Artwork Donation Agreement Summary
Last Updated: 1/19/2022
This Document outlines a summary of the main points and spirit of the Artwork Donation Agreement (“Agreement”), dated January 16, 2022 and effective as of the Effective Date (as defined herein), held between Art SPV 1, LLC, a Delaware limited liability company (the “Donor”), and the Particle Foundation, a Delaware non-stock non-profit corporation (the “Foundation”).
The Donation Agreement and the Donation become effective in full force and effect simultaneously with and contingent on the primary sale of 9,000 serialized, non-fungible tokens of the Art (“Particles”).
2. The Donation.
a. The Donor, as the sole owner of the Art, hereby donates 99.99% of the legal title of the physical Art to the Foundation (the “Donation”). For the sake of clarity, the Donation conveys an undivided portion of the donor’s entire interest in 99.99% of the physical Art and all rights in and to the Art; provided, however,that the Donation does not include any rights, title or interests in any of the Particles or any other digital reference or representation of the Art, or the right to hold and dispose the Particles, which shall remain the property of the Donor.
b. The Donation is to be publicly recorded on an appropriate blockchain, as determined and directed by the Donor.
c. As part of the consideration for the Donation, the Foundation hereby acknowledges and agrees that the preservation of the Art is an essential element of the Particles and that the Art may not be sold under any circumstances unless such sale is (i) in furtherance of the Foundation’s charitable purpose and (ii) for so long as Particles remain in existence.
d. The Donor hereby acknowledges that the Donation 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 (as set forth in the “Particle Bill of Rights”).
e. The Donor and the Foundation shall cooperate to modify the terms of the Donation as the Foundation determines is necessary to preserve its status as an organization described in Code Section 501(c)(3), to avoid unrelated business income and otherwise to meet the requirements of law.
f. The Parties each acknowledge that per the “Particles Terms and Conditions,” which governs a Particle owner’s rights with respect to the Particles and the Art, each Particle owner has (i) covenanted to contribute to the Particle Foundation any and all proceeds of value which may flow from the physical Art that they would otherwise be entitled to (in light of the 0.01% of the legal title of the physical Art which will collectively be held by the 10,000 Particles) and (ii) granted to the Particle Foundation a Power of Attorney to effect such contribution.
3. Maintenance of Physical Art.
The Foundation herby agrees to take physical 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 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 physical Art is stored at any time, to maintain sufficient environmental and climate conditions necessary to maintain the physical 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 physical 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 physical 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 physical Art; and
i. and cause to be performed any and all other services and activities required to maintain the physical 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 physical possession of the Art, to display the physical Art upon the following conditions in the following mediums.
a. Physical Display. The Foundation hereby agrees to display the physical 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).
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 the Donor (including all owners of Particles).
c. Temporary Removal from Display. The Foundation may temporarily remove the physical Art from display as may be reasonable for the transportation or maintenance of the physical Art or as may be reasonably practicable in connection with the Foundation’s charitable purpose.
5. Intellectual Property.
a. The Donor 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 the Donor 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, Particle 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 Donor. The Donor understands and agrees that the physical Art will be displayed in a public place and may be photographed, filmed, or otherwise recorded for any purpose without any restriction by the Foundation.
c. Release. The Donor hereby releases the Foundation from any claims or demands associated with the Art including, without limitation, any claims under or arising from the Federal Copyright Act.
Both the Donor (and its managing member Art MGMT 1, LLC), and the Particle Foundation have signed this agreement in good faith. The originals remain in both entities records.