Terms of Service

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 (including to allow Customer create Outputs for that Authorised Brand).

Where there is no Order Form, this Agreement is entered into by and between Customer and Pencil automatically when Customer concludes a purchase on the relevant order page and clicks to accept these Terms and Conditions. Where applicable, in respect of any person who concludes such order on behalf of another person or entity, you represent and warrant that you have the full and sufficient authority to accept the Terms and Conditions on behalf of 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 any inconsistency or conflict between any provision(s) of these Terms and Conditions and any provision(s) of the Order Form, the relevant provision(s) of the Order Form shall govern and prevail.

THE PARTIES AGREE AS FOLLOWS:

1.             INTERPRETATION

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

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

(b)            “Authorised Users” means those of Customer’s employees or other staff who are authorised from time to time by Pencil to use the 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 of accessing and using those Workspace(s) via the Platform (“Access Credentials”).

(c)            “Beta Product” 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, Sunday or public holiday in London, United Kingdom.

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

(f)             “Connected Application” means any system or application owned or controlled by 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 Connected Application with the Platform using integrations made available as part of the Platform).

(g)            “Connected Data” means any information or data (including any information or data relating to advertising performance) made available within the Platform via any Connected Applications or otherwise made available via Connected Applications and uploaded to the Platform (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 (where applicable, as identified in the Order Form).

(j)             “Documentation” means any manuals, instructions, user guides published 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 agreed pursuant to the Order Form.

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

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

(n)            “Intellectual Property Rights” means all copyright and related 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, rights in designs, rights in computer software, database rights, topography rights, moral rights, rights in confidential information (including know‑how and trade secrets), so-called ‘personality rights’ and ‘publicity rights’ (including rights to natural person’s name, image and likeness), and any other intellectual property rights, in each case whether registered or unregistered and 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 the world.

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

(p)            “Order Form” means an order form signed by the Parties for a ‘Pencil Pro’ Subscription to use the Platform to generate Content for the Authorised Brand plus associated Services, which incorporates these Terms and Conditions.

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

(r)            “Pencil” means 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.

(s)            “Pencil Technology” means collectively (i) the Platform, as updated from time to time; (ii) any and all other technology and software owned or used by Pencil, any associated algorithms, software code (in any form including source code and executable or object code), neural networks, models (including model architectures and algorithms (whether or not, instantiated in software code)), model weights, parameters, hyper parameters and coefficients, embeddings, calibrations, application programming interfaces, computer systems;(iii) any benchmarking, analytics or technical data relating to the performance or operation of the Platform; (iv) the Documentation as updated and amended from time to time; (v) as applicable in the context of a ‘Pencil Standard’ Subscription only, any Pencil Improvements; and (vi) any and all Intellectual 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 is owned, operated and/or licenced by Pencil, which may be used by Customer to generate Outputs, the features and functionalities of which shall vary dependent upon whether Customer has purchased a ‘Pencil Pro’ Subscription or a ‘Pencil Standard’ Subscription.

(u)            “Platform Interface” means the standard web‑based interface required for Customer to access and use the Platform for the ordinary operation thereof under this Agreement, which is as notified 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 relevant in 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 services are further described on https://trypencil.com), including where applicable as 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 page prior to purchase of a subscription to access the Platform or, where applicable, 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 the Authorised Brand for a given market, geography or similar, and which is identified in the Order Form.  

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

1.3           The following rules of interpretation shall apply in this Agreement: (a) any reference to thisAgreement terminating shall, where the context requires, include a reference to this Agreement terminating by expiry of the Term; (b) the words “include” and “including” (or similar) shall be construed as illustrative only and shall not limit the sense of the description, 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 and agrees that certain terms and conditions of the Agreement shall apply dependent upon 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 which are as described here: https://trypencil.com/pricing (or as further elaborated upon in the relevant Documentation associated with the respective subscription packages).

2.             PLATFORM

2.1           Platform Access. Subject to Customer’s and its Authorised Users’ continued compliance with this Agreement (including payment 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 Customer and its Authorised Users to use the ordinary features and functionalities of the Platform as part of Customer’s internal business operations via theWorkspace(s) in connection with the Authorised Brand; and (b) only where permitted as part of the ‘Pencil Pro’ Subscription, for Customer to apply its trade marks, trade names, service marks, trade dress, logos and ‘look and feel’ to the Platform using the ordinary features and functionalities 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 providers of Third‑Party Services (as defined below) to use any Inputs, Outputs, nor any Connected Data, to develop or improve the Pencil Technology and/or any Third-Party Services (including any models, algorithms, and systems that are part of or integrated with the Platform); provided that, such Inputs, Outputs and Connected Data will be used to train and improve any dedicated predictive model associated with any Workspace(s) and which is made accessible via the Platform as part of a ‘PencilPro’ Subscription (such models, each a “Dedicated Model”). The Dedicated Models shall not be made available by Pencil for use by any other Pencil customers, and no Dedicated Model shall be made available to or used by Customer or its Authorised Users other than via the relevant Workspace to which that model is dedicated.

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

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

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

2.6           Beta Testing. From time to time, Customer may have the option to participate in a programme where Customer and its Authorised Users are permitted at no additional cost to access certain Beta Products. Customer may only use the Beta Products to internally evaluate and test such Beta Products and for no other purpose whatsoever. The Beta Products are not generally available and are provided by Pencil “as is”, without any conditions, warranties, representations, undertakings, or other terms either express or implied whatsoever (including as to non‑infringement, merchantability, satisfactory quality, use of reasonable skill and care or fitness for any particular purpose). Furthermore, Pencil does not provide any indemnities or service level or availability commitments whatsoever in relation to 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 Customer shall comply with, certain additional restrictions or limitations on Customer’s and its Authorised Users’ use of the Beta Products. Pencil may terminate Customer’s access to any Beta Product(s) at any time with or without notice, at which point Customer and its Authorised Users must stop using the Beta Product.Customer shall not disclose to any third party or publish (including via the internet or social media) details of any Beta Product (including details of its any evaluation or testing (including any Outputs, results, screenshots, questions, or workflows) of the Beta Product) without Pencil’s prior written consent.  

3.             OWNERSHIP AND LICENSING

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) unless and to the limited extent expressly agreed otherwise under the Order Form, any work product, 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 Pencil Technology nor  Work Products (subject only to the limited licences expressly granted in Sections 2.1 and 3.2), and Pencil reserves all rights therein and thereto not expressly granted in this Agreement.

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

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

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

3.5           ‘Pencil Standard’ – Improvement and Training Licence. In respect of Customers with a ‘Pencil Standard’ Subscription, Customer hereby grants Pencil a non‑exclusive, fully sub‑licensable, transferable, worldwide, perpetual and irrevocable, royalty‑free and fully paid‑up licence to use Inputs, Outputs and Connected Data on an anonymised, de‑identified or aggregated basis to develop or improve the Pencil Technology and related technology, products and improvements (“Pencil Improvements”), including to train models that are part of the Pencil Technology and/or to create new, improved or augmented algorithms, models and model weights.

4.             FEES 

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

4.2           ‘Pencil Pro’ – Invoicing and Payment. In respect of Customers with a ‘Pencil Pro’ Subscription, Pencil shall issue Customer with invoices in respect of any Fees that come due and payable and Customer shall pay the amounts shown in all such invoices in full into the Pencil Bank 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’– Payment Processing and Payment. In respect of Customers with a ‘Pencil Standard’ Subscription: (a) Customer acknowledges that Pencil uses a third‑party service provider for payment services (e.g., card acceptance, merchant settlement, 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‑Party Payment Processor; (c) Customer shall provide complete and accurate payment and billing information and a valid and authorised payment method by which it shall pay the Fees; (d) Customer hereby authorises Pencil, and its Third‑PartyPayment Processor appointed from time to time, to charge such payment method for 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 such purpose; (e) if Customer’s payment method is rejected or payment for the Fees otherwise cannot 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 to the Platform and/or provision of the Services as described in Section 4.6; and (f) Customer acknowledges and agrees that this Agreement shall automatically renew and Customer’s payment method shall continue to charge the then-current Fees for its ‘Pencil Standard’ Subscription unless and until this Agreement is  terminated in accordance with its terms (including in accordance with Section 12.1(z)).

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

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

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

5.             RESTRICTIONS

Customer shall not: (a) use the Pencil Technology, any Outputs and/or any  Work Products in any manner or for any purpose that is inconsistent with this Agreement (including using the Platform and/or any Outputs in connection with any other brand than the Authorised Brand and/or allowing Authorised Users to access Workspace(s) for which they do not have active Access Credentials); (b) provide or otherwise make the PencilTechnology available to any third parties (other than to Authorised Users as permitted under Section 2.1);(c) use the Pencil Technology to create, market or distribute any product or service that is similar to, competitive with, or otherwise replicates or seeks to replicate any features or functionalities of, the Platform or any other part of the Pencil Technology; (d) introduce to the Pencil Technology any ‘backdoor’, ‘drop dead device’, ‘time bomb’, ‘Trojan horse’, ‘virus’ or ‘worm’ or any other equivalent code, software routine or instructions designed or intended to disrupt, disable, harm or otherwise impede in any manner the operation of the Pencil Technology or any device or system owned or controlled by Pencil or any third party, or which otherwise may damage or destroy any data or file; (e) use the Pencil Technology in a manner(including through query access) to gather information as to infer the operation of, or replicate, all or any part of any machine learning models, datasets or other technologies forming part of the Pencil Technology (including as part of any so‑called ‘model extraction’, ‘model inference’ or ‘model inversion’ techniques or similar); (f) modify, copy, resell, rent, lease, sub‑licence, load, merge, adapt or translate the Pencil Technology ; (g) contest, challenge or otherwise make any claim or take any action adverse to Pencil’s ownership of, or interest in, the Pencil Technology ; (h) re‑use, disseminate, copy, or otherwise use the Pencil Technology in a way that infringes, misappropriates, or violates any Intellectual Property Rights or other right of Pencil or any third party; (i) remove, alter or obscure any trademark notice, copyright notice or any other proprietary notice from the Pencil Technology, unless and to the extent permitted in accordance with Section 2.1(b);(j) circumvent, disable, or interfere with security‑related or rate‑limiting features of the Pencil Technology or features that limit, prevent or restrict use, access to, or copying of the Pencil Technology, or that enforce limitations on the use of the Pencil Technology; (k) reverse engineer ,decompile, unbundle, disassemble, or create derivative works based on the whole or any part of the Pencil Technology unless, and to the limited extent that, applicable laws of Customer’s jurisdiction require Pencil to give Customer the right to do so to obtain information necessary to render the Pencil Technology interoperable with other software; provided, however, that Customer must first request such information from Pencil, and Pencil may (in its sole discretion) either provide such information to Customer or impose reasonable conditions on such use of the source code for the Pencil Technology to ensure that Pencil and its licensors’ proprietary rights in the source code for the PencilTechnology are protected; (l) impose (or which may impose, in Pencil’s sole discretion) an unreasonable or disproportionately large load or strain on thePlatform; (m) automatically publish or make generally available any Outputs without human intervention, review and approval; (n) use the Platform otherwise than in strict accordance with any terms, conditions and policies of the provider 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 purpose that contradicts the restrictions set forth in Appendix A (Use‑basedRestrictions); or (p) take any action designed or intended to do any of the foregoing. 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 the foregoing restrictions.

6.             WARRANTIES AND DISCLAIMERS

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

6.2           Disclaimer. Except as expressly provided in this Agreement, the Platform, Services, Work Products and the Outputs are provided “as is” and to the fullest extent permitted by law, Pencil disclaims all other conditions, warranties, representations, undertakings, or other terms which might have effect between the Parties with respect to the Platform, Services, Work Products and/or theOutputs, or otherwise be implied or incorporated into this Agreement, whether by 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 or usage of trade. Furthermore, Customer acknowledges that Pencil: (a) gives no express or implied warranty, representation, nor undertakings that the Outputs do not infringe third party rights (including Intellectual Property Rights), nor that any contents, findings or materials created or otherwise derived from use of Platform will constitute valid, subsisting or enforceable Intellectual Property Rights and/or be capable of registration in any jurisdiction; (b) does not warrant, 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 the accuracy or currency of any Outputs. Customer shall be solely responsible for Customer’s use of the Platform, the Services and any Output and, unless and to the extent expressly agreed otherwise as part of any Services, for evaluating the fitness of any Output as appropriate for Customer’s specific use case or any other purpose.

7.             CUSTOMER DEPENDENCIES

Customer shall: (a) implement and maintain effective security policies and procedures to prevent unauthorised disclosure of Access Credentials and unauthorised access to the Platform; (b) secure any systems and devices Customer uses to access the Platform; (c) ensure that all Authorised Users of the Platform have installed, and access the Platform via the Platform Interface, using a supported version of the internet browsers and operating systems that are listed in the Documentation as supported by Pencil from time to time; (d) ensure that it has an internet connection with adequate bandwidth for Authorised Users to access and use the Platform; (e) ensure that it maintains connectivity to the extent necessary to prevent network performance 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.             THIRD-PARTY SERVICES AND CONNECTED APPLICATIONS

8.1           Third-Party Services. Certain elements of the Platform may incorporate functionality of, or enable access to, certain third‑party tools, systems, applications and/or platforms (including certain third‑party artificial intelligence models, algorithms, and platforms) (“Third‑Party Services”).The incorporation of the functionality of, or Customer’s and its Authorised Users’ ability to access, certain Third-Party Services via the Platform will vary depending upon the particular ‘Magic Tools’ enabled or disabled by Customer through 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 where applicable), it is instructing Pencil to share any Inputs, Outputs and/or Connected Data with the relevant providers of such Third‑Party Services to the extent necessary to facilitate such functionality or access. Customer acknowledges that Customer and/or its Authorised Users may be required to enter into certain agreements with the providers of such Third‑Party Services and in the event the relevant agreements are not entered into, Customer and/or its Authorised 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 rely upon 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‑Party Services and any Connected Applications are not under Pencil’s control and Pencil is not responsible for those Third‑Party Services nor Connected Applications, and Pencil will have no liability for any unavailability or failure of any Third‑Party Service or Connected Application, or any third-party provider’s decision to discontinue, suspend or terminate any Third‑Party Service 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 nature relating to Third‑Party Services or Connected Applications.  

9.             DATA PROTECTION

The Pencil 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 of Customer 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 of any inconsistency or conflict between any provision(s) of this Agreement and any provision(s) of the DPA, the relevant provision(s) of the DPA shall govern and prevail in preference to any relevant provision(s) of this Agreement insofar as they relate to Pencil’s Processing of Customer Personal Data. Any capitalised terms used in this Section 9, but not defined in this Agreement, shall have the meaning given to them in the DPA.

10.           INDEMNITIES

10.1         Pencil Indemnities. Subject to Sections 10.2and 10.3, Pencil shall indemnify: (a) Customers with a ‘Pencil Pro’ Subscription from and 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, misappropriates or violates the Intellectual Property Rights of that third party; and(b) Customer from and against Losses incurred by Customer as a result of amounts awarded in judgment or settlement of any third party Claim against 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 a third party.The obligations set forth in this Section 10.1 as they may apply in the circumstances shall constitute Pencil’s entire liability and Customer’s sole remedy for any actual or alleged infringement, misappropriation or violation of anyIntellectual Property Rights of a third party arising out of or in connection with this Agreement.

10.2         Customer obligations. Customer shall: (a) notify Pencil in full, accurate and complete detail in writing promptly (and in any event within two (2) Business Days) after it becomes aware of any event or any Claim, which it believes may give rise to a claim for indemnification under Section 10.1 (an “Indemnified Claim”); (b) allowPencil sole authority to control the defence and settlement of any Indemnified Claim; (c) provide Pencil with all reasonable cooperation in the defence of such Indemnified Claim; and (d) not settle or compromise any Indemnified Claim or make any admission of liability without the express prior written consent ofPencil. In relation to any Indemnified Claim, at its option, Pencil may elect to: (x) modify or replace all or any relevant part of the Platform 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 any pre‑paid Fees pro‑rated to reflect the remainder of the Initial Term or then‑current Renewal Term (as applicable).

10.3         Exclusions. Pencil shall have no liability whatsoever to Customer under either indemnity set out in Section 10.1 (as and where applicable) in respect of any Indemnified Claims based on or arising directly or indirectly as a result of: (a) any breach of 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 Pencil to be used with the Platform; (c) any modification of the Platform by any person other than Pencil or its expressly authorised agents or any third party that performs any element of the Services for or on behalf of Pencil; (d) the Inputs and/or Connected Data and/or any use thereof by 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 arises under Section 10.1(a)); (f) any Connected Applications; (g) any Beta Products (including any use of the Platform in conjunction with any Beta Products); (h) in respect of Customers with a ‘Pencil Standard’ Subscription only, any Outputs or any use whatsoever of any Outputs; or(i) in respect of Customers with a ‘Pencil Pro’ Subscription only, who may benefit from the indemnity set out in Section 10.1(a): (i) any modification to any Output by any person other than Pencil or its expressly authorised agents or any third party that performs any element of the Services for or on behalf of Pencil; (ii) use of any Output by any person in connection with any Content (including Customer’s Inputs) that, alone or in combination, infringe, misappropriate or violate any third party’s Intellectual Property Rights; or (iii) Customer’s or its Authorised Users’ intentional, negligent or reckless generation of an Output that infringes, misappropriates or violates any third party’s Intellectual Property Rights.

10.4         Customer Indemnity. In respect of Customers with a ‘Pencil Standard’ Subscription only, Customer agrees to indemnify Pencil on demand for, and hold harmless Pencil from and against, any and all Losses suffered or incurred by Pencil arising out of or in connection with any third-party Claim brought, made or threatened against Pencil that: (a) any Inputs, Outputs, Connected Data or Customer’s Marks infringes, misappropriates or violates the rights (including Intellectual Property Rights) 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 reliance upon, any Outputs; or (ii) Customer’s breach of this Agreement and/or violation of applicable law.

11.           LIMITATION OF LIABILITY

11.1         Unlimited Liability. Nothing in this Agreement limits or excludes the liability of either Party: (a) for death or personal injury 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 due and payable under this Agreement.

11.2         Exclusions. Subject only to Section 11.1, Pencil shall not in any circumstances be liable to Customer whether in contract, tort (including for 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 or indirect) of profits, business, business opportunities, revenue, turnover, reputation or goodwill, anticipated savings or wasted expenditure (including management time); or (ii) special, indirect or consequential loss or damage whatsoever, in each case (i) and (ii) however arising under or in connection with this Agreement and even if Pencil was aware of the possibility that such loss or damage might be incurred; or (b) any loss, damage or 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’ Subscription only, such liability arises under Section 10.1(a)); (ii) any loss or corruption of data or information; (iii) any breach, non‑performance or any other default by Customer under this Agreement; (iv) any failure by Customer to comply with any applicable law, regulation or applicable code of practice; and/or (v) Customer’s failure to ensure each Authorised User maintains 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 the indemnity given by Pencil in Section 10.1(a) to Customers with a ‘Pencil Pro’ Subscription, shall under no circumstances exceed one hundred per cent (100%) of all Fees paid by Customer under this Agreement in the twelve (12) months immediately preceding the first event (or first event in any series of connected events) giving rise to an Indemnified Claim for the specific Workspace used to generate the Output that is the subject of that Indemnified Claim; and (b) in respect of any and all other Claims(whether in contract, tort (including negligence or breach of statutory duty), misrepresentation (whether innocent or negligent), restitution or otherwise) arising in connection with the performance or contemplated performance of this Agreement shall under no circumstances exceed one hundred per cent (100%) of the Fees paid by Customer under this Agreement in the twelve (12) months immediately preceding the first event (or first event in any series of connected events) giving rise to a Claim against Pencil for the specific Workspace(s) which form the subject matter of that Claim – provided that, the existence of more than one Indemnified Claim, Claim, or event (or series of connected events) from which liability arises shall not enlarge the limits set out in this Section 11.3.

12.           TERM AND TERMINATION

12.1         Commencement and duration. Unless terminated earlier pursuant to the terms of Section 12.2, this Agreement shall: (a) commence on the effective date of this Agreement and continue for the Initial Term; and (b) automatically renew for further successive Renewal Terms at the end of the Initial Term and at 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 Party not later than sixty (60) days before the end of the Initial Term or then‑current Renewal Term to terminate this Agreement upon the expiry of the Initial Term or then‑current Renewal Term; or (z) in respect of Customers with a ‘Pencil Standard’ Subscription, either: (i) Customer elects to cancel its subscription prior to the commencement of any Renewal Term through its configuration of the relevant settings within Customer’s account for the Platform; or (ii) Pencil givesCustomer notice before the end of the Initial Term or then‑current Renewal Term to terminate this Agreement upon the expiry of the Initial Term or then‑current Renewal Term.

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

13.           CONSEQUENCES OF TERMINATION

13.1         Consequences.On termination of this Agreement: (a) notwithstanding Section 4,Customer shall promptly (and in any event within ten (10) Business Days of the date of termination) pay Pencil any outstanding balances owing to Pencil under this Agreement; (b) any and all licences, permissions and authorisations granted to Customer and/or its Authorised Users by Pencil under this Agreement will terminate automatically; (c) Pencil shall delete and destroy any Dedicated Model(s) and shall certify in writing (on request from Customer) that it has complied with its obligations under this Section 13.1(c); (d) cease to collect Connected Data for Customer and disable any connections to Connected Applications ; and (e) subject toSection 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) in writing that all such Confidential Information and copies thereof have been destroyed.

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 Pencil may 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 retained by a Third‑Party Service or Connected Application, in accordance with any relevant Third-Party Terms; and (c) to any Confidential Information that is retained by Pencil on electronic back‑up media made in the ordinary course of business and from which it cannot readily be isolated from other 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 or continue in force on or after termination of this Agreement shall remain in full force and effect. Termination of this Agreement shall not affect any rights, remedies, obligations or liabilities of the Parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of this Agreement which existed at or before the date of termination.

14.           CONFIDENTIAL INFORMATION

In this Agreement, “Confidential Information” mean sany information that is clearly labelled or identified as confidential, or reasonably ought to be treated as being confidential, and includes the Pencil Technology. Confidential Information excludes: (a) any information which: (i) is or becomes publicly known other than through a breach of this Agreement; (ii) was in the receiving Party’s lawful possession before the disclosure; (iii) is lawfully disclosed to the receiving Party by a third party without restriction on disclosure; (iv) is independently developed by the receiving Party and that independent development can be shown by written evidence; or (v) is required to be disclosed by law, by any court of competent jurisdiction or by any regulatory or administrative body; and (b) in the context of Customers with a ‘Pencil Standard’ Subscription only, Outputs to the extent used under the licence set out 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 party is subject to an equivalent duty of confidentiality; provided that Pencil may make available Customer’s Confidential Information to the providers of any relevant Third‑Party Service and/or Connected Application to be used under and in accordance with any relevant Third‑Party Terms. In respect of any Third-Party Service, Pencil shall ensure that any Third‑Party Terms provide for substantially equivalent duties of confidentiality to those set out in this Section 14. Neither Party will use the other’s Confidential Information for any purpose other than the implementation and performance of this Agreement.

15.           GENERAL

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

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

15.3         Force Majeure. No Party will be in breach of this Agreement nor liable for any failure to perform its obligations under this Agreement if that failure results from circumstances beyond its reasonable control (including, in respect of Pencil, any failure resulting from the action or omission of a provider of any Third‑Party Service and/or any Connected Application, or any unavailability of a Third‑Party Service and/or any Connected Application, resulting from circumstances beyond Pencil’s reasonable control) (a“Force Majeure Event”). If aForce Majeure Event continues for three (3) months, the unaffected Party may terminate this Agreement by giving thirty (30) days’ written notice to the other 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 Pencil shall remain fully liable to Customer for performance of such obligations (subject to the exclusions and limitations outlined herein).

15.5         Assignment. The Customer will not assign, transfer, charge, sub‑contract or deal in any other manner with all or any of its rights or obligations under this Agreement, without the prior written 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 of control (with “control” for these purposes meaning the power of a person to secure that the affairs of Customer are conducted in accordance with the wishes of that person either: (a) by means of the holding of shares, or the possession 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 or any other document regulating Customer or any other entity). Pencil may at anytime freely assign, transfer, charge, sub-contract or deal in any other manner with all or any of its rights or obligations under this Agreement.

15.6         Variation. In respect of Customers with a ‘Pencil Standard’ Subscription only: (a) in addition to any other variation rights set out herein, Pencil may amend this Agreement from time to time by posting a new copy of these Terms and Conditions on this webpage or a successor page or otherwise providing Customer with notice of such amendment;(b) if Customer does not agree to any such amendment, Customer must and shall stop using the Platform and the Services; and (c) Customer’s continued use of the Platform and/or the Services after any amendment constitutes Customer’s binding acceptance of such amendment, provided that Pencil may also require Customer to further evidence such acceptance in a specified manner prior to continued use of 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 in writing 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 only effective if given in writing and shall not be deemed a waiver of any subsequent breach or default. A failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this Agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.

15.8         Entire Agreement. This Agreement constitutes the entire agreement and understanding between the Parties relating to the matters contemplated by this Agreement and supersedes all previous agreements (if any and whether in writing or not) between the Parties in relation to such matters. The Parties acknowledge and agree that, except as otherwise expressly provided for in this Agreement, they are not entering into this Agreement on the 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 (whether a Party to this Agreement or not) in relation to the subject matter of this Agreement, provided that nothing in this Agreement shall exclude any Party from liability for fraud or fraudulent misrepresentation.

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

15.10      Rights of Third Parties. A person who is not a Party to this Agreement shall not be entitled to enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

15.11      Governing law and jurisdiction.The Agreement and all matters arising from it (including any disputerelating to the existence, validity or termination of this Agreement or any contractual or non‑contractual obligation) shall be governed by, and construed in accordance with, the laws of England.In relation to any legal action or proceedings to enforce this Agreement or arising out of or in connection with this Agreement (including any disputerelating to the existence, validity or termination of this Agreement or any contractual or non‑contractual obligation) (for the purposes of this Section 15.11, “Proceedings”) each of theParties irrevocably submits to the exclusive jurisdiction of the courts of England and waives any objection to Proceedings in such courts on the grounds of venue or on the grounds that the Proceedings have been brought in an inappropriate forum provided that a judgment or order of any court may be enforced 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 violates any applicable law, rule or regulation;

2.      in any manner that infringes, violates or misappropriates any rights of any third party (includingIntellectual Property Rights, privacy rights or rights in respect of private information, publicity rights or any other rights to a persons’ name, image or likeness);

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

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

5.      to generate or disseminate demonstrably false or misleading information and/or content for the purpose of, or in any manner that is reckless or negligent as to the risk of, exploiting any natural persons

6.      to generate Outputs that promote, encourage, or depict acts of self-harm, such as suicide, cutting, and eating disorders, and/or that are offensive to human dignity;

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

8.      in any manner that is threatening, harmful, abusive or likely to incite violence or foment political unrest or insurrection;

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

10.    for the purpose of, or in any manner that is reckless or negligent as to the risk of, prejudicially discriminating against or harming natural persons or groups based on online or offline social behaviour or 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 high risk of economic harm (including multi-level marketing, gambling, payday lending, and/or automated determinations of eligibility for credit, employment, educational institutions, or public assistance services);

12.    for or in connection with any fraudulent or deceptive activity (including scams, coordinated inauthentic behaviour, astroturfing, such as fake grassroots support or fake review generation, disinformation, spam and pseudo-pharmaceuticals);

13.    for or in connection with any political campaigning or lobbying, which involves generating high volumes of campaign materials, generating campaign materials personalized to or targeted at specific demographics;

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

15.    for any use intended to, or which has the effect of, discriminating against natural persons or groups based on legally protected characteristics or categories (including any ‘special categories 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

‍support@trypencil.com