Terms of Service

Updated 5 February 2024

These Terms and Conditions, together each relevant Order Form (if applicable), form the “Agreement” entered into by and between the Parties, which governs and conditions the nature and scope of the services to be provided by Pencil to Customer,including provision of access to the Platform for use in connection with the Authorised Brand (includingto allow Customer create Outputs for that Authorised Brand).

Where there is no Order Form, this Agreement is enteredinto by and between Customer and Pencil automatically when Customer concludes apurchase on the relevant order page and clicks to accept these Terms andConditions. Where applicable, in respect of any person who concludes such orderon behalf of another person or entity, you represent and warrant that you havethe full and sufficient authority to accept the Terms and Conditions on behalfof such other person or entity and all references to “Customer”herein are noted to be references to that other person or entity.

Where applicable, to the extent of anyinconsistency or conflict between any provision(s) of these Terms andConditions and any provision(s) of the Order Form, the relevant provision(s) ofthe Order Form shall govern and prevail.


1.             INTERPRETATION

1.1           The following definitionsapply to this Agreement (including its recitals, above):

(a)            “Authorised Brand”means the relevant authorised brand in respect of which Customeris permitted under this Agreement touse the Platform and the Services, which is as identified by Customer in theordering process for a subscription or, where applicable, set out in the relevant Order Form.

(b)            “AuthorisedUsers”means those of Customer’s employeesor other staff who are authorised from time totime byPencil to usethe Platform under this Agreement via certain of the Workspace(s)allocated to the Authorised Brand, and provided usernames,passwords and other necessary credentials by Pencil for the purpose ofaccessing and using those Workspace(s) via the Platform (“AccessCredentials”).

(c)            “BetaProduct” means any feature or functionality of the Platform,which is made available by Pencil on a ‘beta’,pre-release or evaluation basis.

(d)            “Business Day” means any day which is not a Saturday, Sundayor public holiday in London, United Kingdom.

(e)            “Claim”means any claim, demand, complaint, proceeding or other action.

(f)             “ConnectedApplication” means any system or application owned or controlledby Customer,which is connected to the Platform on behalf or at the direction of Customer(including through Customer’s linking of its account for a ConnectedApplication with the Platform using integrations made available as part of thePlatform).

(g)            “Connected Data”means any information or data (including any information or data relating toadvertising performance) made available within the Platform via any ConnectedApplications orotherwise made available via Connected Applications and uploaded to thePlatform (e.g., manually).

(h)            “Content”means any text, images, audio, video or any other materials.

(i)             “Customer”means the person or entity who is a counterparty to the Agreement (whereapplicable, as identified in the Order Form).

(j)             “Documentation” means any manuals, instructions, user guidespublished by Pencil that describe the Platform and its use, operation,features and functionality.

(k)            “Fees” means the fees for the relevant subscription and‘Service Package’ identified on [https://www.trypencil.com/pricing] unless otherwise agreedpursuant to the Order Form.

(l)             “Initial Term”means the relevant subscription term selected by Customer on the order pageprior to purchase of a subscription to access the Platform or, whereapplicable, the Initial Term set out in the Order Form.

(m)          “Inputs” meansany Content input by Customer and its Authorised Users to be processed by thePlatform to create Outputs (including any website properties input to byCustomer the Platform’s ‘URL scanning’ tooling, together with any Contentdisplayed on those properties).

(n)            “Intellectual Property Rights” means all copyright andrelated rights, patents, rights to inventions, utility models, trade marks,service marks, trade, business and domain names, rights in trade dress or get‑up,rights in goodwill or to sue for passing off, unfair competition rights, rightsin designs, rights in computer software, database rights, topography rights,moral rights, rights in confidential information (including know‑how and tradesecrets), so-called ‘personality rights’ and ‘publicity rights’ (includingrights to natural person’s name, image and likeness), and any otherintellectual property rights, in each case whether registered or unregisteredand including all applications for and renewals or extensions of such rights,and all similar or equivalent rights or forms of protection in any part of theworld.

(o)            “Losses” means all losses, liabilities, damages, costs,claims, charges, regulatory fines, demands, actions andexpenses (including legal and professional fees and disbursements andcosts of investigation, litigation, settlement, judgment, interest and penalties).

(p)            “Order Form” means an order form signed by the Parties for a ‘PencilPro’ Subscription to use the Platform to generate Content for the AuthorisedBrand plus associated Services, which incorporates these Termsand Conditions.

(q)            “Outputs” means any visual or audio Content (including copy,storyboards, designs, voiceovers and other visual or audio Content), which is generatedand returned by the Platform based on the Inputs through Customer’s and itsAuthorised Users’ permitted use of the Platform.

(r)            “Pencil” meansPencil AI Limited, a company incorporated and registered under the laws ofEngland and Wales with company number 14789571 with its registered office at 151Rosebery Avenue, London EC1R 4AB.

(s)            “Pencil Technology” means collectively (i) the Platform, asupdated from time to time; (ii) any and all other technology and software ownedor used by Pencil, any associated algorithms, software code (in any formincluding source code and executable or object code), neural networks, models(including model architectures and algorithms (whether or not, instantiated insoftware code)), model weights, parameters, hyperparameters and coefficients,embeddings, calibrations, application programming interfaces, computer systems;(iii) any benchmarking, analytics or technical data relating to theperformance or operation of the Platform; (iv) the Documentation as updated andamended from time to time; (v) as applicable in the context of a ‘PencilStandard’ Subscription only, any Pencil Improvements; and (vi) any and allIntellectual Property Rights in or to each of (i)‑(iv).

(t)             “Platform” means Pencil’s cloud‑based software‑as‑a‑service ‘Pencil’ platform(including the Platform Interface) as described in the Documentation, which isowned, operated and/or licensed by Pencil, which may be used by Customer to generateOutputs, the features and functionalities of which shall vary dependent uponwhether Customer has purchased a ‘Pencil Pro’ Subscription or a ‘PencilStandard’ Subscription.

(u)            “Platform Interface”means the standard web‑based interface required for Customer to access and usethe Platform for the ordinary operation thereof under this Agreement, which is asnotified to Customer from time to time (including, where relevant, https://app.trypencil.com or https://pro.trypencil.com or other https://trypencil.com domain as may be relevantin the circumstances).

(v)            “Services”means those services which Pencil agrees to provide under this Agreement aspart of the relevant ‘Service Package’ selected by Customer (as those servicesare further described on https://trypencil.com), including where applicableas selected on the order page for a subscription or under the Order Form.

(w)           “Renewal Term”means the relevant subscription term selected by Customer on the order pageprior to purchase of a subscription to access the Platform or, whereapplicable, the Renewal Term set out in the Order Form.

(x)            “Term” means the Initial Term and any Renewal Term(s).

(y)           “Workspace”means a ‘Workspace’ made available via the Platform that is allocated to theAuthorised Brand for a given market, geography or similar, and which is identifiedin the Order Form.  

1.2           To the extent not defined inthis Section 1or elsewhere in these Terms and Conditions, the capitalised terms set out asheadings in the Order Form shall have the meaning given to them in that OrderForm.

1.3           The following rules ofinterpretation shall apply in this Agreement: (a) any reference to thisAgreement terminating shall, where the context requires, include a reference tothis Agreement terminating by expiry of the Term; (b) the words “include” and “including” (or similar) shall beconstrued as illustrative only and shall not limit the sense of thedescription, definition, phrase or term(s) that comes before the relevant term;and (c) any reference to the “Parties”means Pencil and Customer and “Party”shall mean one of them.

1.4           Customer acknowledges andagrees that certain terms and conditions of the Agreement shall apply dependentupon the particular subscription package purchased by Customer, being either a“‘Pencil Pro’ Subscription” or a “‘Pencil Standard’Subscription” the primary features and functionalities of each of whichare as described here: https://trypencil.com/pricing (or as further elaboratedupon in the relevant Documentation associated with the respective subscriptionpackages).

2.             PLATFORM

2.1           Platform Access. Subject to Customer’s andits Authorised Users’ continued compliance with this Agreement (includingpayment of all Fees due and payable in accordance with Section 4), Pencil hereby grants Customer a limited,personal, non‑exclusive and non‑sublicensable right during the Term: (a) for Customerand its Authorised Users to use the ordinary featuresand functionalities of the Platform as part of Customer’sinternal business operations via theWorkspace(s) in connection with the AuthorisedBrand; and (b) only where permitted as part of the ‘Pencil Pro’ Subscription, forCustomer to apply its trade marks, trade names, service marks, trade dress,logos and ‘look and feel’ to the Platform using the ordinary features andfunctionalities made available by Pencil for that purpose (“Marks”).

2.2           ‘Pencil Pro’ – No Training.In respect of Customers with a ‘Pencil Pro’ Subscription, Pencil will not use and will not permit any providersof Third‑Party Services (as defined below) to use any Inputs, Outputs, nor anyConnected Data, to develop or improve the Pencil Technology and/or anyThird-Party Services (including any models, algorithms, and systems that arepart of or integrated with the Platform); providedthat, such Inputs, Outputs and Connected Data will be used to train andimprove any dedicated predictive model associatedwith any Workspace(s) and which is made accessible via the Platform as part of a ‘PencilPro’ Subscription (such models,each a “Dedicated Model”). TheDedicated Models shall not be made availableby Pencil for use by any other Pencil customers, and noDedicated Model shall be made available to or used by Customer or itsAuthorised Users other than via the relevant Workspace to which that model isdedicated.

2.3           Availability. Pencil will usecommercially reasonable efforts to maintain the operation and availability ofthe Platform(subject always to (a) any scheduled or emergency maintenance orupgrades; and/or (b) circumstances outside Pencil’s reasonable control(including any Force Majeure Event); and/or (c) resulting from any breach, non‑performanceor any other default by Customer under this Agreement).

2.4           Authorised Users.Customer is solely responsible for the acts and omissions of its AuthorisedUsers. Customer shall immediately notify Pencil of any unauthorised use of anyAuthorised User’s Access Credentials. Customer shall: (a) ensurethat: (i) only Authorised Users access the Platform; and (ii) each AuthorisedUser maintains the confidentiality of the Access Credentials; (b) not allow anyAccess Credentials allocated to an Authorised User to be used by more than oneindividual Authorised User; (c) immediately notify Pencil if any AuthorisedUser ceases to be employed or otherwise engaged by Customer; and (d)Authorised Users only access Workspace(s) for which they have been allocated AccessCredentials.

2.5           Additional Services. In addition to makingavailable the Platform, Pencil shall also provide the Services to Customer.Pencil shall provide any such Services in accordance with reasonable care andskill consistent with good industry standards and practices.

2.6           Beta Testing. From timeto time, Customer may have the option to participate in a programme whereCustomer and its Authorised Users are permitted at no additional cost to accesscertain Beta Products. Customer may only use the Beta Products to internallyevaluate and test such Beta Products and for no other purpose whatsoever. TheBeta Products are not generally available and are provided by Pencil “as is”,without any conditions, warranties, representations, undertakings, or otherterms either express or implied whatsoever (including as to non‑infringement,merchantability, satisfactory quality, use of reasonable skill and care orfitness for any particular purpose). Furthermore, Pencil does not provide anyindemnities or service level or availability commitments whatsoever in relationto the Beta Products (e.g., Sections 2.3 and 10.1 do not apply in respect of Beta Products). As Pencil sees fit inits sole discretion, it may from time to time impose, and Customershall comply with, certain additional restrictions or limitations on Customer’sand its Authorised Users’ use of the Beta Products. Pencil may terminateCustomer’s access to any Beta Product(s) at any time with or without notice, atwhich point Customer and its Authorised Users must stop using the Beta Product.Customer shall not disclose to any third party or publish (including via theinternet or social media) details of any Beta Product (including details of itsany evaluation or testing (including any Outputs, results, screenshots,questions, or workflows) of the Beta Product) without Pencil’s prior writtenconsent.  


3.1           Pencil Ownership. As between the Parties,Pencil retains sole ownership of all right, title and interest, including allIntellectual Property Rights, in and to: (a) the Pencil Technology; and (b) unlessand to the limited extent expressly agreed otherwise under the Order Form, any workproduct, deliverables, materials, content, software, technology or similar produced,conceived, created, developed as part of or in connection with the Services (“WorkProduct”, which excludes, for the avoidance of doubt, Outputs).Customer will not acquire any right, title or interest in or to the PencilTechnology nor  Work Products (subjectonly to the limited licences expressly granted in Sections 2.1 and 3.2), and Pencil reserves all rights therein andthereto not expressly granted in this Agreement.

3.2           Work Products Licence. Pencil hereby grants toCustomer a limited, non‑exclusive, worldwide, perpetual, royalty‑free and fullypaid‑up licence to use the Work Products as part of Customer’s ordinarycommercial operations.

3.3           Customer Ownership.As between the Parties, Customer retains sole ownership of all right, title andinterest, including all Intellectual Property Rights, in and to all Inputs,Outputs, Connected Data and its Marks.

3.4           Licence to Pencil. Customer hereby grants toPencil a non‑exclusive, worldwide, royalty‑free and fully paid‑up licence duringthe Term to use the Inputs,Outputs, Connected Data, any Connected Applications, the Authorised Brand (including thename of the Authorised Brand, any trade marks, trade names, service marks,trade dress, logos and ‘look and feel’ of or associated with the AuthorisedBrand) andits Marks, and under any other relevant Intellectual Property Rights owned orlicensed by Customer, as necessary to provide, operate and make available thePlatform to Customer and/or to provide the Services.

3.5           ‘Pencil Standard’ – Improvementand Training Licence.In respect of Customers with a ‘Pencil Standard’ Subscription, Customer herebygrants Pencil a non‑exclusive, fully sub‑licensable, transferable, worldwide, perpetualand irrevocable, royalty‑free and fully paid‑up licence to use Inputs, Outputsand Connected Data on an anonymised, de‑identified or aggregated basis todevelop or improve the Pencil Technology and related technology, products andimprovements (“Pencil Improvements”), including to train models thatare part of the Pencil Technology and/or to create new, improved or augmentedalgorithms, models and model weights.

4.             FEES 

4.1           Payments. Customer shall pay the Feesin advance in accordance with this Section 4and any relevant terms of the Order Form.

4.2           ‘Pencil Pro’ – Invoicing andPayment.In respect of Customers with a ‘Pencil Pro’ Subscription, Pencil shallissue Customer with invoices in respect of any Fees that come due and payableand Customer shall pay the amounts shown in all such invoices in full into the PencilBank Account (or such other account as directed by Pencil) within thirty (30)days of the invoice date, unless otherwise agreed in the Order Form.

4.3           ‘Pencil Standard’– PaymentProcessing and Payment. In respect of Customers with a ‘PencilStandard’ Subscription: (a) Customer acknowledges that Pencil uses a third‑partyservice provider for payment services (e.g., card acceptance, merchantsettlement, and related services) (“Third‑Party Payment Processor”);(b) Pencil shall process Customer’s payment for the Fees (including anyFees payable in respect of ant Renewal Term(s)) via its appointed Third‑PartyPayment Processor; (c) Customer shall provide complete and accurate payment andbilling information and a valid and authorised payment method by which it shallpay the Fees; (d) Customer hereby authorises Pencil, and its Third‑PartyPayment Processor appointed from time to time, to charge such payment methodfor all Fees coming due and payable to Pencil under and in accordance with thisAgreement and agrees that no additional notice or consent is required for suchpurpose; (e) if Customer’s payment method is rejected or payment for the Fees otherwisecannot be processed via that payment method, then Pencil will notify Customer andCustomer will timely pay the Fees by another mechanism agreeable to Pencil,pending which Pencil may suspend Customer’s and its Authorised Users access tothe Platform and/or provision of the Services as described in Section 4.6; and (f) Customeracknowledges and agrees that this Agreement shall automatically renew and Customer’spayment method shall continue to charge the then-current Fees for its ‘PencilStandard’ Subscription unless and until this Agreement is  terminated in accordancewith its terms (including in accordance with Section 12.1(z)).

4.4           Fees. All Fees: (a) shall bepayable in the currency shown on [https://www.trypencil.com/pricing] or otherwise displayed toCustomer during the ordering process (as applicable) unless otherwise agreed inthe Order Form; (b) are non‑cancellable and non‑refundable unless and to theextent expressly provided otherwise in this Agreement; and (c) are exclusive ofany and all taxes (including value added tax).

4.5           Fee Changes. Pencil reserves the rightto increase the Fees following the Initial Term, and each Renewal Termthereafter, provided that Pencil will provide notification of any such increaseat least ninety (90) days in advance of the end of the Initial Term or then‑currentRenewal Term (as applicable).

4.6           Late payments.In addition to any other rights or remedies available to Pencil, if Customerfails to pay any sums by the due date: (a) any portionof any sums that is not paid when due and payable will accrue interest equal tothe higher of: (i) six percent (6%) per annum above the Bank of England’s baselending rate from time to time; or (ii) the default statutory rate applicable fromtime to time under the Late Payment of Commercial Debts (Interest) Act 1998,accruing on a daily basis and being compounded quarterly, from the time theindebtedness arose, with interest on all overdue interest accruing at the samerate and calculated and payable in the same manner until fully paid, whetherbefore or after judgment; and (b) Pencil may suspend the provision of anyaccess to the Platform and/or any and all other parts of the Services uponfourteen (14) days’ prior notice until payment of the sums is made by Customerin full without liability to Customer or prejudice to any otherrights or remedies available to Pencil in the circumstances.

5.             RESTRICTIONS

Customershall not: (a) use the Pencil Technology, any Outputs and/or any  Work Products in any manner or for any purposethat is inconsistent with this Agreement (including using the Platform and/orany Outputs in connection with any other brand than the Authorised Brand and/orallowing Authorised Users to access Workspace(s) for which they do not haveactive Access Credentials); (b) provide or otherwise make the PencilTechnology available to any third parties (other than to Authorised Users aspermitted under Section 2.1);(c) use the Pencil Technology to create, market or distribute any product orservice that is similar to, competitive with, or otherwise replicates or seeksto replicate any features or functionalities of, the Platform or any other partof the Pencil Technology; (d) introduce to the Pencil Technology any ‘backdoor’, ‘drop dead device’, ‘time bomb’, ‘Trojanhorse’, ‘virus’ or ‘worm’ or any other equivalent code, software routine orinstructions designed or intended to disrupt, disable, harm or otherwise impedein any manner the operation of the Pencil Technology or any device or systemowned or controlled by Pencil or any third party, or which otherwise may damageor destroy any data or file; (e) use the Pencil Technology in a manner(including through query access) to gather information as to infer theoperation of, or replicate, all or any part of any machine learning models, datasetsor other technologies forming part of the Pencil Technology (including as partof any so‑called ‘model extraction’, ‘model inference’ or ‘model inversion’ techniquesor similar); (f) modify, copy, resell, rent, lease, sub‑licence, load,merge, adapt or translate the Pencil Technology ; (g) contest, challengeor otherwise make any claim or take any action adverse to Pencil’s ownershipof, or interest in, the Pencil Technology ; (h) re‑use, disseminate, copy, orotherwise use the Pencil Technology in a way that infringes, misappropriates,or violates any Intellectual Property Rights or other right of Pencil or anythird party; (i) remove, alter or obscure any trademark notice, copyrightnotice or any other proprietary notice from the Pencil Technology, unless andto the extent permitted in accordance with Section 2.1(b);(j) circumvent, disable, or interfere with security‑related or rate‑limitingfeatures of the Pencil Technology or features that limit, prevent or restrictuse, access to, or copying of the Pencil Technology, or that enforcelimitations on the use of the Pencil Technology; (k) reverse engineer,decompile, unbundle, disassemble, or create derivative works based on the wholeor any part of the Pencil Technology unless, and to the limited extent that,applicable laws of Customer’s jurisdiction require Pencil to give Customer theright to do so to obtain information necessary to render the Pencil Technologyinteroperable with other software; provided, however, that Customer mustfirst request such information from Pencil, and Pencil may (in its solediscretion) either provide such information to Customer or impose reasonableconditions on such use of the source code for the Pencil Technology to ensurethat Pencil and its licensors’ proprietary rights in the source code for the PencilTechnology are protected; (l) impose (or which may impose, in Pencil’s solediscretion) an unreasonable or disproportionately large load or strain on thePlatform; (m) automatically publish or make generally available any Outputswithout human intervention, review and approval; (n) use the Platform otherwisethan in strict accordance with any terms, conditions and policies of theprovider of any Third‑Party Service or Connected Application (as applicable) (“Third-PartyTerms”); (o) use the Pencil Technology, any Outputs and/or any  Work Products in any manner or for any purposethat contradicts the restrictions set forth in Appendix A (Use‑basedRestrictions); or (p) take any action designed or intended to do any of theforegoing. Pencil may immediately suspend the provision of any access to thePlatform and/or any and all other parts of the Services for any breach of theforegoing restrictions.


6.1           Limited Warranties. Each Party warrants andrepresents on an ongoing basis that it has, and undertakes that it shallcontinue to have for the duration of this Agreement at all relevant times, therequisite power, capacity and authority to enter into this Agreement, to performand carry out its the obligations under this Agreement and to grant anylicences granted under this Agreement. Pencil warrants that, during the Term,the Platform will materially conform to the then‑current Documentation whenused in accordance with that Documentation and the provisions of this Agreement; provided that such warrantyshall not apply: (a) in the event that Customer or any Authorised User hasbreached any of the restrictions outlined in Section 5;or (b) to any defects or issues arising as a result of any use of the Platformin combination with other products, hardware, equipment, software, or data notexpressly authorised by Pencil to be used with the Platform.

6.2           Disclaimer. Except as expressly providedin this Agreement, the Platform, Services, Work Products and the Outputs areprovided “as is” and to the fullest extentpermitted by law, Pencil disclaims all other conditions, warranties,representations, undertakings, or other terms which might have effect betweenthe Parties with respect to the Platform, Services, Work Products and/or theOutputs, or otherwise be implied or incorporated into this Agreement, whetherby statute, common law, custom or otherwise, including any implied conditions,warranties, undertakings or other terms relating to satisfactory quality,reasonable skill and care, fitness for any particular purpose, non‑infringement,ability to achieve a particular result or arising from course of dealing orusage of trade. Furthermore, Customeracknowledges that Pencil: (a) gives no express or implied warranty,representation, nor undertakings that the Outputs do not infringe third partyrights (including Intellectual Property Rights), nor that any contents,findings or materials created or otherwise derived from use of Platform will constitutevalid, subsisting or enforceable Intellectual Property Rights and/or be capableof registration in any jurisdiction; (b) does notwarrant, represent, endorse, support or guarantee the completeness,truthfulness, accuracy, legality, originality, reliability, performance,appropriateness, fitness for purpose or any other attributes of any Outputs;and (c) shall not be, unless and to the extent expressly agreed otherwise aspart of any Services, responsible for reviewing or attempting to verify theaccuracy or currency of any Outputs. Customer shall be solely responsible for Customer’suse of the Platform, the Services and any Output and, unless and to the extentexpressly agreed otherwise as part of any Services, for evaluating the fitnessof any Output as appropriate for Customer’s specific use case or any otherpurpose.


Customer shall: (a) implementand maintain effective security policies and procedures to prevent unauthoriseddisclosure of Access Credentials and unauthorised access to the Platform; (b) secureany systems and devices Customer uses to access the Platform; (c) ensure thatall Authorised Users of the Platform have installed, and access the Platform viathe Platform Interface, using a supported version of the internet browsers andoperating systems that are listed in the Documentation as supported by Pencilfrom time to time; (d) ensure that it has an internet connection with adequatebandwidth for Authorised Users to access and use the Platform; (e) ensure thatit maintains connectivity to the extent necessary to prevent networkperformance degradation; and (f) maintain all necessary back‑up copies of all Inputs,Outputs and Connected Data, and Customer acknowledges that it, and not Pencil,is solely responsible for doing so.


8.1           Third-Party Services. Certain elements ofthe Platform may incorporate functionality of, or enable accessto, certain third‑party tools, systems, applications and/or platforms (including certain third‑partyartificial intelligence models, algorithms, and platforms) (“Third‑Party Services”).The incorporation of the functionality of, or Customer’s and its AuthorisedUsers’ ability to access, certain Third-Party Services via the Platform will varydepending upon the particular ‘Magic Tools’ enabled or disabled by Customerthrough its configuration of the Platform and/or particular Workspaces.  Customer acknowledges that by using the Platform(including through its configuration of relevant ‘Magic Tools’, as and whereapplicable), it is instructing Pencil to share any Inputs, Outputs and/orConnected Data with the relevant providers of such Third‑Party Services to theextent necessary to facilitate such functionality or access. Customeracknowledges that Customer and/or its Authorised Users may be required to enterinto certain agreements with the providers of such Third‑Party Services and inthe event the relevant agreements are not entered into, Customer and/or itsAuthorised Users may be unable to access: (a) such Third‑Party Services; and/or(b) any or all of those elements or functionalities of the Platform that relyupon such Third‑Party Services.  

8.2            Connected Applications. Certain elements of the Platform may permit or enable Customer and/or its Authorised Users to link or otherwise connect or integrate Customer’s Connected Applications to the Platform (including via custom or pre-built integrations). By connecting any Connected Application to the Platform, Customer (a) represents and warrants that it is entitled to link or otherwise connect the Connected Application to the Platform; (b) instructs Pencil to access and/or share any Inputs, Outputs and/or Connected Data with the relevant providers of such Connected Applications and (c) is in agreement with the relevant third-party services and connected applications terms outlined in, but not limited to, Appendix B. Customer acknowledges and agrees that Pencil may access Connected Data so that it may be used in accordance with the terms of this Agreement.

8.3           General.  Customer acknowledges that such Third‑PartyServices and any Connected Applications are not under Pencil’s control andPencil is not responsible for those Third‑Party Services nor ConnectedApplications, and Pencil will have no liability for any unavailability orfailure of any Third‑Party Service or Connected Application, or any third-partyprovider’s decision to discontinue, suspend or terminate any Third‑PartyService or Connected Application. To the fullest extent permitted by law,Customer expressly disclaims any and all express or implied conditions,warranties, representations, undertakings, or other terms of any naturerelating to Third‑Party Services or ConnectedApplications.  

9.             DATA PROTECTION

ThePencil Data Processing Addendum shown from time to time at: https://www.trypencil.com/legals/data-processing-addendum or any successor webpage (the “DPA”)shall apply in accordance with its terms in relation to Pencil’s Processing ofCustomer Personal Data on Customer’s behalf in performance of this Agreement.If and where the DPA applies in accordance with the foregoing, to the extent ofany inconsistency or conflict between any provision(s) of this Agreement andany provision(s) of the DPA, the relevant provision(s) of the DPA shall governand prevail in preference to any relevant provision(s) of this Agreementinsofar as they relate to Pencil’s Processing of Customer Personal Data. Anycapitalised terms used in this Section 9, but not defined in this Agreement, shallhave the meaning given to them in the DPA.

10.           INDEMNITIES

10.1         Pencil Indemnities.Subject to Sections 10.2and 10.3, Pencilshall indemnify: (a) Customers with a ‘Pencil Pro’ Subscription fromand against Losses incurred by such Customers asa result of amounts awarded in judgment or settlement of any third party Claim against Customer alleging that any Output infringes,misappropriatesor violates the Intellectual Property Rights of that third party; and(b) Customer from and against Losses incurred by Customer as a result ofamounts awarded in judgment or settlement of any third party Claimagainst Customer that Customer’s use of the Platform (excluding always any Outputs or any use thereof)within the scope of the rights granted to Customer under this Agreement,infringes, misappropriates or violates the Intellectual Property Rights of athird party.The obligations set forth in this Section 10.1 as they may apply in the circumstancesshall constitute Pencil’s entire liability and Customer’s sole remedy for anyactual or alleged infringement, misappropriation or violation of anyIntellectual Property Rights of a third party arising out of or in connectionwith this Agreement.

10.2         Customer obligations.Customer shall: (a) notify Pencil in full, accurate and complete detail inwriting promptly (and in any event within two (2) Business Days) after itbecomes aware of any event or any Claim,which it believes may give rise to a claim for indemnification underSection 10.1 (an“Indemnified Claim”); (b) allowPencil sole authority to control the defence and settlement of any IndemnifiedClaim; (c) provide Pencil with all reasonable cooperation in the defence ofsuch Indemnified Claim; and (d) not settle or compromise any Indemnified Claimor make any admission of liability without the express prior written consent ofPencil. In relation to any Indemnified Claim, at its option, Pencil may electto: (x) modify or replace all or any relevant part of thePlatform so that it becomes non‑infringing; (y) obtain any required licence(s)to use the applicable third‑party Intellectual Property Rights; or (z)terminate this Agreement on written notice to Customer and refund to Customer anypre‑paid Fees pro‑rated to reflect the remainder of the Initial Term or then‑currentRenewal Term (as applicable).

10.3         Exclusions.Pencil shall have no liability whatsoever to Customer under eitherindemnity set out in Section 10.1 (as and where applicable) inrespect of any Indemnified Claims based on or arising directly or indirectly asa result of:(a) any breachof this Agreement (including the restrictions outlined in Section 5);(b) any use of the Platform in combination with other products, hardware,equipment, software, data or other Content not expressly authorised by Pencilto be used with the Platform; (c) any modification of the Platform by anyperson other than Pencil or its expressly authorised agents or any third partythat performs any element of the Services foror on behalf of Pencil; (d) the Inputs and/or Connected Data and/or any use thereofby Pencil, Customer or any third party; (e) any Third‑Party Services (save to the limited extent,in respect of Customers with a ‘Pencil Pro’ Subscription only, such liability arisesunder Section 10.1(a)); (f) any ConnectedApplications; (g) any Beta Products (including any use of the Platform inconjunction with any Beta Products); (h) in respect of Customers with a ‘PencilStandard’ Subscription only, any Outputs or any use whatsoever of any Outputs; or(i) in respect of Customers with a ‘Pencil Pro’ Subscription only, who maybenefit from the indemnity set out in Section 10.1(a): (i) any modification to any Output by anyperson other than Pencil or its expressly authorised agents or any third partythat performs any element of the Services for or on behalf of Pencil; (ii) use of any Output by anyperson in connection with any Content (including Customer’s Inputs) that, aloneor in combination, infringe, misappropriate or violate any third party’s IntellectualProperty Rights; or (iii) Customer’s or its Authorised Users’ intentional,negligent or reckless generation of an Output that infringes, misappropriatesor violates any third party’s Intellectual Property Rights.

10.4         Customer Indemnity. In respect of Customers witha ‘Pencil Standard’ Subscription only, Customer agrees to indemnify Pencil ondemand for, and hold harmless Pencil from and against, any and all Lossessuffered or incurred by Pencil arising out of or in connection with any thirdparty Claimbrought, made or threatened against Pencil that: (a) any Inputs, Outputs,Connected Data or Customer’s Marks infringes,misappropriates or violates the rights (including Intellectual PropertyRights) of any third party; and/or (b) otherwise arises or results from: (i)the use, licensing, sale, development, import, export, exploitation,modification, enhancement, improvement of or to, and/or or relianceupon, any Outputs;or (ii) Customer’s breach of this Agreement and/or violation of applicable law.


11.1         Unlimited Liability. Nothingin this Agreement limits or excludes the liability of either Party: (a) for death or personalinjury caused by its negligence; (b) for fraud or fraudulent misrepresentation;(c) under the indemnities under Section 10.1(b) and Section 10.4; (d) for any other act,omission, or liability which may not be limited or excluded by applicable law;or (e) in respect of Customer, Customer’s liability to pay Pencil any sums dueand payable under this Agreement.

11.2         Exclusions.Subject only to Section 11.1, Pencilshall not in any circumstances be liable to Customer whether in contract, tort (includingfor negligence), breach of statutory duty (howsoever arising),misrepresentation (whether innocent or negligent), restitution or otherwise,for: (a) any (i) loss, damage or liability (in each case whether direct orindirect) of profits, business, business opportunities, revenue, turnover,reputation or goodwill, anticipated savings or wasted expenditure (includingmanagement time); or (ii) special, indirect orconsequential loss or damage whatsoever, in each case (i) and (ii) however arisingunder or in connection with this Agreement and even if Pencil was aware of thepossibility that such loss or damage might be incurred; or (b) any loss, damageor liability (in each case whether direct or indirect) arising as a result of (i)Customer’s or any third party’s use of any Output (save to the limited extent,in respect of Customers with a ‘Pencil Pro’ Subscriptiononly, such liability arises under Section 10.1(a)); (ii)any loss or corruption of data or information; (iii) any breach, non‑performanceor any other default by Customer under this Agreement; (iv) any failure byCustomer to comply with any applicable law, regulation or applicable code ofpractice; and/or (v) Customer’s failure to ensure each Authorised Usermaintains the confidentiality of its Access Credentials.

11.3         Cap.Subject to Section 11.1 and 11.2, Pencil’s total aggregate liability to Customer: (a) under theindemnity given by Pencil in Section 10.1(a) to Customers with a ‘Pencil Pro’ Subscription, shall under nocircumstances exceed one hundred per cent (100%) of all Feespaid by Customer under this Agreement in the twelve (12) months immediatelypreceding the first event (or first event in any series of connected events)giving rise to an Indemnified Claim for the specific Workspace used to generatethe Output that is the subject of that Indemnified Claim; and (b) in respectof any and all other Claims(whether in contract, tort (including negligence or breach of statutory duty),misrepresentation (whether innocent or negligent), restitution orotherwise) arising in connection with the performance or contemplatedperformance of this Agreement shall under no circumstances exceed one hundredper cent (100%) of the Feespaid by Customer under this Agreement in the twelve (12) months immediatelypreceding the first event (or first event in any series of connected events) givingrise to a Claimagainst Pencil for the specific Workspace(s) which form the subject matter of thatClaim – provided that, theexistence of more than one Indemnified Claim, Claim,or event (or series of connected events) from which liability arises shall notenlarge the limits setout in this Section 11.3.


12.1         Commencement and duration. Unless terminated earlierpursuant to the terms of Section 12.2, this Agreement shall: (a) commence on the effectivedate of this Agreement and continue for the Initial Term; and (b) automaticallyrenew for further successive Renewal Terms at the end of the Initial Term andat the end of each Renewal Term, unless: (y) in respect of Customers with a‘Pencil Pro’ Subscription, either Party gives written notice to the other Partynot later than sixty (60) days before the end of the Initial Term or then‑currentRenewal Term to terminate this Agreement upon the expiry of the Initial Term orthen‑current Renewal Term; or (z) in respect of Customers with a ‘PencilStandard’ Subscription, either: (i) Customer elects to cancel its subscriptionprior to the commencement of any Renewal Term through its configuration of therelevant settings within Customer’s account for the Platform; or (ii) Pencil givesCustomer notice before the end of the Initial Term or then‑current Renewal Termto terminate this Agreement upon the expiry of the Initial Term or then‑currentRenewal Term.

12.2         Termination. Without affecting any otherright or remedy available to it, either Party may terminate this Agreement withimmediate effect by giving written notice to the other Party if the otherParty: (a) commitsa material breach of any term of this Agreement which breach is irremediable or (ifsuch breach is remediable) fails to remedy that breach within a period ofthirty (30) days after being notified to do so; or (b) becomes insolvent orunable to pay its debts, proposes a voluntary arrangement, has a receiver,administrator or manager appointed over the whole or any part of its businessor assets, suffers the presentation of any petition, the making of any ordershall or the passing of any resolution for its winding up (except for thepurposes of a bona fide solvent amalgamation or reconstruction), bankruptcy ordissolution, otherwise proposes or enters into any composition or arrangementwith its creditors or any class of them, ceases to carry on business or claimsthe benefit of any statutory moratorium, or undergoes any similar or equivalentprocess in any jurisdiction. The Parties acknowledge and agree that failure byCustomer to pay any Fees when due shall constitute a ‘material breach’ for thepurposes of Section 12.2(a).


13.1         Consequences.On termination of this Agreement: (a) notwithstanding Section 4,Customer shall promptly (and in any event within ten (10) Business Days ofthe date of termination) pay Pencil any outstanding balances owing to Pencilunder this Agreement; (b) any and all licences, permissions and authorisationsgranted to Customer and/or its Authorised Users by Pencil under this Agreementwill terminate automatically; (c) Pencil shall delete and destroy any Dedicated Model(s) and shall certify inwriting (on request from Customer) that it has complied with its obligationsunder this Section 13.1(c); (d) cease to collect Connected Data forCustomer and disable any connections to Connected Applications ; and (e) subjectto Section 13.1(c), eachParty will promptly return all Confidential Information received from the otherParty, together with all copies, or certify (on request from the other Party) inwriting that all such Confidential Information and copies thereof have beendestroyed.

13.2         Limitations. Any obligation to return,destroy or permanently erase Confidential Information outlined in Section 13.1shall not apply: (a) in respect of any Confidential Information, that Pencilmay be entitled to retain as necessary to comply with any legal, regulatory,judicial, audit, or internal compliance requirements; (b) in respect of any Confidential Information retainedby a Third‑Party Service or Connected Application, in accordance with anyrelevant Third-Party Terms; and (c) to any Confidential Information thatis retained by Pencil on electronic back‑up media made in theordinary course of business and from which it cannot readily be isolated fromother information and deleted, provided that, in each case, the provisions ofSection 14shall continue to apply to Pencil’s retention of any such ConfidentialInformation at all relevant times.

13.3         Survival and accrued rights. Any provision of thisAgreement that either expressly or by implication is intended to come into orcontinue in force on or after termination of this Agreement shall remain infull force and effect. Termination of this Agreement shall not affect anyrights, remedies, obligations or liabilities of the Parties that have accruedup to the date of termination, including the right to claim damages in respectof any breach of this Agreement which existed at or before the date oftermination.


In this Agreement, “Confidential Information” meansany information that is clearly labelled or identified as confidential, orreasonably ought to be treated as being confidential, and includes the PencilTechnology. Confidential Information excludes: (a) any information which: (i) isor becomes publicly known other than through a breach of this Agreement; (ii) wasin the receiving Party’s lawful possession before the disclosure; (iii) islawfully disclosed to the receiving Party by a third party without restrictionon disclosure; (iv) is independently developed by the receiving Party and thatindependent development can be shown by written evidence; or (v) is required tobe disclosed by law, by any court of competent jurisdiction or by anyregulatory or administrative body; and (b) in the context of Customers with a ‘PencilStandard’ Subscription only, Outputs to the extent used under the licence setout in Section 3.5.Each Party will hold the other’s Confidential Information in confidence and,except as otherwise provided in this Agreement, not make the other’sConfidential Information available to any third party unless that third partyis subject to an equivalent duty of confidentiality; provided that Pencilmay make available Customer’s Confidential Information to the providers of anyrelevant Third‑Party Service and/or Connected Application to be used under and inaccordance with any relevant Third‑Party Terms. In respect of anyThird-Party Service, Pencil shall ensure that any Third‑PartyTerms providefor substantially equivalent duties of confidentiality to those set out in thisSection 14.Neither Party will use the other’s Confidential Information for any purposeother than the implementation and performance of this Agreement.

15.           GENERAL

15.1         Marketing.Customer acknowledges and agrees that Pencil may, and Customer hereby grantsPencil a right and licence to, include Customer’s name,  the Authorised Brandand a description of the technology and services provided to Customer in respect of the Authorised Brandunder this Agreement in case study marketing content, lists of or references toany of Pencil’s clients on its website and/or in proposals, and in othermarketing materials.

15.2         Feedback. If Customer provides feedback,suggestions or recommendations to Pencil regarding the Pencil Technology and/orServices (“Feedback”), Customer hereby grants Pencil anunrestricted, unconditioned, irrevocable and perpetual right and licence to freelyuse and exploit such Feedback without any requirement of compensation.

15.3         ForceMajeure. No Party will be in breachof this Agreement nor liable for any failure to perform its obligations underthis Agreement if that failure results from circumstances beyond its reasonablecontrol (including, in respect of Pencil, any failure resulting from the actionor omission of a provider of any Third‑Party Service and/or any ConnectedApplication, or any unavailability of a Third‑Party Service and/or any ConnectedApplication, resulting from circumstances beyond Pencil’s reasonable control) (a“Force Majeure Event”). If aForce Majeure Event continues for three (3) months, the unaffected Party mayterminate this Agreement by giving thirty (30) days’ written notice to theother Party.

15.4         Subcontracting.Pencil may engage any third party to perform its obligations under thisAgreement (including to providers of Third-Party Services), provided that Pencilshall remain fully liable to Customer for performance of such obligations (subjectto the exclusions and limitations outlined herein).

15.5         Assignment. The Customer will notassign, transfer, charge, sub‑contract or deal in any other manner with all orany of its rights or obligations under this Agreement, without the priorwritten consent of Pencil; provided that, Customer may, with not less than five(5) Business Days’ prior notice to Pencil, assign the benefit of this Agreement(in whole and not in part) in connection with Customer undergoing a change ofcontrol (with “control” for these purposes meaning the power of aperson to secure that the affairs of Customer are conducted in accordance withthe wishes of that person either: (a) by means of the holding of shares, or thepossession of voting power, in or in relation to Customer or any other entity;or (b) as a result of any powers conferred by the articles of association orany other document regulating Customer or any other entity). Pencil may at anytime freely assign, transfer, charge, sub-contract or deal in any other mannerwith all or any of its rights or obligations under this Agreement.

15.6         Variation. In respect of Customerswith a ‘Pencil Standard’ Subscription only: (a) in addition to any othervariation rights set out herein, Pencil may amend this Agreement from time totime by posting a new copy of these Terms and Conditions on this webpage or asuccessor page or otherwise providing Customer with notice of such amendment;(b) if Customer does not agree to any such amendment, Customer must and shallstop using the Platform and the Services; and (c) Customer’s continued use ofthe Platform and/or the Services after any amendment constitutes Customer’s bindingacceptance of such amendment, provided that Pencil may also require Customer tofurther evidence such acceptance in a specified manner prior to continued useof the Platform and/or the Services. In respect of Customers with a ‘Pencil Pro’Subscription only: unless and only to the extent expressly permitted in thisAgreement, no variation of this Agreement shall be effective unless it is inwriting and signed by the Parties (or their authorised representatives).

15.7         Waiver.A waiver of any right or remedy under this Agreement or by law is onlyeffective if given in writing and shall not be deemed a waiver of anysubsequent breach or default. A failure or delay by a Party to exercise anyright or remedy provided under this Agreement or by law shall not constitute awaiver of that or any other right or remedy, nor shall it prevent or restrictany further exercise of that or any other right or remedy. No single or partialexercise of any right or remedy provided under this Agreement or by law shallprevent or restrict the further exercise of that or any other right or remedy.

15.8         EntireAgreement. This Agreement constitutesthe entire agreement and understanding between the Parties relating to thematters contemplated by this Agreement and supersedes all previous agreements (ifany and whether in writing or not) between the Parties in relation to suchmatters. The Parties acknowledge and agree that, except as otherwise expresslyprovided for in this Agreement, they are not entering into this Agreement onthe basis of, and are not relying on and have not relied on, any statement,representation, warranty or other provision (in any case whether oral,written, expressed or implied) made, given, or agreed to by any person (whethera Party to this Agreement or not) in relation to the subject matter of thisAgreement, provided that nothing in this Agreement shall exclude any Party fromliability for fraud or fraudulent misrepresentation.

15.9         NoPartnership or Agency.Nothing in this Agreement is intended to, or shall be deemed to, establish anypartnership or joint venture between any of the Parties, constitute any Partythe agent of another Party, or authorise any Party to make or enter into anycommitments for or on behalf of any other Party. Each Party confirms it isacting on its own behalf and not for the benefit of any other person.

15.10      Rightsof Third Parties. Aperson who is not a Party to this Agreement shall not be entitled to enforceany of its terms under the Contracts (Rights of Third Parties) Act 1999.

15.11      Governinglaw and jurisdiction.The Agreement and all matters arising from it (including any disputerelating to the existence, validity or termination of this Agreement or anycontractual or non‑contractual obligation) shall be governed by, and construedin accordance with, the laws of England.In relation to any legal action or proceedings to enforce this Agreement orarising out of or in connection with this Agreement (including any disputerelating to the existence, validity or termination of this Agreement or any contractualor non‑contractual obligation) (for the purposes of this Section 15.11, “Proceedings”) each of theParties irrevocably submits to the exclusive jurisdiction of the courts ofEngland and waives any objection to Proceedings in such courts on the groundsof venue or on the grounds that the Proceedings have been brought in aninappropriate forum provided that a judgment or order of any court may beenforced in any court of competent jurisdiction.


AppendixA – Use‑based Restrictions

Customer shall not use the Platform, Services, any  Work Products and/or any Outputs:

1.      in any manner that violatesany applicable law, rule or regulation;

2.      in any manner thatinfringes, violates or misappropriates any rights of any third party (includingIntellectual Property Rights, privacy rights or rights in respect of privateinformation, publicity rights or any other rights to a persons’ name, image orlikeness);

3.      for any purpose that is ormight reasonably be considered to be obscene, lewd, lascivious, offensive,pornographic, indecent, vulgar, prurient, excessively violent, hateful orinflammatory, or that promotes, encourages, or depicts acts of self-harm, suchas suicide, cutting, and eating disorders;

4.      for the purpose of, or inany manner that is reckless or negligent as to the risk of, exploiting, harmingor attempting to exploit or harm natural persons under the age of eighteen (18)or vulnerable natural persons (having regard to their social, economic, physicalor mental characteristics or circumstances);

5.      to generate or disseminate demonstrablyfalse or misleading information and/or content for the purpose of, or in anymanner that is reckless or negligent as to the risk of, exploiting any naturalpersons

6.      to generate Outputs thatpromote, encourage, or depict acts of self-harm, such as suicide, cutting, andeating disorders, and/or that are offensive to humandignity;

7.      for any military,para-military, militia or similar uses;

8.      in any manner that isthreatening, harmful, abusive or likely to incite violence or foment politicalunrest or insurrection;

9.      to make any solely‑automateddecisions which have legal or any similarly significant effects (including thatwould or would purport to create or modify a binding, enforceable obligation);

10.    for the purpose of, or inany manner that is reckless or negligent as to the risk of, prejudicially discriminatingagainst or harming natural persons or groups based on online or offline social behaviouror known or predicted personal or personality characteristics;

11.    for any purpose that has, orin any manner that is reckless or negligent as to the risk of having, a highrisk of economic harm (including multi-level marketing, gambling, paydaylending, and/or automated determinations of eligibility for credit, employment,educational institutions, or public assistance services);

12.    for or in connection withany fraudulent or deceptive activity (including scams, coordinated inauthenticbehaviour, astroturfing, such as fake grassroots support or fake reviewgeneration, disinformation, spam and pseudo-pharmaceuticals);

13.    for or in connection withany political campaigning or lobbying, which involves generating high volumesof campaign materials, generating campaign materials personalized to ortargeted at specific demographics;

14.    in direct connection withthe administration of justice, law enforcement, immigration or asylum processes;and/or

15.    for any use intended to, orwhich has the effect of, discriminating against natural persons or groups basedon legally protected characteristics or categories (including any ‘specialcategories of personal data’ as defined in the General Data ProtectionRegulation 2016/679 of the European Union).

Appendix B – Third-Party Services and Connected Applications terms

1. Google DV360 and Google Display Network

a. Customer agrees to be bound by the Google Ads policies as outlined at https://support.google.com/adspolicy/answer/6008942 

2. YouTube

a. Customer agrees to be bound by the YouTube terms of service as outlined at https://www.youtube.com/t/terms

3. Getty

a. Customer has the right to use the prompts, or any other inputs that are input into the Getty API that are used to generate the Content;

b. Customer warrants that the prompts and/or any other inputs used to generate such Content do not use any names, likeness of real people, trademarks, trade dress, logos, works of art or architecture, or other elements protected by third-party intellectual property rights that Customer does not have the right to use

Contacting Us
If there are any questions regarding this document, you may contact us using the information below.

Pencil AI Limited

151 Rosebery Avenue London EC1R 4AB