ripcache | Neutral: Artwork Loan Agreement
Last Updated: 23/01/2024
This Artwork Loan Agreement (this “Agreement”), dated as of January 23rd, 2024 and effective as of the Effective Date (as defined herein), is by and among 4JM Corp., a Delaware corporation (“4JM”), the Particle Foundation, a Delaware non-stock non-profit corporation (the “Foundation”), and the Particle Holders (as defined below).
WHEREAS, one-hundred percent of the legal title to the artwork “Netural” (the “Art”) by ripcache (the “Artist”) has been contributed equally among the serialized, non-fungible tokens of the Art, known as Particles and subject to the Particle Terms and Conditions, available at www.particlecollection.com/terms;
WHEREAS, the Foundation has been organized and is operated as a non-profit corporation described in Section 501(c)(3) of the Internal Revenue Code of 1989, as amended (the “Code”), and has been granted tax-exempt status;
WHEREAS, the Foundation established the “Particle Museum,” a transformative physical and digital museum intended to hold, conserve, display and democratize ownership among the public in contemporary and fine artworks; and
WHEREAS, in accordance with the Particle Terms and Conditions of Sale, the owners of the Particles (the “Particle Holders”) desire to loan the Art to the Foundation on a perpetual basis, on the terms and conditions contained herein, and the Foundation intends to accept such loan in furtherance of its charitable purpose.
NOW, THEREFORE, in consideration of the mutual promises below, the parties agree as follows:
1. Effectiveness.
This Agreement and the Loan described hereunder shall become effective in full force and effect simultaneously with and contingent on the primary sale of 64 Particles, as determined by 4JM in its sole discretion (the “Effective Date”).
2. The Loan.
a. In accordance with the Particle Terms and Conditions, the Particle Holders, as the sole collective owners of the title to the Art, hereby loan the Art to the Foundation on the terms and conditions contained herein (the “Loan”). For the sake of clarity, the Loan does not include or convey any rights, title or interests, including any intellectual property rights, in the Artwork or any of the Particles or other digital references or representations of the Art, or the right to hold and dispose of the Particles, which shall remain the exclusive property of the Particle Holders.
b. The Particle Holders hereby acknowledge that the Loan does not limit the Foundation’s exclusive discretion to determine the contents of the Particle Museum’s programs and exhibitions or to interpret its mission.
c. The parties shall cooperate to modify the terms of the Loan as the Foundation determines is necessary to preserve its status as an organization described in Section 501(c)(3) of the Code, to avoid unrelated business income and otherwise to meet the requirements of law.
3. Maintenance of Physical Art.
As part of the consideration for the Loan, the Foundation hereby acknowledges and agrees that the preservation of the Art is an essential element of the Particles. The Foundation herby agrees to take possession of the Art for so long as this Agreement remains in effect, and shall:
a. cause to be performed all services and activities necessary for the ongoing maintenance and preservation of the Art so that the Art shall remain in the same or better condition as when received;
b. except as otherwise provided herein, supply, or cause to be supplied, all goods and materials required for the proper maintenance of the Art;
c. cause to be performed preventative maintenance services, such as cleanings, testing and inspections conducted by industry professionals, experts and/or consultants;
d. cause to be performed any necessary repairs to the Art conducted by industry professionals, experts and/or consultants;
e. cause the Particle Museum, or any other physical location where the Art is stored at any time, to maintain sufficient environmental and climate conditions necessary to maintain the Art in the same or better condition as when received, in consideration of lighting, moisture, humidity, temperature, air quality and any other factors relevant to the caretaking of valuable artwork;
f. cause the Particle Museum, or any other physical location where the Art is stored at any time, to be monitored, and to cause the prompt, reasonable response to any system alarms and alerts;
g. cause to be maintained all operation logs, production records and reports documenting the operation and maintenance of the Art maintained in the ordinary course and in accordance with industry standards;
h. at its own expense, maintain and carry insurance in full force and effect with financially sound and reputable insurers to insure the entirety of the appraised value of the Art; and
i. cause to be performed any and all other services and activities required to maintain the Art in the same or better condition as when received, whether or not previously contemplated by the parties, in furtherance of the intent and purpose of this Agreement.
4. Display of Art.
The Foundation further agrees, upon taking possession of the Art, to display the Art upon the following conditions in the following mediums.
a. Physical Display. The Foundation hereby agrees to display the Art at the Particle Museum, in no less prominence of display than any other piece of artwork that is displayed at the Particle Museum (as determined in the Foundation’s sole discretion). A label shall clearly identify the Artist.
b. Digital Display. The Foundation hereby agrees to display the Art digitally to the Particle Museum’s members through a website portal only available to verified members of the “Particle community” as determined by 4JM (including all owners of Particles and specifically the Particle Holders). The Artist shall be clearly identified.
c. Temporary Removal from Display. The Foundation may temporarily remove the Art from display as may be reasonable for the transportation or maintenance of the Art or as may be reasonably practicable in connection with the Foundation’s charitable purpose.
5. Particle Holder Rights. The Foundation acknowledges that the Particle Holders have been granted certain rights and privileges with respect to the Art under the Particle Terms and Conditions, and that these certain rights and privileges will be in effect during the duration of the Loan. As such, the Foundation further hereby agrees to exercise commercially reasonable efforts in light of its charitable purpose to honor and materialize these rights and privileges, as communicated by 4JM from time to time.
6. Intellectual Property.
a. Particle Museum IP. 4JM acknowledges that the Foundation is the sole and exclusive owner of the name “Particle Museum” and its logo, as well as all derivatives thereof. The Foundation grants to 4JM a nonexclusive license to use the name “Particle Museum” and derivatives thereof and the Particle Museum’s logo throughout the world in connection with the Particle Museum, Foundation or Particles. All right, title and interest in and to the name “Particle Museum” and any derivative thereof and the Particle Museum logo, including goodwill associated with and symbolized by the name “Particle Museum” and the “Particle Museum” logo, shall remain vested in the Foundation.
b. Third Party Infringement. The Foundation shall not be responsible for any third party infringement of any copyright to the Art and is not responsible for protecting any intellectual property rights of the Artist.
7. Confidentiality.
The terms of this Agreement shall be confidential and shall not be disclosed by each party to any third party (other than to legal or accounting advisors, as required by law or to enforce the agreement) without the other parties’ consents, unless requested by the Internal Revenue Service or an interested party in connection with a tax deduction under Section 170 of the Code. This paragraph shall survive the termination of this Agreement.
8. Indemnification.
The Foundation and 4JM shall each defend, indemnify and hold harmless the Particle Holders from and against all damages, claims, losses, expenses, costs, obligations and liabilities, including, but not limited to, liabilities for attorneys’ fees and/or expenses, suffered or incurred by a Particle Holder as a result of: (i) any breach of any representation or warranty made by the Foundation or 4JM, as applicable, under this Agreement; or (ii) any failure by the Foundation or 4JM, as applicable, to perform or fulfill any of its covenants or agreements set forth in this Agreement.
9. LIMITATION OF LIABILITY.
THE OTHER PARTIES EACH ACKNOWLEDGE AND AGREE THAT IN NO EVENT WILL THE FOUNDATION BE LIABLE TO THE OTHER PARTIES FOR TOTAL DAMAGES IN EXCESS OF THE AMOUNT OF ANY INSURANCE RECOVERY FROM THE FOUNDATION’S INSURANCE POLICY(IES) OR FOR ANY LOSS OR DAMAGE DUE TO CAUSES EXCLUDED FROM COVERAGE UNDER THE SUCH INSURANCE POLICY(IES). FURTHERMORE, THE FOUNDATION WILL NOT BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, WHETHER IN WARRANTY, TORT, CONTRACT, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR LOSS OF GOOD WILL, WHETHER OR NOT THE FOUNDATION HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND WHETHER OR NOT SUCH DAMAGES WERE FORESEEABLE.
10. Term and Termination.
The term of this Agreement shall extend from the Effective Date in perpetuity and shall remain in full force and effect unless and until (i) the Art is sold by the Particle Holders in accordance with the Particle Terms and Conditions or (ii) the Foundation is dissolved in accordance with the terms and conditions as set forth in its governing documents. Upon such termination, 4JM and the Foundation agree to work in good faith to secure the safe transport of the Art within a reasonable period of time to the address specified by 4JM, at the cost of 4JM.
11. Choice of Law and Venue.
This Agreement is made under, and shall be construed according to the laws of the state of Delaware, without regard to conflict of law principles. The parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of the state and federal courts of such location and waive any protest to such forum as inconvenient for the resolution of any dispute arising hereunder.
12. Compliance with Laws.
Each party shall comply with all laws and regulations applicable to its performance its obligations hereunder. Each party shall be responsible for costs, expenses and liabilities associated with such compliance.
13. Fees.
Each party shall be responsible for the payment of all costs and expenses associated with the fulfillment of its obligations and its compliance with the terms and conditions of this Agreement.
14. Captions.
Section headings are for reference only and shall not be used to interpret this Agreement.
15. Severability.
If any provision hereof is found to be invalid or unenforceable, such finding shall not affect the validity of any other provision hereof; and such provision shall be enforced to the maximum extent possible so as to effect the intent of the parties.
16. No Waiver.
Any failure to enforce any right or to require performance of any provision of this Agreement shall not be considered a waiver of such right or performance.
17. Entire Agreement.
This Agreement, including the attached and incorporated exhibits, contains the entire agreement between the parties, and supersedes all other oral or written provisions. Each party acknowledges that it is entering into this Agreement without relying on any promise by another party that is not expressly set forth in this Agreement.
18. Modifications and Amendments.
No amendment or modification to this Agreement shall be effective unless it is in writing and signed by authorized representatives of each of the parties hereto.
19. Further Assurances.
From time to time, the parties will execute and deliver such additional documents and will provide such additional information as may be reasonably necessary to carry out the provisions of this Agreement and the intent of the parties and to give effect to the transactions contemplated hereby.
20. Notices.
All notices and requests in connection with this Agreement shall be given or made upon the respective parties in writing and shall be deemed to be given as of the day such notice or request is received by the other party.
All such notices and requests should be directed to any address identified via written notice to the other party.
21. Assignment/Binding Effect.
This Agreement may not be assigned by a party without the prior written consent of the other party. The provisions, covenants, and conditions in this Agreement shall inure to and bind the parties and their legal heirs, representatives, successors, and assigns.
22. Power to Execute Agreement.
Each individual executing this agreement, on behalf of one of the parties, represents that he or she is duly authorized to sign and deliver the agreement on behalf of such party and that this agreement is binding on such party in accordance with its terms.
23. Counterparts.
This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument.