BAYC AVATAR LICENSE TERMS

“BAYC NFT” means a non-fungible token minted by a smart contract deployed to the Ethereum blockchain at address 0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d, or such other smart contract(s) as designated by Yuga Labs from time to time in its sole discretion, including any replacement, upgrade, or successor smart contract(s) that Yuga Labs may designate in its sole discretion (each, an “BAYC Smart Contract”).

A BAYC Smart Contract associates each BAYC NFT with a piece of two-dimensional digital art. In connection with, and modeled upon, such art, Yuga Labs has created one or more associated digital files of two-dimensional and three-dimensional digital art consisting of form, texture, and appearance, which is made available for download to verified owners of the associated BAYC NFT (collectively, the “Avatar Files”).

Provided that you own the applicable BAYC NFT (“Your BAYC NFT”), as recorded by the BAYC Smart Contract, and subject to your acceptance of and compliance with, these Terms, Yuga Labs grants you certain rights in and to the Avatar Files associated with Your BAYC NFT (“Your Avatar Files”), as set forth herein. Your download from us and/or access of Your Avatar Files and/or the exercise of your rights contained herein constitutes your acceptance of, and agreement to, these Terms, without modification.

NOTICE REGARDING ARBITRATION AND CLASS ACTION WAIVER:

BY ACCEPTING THESE TERMS, YOU ARE AGREEING (WITH LIMITED EXCEPTION) TO RESOLVE ANY DISPUTE BETWEEN YOU AND YUGA LABS THROUGH BINDING, INDIVIDUAL ARBITRATION RATHER THAN IN COURT. PLEASE REVIEW CAREFULLY SECTION 10 (DISPUTE RESOLUTION) BELOW FOR DETAILS REGARDING ARBITRATION. HOWEVER, IF YOU ARE A RESIDENT OF A JURISDICTION WHERE APPLICABLE LAW PROHIBITS ARBITRATION OF DISPUTES, THE AGREEMENT TO ARBITRATE IN SECTION 10 WILL NOT APPLY TO YOU, BUT THE PROVISIONS OF SECTION 12 (GOVERNING LAW AND FORUM CHOICE) AND RELEVANT PROVISIONS OF APPLICABLE LAW WILL STILL APPLY.

YOU ALSO WAIVE ANY RIGHT TO PARTICIPATE IN A CLASS ACTION LAWSUIT OR CLASS WIDE ARBITRATION.

1. Ownership.

1. We Own (but License to You) the IP in Your Avatar Files. Yuga Labs owns all rights, title, and interest in and to Your Avatar Files, including any and all copyrights, trademarks, designs, and other intellectual property rights therein (“IP”). However, we grant you the License (each as defined below) to use Your Avatar Files for as long as you own Your BAYC NFT.

2. You Own the IP in Your Derivative Works. In connection with the License granted to you under these Terms, as between you and Yuga Labs, you own all rights, title and interest in and to any “derivative work” (as defined by the Copyright Act of 1976, as amended) based upon Your Avatar Files (“Derivative Work”) that you create, or cause to be created, during the License Term (defined below); provided, however, that (i) we retain the copyright in Your Avatar Files that underlie any Derivative Work; (ii) your use of any Derivative Work during and after the License Term is subject to these Terms; and (iii) your use of any Derivative Work after the License Term may require a license from the current owner of the BAYC NFT.

3. Utility. From time to time, you may be offered utility, benefits, or entitlements associated with Your Avatar Files (collectively, “Utility”), such as access to our games but these Terms do not confer any Utility, and any Utility may be subject to other terms and conditions. Yuga Labs makes no assurances that we will provide any Utility. Yuga Labs will not be responsible in any manner for any Utility offered, or proposed to be offered by, any third party.

1. License.

1. License Grant. 

1. Subject to your acceptance of, and compliance with, these Terms, upon lawfully acquiring Your BAYC NFT and, for so long as you own Your BAYC NFT (each date as recorded by the BAYC Smart Contract, the “ License Term”), Yuga Labs grants to you an exclusive, universe-wide, royalty-free, sublicensable (subject to Section 2(b)(ii)) license to reproduce, distribute, prepare derivative works based upon, publicly display, publicly perform, transmit, and otherwise use and exploit, Your Avatar Files, as applicable (the “License”). The License is intended to be broad, enabling you to make both commercial and non-commercial uses of Your Avatar Files, in any and all media, whether existing now or invented later, subject only to the restrictions set forth below.

2. The  License is exclusive, except as to Yuga Labs and its sublicensees, who may also freely use and exploit Your Avatar Files in any manner or medium whatsoever now and in the future; provided, however, we will not commercialize, or cause to be commercialized, Your Avatar Files as a standalone product. Notwithstanding the foregoing, we may include Your Avatar Files as part of our commercial products and services alongside our IP. By way of illustration, we include Your Avatar Files in our Otherside platform with other Avatar Files, but we will not license Your Avatar File as a sole feature character in a third-party commercialized video or series.

2. Restrictions and Reservations.

1. The License extends only to Your Avatar Files. This means the complete selection, arrangement, and composition of all base layers, features, attributes, and other elements that comprise Your Avatar Files (including but not limited to the texture, body artwork, and accessories included therewith). Thus, while the License allows you to create and exploit Derivative Works, the License does not grant you rights in any individual element or trait of Your Avatar Files subject thereto (such as the design of an item of clothing displayed by Your Avatar File), or a license to exploit any individual element separate and apart from Your Avatar File. For example, the License allows you to create alternative three dimensional renderings of, and to add new original clothing or accessories to, Your Avatar File, but does not allow you to extract individual features (e.g., body features or items of clothing) for use in a separate work.

2. The License, including your authority to sublicense Your Avatar Files, is subject to and subordinate to our reservation of rights set forth Section 2(a)(ii) of these Terms. For the avoidance of doubt, any sublicense issued by you in contravention thereof shall be deemed void ab initio and without legal effect.

3. The License does not grant you any rights in or to Yuga Labs’ (or any other) trade names, brands, trade dress, or trademarks (e.g., “Yuga Labs'' and “BAYC”), all of which are expressly reserved to Yuga Labs (collectively, “Yuga TM Rights”). You hereby agree that any Yuga TM Rights you purport to acquire, together with any associated goodwill, shall automatically, immediately, and at your expense be assigned to Yuga Labs.

4. You may not use Your Avatar Files in a manner that expresses hate or encourages violence towards a person or group based on membership in a protected class, such as race, religion, gender, orientation, or disability. 

5. You may not use Your Avatar Files in a manner that violates applicable law.

6. All rights not expressly granted herein are reserved by us.

2. Enforcement.

1. Copyright Notices. From time to time, Yuga Labs may provide a copyright notice which you may use with Your Avatar Files (the “Yuga Copyright Notice”). Subject to your compliance with these Terms, you may include a copyright notice identifying you, or such other person you designate, as the copyright owner of any Derivative Work created during the License Term, provided, however, that you also include the Yuga Copyright Notice.

2. Copyright Registrations. You shall ensure that any application to obtain a copyright registration in a Derivative Work may identify you or such other person you designate as the copyright owner but shall identify Your Avatar Files as a preexisting work upon which the Derivative Work is based.

3. Actions. To the extent applicable law authorizes you to bring a claim for infringement based upon the unauthorized use of Your Avatar Files, you agree that: (i) any such claim shall be based solely upon the unauthorized use of Your Avatar Files, not other Avatar Files (for example, on the ground that another Avatar File is substantially similar to Your Avatar File); and (ii) Yuga Labs may, in its sole discretion, join and, unless it would materially prejudice your rights, elect to take over the control of the prosecution of, any such action.

4. Disputes Among Holders. Yuga Labs has no obligation to support the resolution of, or resolve any, dispute that may arise between licensees of Avatar Files.

3. Transfers.

1. No Decoupling. Except as expressly provided herein, ownership of an BAYC NFT and the License are not separable in any way. You may not engage in any transaction or activity that purports to decouple the License from Your BAYC NFT.

2. Termination of License. Upon the transfer of Your BAYC NFT, (i) the License granted to you hereunder, shall immediately and automatically terminate; (ii) you must discontinue any use of Your Avatar File as a trademark or other source identifier; and (iii) any trademark and corresponding registration obtained in connection with your exercise of the License shall be deemed abandoned unless duly transferred to the new Holder under a separately negotiated written agreement.

3. Published Works. If, during the License Term, you create and make available to the public a work using Your Avatar Files (a “Published Work”), you may, except as set forth in Section 4(b)(ii), continue to use and exploit that Published Work in accordance with these Terms after the License Term; provided, however, that: (i) you will be responsible for any obligations or liabilities arising from your continued use of the Published Work after the License Term; and (ii) this privilege does not allow you to use the Avatar Files to create any new works or materials after the License Term. Thus, for example:

• A digital series featuring Your Avatar File that was released during the License Term may continue to run after the License Term, but any creation or distribution of any new episodes featuring such Avatar File would require a license from the new Holder.

• After the License Term, you may sell off inventories of merchandise featuring Your Avatar File that were created and offered for sale during the License Term, but the creation or distribution of any new merchandise or inventory featuring the Avatar File would require a license from the new Holder.

4. Holder’s Representations and Warranties.

Holder represents and warrants that Holder:

1. is over the age of majority and has the legal capacity to enter into these Terms;

2. will only use and interact with Your Avatar Files in accordance with these Terms;

3. will comply with all applicable law in the exercise of its rights and obligations under these Terms and will not violate any right of Yuga Labs, its licensors, or any right of any third party; and

4. is not, and will not, knowingly execute a transaction involving Your Avatar Files with any person who is (i) located in a country that is subject to a U.S. Government embargo, or that has been designated by the U.S. Government as a terrorist-supporting country; or (ii) listed on any U.S. Government list of prohibited or restricted parties.

5. Warranty Disclaimers.

1. EACH AVATAR FILE IS PROVIDED “AS IS” AND “AS AVAILABLE” WITHOUT WARRANTY OF ANY KIND. WITHOUT LIMITING THE FOREGOING, YUGA LABS EXPLICITLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUIET ENJOYMENT AND NON-INFRINGEMENT, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF TRADE.

2. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES IN CONSUMER CONTRACTS, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.

6. Assumption of Risk.

Holder accepts and acknowledges all risks associated with the following:

1. Avatar Files subject to the License may be used in myriad ways. While we strongly encourage transparency, communication, and research prior to commercializing Your Avatar File, including to understand what previous and existing uses have been made of Your Avatar File and the impact of those prior uses may have, your commercialization of Your Avatar File is solely at your own risk. Yuga Labs is not responsible for verifying or providing information on how an Avatar File has been exploited. Additional documentation from a Holder may be necessary or prudent.

2. Transactions or Utility involving Your Avatar Files may rely on third-party or decentralized platforms, systems, or marketplaces. We do not maintain, control, or assume any obligations with respect to such third-party platforms, systems, or marketplaces. To the extent that Yuga Labs provides links or access to third-party platforms, sites, or other resources, it does so only as a convenience and is not responsible for the content, products, or services on or available from those third parties or through any content displayed thereon.

7. Indemnity.

You shall defend, indemnify, and hold Yuga Labs, its licensors, affiliates, representatives, and service providers, and each of them, and all of their respective officers, directors, employees, and agents (the “Indemnified Parties”) harmless from and against any and all claims, damages, losses, costs, investigations, liabilities, judgments, fines, penalties, settlements, interest, expenses, and other similar results or occurrences (including attorneys’ fees) that directly or indirectly arise from, or are related to or in connection with, any claim, suit, action, demand, or proceeding or other similar occurrence, process, or activity that is initiated, made, brought, or financed by a third party against the Indemnified Parties, or on account of the investigation, defense, or settlement thereof, arising out of, related to, or in connection with: (a) your access to or use of any third-party services or products; (b) your breach or alleged breach of these Terms; (c) your exercise or attempted exercise of the License; or (d) your actual or alleged violation of applicable law. Counsel to be used in the defense of such claim must be approved by Yuga Labs in writing prior to retention of such counsel and, upon our request, you will allow us to participate in the defense of any such claims. You will not enter into any settlement or compromise of any claim or litigation or that includes an admission of liability without our prior written consent.

9. Limitation of Liability.

1. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NO INDEMNIFIED PARTY WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOST BUSINESS OPPORTUNITY, LOSS OF DATA OR GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE, OR SYSTEM FAILURE, OR THE COST OF SUBSTITUTE SERVICES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THESE TERMS OR FROM THE USE OF OR INABILITY TO USE OR INTERACT WITH ANY AVATAR FILE, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, OR ANY OTHER LEGAL THEORY, AND WHETHER OR NOT YUGA LABS OR ITS SERVICE PROVIDERS HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGE, EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. IN NO EVENT WILL ANY INDEMNIFIED PARTY’S CUMULATIVE LIABILITY HEREUNDER FROM ALL CAUSES OF ACTION AND ALL THEORIES OF LIABILITY EXCEED ONE HUNDRED DOLLARS ($100.00).

2. HOLDER ACKNOWLEDGES THAT THE EXCLUSIONS AND LIMITATIONS OF DAMAGES SET FORTH ABOVE ARE FUNDAMENTAL ELEMENTS OF THE BASIS OF THE BARGAIN BETWEEN YUGA LABS AND HOLDER.

10. Dispute Resolution.

1. Mandatory Arbitration of Disputes. Any dispute, claim, or controversy arising out of or relating to these Terms or the breach, termination, enforcement, interpretation, or validity thereof, or the use of Your Avatar File (“Dispute”) must be resolved solely by binding, individual arbitration and not in a class, representative, or consolidated action or proceeding. Each party waives the right to a trial in court and/or by a jury. This arbitration provision shall survive any termination of the License or these Terms.

2. Exceptions. As a limited exception to Section 10(a) above: (i) the parties may seek to resolve a Dispute in small claims court if it qualifies; and (ii) each party retains the right to seek injunctive or other equitable relief from a court to prevent (or enjoin) the infringement or misappropriation of its intellectual property rights.

3. Conducting Arbitration and Arbitration Rules. The arbitration will be conducted by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules (the “AAA Rules”) then in effect, except as modified by these Terms. The AAA Rules are available at www.adr.org or by calling 1-800-778-7879. A party who wishes to start arbitration must submit a written Demand for Arbitration to AAA and give notice to the other party as specified in the AAA Rules. The AAA provides a form Demand for Arbitration at www.adr.org. Any arbitration hearings will take place in the county (or parish) where one lives, with provision to be made for remote appearances to the maximum extent permitted by the AAA rules, unless the parties both agree to a different location. The parties agree that the arbitrator shall have exclusive authority to decide all issues relating to the interpretation, applicability, enforceability, and scope of these Terms.

4. Arbitration Costs. Payment of all filing, administration, and arbitrator fees will be governed by the AAA Rules, and Yuga Labs won’t seek to recover the administration and arbitrator fees for which Yuga Labs is responsible unless the arbitrator finds your Dispute is frivolous. If Yuga Labs prevails in arbitration, Yuga Labs will pay all of its attorneys’ fees and costs and won’t seek to recover them from you. If you prevail in arbitration, you will be entitled to an award of attorneys’ fees and expenses to the extent provided under applicable law.

5. Injunctive and Declaratory Relief. Except as provided in Section 10(d) above, the arbitrator shall determine all issues of liability on the merits of any claim asserted by either party and may award declaratory or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual claim. To the extent that you or Yuga Labs prevail on a claim and seek public injunctive relief (that is, injunctive relief that has the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the public), the entitlement to and extent of such relief must be litigated in a civil court of competent jurisdiction and not in arbitration. The parties agree that litigation of any issues of public injunctive reliefs shall be stayed pending the outcome of the merits of any individual claims in arbitration.

6. Class Action Waiver. YOU AND YUGA LABS AGREE THAT EACH PARTY MAY BRING CLAIMS AGAINST THE OTHER ONLY IN ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, if a Dispute is resolved through arbitration, the arbitrator may not consolidate another person’s claims with a party’s claims and may not otherwise preside over any form of a representative or class proceeding. If this specific provision is found to be unenforceable, then the entirety of this Dispute Resolution section shall be null and void.

7. Severability. With the exception of any of the provisions in Section 10(f) (Class Action Waiver), if an arbitrator or court of competent jurisdiction decides that any part of these Terms is invalid or unenforceable, the other parts of these Terms will still apply.

10. Amendments.

Yuga Labs reserves the right to clarify or amend these Terms by publicly publishing a new version of them, including, but not limited to, on http://yuga.com/3d-avatar-terms and any other website.

11. Governing Law and Forum Choice.

These Terms and any action related thereto will be governed by the U.S. Federal Arbitration Act, federal arbitration law, and the laws of the State of New York, without regard to its conflict of laws provisions. Except as otherwise expressly set forth in Section 10 (Dispute Resolution), the exclusive jurisdiction for all Disputes (defined above) will be the state and federal courts located in the State and City of New York, and you and Yuga Labs each waive any objection to jurisdiction and venue in such courts.

12. Miscellaneous.

1. The License applies only to the Avatar File associated with the corresponding BAYC NFT on the blockchain that Yuga, in its sole discretion, may designate, which designation shall apply retroactively. Thus, for example, if a fork or other event purports to result in duplicate BAYC NFTs, only the owner of the non-fungible token recorded on the blockchain designated by Yuga Labs will be eligible to receive the benefit of the License. Any license purportedly granted hereunder to the owner of a non-fungible token recorded by a smart contract or on a blockchain not designated by Yuga Labs is void ab initio.

2. These Terms will transfer and be binding upon and will inure to the benefit of the parties and their permitted successors and assigns.

3. These Terms constitute the entire agreement, and supersede any and all prior or contemporaneous representations, understandings and agreements, between the parties with respect to the subject matter of these Terms, all of which are hereby merged into these Terms. Without limitation, the terms of any other document, publication, course of dealing, or course of trade will not modify these Terms, except as expressly provided in Sections 11 or 13(a) or as the parties may agree in writing.

4. Our failure to promptly enforce a provision of these Terms or any rights related to a Avatar File will not be construed as a waiver by us of such provision or rights.

5. Nothing contained in these Terms will be deemed to create, or be construed as creating, a joint venture or partnership between the parties. Neither party is, by virtue of these Terms or otherwise, authorized as an agent or legal representative of the other party. Neither party is granted any right or authority to assume or to create any obligation or responsibility, express or implied, on behalf or in the name of the other party. Nothing contained in these Terms will be deemed to create any third-party beneficiary right upon any third party whatsoever.

6. The parties shall execute and deliver to the other party any and all such other instruments in reasonable mutually acceptable form and substance and shall take any and all such other actions as may be reasonably necessary to carry the intent of these Terms into full force and effect.

7. If any one or more of the provisions of these Terms should be ruled wholly or partly invalid or unenforceable, then the provisions held invalid or unenforceable will be deemed amended, and the arbitrator, court, or other government body is authorized to reform the provision(s) to the minimum extent necessary to render them valid and enforceable in conformity with the parties’ intent as manifested herein.

8. The headings to sections of these Terms are for convenience or reference only and do not form a part of these Terms and will not in any way affect its interpretation.

9. Neither party will be afforded or denied preference in the construction of these Terms, whether by virtue of being the drafter or otherwise.

10. For purposes of these Terms, the words and phrases “include,” “includes,” “including,” and “such as” are deemed to be followed by the words “without limitation”.

11. Holder may give notice to Yuga Labs by contacting Yuga Labs at [email protected]. Notice is effective upon receipt.

12. The parties have agreed to contract electronically and, accordingly, electronic signatures or any other forms of acceptance permitted by law, will be given the same effect and weight as original signatures.