Data Processing Addendum

THIS DATA PROCESSING ADDENDUM (“DPA”) is entered into as of the Addendum Effective Date by and between: (1) PENCIL AI LIMITED, a company incorporated and registered under the laws of England and Wales with company number 14789571 with its registered office at 151 Rosebery Avenue, London EC1R 4AB (“Pencil”); and (2) the entity or other person who is a counterparty to the Agreement (as defined below) into which this DPA is incorporated and forms a part (“Customer”), together the “Parties” and each a “Party”.

HOW AND WHEN THIS DPA APPLIES

- If and as provided for in the terms and conditions of the Agreement, this DPA is automatically incorporated into and forms a binding and effective part of that Agreement on and from the Addendum Effective Date.

- This DPA applies only if and to the extent Applicable Data Protection Laws govern Pencil’s Processing of Customer Personal Data in performance of the Service(s) as a ‘processor’, ‘service provider’ or similar role defined under Applicable Data Protection Laws. 

- Accordingly, this DPA does not apply to Pencil’s Processing of any Personal Data for its own business/customer relationship administration purposes, its own marketing or service analytics (e.g., involving data collected by Pencil relating to Customer’s users’ use of the Services), its own information and systems security purposes supporting the operation of the Services, nor its own legal, regulatory or compliance purposes.

‍INTERPRETATION

In this DPA (including the explanatory notes above) the following terms shall have the meanings set out in this Section 1, unless expressly stated otherwise:

- “Addendum Effective Date” means the effective date of the Agreement.

- “Agreement” means any agreement incorporating the Pencil Terms of Service shown at https://www.trypencil.com/terms (the “Terms of Service”) or any other agreement entered into by the Parties that provides that this DPA will be incorporated therein by reference.  

- “Applicable Data Protection Laws” means the privacy, data protection and data security laws and regulations of any jurisdiction directly applicable to Pencil’s Processing of Customer Personal Data under the Agreement (including, as and where applicable, GDPR and State Privacy Laws).   

- “Controller” means the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the Processing of Personal Data.

- “Customer Personal Data” means any Personal Data Processed by Pencil or its Sub-Processor on behalf of Customer to perform the Services under the Agreement (including, for the avoidance of doubt, any such Personal Data comprised within any Inputs). 

- “Data Subject” means the identified or identifiable natural person to whom Customer Personal Data relates. 

- “Data Subject Request” means the exercise by a Data Subject of its rights in accordance with Applicable Data Protection Laws in respect of Customer Personal Data and the Processing thereof.

- “EEA” means the European Economic Area.

- “GDPR” means, as and where applicable to Processing concerned: (i) the General Data Protection Regulation (Regulation (EU) 2016/679) (“EU GDPR”); and/or (ii) the EU GDPR as it forms part of UK law (as amended from time to time) (“UK GDPR”). 

- “Personal Data” means “personal data,” “personal information,” “personally identifiable information” or similar term defined in Applicable Data Protection Laws.

- “Personal Data Breach” means a breach of Pencil’s security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to, Customer Personal Data in Pencil’s possession, custody or control. For clarity, Personal Data Breach does not include unsuccessful attempts or activities that do not compromise the security of Customer Personal Data (such as unsuccessful log-in attempts, pings, port scans, denial of service attacks, or other network attacks on firewalls or networked systems).

- “Personnel” means a person’s employees, agents, consultants, contractors or other staff.

- “Process” and inflections thereof means any operation or set of operations which is performed on Personal Data or on sets of Personal Data, whether or not by automated means, such as collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction.

- “Processor” means a natural or legal person, public authority, agency or other body which Processes Personal Data on behalf of the Controller.

- “Restricted Transfer” means the disclosure, grant of access or other transfer of Customer Personal Data to any person located in: (i) in the context of the EU GDPR, any country or territory outside the EEA which does not benefit from an adequacy decision from the European Commission (an “EEA Restricted Transfer”); and (ii) in the context of the UK GDPR, any country or territory outside the UK, which does not benefit from an adequacy decision from the UK Government (a “UK Restricted Transfer”), which would be prohibited without a legal basis under Chapter V of the GDPR.

- “SCCs” means the standard contractual clauses approved by the European Commission pursuant to implementing Decision (EU) 2021/914.

- “Services” means those services and activities to be supplied to or carried out by or on behalf of Pencil for Customer pursuant to the Agreement, including provision of access to the Platform and the Services.

- “State Privacy Laws” means the California Consumer Privacy Act of 2018 (“CCPA”) (as amended by the California Rights Act of 2020), the Colorado Privacy Act, the Virginia Consumer Data Protection Act, the Connecticut Data Privacy Act., and the Utah Consumer Privacy Act, in each case only if and to the extent applicable to Pencil’s Processing of Customer Personal Data under the Agreement. 

- “Sub-Processor” means any third party appointed by or on behalf of Pencil to Process Customer Personal Data.

- “Supervisory Authority”: (i) in the context of the EEA and the EU GDPR, shall have the meaning given to that term in the EU GDPR; and (ii) in the context of the UK and the UK GDPR, means the UK Information Commissioner’s Office.

- “UK Transfer Addendum” means the template Addendum B.1.0 issued by the ICO and laid before Parliament in accordance with s119A of the Data Protection Act 2018 on 2 February 2022, as it is revised under Section ‎‎18 of the UK Mandatory Clauses included in Part 2 thereof (the “UK Mandatory Clauses”).

Unless otherwise defined in this DPA, all capitalised terms in this DPA shall have the meaning given to them in the Agreement.

APPLICATION OF THIS DATA PROCESSING ADDENDUM 

1. The front-end of this DPA applies generally to Pencil’s Processing of Customer Personal Data under the Agreement.

2. Annex 2 (European Annex) applies only if and to the extent Pencil’s Processing of Customer Personal Data under the Agreement is subject to the GDPR. 

3. Annex 3 (State Privacy Laws Annex) applies only if and to the extent Pencil’s Processing of Customer Personal Data on behalf of Customer under the Agreement is subject to the State Privacy Laws.  

4. Section 9 of this DPA applies to Pencil’s Processing of Customer Personal Data to the extent required under Applicable Data Protection Laws for contracts with Processors, and in such cases, only in respect of Processing of Customer Personal Data subject to such laws.

PROCESSING OF CUSTOMER PERSONAL DATA

1. The Parties acknowledge and agree that the details of Pencil’s Processing of Customer Personal Data (including the respective roles of the Parties relating to such Processing) are as described in Annex 1 (Data Processing Details) to the DPA. 

2. Pencil shall not Process Customer Personal Data other than: (a) on Customer’s instructions; or (b) as required by applicable laws provided that, in such circumstances, Pencil shall inform Customer in advance of the relevant legal requirement requiring such Processing if and to the extent Pencil is: (i) required to do so by Applicable Data Protection Laws; and (ii) permitted to do so in the circumstances. Customer instructs Pencil to Process Customer Personal Data to provide the Services to Customer and in accordance with the Agreement. The Agreement is a complete expression of such instructions, and Customer’s additional instructions will be binding on Pencil only pursuant to any written amendment to this DPA signed by both Parties. Where required by Applicable Data Protection Laws, if Pencil receives an instruction from Customer that, in its reasonable opinion, infringes Applicable Data Protection Laws, Pencil shall notify Customer.

3. Customer hereby instructs Pencil to Process any Customer Personal Data comprised in Connected Data (“Connected Service Personal Data”) to the fullest extent required to enable Pencil to provide the Services. In respect of any such Connected Service Personal Data and any Processing thereof, Customer acknowledges and agrees that: (a) Pencil acts as a Processor on behalf of Customer; (b) the relevant provider of the Third-Party Service may act as a Controller in its own right or as a (sub-)Processor of Customer; (c) neither Pencil nor the relevant provider of the Third-Party Service acts as a (Sub-)Processor of the other in respect of Pencil’s Processing of such Connected Service Personal Data; and (d) as between Customer and Pencil, Pencil has no obligation to agree or establish any terms, conditions or arrangements with the relevant provider of the Third-Party Service in relation to Pencil’s Processing of Connected Service Personal Data, nor any Restricted Transfer(s) initiated by Customer to Pencil via the provider of the relevant Third-Party Service (to which Paragraph 2 of Annex 2 (European Annex) shall apply).

PENCIL PERSONNEL

‍Pencil shall take commercially reasonable steps to ascertain the reliability of any Pencil Personnel who Process Customer Personal Data, and shall enter into written confidentiality agreements with all Pencil Personnel who Process Customer Personal Data that are not subject to professional or statutory obligations of confidentiality.

SECURITY 

1. Pencil shall implement and maintain technical and organisational measures in relation to Customer Personal Data designed to protect Customer Personal Data against Personal Data Breaches as described in Annex 4 (Security Measures) (the “Security Measures”).  

2. Pencil may update the Security Measures from time to time, provided the updated measures do not materially decrease the overall protection of Customer Personal Data.

DATA SUBJECT RIGHTS

1. Pencil, taking into account the nature of the Processing of Customer Personal Data, shall provide Customer with such assistance as may be reasonably necessary and technically feasible to assist Customer in fulfilling its obligations to respond to Data Subject Requests. If Pencil receives a Data Subject Request, Customer will be responsible for responding to any such request.

2. Pencil shall: (a) promptly notify Customer if it receives a Data Subject Request; and (b) not respond to any Data Subject Request, other than to advise the Data Subject to submit the request to Customer, except as required by Applicable Data Protection Laws.

PERSONAL DATA BREACH

1. Pencil shall notify Customer without undue delay upon Pencil’s confirmation of a Personal Data Breach affecting Customer Personal Data. Pencil shall provide Customer with information (insofar as such information is within Pencil’s possession and knowledge and does not otherwise compromise the security of any Personal Data Processed by Pencil) to allow Customer to meet its obligations under the Applicable Data Protection Laws to report the Personal Data Breach. Pencil’s notification of or response to a Personal Data Breach shall not be construed as Pencil’s acknowledgement of any fault or liability with respect to the Personal Data Breach.

2. Customer is solely responsible for complying with notification laws applicable to Customer and fulfilling any third-party notification obligations related to any Personal Data Breaches.

3. If Customer determines that a Personal Data Breach must be notified to any Supervisory Authority, any other governmental authority, any Data Subject(s), the public or others under Applicable Data Protection Laws, to the extent such notice directly or indirectly refers to or identifies Pencil, where permitted by applicable laws, Customer agrees to: (a) notify Pencil in advance; and (b) in good faith, consult with Pencil and consider any clarifications or corrections Pencil may reasonably recommend or request to any such notification, which: (i) relate to Pencil’s involvement in or relevance to such Personal Data Breach; and (ii) are consistent with applicable laws.

SUB-PROCESSING

1. Customer generally authorises Pencil to appoint Sub-Processors in accordance with this Section 8. Information about Pencil’s Sub-Processors, including their functions and locations is as shown in the Sub-Processor page displayed from time to time at  https://trypencil.com/sub-processors or any successor page (the “Sub-Processor Page”). Without limitation, Customer authorises Pencil’s engagement of the Sub-Processors listed on the Sub-Processor Page as of the Addendum Effective Date.

2. Pencil shall give Customer prior written notice of the appointment of any proposed Sub-Processor, including reasonable details of the Processing to be undertaken by the Sub-Processor by updating the Sub-Processor Page and providing a means by which Customer may subscribe to receive notice of such updates (or otherwise providing written notice to Customer) – Customer agrees that Customer is solely responsible for ensuring that it subscribes to such updates, and it shall do so. If, within fourteen (14) days of receipt of that notice, Customer notifies Pencil in writing of any objections (on reasonable grounds) to the proposed appointment: (a) Pencil shall use reasonable efforts to make available a commercially reasonable change in the provision of the Services, which avoids the use of that proposed Sub-Processor; and (b) where: (i) such a change cannot be made within fourteen (14) days from Pencil’s receipt of Customer’s notice; (ii) no commercially reasonable change is available; and/or (iii) Customer declines to bear the cost of the proposed change, then Customer may terminate the Agreement by written notice to Pencil as its sole and exclusive remedy.

3. If Customer does not object to Pencil’s appointment of a Sub-Processor during the objection period referred to in Section 8.2, Customer shall be deemed to have approved the engagement and ongoing use of that Sub-Processor.

4. With respect to each Sub-Processor, Pencil shall maintain a written contract between Pencil and the Sub-Processor that includes terms which offer at least an equivalent level of protection for Customer Personal Data as those set out in this DPA (including the Security Measures). Pencil shall remain liable for any breach of this DPA caused by a Sub-Processor to the same extent that Pencil would have been liable for the same under and subject to the Agreement were it to have committed such breach itself. 

AUDITS 

1. Pencil shall make available to Customer on request, such information as Pencil (acting reasonably) considers appropriate in the circumstances to demonstrate its compliance with this DPA. 

2. Subject to Sections 9.3 to 9.6, in the event that Customer (acting reasonably) is able to provide documentary evidence that the information made available by Pencil pursuant to Section 9.1 is not sufficient in the circumstances to demonstrate Pencil’s compliance with this DPA, Pencil shall allow for and contribute to audits, including on-premise inspections, by Customer or an auditor mandated by Customer in relation to the Processing of Customer Personal Data by Pencil.

3. Customer shall give Pencil reasonable notice of any audit or inspection to be conducted under Section 9.2 (which shall in no event be less than fourteen (14) days’ notice) and shall use its best efforts (and ensure that each of its mandated auditors uses its best efforts) to avoid causing any destruction, damage, injury or disruption to Pencil’s premises, equipment, Personnel, data, and business (including any interference with the confidentiality or security of the data of Pencil’s other customers or the availability of Pencil’s services to such other customers).

4. Prior to conducting any audit, Customer must submit a detailed proposed audit plan providing for the confidential treatment of all information exchanged in connection with the audit and any reports regarding the results or findings thereof. The proposed audit plan must describe the proposed scope, duration, and start date of the audit. Pencil will review the proposed audit plan and provide Customer with any concerns or questions (for example, any request for information that could compromise Pencil’s security, privacy, employment or other relevant policies). Pencil will work cooperatively with Customer to agree on a final audit plan.  

5. If the controls or measures to be assessed in the requested audit are assessed in a SOC 2 Type 2, ISO, NIST or similar audit report performed by a qualified third-party auditor within twelve (12) months of Customer’s audit request (“Audit Report”) and Pencil has confirmed in writing that there have been no known material changes in the controls audited and covered by such Audit Report(s), Customer agrees to accept provision of such Audit Report(s) in lieu of requesting an audit of such controls or measures. Pencil shall provide copies of any such Audit Reports to Customer upon request; provided that they shall constitute the confidential information of Pencil, which Customer shall use only for the purposes of confirming compliance with the requirements of this DPA or meeting Customer’s obligations under Applicable Data Protection Laws. Nothing in this Section 9 shall be construed to obligate Pencil to breach any duty of confidentiality.

6. Pencil need not give access to its premises for the purposes of such an audit or inspection: (a)where an Audit Report is accepted in lieu of such controls or measures in accordance with Section 9.5; (b) to any individual unless they produce reasonable evidence of their identity; (c) to any auditor whom Pencil has not approved in advance (acting reasonably); (d) to any individual who has not entered into a non-disclosure agreement with Pencil on terms acceptable to Pencil; (e) outside normal business hours at those premises; or (f) on more than one occasion in any calendar year during the term of the Agreement, except for any audits or inspections which Customer is required to carry out under the GDPR or by a Supervisory Authority. Nothing in this DPA shall require Pencil to furnish more information about its Sub-Processors in connection with such audits than such Sub-Processors make generally available to their customers.

RETURN AND DELETION

1. Upon expiration or earlier termination of the Agreement, Pencil shall return and/or delete all Customer Personal Data in Pencil’s care, custody or control in accordance Customer’s instructions as to the post-termination return and deletion of Customer Personal Data expressed in the Agreement (for the avoidance of doubt, in relation to Customers with a ‘Pencil Standard’ Subscription, this shall not apply in respect of any Personal Data used under the licence set out in Section 3.5 of the Terms of Use. To the extent that deletion of any Customer Personal Data contained in any back-ups’ maintained by or on behalf of Pencil is not technically feasible within the timeframe set out in Customer’s instructions, Pencil shall (a) securely delete such Customer Personal Data in accordance with any relevant scheduled back-up deletion routines (e.g., those contained within Pencil’s relevant business continuity and disaster recovery procedures); and (b) pending such deletion, put such Customer Personal Data beyond use.

2. Notwithstanding the foregoing, Pencil may retain Customer Personal Data where required by applicable laws, provided that Pencil shall (a) maintain the confidentiality of all such Customer Personal Data and (b) Process the Customer Personal Data only as necessary for the purpose(s) and duration specified in the applicable law requiring such retention. 

CUSTOMER’S RESPONSIBILITIES

1. Customer agrees that, without limiting Pencil’s obligations under Section 5 (Security), Customer is solely responsible for its use of the Services, including (a) making appropriate use of the Services to maintain a level of security appropriate to the risk in respect of the Customer Personal Data; (b) securing the account authentication credentials, systems and devices Customer uses to access the Services; (c) securing Customer’s systems and devices that Pencil uses to provide the Services; and (d) backing up Customer Personal Data.

2. Customer shall ensure: (a) that there is, and will be throughout the term of the Agreement, a valid legal basis for the Processing by Pencil of Customer Personal Data in accordance with this DPA and the Agreement (including, any and all instructions issued by Customer from time to time in respect of such Processing) for the purposes of all Applicable Data Protection Laws (including Article 6, Article 9(2) and/or Article 10 of the GDPR (where applicable)); and (b) that all Data Subjects have (i) been presented with all required notices and statements (including as required by Article 12-14 of the GDPR (where applicable)); and (ii) provided all required consents, in each case (i) and (ii) relating to the Processing by Pencil of Customer Personal Data pursuant to the Agreement.

3. Customer agrees that the Services, the Security Measures, and Pencil’s commitments under this DPA are adequate to meet Customer’s needs, including with respect to any security obligations of Customer under Applicable Data Protection Laws, and provide a level of security appropriate to the risk in respect of the Customer Personal Data.

4. Customer shall not provide or otherwise make available to Pencil any Customer Personal Data that contains any (a) Social Security numbers or other government-issued identification numbers; (b) protected health information subject to the Health Insurance Portability and Accountability Act (HIPAA) or other information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional; (c) health insurance information; (d) biometric information; (e) passwords to any online accounts; (f) credentials to any financial accounts; (g) tax return data; (h) any payment card information subject to the Payment Card Industry Data Security Standard; (i) Personal Data of children under 16 years of age; or (j) any other information that falls within any special categories of personal data (as set out in Article 9(1) of the GDPR) and/or data relating to criminal convictions and offences or related security measures (together, “Restricted Data”).

5. Except to the extent prohibited by Applicable Data Protection Laws, Customer shall compensate Pencil at Pencil’s then-current professional services rates for, and reimburse any costs reasonably incurred by Pencil in the course of providing, cooperation, information, or assistance requested by Customer in respect of this DPA (including pursuant to Sections 6, 7 and 9 of this DPA and Paragraph 1 of Annex 2 (European Annex)), beyond providing self-service features included as part of the Service.

LIABILITY  

The total aggregate liability of either Party towards the other Party, howsoever arising, under or in connection with this DPA and the SCCs (if and as they apply) will under no circumstances exceed any limitations or caps on, and shall be subject to any exclusions of, liability and loss agreed by the Parties in the Agreement; provided that, nothing in this Section 12 will affect any person’s liability to Data Subjects under relevant third-party beneficiary provisions of the SCCs (if and as they apply).

VARIATION 

Pencil may on notice vary this DPA to the extent that (acting reasonably) it considers necessary to address the requirements of Applicable Data Protection Laws from time to time, including by varying or replacing the SCCs in the manner described in Paragraph 2.5 of Annex 2 (European Annex).  

INCORPORATION AND PRECEDENCE

1. This DPA shall be incorporated into and form part of the Agreement with effect on and from the Addendum Effective Date. In the event of any conflict or inconsistency between: (a) this DPA and the Agreement, this DPA shall prevail; or (b) any SCCs entered into pursuant to Paragraph 2 of Annex 2 (European Annex) and this DPA and/or the Agreement, the SCCs shall prevail in respect of the Restricted Transfer to which they apply.‍

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Data Processing Details

This Annex 1 (Data Processing Details) to the DPA includes certain details of the Processing of Customer Personal Data as required: (a) by certain Applicable Data Protection Laws; and (b) to populate the Appendix to the SCCs in the manner described in Paragraph 2.2(d) of Annex 2 (European Annex).

Pencil Details

Name:

Pencil (as defined above)

Address:

As set out in the pre-amble to the DPA

Contact Details for Data Protection:

Role: CEO

Email: will@trypencil.com

Pencil’s Activities:

Pencil is a provider of a generative AI platform which customers can use to efficiently create advertising copy, images and campaigns tailored to their unique brand voice.

Role: 

Processor 

Customer details

Name:

Customer (as defined above)

Address:

Customer’s address is the address shown in or determined by the Agreement; or if no such address is contained within the Agreement, Customer’s principal business trading address – unless otherwise notified to Pencil’s contact point noted above. 

Contact Details for Data Protection:

Pencil’s primary point of contact with Customer; or any other email notified by Customer for the purpose of providing it with Data Protection-related communications or alerts. 

(Customer agrees that it is solely responsible for ensuring that such email addresses are valid and up to date, and direct relevant communications to the appropriate individual within its organisation.) 

Customer Activities:

Customer’s activities relevant to this DPA are the use and receipt of the Services as part of its ongoing business operations under and in accordance with the Agreement.

Role: 

- Controller – in respect of any Processing of Customer Personal Data in respect of which Customer is a Controller in its own right; and 

- Processor – in respect of any Processing of Customer Personal Data in respect of which Customer is itself acting as a Processor on behalf of any other person (including its affiliates if and where applicable).

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Details of processing

Categories of Data Subjects:

Any individuals whose Personal Data is comprised within data submitted to the Services by or on behalf of Customer under the Agreement, which will be as determined by Customer in its sole discretion through its use of the Services (including as a result of any systems, platforms or technologies with which Customer integrates the Services and the configuration(s) of such integration(s)).

Categories of Personal Data:

Any Personal Data comprised within data submitted to Services by or on behalf of Customer under the Agreement, which will be as determined by Customer in its sole discretion through its use of the Services (including as a result of any systems, platforms or technologies with which Customer integrates the Services and the configuration(s) of such integration(s), such as Connected Services Personal Data).

Sensitive Categories of Data, and associated additional restrictions/safeguards:

Categories of sensitive data: None – as noted in Section 11.4 of the DPA, Customer agrees that Restricted Data, which includes ‘sensitive data’ (as defined in Clause 8.7 of the SCCs), must not be submitted to the Services. Additional safeguards for sensitive data: N/A

Frequency of transfer:

Ongoing – as initiated by Customer in and through its use, or use on its behalf, of the Services.  

Nature of the Processing:

Processing operations required in order to provide the Services in accordance with the Agreement.

Purpose of the Processing:

Customer Personal Data will be processed: (i) as necessary to provide the Services as initiated by Customer in its use thereof, and (ii) to comply with any other reasonable instructions provided by Customer in accordance with the terms of this DPA. 

Duration of Processing / Retention Period:

For the period determined in accordance with the Agreement and DPA, including Section 10 of the DPA.

Transfers to (sub-)processors:

Transfers to Sub-Processors are as, and for the purposes, described from time to time in the Sub-Processor Page (as may be updated from time to time in accordance with Section 8 of the DPA).

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European Annex

DATA PROTECTION IMPACT ASSESSMENT AND PRIOR CONSULTATION

Pencil, taking into account the nature of the Processing and the information available to Pencil, shall provide reasonable assistance to Customer, at Customer’s cost, with any data protection impact assessments and prior consultations with Supervisory Authorities which Customer reasonably considers to be required of it by Article 35 or Article 36 of the GDPR, in each case solely in relation to Processing of Customer Personal Data by Pencil.

RESTRICTED TRANSFERS 

Entry into Transfer Mechanisms 

1. EEA Restricted Transfers. To the extent that any Processing of Customer Personal Data under this DPA involves an EEA Restricted Transfer from Customer to Pencil, the Parties shall comply with their respective obligations set out in the SCCs, which are hereby deemed to be (i) populated in accordance with Section 2.2 of this Annex 2 (European Annex); and (ii) entered into by the Parties and incorporated by reference into this DPA. 

2. UK Restricted Transfers. To the extent that any Processing of Customer Personal Data under this DPA involves a UK Restricted Transfer from Customer to Pencil, the Parties shall comply with their respective obligations set out in the SCCs, which are hereby deemed to be: (i) varied to address the requirements of the UK GDPR in accordance with the UK Transfer Addendum and populated in accordance with Sections 2.2 and 2.3 of this Annex 2 (European Annex); and (ii) entered into by the Parties and incorporated by reference into this DPA. 

Population of SCCs

1. Signature of SCCs. Where the SCCs apply in accordance with Paragraph 2.1(a) and/or Paragraph 2.1(b) of this Annex 2 (European Annex), each of the Parties is hereby deemed to have signed the SCCs at the relevant signature block in Annex I to the Appendix to the SCCs.

Modules of SCCs. As and where relevant: Module Two of the SCCs applies to any EEA Restricted Transfer involving Processing of Personal Data in respect of which Customer is a controller in its own right; and/or Module Three of the SCCs applies to any EEA Restricted Transfer involving Processing of Personal Data in respect of which Customer is a processor.

2. Population of body of SCCs. As and where applicable to the relevant Module and the Clauses thereof: (i) in Clause 7: the ‘Docking Clause’ is not used; (ii) in Clause 9: ‘Option 2: General Written Authorisation’ applies, and the minimum time period for advance notice of the addition or replacement of Sub-Processors shall be the advance notice period set out in Section 8.2 of the DPA;  (iii) in Clause 11: the optional language is not used; (iv) in Clause 13: all square brackets are removed and all text therein is retained; (v) in Clause 17: ‘OPTION 1’ applies, and the Parties agree that the SCCs shall be governed by the law of Ireland in relation to any EEA Restricted Transfer; and (vi) in Clause 18(b): the Parties agree that any dispute arising from the SCCs in relation to any EEA Restricted Transfer shall be resolved by the courts of Ireland.  

3. Population of Appendix to SCCs. Annex I to the Appendix to the SCCs is populated with the corresponding information detailed in Annex 1 (Data Processing Details) to the DPA, with: Customer being ‘data exporter’; and Pencil being ‘data importer’, and Part C to that Annex I is populated with: the competent Supervisory Authority shall be determined as follows: (i) where Customer is established in an EU Member State: the competent Supervisory Authority shall be the Supervisory Authority of that EU Member State in which Customer is established; and (ii) where Customer is not established in an EU Member State, Article 3(2) of the GDPR applies and Customer has appointed an EEA Representative under Article 27 of the GDPR: the competent Supervisory Authority shall be the Supervisory Authority of the EU Member State in which Customer’s EEA Representative relevant to the Processing hereunder is based (from time-to-time), which Customer shall notify to Pencil in writing. Annex II shall be populated with reference to the information contained in or determined by Section 2.3 of the DPA (including the Security Measures).

UK Restricted Transfers

1. UK Transfer Addendum. Where relevant in accordance with Section 2.1(b) of this Annex 2 (European Annex), the SCCs apply to any UK Restricted Transfers as varied by the UK Transfer Addendum in the following manner: (i) ’Part 1 to the UK Transfer Addendum’: (A) the Parties agree: Tables 1, 2 and 3 to the UK Transfer Addendum are deemed populated with the corresponding details set out in Annex 1 (Data Processing Details) to the DPA and Section 2.2 of this Annex 2 (European Annex); and (B) Table 4 to the UK Transfer Addendum is completed with ‘Data Importer’ only; and (ii)  ‘Part 2 to the UK Transfer Addendum’: the Parties agree to be bound by the UK Mandatory Clauses of the UK Transfer Addendum and that the SCCs shall apply to any UK Restricted Transfers as varied in accordance with those Mandatory Clauses.

2. Interpretation. As permitted by section 17 of the UK Mandatory Clauses, the Parties agree to the presentation of the information required by ‘Part 1: Tables’ of the UK Transfer Addendum in the manner determined by 2.3(a) of this Annex 2 (European Annex); provided that the Parties further agree that nothing in the manner of that presentation shall operate or be construed so as to reduce the Appropriate Safeguards (as defined in section 3 of the UK Mandatory Clauses). In relation to any UK Restricted Transfer to which they apply, where the context permits and requires, any reference in the DPA to the SCCs, shall be read as a reference to those SCCs as varied in the manner set out in this Section 2.3 of this Annex 2 (European Annex).

Operational Clarifications  

1. When complying with its transparency obligations under Clause 8.3 of the SCCs, Customer agrees that it shall not provide or otherwise make available, and shall take all appropriate steps to protect Pencil’s and its licensors’ trade secrets, business secrets, confidential information and/or other commercially sensitive information.

2. Where applicable, for the purposes of Clause 10(a) of Module Three of the SCCs, Customer acknowledges and agrees that there are no circumstances in which it would be appropriate for Pencil to notify any third-party controller of any Data Subject Request and that any such notification shall be the sole responsibility of Customer.

3. For the purposes of Clause 15.1(a) of the SCCs, except to the extent prohibited by applicable law and/or the relevant public authority, as between the Parties, Customer agrees that it shall be solely responsible for making any notifications to relevant Data Subject(s) if and as required.

4. The terms and conditions of Section 8 of the DPA apply in relation to Pencil’s appointment and use of Sub-Processors under the SCCs. Any approval by Customer of Pencil’s appointment of a Sub-Processor that is given expressly or deemed given pursuant to that Section 8 constitutes Customer’s documented instructions to effect disclosures and onward transfers to any relevant Sub-Processors if and as required under Clause 8.8 of the SCCs.

5. The audits described in Clauses 8.9(c) and 8.9(d) of the SCCs shall be subject to any relevant terms and conditions detailed in Section 9 of the DPA.

6. Certification of deletion of Personal Data as described in Clauses 8.5 and 16(d) of the SCCs shall be provided only upon Customer’s written request.

7. In respect of any given Restricted Transfer, if requested of Customer by a Supervisory Authority, Data Subject or further Controller (where applicable) – on specific written request; accompanied by suitable supporting evidence of the relevant request, Pencil shall provide Customer with an executed version of the relevant set(s) of SCCs responsive to the request made of Customer (amended and populated in accordance with relevant provisions of this DPA in respect of the relevant Restricted Transfer) for countersignature by Customer, onward provision to the relevant requestor and/or storage to evidence Customer’s compliance with Applicable Data Protection Laws.

Adoption of new transfer mechanism

Pencil may on notice vary this DPA and replace the relevant SCCs with: (a) any new form of the relevant SCCs or any replacement therefor prepared and populated accordingly (e.g., standard data protection clauses adopted by the European Commission for use specifically in respect of transfers to data importers subject to Article 3(2) of the EU GDPR); or (b) another transfer mechanism, other than the SCCs, that enables the lawful transfer of Customer Personal Data by Customer to Pencil under this DPA in compliance with Chapter V of the GDPR.  

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State Privacy Laws Annex

1. In this Annex 3, the terms “business,” “business purpose,” “commercial purpose,” “consumer,” “sell,” “share,” and “service provider” shall have the respective meanings given thereto in the CCPA; and “personal information” shall mean Customer Personal Data that constitutes “personal information” as defined in and that is subject to the State Privacy Laws.

2. The business purposes and services for which Pencil is Processing personal information are for Pencil to provide the Services to and on behalf of Customer as set forth in the Agreement, as described in more detail in Annex 1 (Data Processing Details) to the DPA.

3. It is the Parties’ intent that with respect to any personal information, Pencil is a service provider. Pencil (a) acknowledges that personal information is disclosed by Customer only for limited and specific purposes described in the Agreement; (b) shall comply with applicable obligations under the State Privacy Laws and shall provide the same level of privacy protection to personal information as is required by the State Privacy Laws; (c) agrees that Customer has the right to take reasonable and appropriate steps under and subject to Section 9 (Audits) of the DPA to help ensure that Pencil’s use of personal information is consistent with Customer’s obligations under the State Privacy Laws; (d) shall notify Customer in writing of any determination made by Pencil that it can no longer meet its obligations under the State Privacy Laws; and (e) agrees that Customer has the right, upon notice, including pursuant to the preceding clause, to take reasonable and appropriate steps to stop and remediate unauthorised use of personal information.  

4. Pencil shall not (a) sell or share any personal information; (b) retain, use or disclose any personal information for any purpose other than for the business purposes specified in the Agreement, including retaining, using, or disclosing the personal information for a commercial purpose other than the business purpose specified in the Agreement, or as otherwise permitted by State Privacy Laws; (c) retain, use or disclose the personal information outside of the direct business relationship between Pencil and Customer; or (d) combine personal information received pursuant to the Agreement with personal information (i) received from or on behalf of another person, or (ii) collected from Pencil’s own interaction with any consumer to whom such personal information pertains except as and to the extent necessary as a part of Pencil’s provision of the Services. Pencil hereby certifies that it understands its obligations under this Section 4 and will comply with them.. 

5. Pencil shall implement reasonable security procedures and practices appropriate to the nature of the personal information received from, or on behalf of, Customer, in accordance with Section 5 (Security Measures) of the DPA.

6. When Pencil engages any Sub-Processor, Pencil shall notify Customer of such Sub-Processor engagements in accordance with Section 8 (Sub-Processing) of the DPA and that such notice shall satisfy Pencil’s obligation under the State Privacy Laws to give notice of such engagements.

7. Pencil agrees that Customer may conduct audits, in accordance with Section 9 of the DPA, to help ensure that Pencil’s use of personal information is consistent with Pencil’s obligations under the State Privacy Laws.

8. The parties acknowledge that Pencil’s retention, use and disclosure of personal information authorised by Customer’s instructions documented in the Agreement and DPA are integral to Pencil’s provision of the Services and the business relationship between the Parties.

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Security Measures

As from the Addendum Effective Date, Pencil will implement and maintain the Security Measures as set out in this Annex 4. 

1. Organisational management and staff responsible for the development, implementation and maintenance of Pencil’s information security program. 

2. Data security controls which include at a minimum logical segregation of data, restricted (e.g. role-based) access and monitoring, and utilisation of commercially available and industry standard encryption technologies for Customer Personal Data.

3. Logical access controls designed to manage electronic access to data and system functionality based on authority levels and job functions.

4. Password controls designed to manage and control password strength, expiration and usage.

5. Physical and environmental security of production resources relevant to the Services is maintained by the relevant Sub-Processor(s) (and their vendors) engaged from time-to-time by Pencil to host those resources. Pencil takes steps to ensure that such Sub-Processors provide appropriate assurances and certifications that evidence such physical and environmental security – including security of data centre, server room facilities and other areas containing Customer Personal Data designed to:  

5.1 protect information assets from unauthorised physical access, 

5.2manage, monitor and log movement into and out of Sub-Processor facilities, and 

5.3 guard against environmental hazards such as heat, fire and water damage.

6. Operational procedures and controls to provide for configuration, monitoring and maintenance of technology and information systems, including secure disposal of systems and media to render all information or data contained therein as undecipherable or unrecoverable prior to final disposal or release from Pencil’s possession.

7. Change management procedures and tracking mechanisms designed to test, approve and monitor all material changes to Pencil’s technology and information assets.

8. Incident management procedures designed to allow Pencil to investigate, respond to, mitigate and notify of events related to Pencil’s technology and information assets. 

9. Network security controls that provide for the use of enterprise firewalls and intrusion detection systems designed to protect systems from intrusion and limit the scope of any successful attack.

10. Vulnerability assessment and threat protection technologies and scheduled monitoring procedures (as implemented by the relevant Sub-Processor(s) (and their vendors) engaged from time-to-time by Pencil to host the Platform) designed to identify, assess, mitigate and protect against identified security threats, viruses and other malicious code.

11. Business resiliency/continuity and disaster recovery procedures designed to maintain service and/or recovery from foreseeable emergency situations or disasters.  

12. Pencil may freely update or modify these Security Measures from time to time provided that such updates and modifications do not materially decrease the overall security of Services and/or relevant Customer Personal Data.

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