) services satisfactorily performed prior to the effective date of termination; and (iii) reasonable, documented, and non-cancellable costs incurred by Vendor prior to receipt of the termination notice that are directly attributable to the terminated portion of the Purchase Order, provided that Vendor uses commercially reasonable efforts to mitigate such costs. In no event shall Company 3’s total payment obligations under this Section 23 exceed the total price of the terminated Purchase Order. Vendor shall have no claim for lost profits, anticipated revenues, or any other damages arising from such termination.

24. INDEPENDENT CONTRACTOR RELATIONSHIP. The relationship between the Parties is that of independent contractors. Nothing in these Terms shall be construed to create a partnership, joint venture, agency, franchise, or employer-employee relationship between the Parties. Neither Party shall have the authority to bind the other Party or to incur any obligation on behalf of the other Party. Each Party shall be solely responsible for the supervision, direction, control, and payment of its own personnel, including all applicable wages, benefits, taxes, and withholdings. No personnel of either Party shall be entitled to any benefits, including but not limited to health insurance, retirement plans, paid leave, workers’ compensation, or any other benefit or right that employees of the other Party may receive.